DEI Advisors Podcast

Anthony Capuano, President & CEO, Marriott International, interviewed by David Kong

May 22, 2023 David Kong
DEI Advisors Podcast
Anthony Capuano, President & CEO, Marriott International, interviewed by David Kong
Show Notes Transcript

Tony shares his career journey ascending to his current role leading Marriott and his learnings along the way. We discuss the leadership role Marriott has played in ESG and DEI efforts in the industry and how that helps Marriott. He shares mentoring advice he received from Bill Marriott and Arne Sorenson, and also offers lessons in leadership, work life balance and strategic agility. He also shares advice for self empowerment.

David Kong:

Greetings. I'm David Kong, the founder and principal of D E I advisors. We are a nonprofit organization based in Arizona. Our mission is to empower Personal Success. Today we're delighted to welcome Tony Capuano, the president and c e O of Marriott International. Tony is involved in several civic and professional organizations. And he is also on the board of McDonald's and Save Venice. Tony, it's a great honor to welcome you to

Tony Capuano:

our show. Great to see you again, David. Thanks for having me.

David Kong:

Oh, thanks so much for taking the time. I know how busy you are. Tony, let's start with your career journey. You've had a very exciting career journey. I know you started atLaventhol and Horwath. And you've been with Marriott for 29 years now. Can you share some of the key inflection points and the factors that contributed to your success? Sure.

Tony Capuano:

During my time at Cornell, I spent most of my internships and operations, but was always drawn to the real estate and transaction side of the business. And at the time, as you'll recall, Lathon Howorth was the premier hospitality consulting firm. And I was lucky enough to be offered a position with them coming right outta school. And joined their Boston office, and it was such a great place to get started. It was broad exposure to a variety of quality tiers, a variety of project types projects all over New England city center projects, resort projects and really allowed me to dig into, Underwriting projects from the owner's perspective really understand the economics of projects and how the owners on evaluated the economics of those projects. When I left Leventhal maybe it was the combination of four years in Ithaca, New York and two years in Boston. But I went out to the West Coast and joined Kenneth Leventhal and Company. And this would've been 1997, so it was before Ernst and Young acquired Kenneth Leventhal. And so at the time the Big Eight accounting firm still existed, but Kenneth Leventhal was pretty unique. They were an integrated firm with accounting, audit, tax consulting, but the entirety of their client base was real estate focused. And so it was a terrific place to learn across real estate sectors. The two thing. I was in the leisure time advisory group, but we were working on multiple asset classes and the two most impactful part of my ti time there, number one. We were very focused at the time on a practice that evaluated Japanese investment in US real estate. You'll recall at the time the Japanese were very focused on investing in US real estate, particularly on trophy assets. So that was a big focus area of mine. And then secondly, When the RTC was formed by the federal government, Kenneth Leventhal was actually engaged to develop the valuation methodology. And Kenneth Leventhal developed something called D I V or derived investment value. And so for several years we were traveling around the country to failed savings and loans and valuing the entirety of their real estate portfolios. So it was a great opportunity to value. Office, retail, multi-family, industrial and obviously hospitality. And then in 1995 Marriott had gone through their difficulties in the late eighties and early nineties, had started to rebuild in a post spin world, and I was lucky to join the feasibility group in 95. Shortly after I joined I was able to work with one of my predecessors and mentors, Jim Sullivan on the acquisition of Ritz Carlton in 95. Then I worked with one of my friends and mentors, Arne, on the acquisition of Renaissance in 97. Then moved back to the west coast to join development where I led that group until I guess it would've been 2005 when I came back to headquarters and took over North American development. And then in oh nine my friend Jim Sullivan retired and I took over global development for the company.

David Kong:

What great experiences.

Tony Capuano:

And I was lucky, David, I'm sure like you I was lucky to have just some incredible mentors and friends along the way that provided so much counsel and really taught me how to analyze deals, how to negotiate deals and hopefully made me a better leader as a result of all of their great council over the years.

David Kong:

Yeah. You're absolutely right. We all need mentors and sponsors in our career, and we're gonna talk about that in just a minute. Now I was really impressed to read Marriott's Environmental Social and Governance Progress Report. It's also wonderful to see Marriott widely recognized for its diversity, equity, and inclusion work. Among the many accolades, Forbes had named Marriott as one of America's best employers for diversity. And on the heels of Fortune Magazine recognizing Marriott as one of the best companies to work for- for 26 years in a row, you have launched a new people brand called"Be" to grow and empower your global workforce. Can you tell us about this people brand-

Tony Capuano:

Be"? Of course. So as David, the company is celebrating its 96th year anniversary this year. And the company really since its founding, has been built on five core values. And the first of those core values is putting people first when JW Sr. And Alice Marriott founded the company it was founded on a pretty simple but powerful core principle. This idea that if you take care of The associates will take care of the customers and the customers will come back again and again. And that has been a value that has guided the company and served it so well for nearly a century. And I think this idea of b this employer branding, if you will, is just a continuation of this idea of putting people first. The idea that for our existing associates and prospective future associates, Marriott is a place to be. It's a place to begin your career. It's a place where our associates can belong. And it's a place where associates can become, they can become the best version of themselves, both personally and professionally. And so we're quite excited about it. We've gotten great reaction to from our existing associates around the world. They think it crystallizes all that, that the the culture of putting people first really stands for. And we're really excited to roll it out around the world.

David Kong:

Yeah, I've always liked that mission to put people first. And lots of books have been written, including the Harvard Business Review. Professor Lessinger spoke on service profit chain. I totally subscribe to that thinking, and I love the name B. It just, their stance, it gives clarity to what you want to do. It's just a fantastic program. Sounds like Now

Tony Capuano:

why is, why, David, from all your years in the industry ultimately we are in the people business and our companies will succeed or fail based on our ability to identify attract, develop, and retain our key talent. And it's a big priority for us. It's a big priority for all of our peer companies. And we think this idea of showing folks. Marriott is a company where you, not just a place to earn a paycheck, but to really develop a career. We take great pride in the fact that more than half of our global general managers started in hourly positions. And we really love the idea that. Our associates understand. We view them as a whole person, not just at work, but in their lives. And in fact we just wrapped up our Associate Appreciation week, which is always one of my favorite weeks of the year. And as part of that week, we lo we relaunched a program we've had for years called Take Care. And in its early days, take care admittedly, was focused principally on physical wellbeing and that'll continue to be an important part of the Take Care foundation. But we've expanded Take Care and Take Care now focuses as well on. Financial fluency. When you think about more than 90% of our associates working at the property level, many of those associates maybe haven't had the chance to develop financial fluency to understand how to open bank accounts, the power of compounding, why four oh programs like 401K and employee stock purchase can be such strong contributors to their family's financial wellbeing. So that'll be. The second leg of the stool, if you will. And then third is mental wellbeing. And I think increasingly in a post pandemic world we are just starting to wrap our heads around the damage that has been done to the mental wellbeing of the workforce. And so a big part of the relaunch of Take Care is making a wealth of resources available to our associates and their families to ensure their, the state of their mental wellbeing as

David Kong:

well. I love that. You are absolutely right. Take care is more than just physical wellbeing. It's also financial and mental, especially after the pandemic. Exactly right. Love that. Love that. Now why is E S G environmental social governance and d e i, diversity, equity inclusion so important for Marriott? And what are some of your personal

Tony Capuano:

goals? Yeah, so I think, I mentioned earlier our core values. One of those core values again, that's been around for nearly a century is this idea of serve our world. And Mr. Marriott, as he often does, says it best, right? We are temporary. Tenants on this beautiful planet of ours, and the idea that we've got to be active stewards in the care of this planet for future generations, I think is certainly important to me personally, but through a business lens, it's also being demanded by all of the constituents that we serve, our existing associates and prospective future associates. Flowery language in an annual report no longer satisfies them. They are seeking to align themselves with employers whose core values match theirs, and sustainability is critical to them. And they want to find companies who have not only set ambitious sustainability goals, but have made demonstrated progress against those ambitious goals. I think similarly. In terms of diversity, equity, and inclusion these kids, I have a daughter who's gonna graduate from college next weekend, and so I have the good fortune to spend lots of time at Cornell and meet some of her classmates. They look at prospective employers. And they look at the jobs they aspire to, and they wanna see people that look like them. And so I think it's critical that our company, particularly in the leadership ranks in the C-suite, reflects the workforce at large. I think that's true for our senior leadership. I think that's true for our board of directors. It, I have enormous pride of the fact that at our board level our inclusion and social impact committee just celebrated its 20th anniversary. That should be commonplace, but it's, as you well know it's actually relatively rare for a Fortune 500 company to have had a board level committee focused on these critical issues for two decades. And it, so I really do think a deliberate focus on these critical areas is embedded in the company's DNA and has been for decades.

David Kong:

Yeah, you're absolutely right. Not many companies have a diversity inclusion council for 20 years. No, that's right. It's very impressive. Now, what are some of your

Tony Capuano:

goals? So when I was fortunate enough to be appointed c e o what we call our senior leadership, which is on a global basis, VP and above. So depending on the day that you look at it round numbers, that's about our top 800 in the company. We had set goals of hitting gender parody by 2025 and having at least 25% people of color by 2025 as well. When I looked at the data shortly after my appointment I said, I think we can get to the people of color goal by 2025. I said, but I think we ought to even be more ambitious on gender parody. And so we, we accelerated that goal and we've now. Said we're gonna be at gender parody in our senior leadership by the end of this year, by 2023. The last time I looked at the numbers we were at almost 48%. So we've got a little more work to do in the last seven months of this year, but I'm confident we're gonna get there and it's terrific. Fantastic. We're already almost at gender parity on the, at the board level. In the C-Suite. We're at gender parity and I expect to be there across the company's senior leadership by year end. That's

David Kong:

so exciting. It's great and I applaud Marriott and personal goals. That is truly fantastic. Let's talk about creating alignment, which is not easy to do, especially given Marriott's scale and size. You are the largest hotel company. You have 31 brands now, 8,300 properties, 138 countries and territories. Your executive team is scattered all over the world. How do you create alignment?

Tony Capuano:

I'd say a few things and it won't surprise you that I'll again start with culture and core values. I've been reflecting on this a lot lately given that the entirety of the industry is coming out of what Bill Marriott has characterized as the most significant set of challenges the company and the industry has ever faced. And that was the pandemic and the ripple effects of that pandemic. It. Really the culture and the core values are what guided us. They were our true north as we tried to navigate these extraordinary challenges that were created by the pandemic. And I think even as we've seen this incredible recovery in the last 12 to 18 months. It is that culture and those core values that guide us and create the alignment that you described. We, as you point out, we are widespread and if anything, our international growth is our most accelerated growth. Nearly 60% of our industry leading pipeline is outside the us. We've got about 500,000 room global pipeline and about 60% of that is international. All of the international presidents now report to me as we've rejiggered our C-suite. That connectivity I think is critically important. Having those international voices at my table is extraordinarily valuable. Having all the discipline leads and all the continent leads around that table, I think help measurably in creating the alignment that you describe. But again, it's really culture and core values that help us, almost irrespective of how far flung our footprint is that allow us to stay aligned and stay focused on the core objectives.

David Kong:

You are absolutely right. When you have strong core values and beliefs, you do create alignment just with that. Yeah. kudos for your efforts. Thank you. Now you reference Bill Marriott and Annie Sorenson. Two men that I greatly admired and they are icons of the industry. They are loved and respected. What are some of the best advice that you've received from Bill and Arne?

Tony Capuano:

I was lucky enough, I was just at Mr. Marriott's house last week. I spent a couple hours with him and I could, we could talk for hours about all the extraordinary lessons he's taught. If I had to pick one he often says the four most important words in the English language. Are, what do you think? And they are such simple but powerful words. And when you probe on him a little bit about why he thinks those are such important words, it's because throughout his career, whether he was talking to an executive in the company, whether he was talking to a hotel owner, whether he was talking to a Gorman, whether he was talking to one of the general managers, Really soliciting feedback from the front lines about what do you think, what are you seeing, what are you hearing in the market? And then triangulating on all these different perspectives on a an issue that he was trying to solve or a riddle that was confounding him. The power of asking that question over and over I think is really instructive. It, so much of what he does is simple, but powerful wisdom. He also years ago the dean at Cornell, Kate Walsh came to Washington and she'd never had the privilege to meet Bill Marriott. She asked if I could arrange a meeting, and I said, I'm sure if he's in town he'd be delighted. And of course, he graciously hosted her. And after they spent about an hour together, She said to him, Mr. Marriott, all the kids back in Ithaca know that I'm with you today. And the minute I get back on campus, they're gonna ask what advice I'm bringing back from such an iconic leader. What advice should I share with them? And he got a little smile on his face and he said, tell them to be humble. And I think, again, there's such wisdom in that remark. He a as you point out, he is as big an icon as the industry has ever seen. Yet, despite all he's achieved, he is the most humble man you would ever meet. And when you speak with him and you say, Mr. Marriott, you've accomplished so much. You've created this incredible company. What are you most proud of? Without hesitation. He always says, I'm most proud of the opportunities that our company has created for people all around the world. Pivoting to Arne again, Arne was a remarkable leader, a terrific mentor, and a great friend, and he's terribly missed. Again, so many wonderful lessons. I would probably pick two. Number one, he was among the most intellectually curious people I've ever met. He, and not just about our industry, just about the world in general. He just had that natural intellectual curiosity that I think made him such a wonderful leader of a company that had such a broad global footprint. And then I think secondly I'm sure like me David, you read about all these beautiful tributes that were written about him after his unfortunate passing. And one of the things that really struck me, so many of them were written by somebody that maybe only met him once or twice, yet they wrote like they really had a deep relationship with him, and I'm convinced the reason for that is because when he met them, even if he only spent three or four minutes with them, he had this innate ability to engage. He cleared his mind. And for those three or four minutes, he committed a hundred percent of himself to listening to what they had to say. And my sense is in the world that we live in now, where we're so enabled by technology, we get our news in 140 characters. We're always reading the crawl at the bottom of the television screen. The ability to actually listen is increasingly a skill that is in short supply. And when I think about Arne, I think on the long list of incredible attributes he had as a leader. He was one of the most deliberate and most effective listeners I think I've ever had the privilege to work with.

David Kong:

They're true industry icons. I've had several encounters with both Bill Marriott and Arne Sorenson. I've been in meetings with them, and you're absolutely right. Mr. Marriott always comes across as having great humility. He always wants to listen, and I love what he said- what you think. That's really great advice, right? Arne is always so thoughtful and when he talks to you, he's paying 100% attention to you. No question. That's a rare quality and he also asks a lot of questions, very good questions. That stimulates thinking. Yeah, that

Tony Capuano:

curiosity I think is great. He and I used to joke and he would often say he was the worst person to sit next to on an airplane. So many people wanna read their book or watch a movie or listen to music and he said, but I'm just so fascinated, so interesting. We know so much about ar narrow little section of the business world, but it's so fascinating to talk to somebody that's in. Manufacturing or the grocery business or whatever it might be, and he just had that natural intellectual curiosity that made him so fascinating. Yeah,

David Kong:

that intellectual curiosity is a very important leadership trait. Thanks for sharing that. Of course, mentors and sponsors are so important to our career progression. Do you have any advice on how one can go about finding mentors and sponsors. Yeah,

Tony Capuano:

I think sometimes it's a maybe it's a little bit of an overused analogy, but I subscribe to it. I, when I talk to students, when I talk to young professionals, I think this idea of creating a personal board of directors is extraordinarily valuable. And I think. Trying to build that personal board of directors with as diverse a group as possible. It can contain family members, it can contain colleagues, it can contain peers, it can contain folks within your industry segment and outside your industry segment. And it can have folks you know that are. Higher and further along in their career path than you and maybe even more junior than you, but building this diverse group. And again, because, go back to what I said about Bill Marriott, the ability to say, what do you think? And get a variety of different perspectives about what each member of that personal board of directors thinks, I think is extraordinarily valuable.

David Kong:

Yeah, I love that. And I love the term personal board of directors. And it's so important to our career progression, especially when we are facing setbacks and challenges. Absolutely.

Tony Capuano:

Very good advice! You mentioned at the outset the honor I have now of serving on the Marriott, or excuse me, the McDonald's board of directors, and that has been a great. Learning opportunity for me as well and my interaction with Chris, the c e o at McDonald's. And I look at the way he asks, what do you think to this diverse set of directors that, that McDonald's has on its board? And I think there are some analogies there that all of us we assemble these personal board of directors and we select folks to serve on that personal board of directors that each have their own. Set of unique experiences and characteristics that we can draw fo from as we try to navigate our own personal career challenges. Yeah, I like that

David Kong:

very much. That diversity on our personal board directors is so important. I agree. Now let's switch gears and talk about strategic agility cuz the world is changing so fast and that it sure is. I don't know how many disruptors have entered our industry just in the last, five years or last year alone. Can you talk about strategic agility, which is so important to our own personal growth and also the company's success?

Tony Capuano:

Yeah. I think almost irrespective of industry. This I think strategic agility starts with the idea of continuous learning. You talk to experts that say any skill or any set of knowledge that you develop starts to become stale in two to three years. And so for all of us, Irrespective of what profession we choose, we've got to be continuous learners. We've got to be reading and attending seminars and attending lectures. That puts us in a position to do what all leaders must endeavor to do, which is to look around the corner to anticipate changes. And if anything, I think today, Because of the pace at which disruptors are developing the pace at which technology is evolving. You've gotta be craning your neck to look around that corner even more and more quickly because change is coming so rapidly and I think it's critical for us. At the same time, with one eye, you've gotta be looking around the corner. You've also got to remember what you're good at and what your core competencies are. You'll appreciate this. We had a group of m i t graduate students come visit our new headquarters in Bethesda about a month or so ago, and they toured the headquarters, met with some of our executives, and then I hosted a about an hour round table with them before they left us. And one of the students, very smart young man, he raised his hand and he said, With all of the advances in artificial intelligence, could you envision a day where you might be able to open a hotel with no employees? And I laughed and I said, my goodness, I hope not. And I said, while I think technology advances, AI advances will create opportunities for efficiency. We can't lose sight of the fact that we're in the hospitality business and hospitality is a people business. I said what I do hope is those technology and AI advancements and advancements. We'll create capacity for our associates, and if the technology makes them more efficient, it'll create capacity for them. Even if it creates two more minutes of capacity, that's two minutes. They can look, our guests in the eye get to understand their trip purpose a little more and maybe do something to enhance their stay in a way that they start to build connectivity and loyalty and a more personal experience for that stay.

David Kong:

Yeah, I totally agree with you. Hospitality is not virtual. No,

Tony Capuano:

thank goodness. But I do think, the the agility you described one of the areas where we're having to be quite agile is if you look at a trend that came out of the pandemic, but I think it's gonna endure long beyond the end of the Pandemic, is this idea of blended trip purpose and Lean Oberg. Our C F O and I talked about this a bit on our last quarterly earnings call. We look at demand recovery by day of the week. And it was fascinating to us that Sunday and Thursday were the two days of the week that were covered most rapidly. And what that would suggest is more and more, both business travelers and group meeting attendees are either pre or post business trip tacking on a couple days of leisure. And so if you have that shift in, in the way travelers are traveling, you've got to be more agile. You've got to, because we obviously can't. With the snap of our fingers necessarily change the physical asset. But we can think differently about hours of operation, menu offerings programming in our spas and our fitness centers. We've got to think differently because you may check in on a Wednesday and have a set of needs and expectations on Wednesday and Thursday when you come down the elevator in a suit and tie. But then that you're gonna come down the elevator Friday in a pair of shorts and flip flops. It's still you, but you've now got a completely different set of expectations, and we've got to be prepared to exceed your expectations on Friday the same way we did Wednesday and Thursday. Such

David Kong:

a great example of strategic agility. Really like the two things that you said, which is continuous learning. Yeah. And also focus on your strength and leverage that. Very well said. Thank you. Of course. I see that we're running a little low on time, so I'm gonna ask you a couple more questions, which please is please. One is about managing work-life harmony. You've had demanding jobs your whole career, but you also have to take care of the needs at home. So how do you achieve work-life harmony?

Tony Capuano:

Yeah, it's a great question. I think almost by necessity it's got to be quality over quantity. You and I have both had the privilege of leading companies that have broad global footprints. Our teams around the world deserve our personal attention, and that requires global travel. I think that means we've got to be more present when we're home with our families. We've got to carve out opportunities where we say, I'm not gonna miss this event or this personal time or this milestone with my family, and try and strike that right balance.

David Kong:

That's right. That's great. And another question I have is about disappointments and setbacks. We've all faced them. And I'd like to ask you how you found the strength and eventually not only endured them, but also prevailed at the end.

Tony Capuano:

Yeah. As I mentioned earlier, my daughter's getting ready to graduate college and so I probably feel the need to pour as much parental advice on her as I can. And so we've talked often about how much we all learn from failure. You'd never want your child as they head off into the next phase of their life to have always succeeded. I've always been a firm believer we learn much more from challenges and maybe even failures than we do from success. And I believe that has been the case for myself as well early in my career. Deals that I've chased and lost I've probably learned from deals that I thought were the best deals I had ever done. That turned out not to be the case. Made me a better deal maker I think. Jobs that I wanted where I was not successful. In fact the day Mr. Marriott told me that I had been appointed C E o I joked with him and I said at least now I can stop carrying around this letter I've been carrying for 35 years. Because when I was getting ready to graduate from the hotel school at Cornell they do such a great job at the Career Services office. I interviewed with six or seven companies, was fortunate enough to be offered a number of jobs, but I did get rejected by one company and I carried that rejection letter around for years because it was from Marriott. And I reflected on that. But I talked earlier about humility and as I reflected on that, my guess is. As a brash 21 year old coming out of Cornell, I probably thought I knew a lot more than I actually did, and Marriott probably thought this guy knows, needs to go out in the world and get humbled a bit before He's a good cultural fit. And they were probably right. And I think that was a a disappointment I had to overcome. And I was keen seven years later to have another chance to join this wonderful company. What

David Kong:

a great story. I love that. Love! And you're right, disappointments and setbacks are actually learning opportunities. It's not a bad thing that they happen.

Tony Capuano:

I think it's great. I think you read lots of articles about the current culture and this idea of everyone wins a trophy and, failure's not bad. I think it, it strengthens character and at all ages we learn from our failures.

David Kong:

Absolutely. We are coming to the end of this show. I feel like I can talk to you the whole day, but I know you are busy. I want to be respectful of your time. Can you leave us parting advice? Our show is about self-empowerment. What's your advice on self-empowerment?

Tony Capuano:

I probably lean on my father a little bit. He my father's only 20 years older than I am, and so he was actually a student at Johns Hopkins when I was born. And he would go to school all day, come home, spend a few hours with his family. I. And then he worked graveyard shift at u p s loading trucks. And so he always had an extraordinary work ethic and growing up, going through school and even early in my career, I remember him very consistently talking to me about work ethic. And he said there's always folks that are gonna have inherent advantages that you can't overcome. Somebody might be taller than you. Somebody might have more education than you, things that you have no control over. But the one thing that you have control over is the only way somebody outworks you is if you let them. And I think that was a lesson that always stuck with me. And particularly when I talk with young professionals that are just starting their career I remind them there is no substitute for hard work. When I am evaluating young talent, even at our company, one of the things I look at is just drive and work ethic. I know I can teach them all of the tangible skills but it's hard to teach work ethic and drive. And so when I think about self-empowerment, what I would say is if you show up with a smile on your face and a great attitude and an extraordinary work ethic, it's gonna take you a really long way. I

David Kong:

absolutely agree with that. It's similar to the examples that my parents had set for me. I'm an immigrant. I came to this country with the only thing my parents gave me, which was the value of work ethic, believing in being able to succeed through hard work and dedication. That's really good advice. Thanks so much. I know you are very busy and. I really appreciate you taking the time to

Tony Capuano:

share. Oh, it's my absolute pleasure, David and congratulations. Not only did you have a remarkable career and a an extraordinary impact on our industry, but I think this second phase of your career, the work you're doing is incredibly important, and you're gonna have at least as much impact as you did in the first phase. Particularly on the future leaders of our industry. So thank you for all this important work that you're doing. Thanks

David Kong:

very much for those kind words and to our audience who tuned in today to listen to the wisdom of Tony Capano. We thank him. I also thank you. If you're interested in hearing other interviews, please visit our website, www.deiadvisors.org. We hope to see you there. Thanks again, Tony. Thank you, David, on the show. Thank you. See you soon. Thank you. Bye-Bye.