Interview with Simon Cooper (Part 1)
In part one of this two-part interview, Simon Cooper, Former President of The Ritz-Carlton Hotel Company, L.L.C., sits down with The Ritz-Carlton Leadership Center (RCLC) to talk about his experiences and insights on leadership. Mr. Cooper recently joined The Ritz-Carlton Leadership Center as an Executive Speaker.
RCLC: From 2001 to 2010, you served as President of The Ritz-Carlton Hotel Company. What did you most enjoy about that role?
Mr. Cooper: I would choose two aspects of the role. The first has to be the development of our Ladies and Gentlemen. In 2001, we began a major move into the Middle East with the openings of our Istanbul hotel and our hotel in Doha. Istanbul was staffed almost exclusively with bright, well-educated Turks who over time became a terrific cadre of leaders for our expansion in other Muslim countries. The walls of the employee Dining Room are covered in pictures of Ladies and Gentlemen [Editor’s note: Employees at The Ritz-Carlton are referred to as Ladies and Gentlemen] who began their careers at The Ritz-Carlton, Istanbul before moving to other hotels in the system. The Ritz-Carlton, Doha, on the other hand, was primarily staffed by contract employees from other countries. We had 56 countries represented on the team and that created obvious challenges but also created a wonderfully diverse workforce. I still remember that we had only two gentlemen from Nepal in 2001, and now I believe that Nepalese make up the largest contingent on the staff. After Doha and Istanbul, the big push was China and to stand before 500 new Ladies and Gentlemen in Beijing or Chengdu and to see how they responded to The Ritz-Carlton way of caring for its employees was exhilarating and humbling. Yes, we developed the hotels around the world to serve our guests, but the lasting impact that we could make on the lives of those who worked for us was what gave me the “buzz.”
The second thing that I really enjoyed was opening hotels in locations that either created new destinations or acted as catalysts for new business districts. The Ritz-Carlton, Reynolds Plantation in rural Georgia replaced the penitentiary system as the largest employer in Green County when it opened, and it has “anchored” a very successful community and lifetime careers for locals. The Ritz-Carlton, Berlin was the anchor for the redevelopment of the Potsdamer Platz in Berlin, and the foundation of the Berlin Wall is steps from the front door of the hotel. The Ritz-Carton, Georgetown was built out of the shell of the building where Washington, D.C. incinerated its garbage. The Ritz-Carlton, Sanya was the first five-star resort in what today is China’s “Florida,” and has probably been the most successful hotel in terms of financial results for the last five years. The Ritz-Carlton, Hong Kong was a leap of faith when we agreed to move the brand with Sun Hung Kai Properties from Central across the harbor to Kowloon. Fortunately, the 100 floors of office below the hotel are occupied by financial services that moved across with us. I could go on because every hotel has a story and to one degree or another that story is about changing lives for the better.
RCLC: During your tenure as President, the company achieved unprecedented growth. What did you do as a leader to impel and nurture this growth?
Mr. Cooper: Our growth is totally dependent upon our ability to identify the right partners who are willing to choose us to manage and brand their development. I think that our ability to find the right partners was part of our success, but having identified a potential partner there were two critical elements that entered into the equation. First, nothing speaks louder than results. We needed to be able to convince an owner that we were the best operator. In 2001, there were probably only two or three obvious competitors for city hotels and many more for resort hotels. Four Seasons was by far our most significant competitor and in the first half of our growth journey they were a public company and it was relatively easy to demonstrate that we performed better. However, nothing would convince a prospective owner better than the recommendation of an existing owner. This brings me to the second point—which is to always maintain open and honest dialogue with owners. In my first year on the job, I organized an Owner's Meeting. I did not have support from some who were concerned that I was providing a forum for our owners to share grievances; but fortunately, it turned out to be highly constructive. Through these meetings, the team and I developed wonderful relationships that transcended business and more importantly created a platform of trust.
RCLC: What were some of the greatest challenges you faced in your role as President?
Mr. Cooper: Probably my biggest challenge was taking over from my predecessor, Horst Schulze. Horst was revered across the company and the industry, and for the Ladies and Gentlemen, he “walked on water.” I used the line internally that even though I was the new “chef” I was not planning to change the menu. I waited about two years before I really began to reshape the brand, and those years were busy ones with the aftermath of 9/11 and the opening of a dozen hotels. Horst was a visionary legend, and it is not always easy to follow leaders like Horst who have made such an indelible mark on a company. How do you follow Richard Branson?
RCLC: Toward the end of your Presidency with the company, the country was facing difficult economic times. What did you learn about crisis leadership?
Mr. Cooper: I had two big learnings. The first is the role that the leader plays in determining the purport of the crisis. This is a decision that can benefit from a lot of opinions, but at the end of the day, it is a hugely significant decision that only the CEO can make. Let me contrast two crises. 9/11 was a horrendous act, and it had an immediate and dramatic effect on the hotel business and travel. However, although far from forgotten, people would get back to their daily lives, and come January the rush to our Florida resorts was close to normal. If the crisis is short-term, it makes sense to use all the temporary tools available to flex labor—because in a couple of months, it will be business as usual. However, contrast 9/11 with the 2009 Financial Crisis. There were a couple on my team who counseled for the 9/11 approach, but along with the majority of my team, it was my determination that the impact of the crisis would be at least a year and indeed in North America in 2009 our revenues fell 22%. As a result of that decision we had to let go Ladies and Gentlemen for the first time at The Ritz-Carlton—not a decision taken lightly and one that clearly impacted a lot of people. We let go/laid off over 800 leaders/supervisors in North America.
The second learning was the power of communication. Our team and I communicated relentlessly. We employ smart people, and they know what is happening in the world and especially how the crisis is manifesting itself in their hotel’s occupancy rate. They want to be spoken to with candor so that they can plan their lives. In a crisis, I do not think that one can communicate too much. The only consolation that I had from the Financial Crisis was that the engagement scores of our leaders at the end of 2009 exceeded those of the prior year. We came out of the crisis in great shape and broadly we enhanced our levels of trust with our owners and increased the engagement of our Ladies and Gentlemen.
RCLC: What do you think are the most important character qualities or skills that a leader should have?
I view qualities and skills as quite different. Qualities are the inherent values that have been instilled in us, and skills encompass a range of leadership tools that we develop over time. Perhaps more succinctly: who we are versus how we behave. Two qualities that I will highlight are ambition and trust. Ambition is a quality that is not always viewed as positively as I think it should be. Ambitious people are not satisfied with status quo, and they are constantly looking at ways to improve themselves as well as the outcomes of the organization or group that they lead. Can you imagine a high performing leader who is not ambitious?
Engendering trust is an absolute must in business today. Trust is hard to define because it is different for all of us, but I am sure that each one of us can look back over our careers and identify leaders that we trusted and those that we did not, and I am equally sure that there is a perfect correlation between those leaders that we trusted and those that we considered to be excellent. And remember, trust is built by numerous small interactions over time and is broken by a single action. Trust is fragile, but vital if one wants to be an effective leader.
RCLC: Can you share an example of a classic leadership principle that is still effective today?
Mr. Cooper: “Vision” is the most fundamental principle upon which all great leaders build their business, country, church or any other enterprise. From the earliest of times until today, the ability of a leader to develop a vision and effectively communicate that vision to those accountable for execution has been the foundation for success. Consider the vision of Richard Branson, one of the founders of Virgin Atlantic. He went up against British Airways with one plane when British Airways had over 300. Branson’s vision was backed by a business plan that created enormous customer and employee loyalty. His success underscores the importance of being able to marry execution with a great vision. Likewise, Christopher Columbus pestered the Spanish Crown with a vision that he could reach the Spice Islands of Asia by sailing west. This reminds us that in executing a vision we need to be prepared to change course when reality negates the original idea. I do not think that any business, team or group can succeed without a vision and perhaps, more importantly, a vision should never be static.
Mr. Simon Cooper is available to speak with organizations about crisis leadership, the principles of timeless leadership, international expansion and building effective teams.