Leadership: What it takes to get through Tough Times

Every now and then I check out Bill Marriott's blog. Yes, Bill Marriott as in Courtyard Marriott and Renaissance Marriott, etc. In today's comments, he talks about commitment, and leadership, and what it takes for a businessperson to get through these times and come out stronger and perhaps well ahead of competition. Here is an edited version:

"I've been through eight recessions in my lifetime and, while this one feels deeper and less predictable, I've learned what companies like Marriott need to do to come out strong. Cost cutting is obviously the key to survival today. But the wrong kind of cuts will delay a comeback and erode our competitive position. We need to invest in people, product and service innovation that will reap benefits in the future.

With fewer people checking into our hotels, we've been forced to eliminate some positions. For me, that's the toughest part of the job. I believe sacrifices must be shared and so I've informed the Marriott Board of Directors that I will decline two thirds of my compensation in 2009. All of our senior executives are seeing significant decreases in their compensation as well.

As we think about strength and vitality going forward, I'm also proud to announce some shifts in our management structure that I believe will put us in the strongest position for the future. Effective May 1, Bill Shaw, our current President and COO will become Vice Chairman of the corporation overseeing Global Finance, Owner and Franchise Services, Architecture and Construction, Information Resources and will be Chairman of our Corporate Growth Committee. In his 34 years with Marriott, Bill Shaw has provided tremendous leadership, especially during the past 12 years when he oversaw global operations across all of Marriott's brands. Bill has assembled a first rate management team with expertise second to none in our industry. He has been at my side through recessions in the '80s, the '90s and again in 2001. His wise financial judgment was and continues to be invaluable.

Arne Sorenson, our current CFO and President for European Lodging will be promoted to the position of President and COO, effective May 1. Since joining Marriott 12 years ago, Arne has rapidly emerged as one of the top senior executives in the hospitality industry. He has shown tremendous range and success across a wide scope of disciplines that positions him uniquely for a larger leadership role in our company at a time when both the challenges and opportunities for growth are terrific. In his new role, he'll be responsible for the performance and growth of our brands and businesses throughout the world.

Carl Berquist, currently Executive VP, Financial Information and Enterprise Risk Management, will become CFO, reporting to Bill Shaw. Carl joined Marriott in 2002 after a brilliant career at Arthur Anderson.

The steps we are taking today are important and will put Marriott in the strongest position for a successful future. In these unprecedented times, the company is fortunate to have extraordinary executives who will expand our industry leadership and drive long-term opportunity and growth.

This economy provides a tough environment for any company. But it's a wonderful environment for learning. Over the years, Marriott has assembled a fine team of top executives with tremendous scope and range through a process of rotating them through every part of the business. In fact, our success with this leadership development strategy is profiled in the current issue of the Harvard Business Review.

This economy puts all of us to the test. And yet, I am confident we have the people, the places and the sense of purpose that will prevail. On Inauguration Day, we took out an ad in USA Today to mark the historic presidency of Barack Obama. It listed all the conventional wisdom that has been proven to be wrong in our history:

• That you can't abolish slavery.
• That you can't give women the right to vote.
• That you can't fly an airplane from New York to Paris.
• That you can't cure polio.
• That you can't put a man on the moon.
• That you can't beat the Russians in hockey.
• That you can't elect a black man President of the United States.

But we said, "Yes we can!"

That's how I feel now. We're at a crossroads. Things are tough. But when it comes to building a better future, with more opportunity for our associates to welcome millions of guests at more than 3,100 beautiful hotels around the world, I know the answer is: Yes we can!
I'm Bill Marriott and thanks for helping me keep Marriott on the move."

Planning to Retire - What happens to your business?

Many independent repair shops in the U.S. are family-owned and family-operated. Many are second-generation, and a small portion of third-generation shops that have successfully passed from the original owner to the next. But some of you own a great business, you might be in your late 40's or mid-50's, and you haven't given a thought to what might happen when you plan to move on. You're not unique. According to the Wall Street Journal, full half of public and private corporate boards do not have a formal CEO-succession plan in place. Even giant corporations like Merrill Lynch and others who spend millions of dollars recruiting and training employees, don't think about who might run the joint once the "big guy" leaves.

For some owners of small businesses, it's a simple process. You decide to retire, no one in the family wants to carry the business on, so you try to sell your shop as a viable operation or you simply close your doors and try to sell the property.

You might say to yourself, "I'm just trying to get through today, or this week. I don't have time to think about 5 or 10 years from now." But in reality, if your retirement is 5 to 10 years from now, NOW is the right time to begin thinking and planning. In order to build a successful business that will continue to thrive after you are gone, you need to groom the next leader of your business over a 3 - 10 year timeframe.

Succession planning isn't something you do on a Saturday or Sunday, and then consider it done. It is a process of filling a pipeline with talent. And believe me, I speak from experience, it can be difficult to groom the future leader of your company. Sometimes people fire people they are afraid might be "too good" for their current position, they may feel threatened by that person's expertise. You might be better off subordinating your fear, and instead, encouraging the professional growth and leadership abilities of that person. You might be pleasantly surprised.

You should consistently review the performance and talents of your people. Don't surround yourself with people who always agree with you - use other people to expand your own expertise. Be willing to share power with potential heirs, and give them the authority they need to grow. At the same time, give them the tools they need - this may include additional education. Help them handle a variety of challenges. As they grow into the position, you will probably grow as well. Focus on the future of your business, and not on last week's work. Our business models are changing more rapidly than in previous years, and you need to find or develop a leader with strengths and talents that are different from your own. Learn to share the load, embrace the change that will come with new leaders in your business, and eventually you will be able to retire with confidence that your business will thrive and grow well after you're gone.