Part 8. Decision-making and personality
In 1965, Marriott opened its fifth hotel, a 500-room convention facility two blocks east of historic Peachtree Street in downtown Atlanta, Georgia. The huge project was designed to put Marriott on the map as a hotel company, and we poured all of our energies into creating a showcase property. Just as we were putting on the finishing touches, we learned that another hotel under construction not far away was up for sale. At the invitation of the architect and developer John Portman, a team of Marriott hotel people toured the site. Our guys shook their heads over the work flow of the heart of the house. They craned their necks and squinted to find the tip-top of an open-air, multistory space in the central lobby that wasted thousands of cubic feet. They exchanged glances over the confusing location of restaurants and ballrooms. Other aspects of the unusual design came in for silent censure as well. "It's a disaster! The building will never work! We'd have to be crazy to buy it!" was the group's considered opinion. Besides, who would want to have two hotels of the same brand in one city? Insane! We politely declined to make an offer. Out of our "wisdom" was born the Hyatt Regency of today. As soon as the Atlanta Hyatt Regency threw open its doors, a steady stream of people passed through the hotel simply to stand in the "Awesome!" spot in the lobby—the best vantage point for appreciating the dizzying heights of the light-filled atrium. In no time, almost every major city decided it needed to have a similar showplace hotel. Hyatt Regencies soon sprouted up in key markets around the country. All because Marriott (among others) couldn't see past the building's unusual mechanics to the architect's grander vision. To rub salt in the wound, our certainty then that having two Marriott hotels in the same city was a crazy idea is now laughable. Today, we have nearly fifty Marriott hotels in the Atlanta area alone! When I can stop grimacing long enough, I like to use the Atlanta Hyatt Regency story as an example of just one of the thousands of forks in the road that Marriott has faced over the years. Most forks have been small decisions that simply keep the daily grind grinding along. But once in a while, we've been presented with a choice that turns out to have dramatic consequences. As we learned in Atlanta more than thirty years ago, you can't always tell which decisions which are until long after the choice has been made. All you can do is make the best decision possible at that moment, cross your fingers, and keep moving. Making decisions, of course, is a big part of running a business. Not a day goes by in the life of a company that you don't commit yourself to a particular path, turning down one or more opportunities in favor of another. I've found that following a few simple rules keeps me from getting bogged down by the dozens of puzzles, queries, and opportunities that land on my desk every day. The first and most important rule is: Be willing to make a decision. Not everybody finds this easy. My father hated making decisions, for fear that some better option was just around the corner. He analyzed things to death, believing that one more fact or figure could make all the difference between the right decision and a wrong one. Through the years, I spent hours responding to a steady onslaught of detailed comments and concerns from him about every aspect of our business. Dad's constant barrage of questions drove me a little crazy. If I had stopped to answer his every inquiry, I would never have gotten anything else accomplished. On the other hand, some of the points he raised did help me sharpen my own arguments for the decisions I was making on behalf of the company. Watching and working with my father for years, I determined not to suffer from the same kind of indecisiveness that plagued him. In fact, I'm sometimes accused—probably with some justification—of being very impatient about making decisions. It's probably a natural reaction to my father, a case of the pendulum swinging the other way. Unlike him, I'm a graduate of the, "bias for action" school; I'd rather make a decision and get on with it. If new information comes in, I'm willing to listen and adjust accordingly. One of the simplest but most effective ways that I put my bias for action into effect is to handle each piece of paper that comes across my desk only once. As promised by time management gurus, this small act of self-discipline has amazing effects. Not only does it keep the avalanche of paper that comes into my office somewhat under control, the daily practice keeps me in training for decision-making on a larger scale. The second rule for decision-making, I think, is to do your homework. Remember our travel agency and security businesses? Our organizational decision-making skills definitely improved in quality after we put more muscle into disciplined study. I don't think we would have been able to diversify successfully into the limited-service lodging market, for example, had we not devoted so much energy to studying the competition thoroughly in order to design Courtyard by Marriott. On the flip side, study needs to come to an end at some point and a choice must be made. Don't let dotting /'s and crossing is become a convenient way to avoid following the first rule: Make a decision. I think a lot of executives—my father among them—uses minute analysis as a way to cope with the fear of making a decision. If you're someone who suffers from analysis paralysis, you know what I'm talking about. More often than not, the critical information needed to make an informed decision does not require delving into microscopic details. To use Courtyard as an example again, we studied the competition to a fare-thee-well in order to design the product; the decision to go after the market was made long before we got into convening focus groups, constructing potential room layouts, etc.
The truth is, when it comes to making decisions, doing your homework only get you so far. Which brings me to my third rule of decision-making: Listen to your heart. Research and analysis should give you the hard data you need to debate a decision with intelligence and insight, but facts alone aren't always enough to make a correct decision.
I'll give you just two examples from Marriott's past to illustrate my point. One decision was made virtually overnight. The other involved more than two years of careful study. In the end, heart was the true deciding factor in each case.
In February 1995, Jim Sullivan, one of our senior development executives, was meeting with Fred Malek, former head of Marriott's Lodging Group, for one of the pair's periodic "What's up with you?" chats. As Jim was heading out the door at the end, Fred casually asked: "Oh, by the way, you wouldn't be interested in Ritz-Carlton, would you?" Jim quickly closed the door, sat back down, and on April 25, less than three months later, Marriott and Ritz-Carlton closed a deal to bring Ritz-Carlton into the Marriott family.
The determination to acquire a major interest in the management of Ritz-Carlton's thirty-one hotels was probably the quickest major decision that we have ever made. We had been thinking about getting into the luxury tier of lodging, so the opportunity was right on target. We know the hotel business, we were very familiar with the Ritz product and its great market appeal, and we .could see clearly that the fit would be a good one. The number-crunching before the paperwork was signed was important, but it was definitely not the deciding factor. Heart was.
The second example of heart in action involved a two-year debate in the early 1980s over whether or not Marriott should acquire Disney. Our flirtation with the idea is probably the company's most dramatic example of a well-studied fork in the road. One former Marriott executive who was a pivotal figure in exploring the Disney possibility believes it's one of the most significant "roads not taken" in American business history.
His characterization is too grand, but Disney does definitely rank as a defining moment for Marriott. When we were looking into acquiring the company, Walt Disney's original empire had been treading water for a number of years. Walt had died in 1966, and it seemed to many observers that the creative spark of the company had died with him. The Disney organization was ripe for revitalization.
I was attracted to the idea of acquiring Disney because of the company's legendary success with Disneyland and Disney World and, naturally, the hotels associated with the parks. It seemed to me that the combination of the Marriott brand with the Disney brand could have been phenomenal. Both organizations are family-oriented and share clean-cut values. Each had had charismatic founders who forged strong corporate cultures. Together, we might have dominated the family and leisure travel markets.
The idea of acquiring Disney had plenty to recommend it, but—unlike Ritz-Carlton—it was not a decision that could be made in the blink of an eye. For one thing, Disney was larger than Marriott. We'd have had to borrow $2.5 billion to bankroll the acquisition. Even in the big-deal days of the 1980s, that kind of money would have been a bet-the-ranch transaction for our company. And there was a good chance that Disney wasn't going to welcome our interest. Disney also consisted of more than hotels; we would be taking on the crème de la crème of theme parks, plus a film business bout which we knew absolutely nothing. We quietly studied Disney, trying to get a feel for not only the numbers, but the culture and traditions of the company. The Disney organization was known for being pretty tight-lipped about its internal workings.
We even approached Disney to do a small hotel deal to get our foot in the door, meet the key players, and get some firsthand experience with the company. For more than two years, we scrutinized Disney— coming as close as I've ever experienced to a case of analysis paralysis on my watch—until we knew the company almost as well as we knew ourselves. In the end, it came down to exactly that: knowing our strengths and weaknesses well enough to have a strong feeling that the acquisition simply was not right for Marriott.
What precisely did my heart tell me? For one thing, too much of Disney's success and intrinsic value rested Ion a creative spark that I didn't feel we had. I knew that we would not be comfortable trying to run a business— especially one larger than Marriott—that depended I upon a steady stream of creative juices focused on I entertainment to make it work. At the time, we had learned this lesson in our own Great America theme parks. I couldn't, at that moment, foresee finding anyone to take over Disney and provide it with the imaginative leadership that I knew the company needed to reach its potential. It was too risky to acquire Disney if we couldn't make it extremely successful.
At one point, we looked into the possibility of asking someone else to buy Disney's movie division, leaving Marriott with the parks and hotels. Although Disney's film business in the early 1980s was small compared to what it is today, it was one of the key points of the company that I personally didn't feel comfortable with. We suggested to Coca-Cola that they take a look at the film side; they owned Columbia Pictures Industries Inc., and former baseball commissioner Fay Vincent was running it as president and CEO. Marriott's chief financial officer, Gary Wilson, and Vincent talked it over during a flight aboard Coca-Cola's corporate jet. Vincent gave it some thought and made a midair decision: No thanks. Columbia was providing enough challenges at the time, and another film venture didn't sound appealing. Not long after that, I decided to let the opportunity go. The upshot is that Michael Eisner soon came along and helped catapult Disney back into the forefront of the entertainment business. Today, as everyone knows, the Disney Empire is wildly successful.
Eisner onсe asked me why I decided not to buy Disney. I told him it was because I didn't know someone like him existed. If I'd been aware that a leader with his creative talent was available to run the show, I might have made a different decision.
The reality is, I probably still would have said no. My personal desire to be hands-on would have prevented me from giving even someone as talented as Eisner the run of the place—which is what would have been required to make the acquisition a success. I would also have been constantly worried about Disney's size and complexity siphoning my attention away from Marriott's original businesses. I would not have been happy to make that sacrifice.
We made the right decision about Disney based on what we knew and what my heart told me at the time. I won't deny that the high financial stakes were part of the decision—the price tag of Disney would have exceeded Marriott's total annual sales at the time— but ultimately I made the choice based on knowing my own limits. The fact that it took us nearly three years to reach a definitive decision itself tells me that we probably made the correct choice. If Disney had been right for us, it would not have taken us so long to see it.
The Disney question is a fine example of an opportunity that came and went, never to return. It's also a good illustration of what I think is the fourth rule of decision-making: Don't waste time regretting, revisiting, or ruminating over what might have been. Have there been moments when I've wondered what might have happened if Marriott had acquired Disney? Sure. But I made peace with the decision years ago. The making peace part is important in decision-making. If you spend time going over the what if's of every decision you make, you do nothing but waste time that could otherwise be going into exploring new opportunities. Occasionally, circumstances change so dramatically that it's appropriate to take another look at an opportunity from a fresh perspective. When we turned down the chance to buy John Portman's original Atlanta hotel in 1965, for example, it was the right decision for Marriott at the time. At that stage in Marriott's evolution as a hotel company, we weren't ready to appreciate the cutting-edge architecture of a John Portman. We were still focused on getting those all-important basics in place and opening our first downtown hotel.
Twenty years later, the story was different. By then, we were at a point in our development that having a couple of Portman-designed properties in our portfolio was the right fit and gave us a nice halo. Times Square in New York City was the site of one of the two Marriott Marquis hotels that Portman put together for us. The other is the Marriott Marquis in—yes—Atlanta. There was something especially appropriate about having Atlanta be the site of one of Portman's designs for us.
We haven't only revisited decisions about individual properties. We've also taken another look at broad philosophical issues when the timing has been right. Hotel franchising is the example that comes to mind first. I've already touched upon Marriott's earliest— and ambivalent—experiences with hotel franchising. We reefed our sails after our Marriott Inn franchise program failed to flourish in the 1960s. Among other things, our corporate culture just wasn't ready to embrace the idea of being a franchiser organization.
By the early 1990s, when we needed to jump-start growth after a couple of years of licking our wounds, our attitude toward franchising was much more open-minded. We came back to the issue with a different viewpoint, different needs, and different goals. Hence, our decision was different. We're still adjusting to the role of franchiser, but this time we've put our heart where our policy is.
Another area where we try to put heart into policy is the arena of gambling. Beginning in the late 1970s and early 1980s, many lodging chains began to turn their attention to legalized gambling. It's a lucrative business and, in the eyes of some, a glamorous one. We opted not to follow the pack. The pros and cons of getting into gambling (or gaming, as some call it) were pretty straightforward for us. The main argument on the side of entering the business is the power of the established Marriott name. We were virtually assured of success if we opted to build casino hotels.
In my mind, however, the negatives readily outweighed the positives, and still do today. For one thing, the gambling and lodging businesses are completely different; the two might often be found in one building, but their operations—right down to the way their books are kept—have little in common. The result, I think, is that one has to give way to the other. I've watched many Marriott competitors go so far down the road into gambling that their original business—lodging—has become a secondary thought. Their attention has been diverted away from what was once their core business. Given our presence in and love of lodging, I couldn't see allowing the company to be pulled in a direction that would do short shrift to what we do best.
Frankly, too, the culture of Marriott—I keep coming back to the culture of the company—simply doesn't fit comfortably with what I've seen of the gambling trade. Our overall business is basically a family-oriented enterprise. We take pride in that image. And I am personally uncomfortable with what I perceive to be the negative effects of gambling.
Some would argue that if gambling is lucrative as a business, Marriott as a public company has an obligation to pursue it. I strongly disagree. Corporate leaders all across the country make decisions every day about which businesses to get into or out of. And. not all of those decisions are based on economics.
Is our decision about gambling written in stone? No. Like any rule, there are exceptions. Today, we have a half dozen casinos in Marriott hotels overseas, largely to meet local market conditions. Here in the United States, if one of our key urban markets legalized gambling and all of our competitors leaped in, we'd be forced to revisit the decision to remain competitive. But I can guarantee that we would be very careful about how we'd go about it. When you’re going through something like a heart attack, you tend to think that a mistake of gigantic proportions has just been made.
In my case, there was no mistake; I was exactly where my bad habits had put me. For years leading up to my heart attacks, I had been the walking stereotype of the workaholic executive: too little exercise and rest, too much work, and too many heavy dinners too late at night. By the third heart attack, I concluded that if cardiovascular trouble didn't kill me, my wife, Donna, probably would if I didn't make some changes in the way I was living.
Most of the adjustments I made were the standard, commonsensical ones we've all heard about. I changed my diet, cut back on travel a little bit, began exercising more regularly, and picked our lakeside home in New Hampshire as the relaxing place to visualize when I need to calm down during stressful moments.
The most difficult change by far was attitudinal. Not only did I inherit my father's workaholism and heart problems, I also picked up his habit of worrying.
While Dad was alive, he frequently handwrote long notes to me in the dead of night because he literally couldn't rest until he'd gotten whatever was bothering him on paper. Night-shift associates at our properties would do a double-take when they spotted the chairman walking briskly through a hotel kitchen at 3:00 A.M. Dad paid for his perpetual restlessness with an ongoing series of illnesses that sometimes took him away from the office for months at a time. My mother spent a great portion of her time nursing him back to health, only to watch him lose it again to work and worry.
I've never been quite as bad as my father about getting a decent night's sleep. On the other hand, I probably didn't learn as much as I should have from his up-and-down state of health. Or at least I didn't learn until I got waylaid by serious illness myself. Like Dad, I have a hard time sitting still when there's work to be done. (And there's always work to be done.) I definitely have a rough time not worrying about the millions of things large and small that can go wrong at Marriott. The irony, of course, is that my heart attacks only brought more worries. One of the worst aspects of the illness was the timing. In the fall of 1989, some of the signs of bad economic times were becoming hard to ignore. It didn't speed my recovery being upset by the unpleasant thought that I was sidelined just as we were perhaps about to encounter some of our biggest challenges. It was not easy to face the fact that three decades of sixteen-hour days on the job had put me in the very position I most wanted to avoid: not being at the helm if we hit rough seas.
Rough seas or not, my body told me in no uncertain terms that I had to slow down, take it easier, and make some fundamental attitude changes—or risk getting socked again with another heart attack.
One key attitude adjustment I made in the aftermath of illness was to become better at delegation. I still chomp at the bit waiting for results from our team, but I no longer feel compelled to have my hands in everything that goes on in the company. Don't get me wrong. My penchant for being hands-on remains as strong as ever; I simply don't exercise it twenty-four hours a day. Probably the most important sign of my attitude about delegation was the decision in February 1997 to place the presidency of Marriott International in the hands of Bill Shaw, a twenty-two-year veteran of the company and one of our most admired and trusted executives.
In addition to cutting back on the quantity of work I personally handle, I'm also working harder at saying no to demands on my time. It's not easy. I have a strong inclination for listening to a wide variety of viewpoints; it's difficult to acknowledge that I simply can't afford to make time for everyone who wants to discuss an issue with me. Naturally, my time with family and Marriott associates takes precedence. Time for my church activities remains a high priority, as do my duties on various boards of directors, but invitations to just about everything else are frequently politely turned down. Saying no is hard for me, but it has to be.
One of the most valuable lessons that my heart attacks taught me is to improve the balance in my life between work and play. If this sounds like an odd goal to which to aspire, you've probably never suffered from chronic workaholism. My vision of a perfect vacation includes sitting in the sunshine on my dock in New Hampshire, watching speedboats careen past me while I chat on the telephone nonstop with a parade of people in the field and at headquarters. If you think I'm kidding, ask my secretary, Phyllis, or any member of my family. I'm trying to be better about leaving the office behind on weekends and on vacation. It's one lifelong habit that I don't really expect to lick, but I'm giving it my best shot. I've learned my lesson—at least in theory—about the high price of working too hard.
While lying on my back in the hospital, I learned something else. Marriott the man might be felled by illness, but Marriott the company has a constitution of iron. Our executive team stepped up to the challenge of my illness beautifully. Evidence of our company's ability to weather my sudden incapacitation made a significant dent in my anxiety about not being in the office. Remember what I said earlier about not letting an institution be held hostage by the presence or absence of a single individual? I'd have been devastated if our sixtysome-year-old company had fallen into disarray or paralysis simply because I was out of commission for a few months. As much as anyone likes to think he or she is indispensable, it was gratifying and comforting to see Marriott's organizational maturity and teamwork come through in what could have been a crisis.
Why have I told you all this? If even one person learns from my negative experience, changes his or her habits, and is spared a heart attack or other serious illness, I'll be pleased. Anyone who thinks that pushing the limits of human endurance is necessary to a company's success should think again. My heart attacks merely made everyone worry, from family to friends to employees to Wall Street. Work hard by all means, but don't run up a huge tab of stress and worry. Sooner or later, you will pay for it, and so will everyone around you.
Linguistic Survey of Part 8:
1. Translate into English (see the text, if need be):
по приглашению кого-либо, в тот момент, в пользу кого-либо, сразу за углом, по поручению кого-либо (= во благо кого-либо, от имени кого-либо), реакция на что-либо, в больших масштабах, посвятить что-либо кому-либо, справиться с чем-либо, в конце всего, развилка на дороге, чутьё на цифры, основываться на чем-либо, в то время (= в тот период), обговорить что-либо, на этом этапе (= стадии), в той точке развития, приходить на ум, среди всего прочего, быть осторожным в отношении чего-либо.
2. Make up sentences using gerund after:
to hate, to accuse sb of, to be impatient about, the fear of, to be comfortable about.
3. Explain the phrases (see the situations in the text):
a showcase property; the work flow;
a vantage point; key markets;
to analyse sth to death;
to study sth to a fare-thee-well;
a market appeal; to tread water;
to be tight-lipped about sth;
to make peace with sth; to do short shrift;
to be better at delegation.
4. Words which you may not find in a dictionary:
- a showplace hotel = a hotel nice to look at, a hotel to be proud of;
- to bankroll the acquisition = to provide the financial side of purchase through banks;
- a bet-the-ranch transaction = a highly risky deal, a financial operation of high risk;
- crime de la crime of theme parks = the best parks (French insertion; in English – the cream of society);
- to jump-start growth = to start sth vehemently, harshly as if from a ski-jump;
- a workaholic executive = a hard-working man (work + alcoholic);
- to do a double-take = to get two times more (mostly of money);
- to chomp at the bit = to take the bit between one’s teeth (= to get nervous, eager, impatient etc.)
5. Another contribution to your topical vocabulary:
to decline an offer; to run a business;
to make a decision (decision-making);
to put sth into effect; a firsthand experience;
to acquire a company; gambling;
lucrative; to keep the books;
to cut back on sth; night-shift associates;
to delegate (the presidency) to sb.
Tacks for Debate on Part 8:
1) Will you ever follow the four rules of Mr. Marriott for decision-making?
2) Marriott acquired Ritz-Carlton’s hotels. Why didn’t they acquire Disney? Why didn’t they get into gambling?
3) Should a CEO work himself up to a heart attack? Do they sometimes do this because they are irreplaceable?