Monday, 19 November 2018
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Mark Hoplamazian of Hyatt Hotels on Airbnb and Why Stupid Questions Are Smart

Mark Hoplamazian of Hyatt Hotels on Airbnb and Why Stupid Questions Are Smart
20 Oct
12:13

Mark Hoplamazian, the chief executive of Hyatt Hotels, has worked for one family for the bulk of his professional career.

He attended Harvard College and got his M.B.A. at the University of Chicago. After short stints at First Boston and the Boston Consulting Group, he joined the Pritzker family’s sprawling business empire in 1989.

Inside the Pritzker organization, Mr. Hoplamazian got an intense and varied introduction to business, working closely with Jay Pritzker, the family’s influential patriarch, on companies including Hyatt Hotels and the industrial behemoth Marmon.

But in the years after Mr. Pritzker’s death in 1999, a family feud erupted, and it fell to Mr. Hoplamazian and his team to dismantle the Pritzker empire and try to appease warring factions. Eventually, Mr. Hoplamazian was made C.E.O. of Hyatt.

This interview, which was condensed and edited for clarity, was conducted at the Hyatt Centric Times Square in New York City.

What did your parents do?

I grew up outside of Philadelphia. My father ran a landscaping business. My mom never worked outside the home, so she was the glue of our family. But I kind of lived a couple of different childhoods, because my father passed away when I was 13. My life hit an inflection point. My whole focus on school shifted after my dad passed away. I was the youngest of five kids, my dad had been the breadwinner, and I became hyper-focused on “How are we going to live and survive?”

What was your first job?

In the landscaping business, there are many different things you can do even as a kid — taking ivy cuttings and planting them in little peat pots to let them grow, digging trees, a lot of physical work. That’s what I would do for summers and on weekends from the time I was 10, or even younger. I was driving tractors and trucks when I was 13, 14 and 15 years old.

Is that legal?

No. In fact, when I was 15, the first time I ever drove a truck on the road there was an amazing blizzard. It was 1978, I’ll never forget it. It hit the whole East Coast. My brother had a contract to clear snow at this huge parking lot area, but he needed someone to drive one of the trucks over there to have it be available. He said, “Just get in the truck. I know you can drive it, because you’ve been driving around the nursery. Just follow me.” We get on the road, and there was so much snow, and I’m driving illegally at that time. The good news is, there was nobody else on the road.

How did you wind up joining the Pritzker organization?

A friend of mine was working with them, and I got a call from him. He said, “So we’ve decided that we’re going to probably hire someone of your experience level. Why don’t you come in and meet Jay?” I show up, and sitting at the table was Jay, the head of the machinist union at Eastern Airlines and his lawyer. Eastern was in bankruptcy, and so they were there pitching Jay on stepping in to take over the airline. At the end of that first meeting, Jay hands me the box of information they brought, and this was on a Tuesday. He said, “Why don’t you come back on Friday and tell me what you think we should do?” I didn’t know anything about airlines, and I knew even less about bankruptcy. That was my interview.

So what happened?

I came back on Friday, and I fumbled around, I guess, well enough for him to say, “O.K., the kid’s not a complete idiot.” Jay elected not to move forward with it.

When you joined the Pritzker organization, what did they have you do?

Their portfolio was very wide and broad. But it was a tiny organization, so the stuff that I was involved with was everything from selecting members of management teams to negotiating operating contracts for businesses and then doing financing. It was like up and down the functional dimensions and across many different businesses. It was great, diverse kind of business experience.



How did you develop as a leader during this time, especially given that the organization was pretty small?

There was a highly complicated deal that we did in joint venture with an Israeli company to launch a new business jet. Wildly complicated transaction. It was my deal. Jay basically said, “Go see if you can make something work out of this.” It was very, very, very challenging. There was lots of internal opposition.

It was really a lesson in perseverance. I had to say, “No, actually, I believe in this, and I think I can get this done. I’m going to compel myself to get it done even in the face of a whole bunch of opposition.” Ultimately it was a very successful deal. And my position in the organization changed after that. When you walk through that barrier, you have a different sort of posture with a lot of other people.

You were there when the Pritzker family sort of unraveled.

In the case of the Pritzkers, I describe them as sort of like communists in some ways because it was definitely a collective effort. Jay’s whole philosophy was: I’m here helping the entirety of the family advance. It wasn’t about my personal wealth versus others’. In fact, the whole structure was a complicated trust structure for the benefit of all the family members.

That is really the fundamental thing that changed when the food fight hit. The assertions were about lack of transparency and understanding how all this stuff actually worked. Most family-owned companies fall apart after the third or fourth generation because you have people who are involved in the business, and then a whole bunch of people who aren’t.

What was your role in the whole affair?

Our group was responsible for mapping out how we were going to unwind the entire portfolio. We were holding these family meetings where all the principal beneficiary groups were coming together. There were more lawyers in the room than there were family members. It was like having the first annual meeting of an enterprise that was three generations old at that time, and I was the M.C. I had to stand up in front of the entirety of the family and lead the meetings. I did that for five successive years until I left to go join Hyatt.

Then you started running Hyatt. What was it like moving from a small family business to a big company?

It was pretty intimidating in some ways. I came into the business, and I was pretty ignorant. I knew a lot about the financial and tax structure of Hyatt because I had helped put the company together in the whole family reorganization. But I didn’t really know the business; I didn’t grow up in the business. That level of ignorance was super powerful because it just let me ask a whole bunch of stupid questions, which served me extremely well. Those simple questions often led to interesting discussions about why we do certain things the way we do, and that led to changes. But it was organic as opposed to me coming in thinking that I knew better. It was actually the result of inquiry.

What’s the biggest challenge facing the hotel industry today?

The sharing economy is one. Of course, Airbnb is like the poster child for that because they have grown so quickly. The lesson for us in Airbnb when they first started was that a lot of what that customer experience was about was the attractive human interface between a guest and a real human being on the other side, not a trained professional. But the company has evolved. No longer is it typical that you’re renting Aunt Millie and Uncle Ed’s apartment, but it’s Industrial Apartment L.L.C. #5 with 45 units in a building. It’s become very institutional.

I think Airbnb spurred a lot of focus around purpose and empathy and care as the cornerstone for why we existed, and from that perspective I think it’s been great, because that’s been tremendously beneficial in leading the company since then.

You use the word empathy a lot. What are you getting at?

We’ve focused a lot of time and attention on mindfulness as a key capacity. In order to practice empathy, you have to be present, and one great vehicle to being present is to be mindful. Mindfulness became the central element of our wellness investment. Miraval and Exhale, our two brands that we bought, their foundations are around mindfulness, a mindful approach to nutrition, yoga, fitness, you name it.

To me, first and foremost, I want people to be present, to be able to engage and really glean what’s going on with someone. Don’t be so focused on executing the checklist and the services that you’re supposed to provide to them that you’re skipping over what’s really going on with that person.

A LinkedIn reader, Billy Byrne, asks how that focus on empathy translates to your corporate culture.

It’s actually one of the things that we can do that is maybe not unique to our industry, but powerfully enabled by our industry. That is, bringing people with low skill sets into a vocational path that allows them to advance and have a career. One of the key problems in the United States, and actually this is a global phenomenon, is you have a large and growing number of people who are essentially disenfranchised. They’re young people who are out of school and out of work. To me, this is the area of focus that we should apply ourselves to from a philanthropic effort, but also from a fulfillment of our purpose perspective. Bringing more and more people out of that community into our industry is something that we’re focused on.

Source: https://www.nytimes.com/2018/10/19/business/mark-hoplamazian-of-hyatt-hotels-on-airbnb-and-why-stupid-questions-are-smart.html

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