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CEO of Four Seasons, Kathleen Taylor on “You’re only a Good Leader if Everyone is Following You”

Four Seasons’ founder Isadore Sharp knew over a decade ago that Kathleen Taylor would one day take over from him as company CEO.

By: Carolyn Lawrence | Photography by: Matthew Stylianou

The first thing that strikes you as you enter the north Toronto grounds of the Four Seasons Hotels Ltd. corporate head office is the elegant grandeur of it all.

It’s almost an anomaly, a warm, luxurious oasis off of Leslie St., just west of the cold barrenness of Eglinton Ave. and Don Mills Rd.

The building is a reflection of the quality of the luxury chain of hotels and resorts that stretch across the world, from Bali to Shanghai, New York to Beverly Hills, Budapest to London’s Canary Wharf, Beirut to Damascus – 82 locations in 35 countries, currently. During the photo shoot, we learn that the construction of the new Toronto flagship location in Yorkville is on schedule and budget for the June 2012 opening.

The Four Seasons chain is for those who understand and appreciate the best. They’ll tell you the foundation of the company is the quality of its people – the dignity, pride, and satisfaction inherent in them. Four Seasons is a company that has been ranked by Fortune magazine as one of the top companies in the world to work for. That’s an achievement that doesn’t come by chance. The four pillars – quality, service, culture, brand – are at its core.

Company president and now CEO, Kathleen Taylor, reflects that.

She made her way up the chain to its top position after joining Four Seasons in 1989 as corporate counsel because she embraced that philosophy and those values.

Everyone around the office calls her “Katie.” When we meet, it’s just her third official day as the new CEO, taking over from company founder Isadore Sharpay on a Katie was chief operating officer before that. Isadore will sts company chairman, and will remain involved, in large part by continuing to oversee the direction of the design and aesthetics of new and existing hotels, as he has always done.

Four Seasons is a great Canadian business story, started by Isadore in Toronto in 1961 as a modest motor inn, and Katie well understands the fine legacy she is inheriting.

We chat casually before the photo shoot begins, about her three children, all of whom have almost grown up. She talks about life with her husband, and about next steps in her life, as she leads the business into the next decade.

“It’s all about people,” she says, reaching for a tablet on her desk that lists 10 lessons to lead by. “You’re only a great leader if everyone is following you.”

True to form, we follow her lead to start the magazine photo shoot.

Congratulations on your recent appointment to CEO of Four Seasons. How was your first day on the job?

I had a lot of people in the hallways saying, “How do you feel … it’s your first day. Do you feel excited?” I said, “I’m excited.” They said, “Do you feel different?” I said, “No.” So excited, but not different. The job is different, but similar in many ways. I was in the chief operating role for three and a half years. All my direct reports during that period are still all of my direct reports now. The big change for me now is instead of reporting to Izzy (Isadore Sharp) as the CEO, I report to the Board of Directors as the CEO. The company was very shared when he was CEO and I was COO. So this is certainly going to be more responsibility and more people looking to me for future direction and leadership.

How did you make the shift from COO to CEO? What changes, or measurements or preparations, were needed to be made in order to be named?

The COO job was actually a specially created role designed to get me ready to be the CEO. Izzy referred to it as Chief Operating Officer, but read CEO in training. In fact one of my RVPs (regional vice presidents) sent me a really cute note the day the announcement came out that said finally the training wheels have come off the title, which is reflective of what Izzy had said about the role. But it was perfectly designed to signal to the world that someday change would come and some day I would be the CEO. So there was no surprise to anyone in the announcement I think … employees, customers, hotel owners. If you read through all the congratulatory notes it’s all about as we expected, as we anticipated, as we all knew. And Izzy did that deliberately because the company is all about evolution, continuation and all about promotion and leadership from within. So this signal that came a few years back that I was the person that was going to take over from him was very deliberate, very public at the time that he did it. And so through that three-and-a-half-year period, he and I spent a lot of time talking about the things I should be thinking about differently and the things I should be doing differently. So during that period, I obviously had a lot more responsibility as a Chief Operating Officer because that shift was really big. I went from leading the business side of the business with someone else leading the operations side of the business to me leading the whole business. So I got a whole bunch of new direct reports at that time, new responsibility. So taking on all of those new areas, learning them, learning them from my direct reports, but also from my own personal experiences, becoming more involved with my senior leaders around the world, more involved with our hotel owners around the world, more involved with our key customers and guests around the world … all of that was part of the “training period.” So the transition has been very methodical and very planned and coordinated. There has been a lot of change over that three-and-a-half-year period, which really means there shouldn’t be a whole lot of change in my life going forward. There will be some, I don’t want to underestimate it, but the bulk of it has occurred. This is the first CEO in Four Seasons history that is not the founder, so it’s not just any transition, it’s the most important transition the company will ever have and so it had to be very thoughtful, it had to be very deliberate, had to speak to the hearts and minds of particularly the employees, but certainly all the other stakeholders who helped make the company successful.

How did you make the transition from a lawyer to corporate counsel to operations and eventually the role that you hold today? What were the gaps in your knowledge and skill set that you sought throughout that journey and how did you develop and train yourself to be at the top?

So how I got to business from law, you have to go back a little bit before that and say okay what did I do before I got to law? So before I got to law I did a political science degree at the University of Toronto … loved university. I was the first kid in our entire extended family to go to university and it was just the greatest experience I’d ever had. So I wanted to stay in university as long as I possibly could. So I found a joint program at Schulich (School of Business) and Osgoode (Hall Law School), which was going to take another six years to complete, so it was perfect. I get a law degree and an MBA, then do articles, then do bar admissions and wasn’t this terrific. The good news is my father thought it was terrific too. I came from a very modest family upbringing, but he was prepared to help financially, he gave me a little bit of financial assistance and off I went. I graduated from that program, where most people became investment bankers. So I was a very unusual type because I decided at a very late point in my process of graduation that I was going to practice law for a little while. Looking back on it, why did I do that? I think primarily because my dad really thought it was important. I think that’s why I ended up at Goodmans LLP. Why Goodmans is a whole other story, but that’s why I ended up in law. But as I did my rotation through Goodmans, I was particularly attracted to the types of law that are very business-oriented. And I could see that I wasn’t very interested when I was in the litigation department. It was okay when I was doing administrative law, but when I was in the tax department, the bankruptcy department and then in fact the securities department, which is where I spent my three years, that’s where my interests really lay. Then when the market crashed in ’87, I went off to the securities commission because there was nothing really to do after Black Monday in 1987. And while I was at the securities commission, my former mentor from the law firm, who had become the General Council here, called and offered me a job. I was ready for a change. I had started dating my husband, who was another lawyer at Goodmans. So that relationship wasn’t sustainable if the two of us were going to stay there. So I moved, and I moved to this company really to get that change from law to business. I wasn’t looking for a career in hospitality. I didn’t think Four Seasons was the greatest hotel company on the planet. I didn’t know anything about hotel companies or the hotel business and all of that I learned after I got here. I also didn’t expect to stay that long. If you remember I told you, I had been an undergrad and being educated for ten years. So by the time I got to work I was way behind my cohort. Some of them had mortgages, some of them had families. I had a lot of catching up to do with my career. So I really did expect to come here, stay for a few years, get some great business experience and then move onto the next business opportunity. My boss David was about the same age as I was, a very capable, smart guy. And so I could see a whole lot of head room in career opportunity and in 1993 he left and that’s when I got my first big break with Four Seasons. I was a brand new mom, I had just had my first child and I hadn’t been here that long, by Four Seasons’ terms. I had only been here three and a half years or so in a company where people pride themselves on twenty plus and some of that was on maternity leave. I was a newby. And yet Izzy and Roger — Roger was my then boss after David left — discussed it and said let’s give her a shot and let’s see if it works. So they gave me his job, which was pretty remarkable to me. And at that time I was probably too excited to actually reflect on the meaning of that moment. These guys said we trust that you are going to be able to succeed. Because they put their trust in me, I stayed, I loved it. I guess Izzy would probably say that years ago he saw something in me that he liked. We started working most closely together in 1994 when he was looking for a strategic investor. And during that process, because I was very involved in leading that investor search process with the investment bankers and the lawyers, because of my role as general counsel, Izzy and I started working a lot together. And from that moment on, again I can see looking back, he was managing my career … so you’re doing that very well so why don’t you oversee some responsibilities for development. So in the mid 90s I became the head of development, in addition to my other duties. And in the later 90s I took on responsibility for corporate human resources. So gradually, every couple of years,

Izzy would add some responsibility to my job. And then in 1999 John Sharpe and Roger Garland — John Sharpe, no relation to Izzy Sharp — they were the two chief lieutenants of the company. John had run worldwide hotel operations for his career, Roger had run the business side, we all reported to him. They were both ready to retire. And so Izzy had to decide who was going to succeed them, so he picked me to succeed Roger and he picked a former colleague of mine, Wolf Hengst, to succeed John Sharpe. And so for the next almost seven years, Wolf and I served the company as co-presidents. And I ran the business side of the business and he ran the hotel operations side of the business, but we essentially ran the company together. And he taught me piles and piles, an immeasurable number of things, about the hotel operations and I’m sure he learned a few things from me about the business side. It was one of those great partnerships. And then Wolf decided he wanted to retire. That was in mid 2006 and that’s when we come current to this story and I become chief operating officer. Wolf retires and now the whole company reports to me and I report to Izzy.

What do you think were the keys to your success? What were the characteristics that Izzy identified that you had?

I think there are a few things. One of the things he saw in me was that I was tenacious. It didn’t matter what the task was, as long as I focused on it, eventually I could figure out how to move it forward. So hard work is kind of an over-used phrase, but it’s hard work combined with focus. Because just working hard isn’t enough, you really have to have your eye on the ultimate objective. He saw in me an ability to get along with everyone. I read in some magazine not too long ago that somebody said, it’s a whole lot easier to promote people and advance people’s careers if they are getting along with everyone. And so that was just how I was brought up. It wasn’t necessarily a skill, it was an innate way that my parents taught me to be, which is that there is no reason not to get along with everyone. And so I approached business the same way, which is how do you work with people, how do you get them what they need, how do you get what you need, but everybody is a winner. And so, that was my approach not only to my internal relationships, but also more importantly, to my external relationships. And I was, in my young time in the company, the chief negotiator for us and all of our major business deals. And I had learned early on that these relationships that we work on at Four

Seasons are extremely long-term. We build up to 80, 100 years that these relationships are supposed to last, longer than most human marriages. And so when you think about negotiating a kind of deal that everybody is going to be happy with for that long of a time period, you have to be negotiating it with a view that you’re going to continue to be living together forever. So it’s not a scoreboard, it’s not I got more points than you got, because that doesn’t work in marriage and that doesn’t work in business either, particularly if you’re going to continue to be in a relationship with people, learning to only worry about the things that really matter and give the person what they need. I think young women of all kinds are particularly well suited to thinking about life that way because we are programmed to try to get along, to try to make relationships work. Whether it’s raising children or sorting out brothers and sisters or sorting out girlfriends, it doesn’t matter what it is, we grow up learning to collaborate and to problem solve with other people and get to the right answers. And so, that for sure was part of it.

How do you balance being a mother and now a CEO?

Well I get asked this question all the time by young women and young men alike because the thing that’s different about it is this generation of young people is different than my generation. Women weren’t worried about it in my day. I think now women and men worry about it practically even now, because young men want the same things, in terms of being a father, wanting balance, wanting time. But we still have to have the babies, so there is no question that the challenge is bigger on the female side. What I tell the young people is forget about the word balance. We keep hearing this phrase work, life, balance. There is no such thing. It’s work, life, imbalance. You are constantly in a state of imbalance. The trick is to make it look like you |are not and it’s like the tree pose in yoga. You are in a constant state of imbalance and the trick is to not let that wobbliness show. And how do you do that … well, it’s all about compromise, it’s all about which choices do you make, which things are you going to prioritize. And the notion that you can have it all … you can have all of some things, you can’t have all of everything. The formula for getting to perfect imbalance is intensely personal. I always remind people to think about what re-energizes them. Where do you draw your energy from? Something recharges everyone’s batteries. Figuring out what that is and making sure that’s a priority is a big first step in making sure that you get balance in your life. For me it was actually very simple, because I love business.

Business is my hobby. So I love work. It’s what I like to read about, it’s what I like to think about, it’s what I like to talk about. It’s what intrigues me. On the other side of it, I love being a mom, I love being a wife, all of those things I think are very fun too and I very rarely do them both together. I remember when the kids were little, I’d go home from work thinking about work all the way home, talking on the phone all the way home, making a to-do list for the next day all the way home, you walk in the back door … “Hi mommy”… gone. It’s like the door closed on that and now your focus shifts. I used to kid that my kids were like a spa treatment. Even if they were crying and making out like bandits, it didn’t matter, it was the shift of my mind and my energy to a different place that actually gave me a rest from business. Then I can remember being on maternity leave and thinking, I gotta get back to work because I needed the break from that and so interestingly, doing both of those things together has helped me create my optimum imbalance, if I can call it that.

Back to the business. I noticed that you are planning a lot of expansion for Four Seasons hotels. Can you tell me about that, and if you’ll continue the aggressive expansion as CEO?

Yes, absolutely. As I said earlier, my work at the company has always been on building and expanding the organization and that’s the side that I grew up in. It’s kind of exciting now to watch hotels either that have just opened or are about to open, that I was directly involved in a few years ago. There are lots of other capable people running development these days, but there is no question that our pipeline is as strong as it has ever been in the history of the company. We have over 50 projects in some stage of development, design, construction, whatever it is. Those should open in the next seven to ten years. We have four openings this year, not including the two that are reopening, London and Nevis, so if we include those in the mix that will be six this year. We’ve got three or four next year and a lot coming in ’12 and

’13. So it’s a very busy development schedule and that’s going to continue to accelerate we think.

Have you had to make any adjustments to that plan given that we just went through a recession? Have your customer’s needs for luxury changed?

Well, two things. We did have an adjustment as a result of the disruption of the capital market. So we’ve had a handful of projects that have kind of been delayed as a result of the inability of the sponsors of the projects, of the owners of those projects, to obtain commercial bank loans and financing for those projects. So that for sure has happened, but a lot of those are starting to rekindle. The operating environment has gotten a lot better, so the confidence around those projects going forward has improved. In terms of the shift in what has happened with luxury over this period of time, it isn’t nearly as significant as one would believe, having read the press. There’s a huge amount of politicking that went around the business of luxury during the recession. Part of that was fueled by what was going on on Wall Street, part of that fueled by some anecdotal stories of AIG sales people being at the St. Regis (resort and spa) in California, and that created a whole aura around luxury which has largely dissipated. The notion that luxury hotels are only about pampering and excess is largely misplaced. I mean luxury hotels, particularly Four Seasons hotels, are designed, really, with the value-add to the customer in mind. This is all about providing services that fill in for the ones the customer left at home or in the office. So when you think about the true meaning of luxury, it’s really all about maximizing the value of the customer’s time or the guest’s time, time being our most precious asset, because it is the one thing that even the richest people in the world cannot buy anymore of. So when you waste your time when you’re travelling on business, or you waste your time when you are travelling on leisure, because your stay hasn’t gone right, then your return on your investment of your travel dollar has gone way down. And our business is all about making sure that we maximize the return on your travel dollar and people pay a premium for that, but the idea is that the premium you pay is less than the value add to the efficiency of your business trip, the quality of your incentive meeting, the quality of your board meeting, or the value your family gets out of your vacation setting. And we haven’t seen the needs of that traveler change in this period. The basic idea that I need to get the most out of this business trip that I can get is something that I think is just good business and that’s not going to change. Customers are just as demanding as they’ve ever been. The notion that people would pay less and get less, it doesn’t make sense. It doesn’t happen in other businesses, why would it happen in the hotel business. And so what we have seen in this period are customers becoming increasingly demanding in their expectations.

As the CEO, what’s your most important job?

My most important job is to continue to inspire our employees to come to work every day and provide the greatest hotel experience on the planet because that is what will drive revenue into our hotels, profitability into our hotels, making our hotel owners more successful, making them want to build more hotels, ultimately creating revenue for the company and making Four Seasons a greater success going forward. And the more successful our hotels become, the more people want to do business with us, the more new hotels we build, the more new customers we have, and ultimately that is what feeds the constant success of the company. So the key stakeholder relationships are all around the employees, the employee’s connection with the guest. All of that adds value to our hotel owners and ultimately adds value to the company. And continuing to focus on product excellence is also a very important part. I’m personally going to have to drive that going forward because with that rapid expansion plan we have to ensure we have leadership excellence on the ground in each of these hotels so that they become the best when they open and they are known for being the best. That becomes the Four Seasons face to the world. It has to be terrific and it has to only be the best experience. We have the best people, the best product and ultimately deliver on those guest expectations.

As a female CEO, what is your perspective on what you bring to the role of CEO? Do you see that the number of women holding roles like yours is growing? Do you see it as an evolutionary or revolutionary process?

I think it is definitely growing in Canada and everywhere. Our industry happens to be an industry where there are not a lot of women leaders, but there are a lot more women general managers in hotels than there were ten years ago. There’s more coming in the future and I do think it’s an evolutionary process. It’s a combination of the businesses and the industries being ready for women leaders. As well that openness and that readiness has to intersect with people being ready to take on those leadership positions, and it has to be women that are ready for those moments of leadership. And not all people, men or women, aspire to those roles. They are very demanding and very time consuming and at times can be very stressful, but at the same time are very energizing and very exciting and you get to move lots of interesting work. So I think it is an evolutionary process. I think there will be lots more women in the next generation who look back and look at our generation and the one before us and the one before that and, say, yes, that was just part of the building block. But it won’t truly be that relevant to the world that they live in ten years, twenty years from now.