Pat shares his background and the contributing factors to his success at Choice Hotels International. He talks about his approach to challenges and advice to his younger self. Pat also touches on the inequity he sees with the lack of women and minorities in executive leadership positions and his advice to them to achieve their career aspirations.
Pat shares his background and the contributing factors to his success at Choice Hotels International. He talks about his approach to challenges and advice to his younger self. Pat also touches on the inequity he sees with the lack of women and minorities in executive leadership positions and his advice to them to achieve their career aspirations.
Greetings. This is David Kong, the founder and principal of DEI Advisors. We are a nonprofit organization dedicated to empowering personal success. We're very fortunate to have Pat Pacious, the president and c e o of Choice Hotels and resorts with us today. Now I know Choice has just acquired Radisson, so Pat is incredibly busy. I appreciate Pat taking time to join us. Thank you,
Pat Pacious:pat. Thank you, David. It's great to be here. It's great to have
David Kong:you. Let's talk about your background first. You were in the US Navy and then you went to work for two very famous consulting firms prior to your career at Choice. Can you tell us how that experience helped you with your role at Choice?
Pat Pacious:Yeah, I spent six years in the Navy. And that's really where I learned to lead people. And my management style, my leadership style really was formed in those in those six years. In the Navy you are thrown into a an environment. Day one, at the age of 21, I was leading 18 electricians. And I didn't know anything about electricity So you you learn to rely on the senior enlisted folks who've been doing it 20 years. You learn to listen to them. But you have to lead them. And you're not always gonna be an expert in your career. But you are gonna be surrounded by experts and subject matter experts and people who you can learn from. And I learned that at a very early age in my career in the Navy. The, I was on my ship for four years and I've worked in the Pentagon for two years and that's really where I learned a lot of strategy and sort of operations and large company problems and opportunities. And I really loved the strategy aspect of what I was doing, and so I really wanted to do that in the private sector. Went to business school and then coming outta business school, was fortunate enough to work at Arthur Anderson which had just a fantastic reputation in the consulting field, and I learned a lot there about how to analyze business problems. They had. A methodology for everything whether it's product line profitability or supply chain issues those types of things. And I really got a good taste of what the business world is like. And being in a consulting environment, you get the opportunity to work across function. So everything from finance to supply chain, to e-commerce, to human capital and the like. And that was really a great training ground for what I do here at choice on a daily basis. So the Navy kind of taught me my leadership style and I think Arthur Anderson really taught me about how businesses truly work.
David Kong:Yeah. You have a very diverse background and no doubt that has helped you. I was also a consultant. I was also with Bearing Point, previously known as KPMG Consulting, and I know that's helped me in the way that I think about things and at the way that approach things. But talking about your role at Choice. Practically transformed the company It's not the same company as when you first went to work for it 17 years ago, what were the contributing factors to your success?
Pat Pacious:I think it's thinking about what is the company's mission. One, one thing that I learned early on about strategy is when you're formulating the strategy for a company or for anything, imagine the world without your company. and that helps you understand what role does it play. And for me, when I've always looked at where choice plays it's been in the right kind of spot for the franchisee who's looking for that more flexible set of brands that allow for more variability. That was always a key strength of choices when I arrived. But if you allow that to occur too much, then your brand standards erode. In the case of our technology at the time, we were way behind. On a number of things. So it's great to have a principle of flexibility, but you have to set the boundaries. And, I was at a, I was at a joint choice at a time where we were going through massive unit growth where our brands really increased their presence, but at the same time, Take comfort in, for instance, in the early two thousands it's brand equity began to erode because we accepted too many hotels into the brand. So we found ourselves, five years later cleaning up the brand. And that's a tough conversation to have with franchisees. It's a tough conversation to have with your shareholders, but it was the right decision. For the long term health of that brand. So I think, when you really enter into a company like I did at Choice, you really have to understand what creates value. And that franchisee relationship was something that's always created value for us here at Choice. As I've become ceo, I've had the opportunity to add an extended stay brand, which has now expanded. Our extended stay footprint, almost 500 hotels. It was about a hundred hotels when I took over. We've turned around the comfort in brand and got that growing again. We've launched a brand called Ever Home. We've launched another brand called Clarion Point. And again, all of those brand launches came from listening to our customer. And for a franchise company like ourselves, that franchisee is our key customer. The guest is also a customer but it's ultimately the franchisee who's serving the guest. And our recent acquisition of Radison has a similar flavor to it, the next chapter, which is to really push further into the upscale segment for Choice Hotels, which is a nice adjacency for us. There's a lot of common franchisee ownership a lot of guests that will move between our mid-scale and our upscale brands. So it just was a the right fit for our current portfolio.
David Kong:Yeah. I've been a big fan and admirer of what you have done at Choice. No doubt. Your background and strategy has helped you tremendously. And your focus on the extended stay and now the upscale segment and upper upscale segment is gonna round out the portfolio even more. And I like what you said about being focused on the customer. Yeah. Ultimately, the franchisees. are not your only customers, but there's always a balance cuz there are paying guests that are also customers.
Pat Pacious:People always ask, who is our customers that the guest or the franchisee? And I say it's both. It's a false choice to say to one or the other. But it's when I always, we look at the pandemic when there were no guests we still had our franchisees looking to us and saying, I need your help. So that tells you who is always gonna be your customer at board. That's the franchisees.
David Kong:Well said. No doubt. Despite your illustrious career, you've suffered some setbacks and disappointments, and we all have challenges we had to deal with. Tell me what is your approach to challenges in general? I
Pat Pacious:think you have to see your way to the other side of them. I've, when I hit a challenge, I'm trying to ask myself, is it, a mole hill or is it a mountain? That helps you understand how much time and effort you need to apply to it. Who's who, whose help you're gonna need. If you're climbing a mountain you might need some help along the way to to get there. And so that's really the first thing is to assess it. And I always have used and we used to do this in consulting, is. I always wanted to know who's been to the other side of the mountain, and can help us. And consultants in that case, in many cases have been to the other side. They've seen companies get through, companies that have, struggled with growth or companies that are looking to be more efficient. There's always somebody who's done it before that you can ask and say, what does it look like on the other side of the mountain? Because if you're at the bottom of that mountain, you've gotta tell your team, this is how long it's gonna take. This is how how much effort we're gonna have to put into it. But I think you have to really be good at sizing your challenges. And then talk to people who've been on the other side. Because there's usually somebody who can give you some advice on not just what to do, but more importantly, what not to do. we all really learn from from those mistakes and it's no, there's no sense making the same mistakes somebody else made. Who faced a similar challenge. So that's been my my approach to it. And it's helped me a lot in my career. I have a lot of mentors who have been down the same path that I have or may have run into the same challenges, but maybe in a different industry or maybe outside of business. And those are usually things that when you set out to to to overcome a challenge. Are really helpful in setting the path forward. Yeah,
David Kong:No doubt. I like what you said about sizing up the challenge first and then finding whether there are other people who have faced similar challenges and learn from them. I like that. Now, talk about challenges, the pandemic. It was the wors crisis the industry has ever faced. Talk about a challenge, Yes. It was immensely challenging. There was no one to go and ask
Pat Pacious:That's exactly right. There was no playbook. And, everybody was in it together. So it wasn't you're facing it and I'm not. The whole world was involved. In something that nobody had any answers to. It's interesting. I relied a lot on my Navy training in that, particularly those first couple of months. Because in the military you're faced with a lot of challenges that nobody's ever faced before. And you have to take the initiative as a leader in many cases and find your path forward. So when we all sat around the table and said what do we do? And I got a lot of blank stares back at me as the leader. I said I've got a lead I have to set. Of course. I always tell my team, I, I'll say we're heading west. I don't know if we're heading, two 60 or two 90 but we're heading in that part of the compass. Because just standing still, is not good. It's not good for your people's morale. It's not good for the competence level that you needed to retain during a period like that. And I think in times of uncertainty, people want to see action and movement. But it needs to be in a calm and controlled way. And so that was my faced a lot of situations in the Navy when I was in charge of driving our ship around in a fleet exercise they throw problems at you that you've never seen before. And you have to rely on your gut instinct because there is no training manual or playbook. And that was true of the pandemic. But that, along the way, I know David, you and I had a few conversations. You are asking me, Hey what are you guys doing? this situation and how can we learn from each other? And that was helpful too. A lot of people in our industry really locked arms banded together. Passed around good ideas. And as information was starting to come into all of us and it became clear as to what customers wanted to see what we were able to do in the travel sector the fact that we were all communicating with each other, we were not in this alone. And it, I always look at it and say, no matter what challenges come our way. Not just the hotel industry, but across the globe, countries worked together to develop these vaccines to get them rolled out to, set the right cleanliness protocols in our industry. It was a team effort. And I think that aspect of that sort of human connectivity, even though we're competitors in our industry, everybody locked arms and said, let's figure this out together. And I think that was that's a really huge high point in my career was the camaraderie that that I experienced during that really dark time.
David Kong:I agree with you. It was immensely gratifying that the teams at the hotels united together, the teams at the corporate office united together, the industry united together, like you said, countries, together. Yeah. It was really gratifying to see, it was wonderful, but I have to pay you Kudos cuz. I throughout the whole time, in spite of the immense adversity and uncertainly that we face, you were calm, you were collected, you always led with courage and grace was just fantastic to see. Kudos to you.
Pat Pacious:Thank you, David. I appreciate it. I would say the same thing about you, but that's been your your entire leadership at at Best Western was was you exuded those attributes. Maybe I picked up a few things from you along the way,
David Kong:to say that. Thank you. But let's talk. Now that we're old and wiser we've learned a few things, and this show is really about collecting wisdom from folks like us. What is your advice to your younger self?
Pat Pacious:I'm an introvert at heart and. people along the way always told me to speak up more in meetings. I read a book probably 15 years ago maybe called Quiet which is really about introverts who've changed the world. Rosa Parks was an introvert. Mother Theresa was an introvert. The interesting thing about introverts is they prepare for everything. They over prepare. But when it comes time to perform, they're always like waiting to be invited to the party, waiting to be, invited into the discussion. And I learned probably 15, 20, 15, 17 years ago to be a little more vocal. And it's served me well because, everybody has something to contribute. And then when I'm in a meeting today, if I see somebody is not contributing, but I know they're anxious sitting on the edge of their seat, I know they've got something to say. Sometimes it takes a leader to invite them in. But I wish earlier in my career, I have been more probably just confident in my own abilities. I think the second thing is just the ability, and I preach this today, the ability to be what we call change agile, which. Again, it's about, we're heading west, but I don't know what's gonna happen year two, three or four. And I think a lot of young people wanna plan their career out for the next five to 10 years, and you just don't know what's gonna happen, what opportunities are gonna come your way. And if you're change agile you'll be willing to say, I know I was thinking that my next step is to go into this department or to get this promotion or move to this company. But, be open to things that come your way that are a little off the path because that certainly has been my career progression. I ran technology. I don't think there's another hotel, c e o that, that has run technology. And that was a tough time when I was asked to do that right in the great recession and I had to fly out to your neck of the woods in Phoenix every two weeks I was out there and then back here in, in the Washington area where my family is. But I learned so much about the company, our industry, our franchisees and myself doing that. But that was not something that was on my career path, was to go be a Chief information Officer. So I would just, I would add that, that really just being open to new challenges, even though it might not be on what you think is your career path is some pretty wise advice I'd give myself.
David Kong:Very good advice. I like that. especially the last one where you want people to be more change agile. That's great advice cuz sometimes people will pigeon hole themselves and we need to branch out and leave our comfort zone and try something different. And you've brought up your experience, you broaden your horizon. Yeah. That's really good. If you have a personal brand statement, what would that be?
Pat Pacious:I can't remember the quote. I think it's something the effect of, there's a lot you can accomplish if you don't care who gets the credit. And I'm somebody, we just bought Radison and I can tell you I'm on my next I'm on the next thing. There isn't, there's a there's an aspect to me, I think that's more just this humility and humble leadership around. It takes everybody to get something like this done. And at the end of the day, I don't care who gets the credit cuz we all win. And I think that's a, it's a great leadership style too because it allows everybody to participate in in success as opposed to, because most make big accomplishments are not the work of a single individual. They're the work of a team or of people helping each other along. And so that would probably be my my personal brand statement. That's a
David Kong:really good one. Sharing that credit and making other people feel like they've made a significant contribution. That's really good. It sets up a virtuous circle.
Pat Pacious:It does. And you use the word we more than I That's the, and it, and people appreciate it particularly is the, As a ceo now, the, the language that I use gets everybody hangs on every word. And so you have to be and sometimes if you're speaking off the cuff, you just have to be careful but if it comes natural to talk about yourself or your team as a we as opposed to just yourself, it I think it helps share that credit around and that that motivates people. Oh, for
David Kong:sure. For. Now among other accolades you have been named the Best CEO for Women by Comparably Choice has also been named the best employer for diversity and the best place of work for LBGTQ Equality. Congratulations. Thanks. Tell us why diversity, equity and inclusion or d e I is important.
Pat Pacious:It's really getting the best from the available people. And it. Really matter what background they come from. Great ideas are not reserved to, certain ethnic groups or genders. So Dee and I, at the end of the day, is about including as many people as you can because those great ideas are gonna come from someplace. I've I come from a very large family, 11 kids and my mother was the first woman admitted to Georgetown's Medical School. And she was a practicing position her whole career. She worked her rear end off And she was a bit of a somebody who pushed up on the glass ceiling. But she was a similar type, to life. She didn't want any accolades. She didn't want the the spotlight. She wanted her actions to represent what what she was able to do. And not because she was a woman or because of her background, but just who she was personally. And so I've always looked at that and said, whether you are an African-American, Hispanic female you know what? What we're all looking for are people who can bring great ideas, bring the right work ethic and contribute to to, to everybody's success. And that's what a lot of our de and I efforts are designed to do is to invite more people into our industry. Our industry is very underrepresented. When it comes to leadership I mentioned technology technology. There's very few African Americans in technology. We're trying to get more women into technology, but there's a lot of effort that's going on across our industry and across just functional areas like technology for instance, where the door is being open to more people who didn't traditionally come to our industry. And we're doing a lot on that front to encourage it. Choice is unique. We've always had, Frank, think about 17 years now, we have had a diversity committee of our board of directors. It was started by Barbara Banham, who was the daughter of our founder. And she was on our board for many years but our company has always been focused on it as a key driver for the future of our business, and as we all know, Our customer base is getting more diverse. Our employee base is getting more diverse. So it is really answering the call as our society is changing to to move the people who have the best ideas regardless of their background into more leadership roles.
David Kong:That's very well said. Thank you for that. Now, related, I know you recently appointed a vice president of environmental, social and Governance, E S G. Tell us your objectives.
Pat Pacious:Yeah. So Choice is a company that has a great story to tell, but we need a better job of telling that story. About probably about eight months ago, I said to myself, I need on our team a full-time resource we've been doing. The E s G functions off the side of people's desks. It was a collateral duty for many, but I said, if we're gonna be really focused on this and drive it forward it makes sense to pick a singular leader, Megan Bruin, who ran our comfort brand and then ran all of our mid-scale brands for us. She has a passion for it. She is very articulate, a great communicator, but most importantly, she understands hotel operations. She understands our franchisees. And so as we start talking about setting goals she knows who to call at the Comfort Inn in, Ocala, Florida and say, is this gonna. What are your challenges and the beauty of what's been happening, particularly on the environmental side in the last, call it five to 10 years? When you used to say environmental before it meant higher cost for owners. Now the technology and the materials that we're able to use doesn't always mean higher cost. In fact, it can mean lower cost. And when we look at our hotels that are being built today, low irrigation, landscaping, salt water pools the lights sensors that turn the lights off when guests leave the room. All of that technology is available today in a, at a reasonable price point, and the benefit is it saves on utility costs. So it's a nice, it's a nice convergence that we're And Megan has that background. She rolled out brand programs for years, and so she's been really focused on that. And then I think the on the S side and the G side, those are also areas that that choice has a a lot to tell and it's important now our shareholders want to know more about it. More and more our guests want to know more about. And certainly our franchisees do as well. So really focusing on those three key stakeholders is what Megan's job is going to be. And it is a full-time job. I think, as the s e c is now looking at requiring public companies to disclose these things. So it's n it's gone beyond just a nice to have or a nice to do and more of a requirement. And I just think as we look out in the next five to 10 years, The role of an ESG leader in companies is gonna become a necessity, not a not a nice to have. And so I wanted to get a little ahead of the game by appointing Megan to that role. And as I said, we have a lot of, we have a great story to tell, but we also have a long way to go on all three of those fronts.
David Kong:Yeah you definitely have a story to tell and you are certainly making a commitment and appointing a vice president to spearhead the effort. Congratulations to you. Let's go back to the topic that's on a lot of people's mind, which is the lack of women and minorities in executive leadership positions. What do you think about the situation and what could be done about it?
Pat Pacious:It's clearly if you look at women owners of hotels that's clearly an area where they are underrepresented as outright owners. This is an area that choice has been focused on for a number of years. We actually have a development team that is a dedicated group of franchise salespeople focused just on underrepresented communities. So it's female, it is Hispanic and African American owners native American owners, veterans. We have a team that's been at this for about 15. think to date they probably sold about 300 franchises over that time. And so the focus has been on how do we make that not 300, but 3000? How do we really step on the gas? And everybody luckily in our industry, is really trying to do that. The biggest challenge for the, for most underrepresented minorities and women in particular is getting access to capital. So we can incent franchise sales, but as David, it costs money to build hotels and it requires both equity and lending. And that's where the the capital markets are really gonna need to change so that they're not always saying show me your 10 years of investing history cuz you know a new female entrepreneur or African American entrepreneur doesn't have that history. As people look back on history and say how did people who had no experience get that experience? It was, they had friends, they had somebody who was willing to support them or back them. And we need to really focus on that as an industry is to get those networks together. If you look at the Asian Indian community here in the United States, and that is a perfect example where through their social connections, They have helped each other become very successful. Entre. I know our African American franchisee association points to them and says that's what we want. We want the networks, we want the the opportunities to to raise our ability to to participate more in hotel ownership. Shifting to the to the corporate side. It is certainly an area that I know we're focused on. I know all of our competitors are focused on is to get more women and minorities into leadership roles. What I'm encouraged by is when I look at our vice president level, which is really the next level down from the folks that report to me we have a significant number of minorities and and women in those roles. So I would expect is in the next five years as those of us at the top start to age out a little bit, the succession plans are much more. Than they were five or 10 years ago. And I'm encouraged by that as well because these are qualified people who are getting a world of experience in what they're doing today and are gonna be ready to step into these leadership roles here in the next three to five years.
David Kong:That's wonderful. And thank you for cultivating the next generation of leaders with so many women and minorities rep represented. Nice job. Time flies when you're having fun. We're getting close to the end of the show. Let's end with your advice to women and minorities.
Pat Pacious:I think anybody having a mentor that you can connect with, and I know people talk about mentorship programs and the most successful mentorships are not, they're. They're not programs. They are a a relationship that that, that takes some courage to ask for. It takes time to work on it. But I would encourage those that aspire to higher levels in their companies and, mentors don't have to be inside your company. But really seek out people who can provide you the advice on how to navigate situations, how to ask for more. When to raise your hand and say, we're doing it now. We're in the middle of an acquisition. There are people on my team who are raising their hand and saying, I'd like to do more. And that's a, every leader wants to hear that. So I would encourage that. And then I think the other thing, David, is really important is make sure you know what you're asking for. To be a c e o of a public company, a global company you've done this, there's a lot of travel involved, there's a lot of constituencies you have to please. There's a lot of stress that these jobs entail. And having that and your family and your customers, and there's a lot of people to please so just make sure that as you aspire to these roles, you have a good sense of what it is you're asking for. And then one thing that's been very helpful to me is make sure you're communicating with your partner your family, about what the future holds if you take on that new role so that they know what to expect too. If you're gonna be spending more time at work on an airplane or, in Europe or the Middle East they need to know that's part of the. Because I've seen a lot of leaders say they want something and then when they've realized what that really entails, they're like, oh, maybe I don't want that. So just, I think it's really interesting to think about all we've gone through with the pandemic. A lot of people are recentering their lives. So make sure as you aspire to new roles you understand what's required of you. On the personal front, we all understand what's required at the job level but a lot of these more senior roles take on a bigger toll personally, and you have to be prepared for it yourself as well as your your family and friends. Yeah,
David Kong:for the longest time, the hotel industry has a very high divorce rate. It's just a toll that the work has on personal life. It's just very hard, like you
Pat Pacious:said. Yeah. The Navy was the same way, David. It was, you're gone for six months and you're in, different parts of the world, high stress environment. It's not a a career that, that Is is helpful for weak marriages. I can tell you that and the hotel space, you're right, there's a lot of travel involved so people need to be comfortable with that. I really
David Kong:Your advice on speaking up. Expressing that you want to contribute. And to your earlier point about sometimes being an introvert I'm an introvert myself. I know exactly what you're talking about. you're probably the most well prepared in the group, but you're the last person to speak cause you're just more comfortable listening to other people. But volunteering to contribute like that is really important when you're climbing a ladder because that's how you advocate for yourself. You make an impression. At the meeting. That's what you need to do. Yeah. Very good advice. Thank you so much, pat. I really appreciate you taking the time and I know this is really busy time for you, so I'm particularly grateful and for the audience that enjoyed the show and enjoyed the advice that you received from Pat Pacious. We have other similar interviews on our website, DEIAdvsiors.org. We hope to see you there. Thanks again,
Pat Pacious:pat. Thanks David. Take care. Bye.