Katie Taylor, newly appointed chief executive officer of Four Seasons Hotels1--Sarah Dea
Visitors to the Four Seasons Hotels Inc. headquarters in Toronto are greeted by a larger-than-life-portrait of founder Isadore Sharp, a tribute to his decades of leadership and his legendary commitment to luxurious quality.
The giant canvas suggests he's gone and needs to be remembered, but nothing could be further from the truth. Company veteran Katie Taylor, who took over for the business icon as chief executive officer last month and is now responsible for overseeing the most rapid expansion in the chain's history, knows she will continue to work under his watchful eye.
Although Mr. Sharp has given up the top job, he has retained control of many aspects of the famed chain's operations, including the design and development of new properties. He knows the brand, he says, and nobody can defend it better.
"The role of founder lasts forever," Mr. Sharp says. "I told her this when I made this decision."
Taking over from a legend is never easy, and it's even harder when an industry is coming out of the most difficult period in its history. Ms. Taylor's challenges are many - financing for new projects is hard to find, room rates are depressed and corporate executives are cautious about spending money on luxury hotels.
To top it all off, she's working with a founder who isn't afraid to firmly step back into the company's business. But Ms. Taylor is confident she can put her own stamp on the chain.
"There are similarities between us and there are certainly differences," Ms. Taylor says. "I'm a different generation. He'll be 79 this year; I just turned 53. I have a different outlook on the world."
The two have enjoyed a symbiotic relationship over the last 10 years, and she has been effectively running the company since being named chief operating officer three years ago. The trust between them runs deep, and is based on the premise that nothing is more important than preserving the Four Seasons brand through tight quality control in every aspect of the chain's operation. Prospective hires face at least four interviews before being offered an entry-level job. High standards of customer service are deeply ingrained in the company and everyone is expected to buy in.
"This is not corporate PR - Issy lives by those rules every day and it is the secret of the Four Seasons brand," says Michael Smith, an analyst at Macquarie Securities who covered Four Seasons before it was taken private in 2007 in a $4-billion deal backed by Bill Gates and Saudi Prince al-Waleed bin Talal that left Mr. Sharp with a 5-per-cent stake.
"The relationship between Issy and Katie will be one of continued mentoring and Katie will have to convince Issy that any change of direction she wants to take will help the brand and not hurt it," he says.
Success will not come easy. Competition is tough in the luxury hotel business, with Marriott Hotels, Hongkong & Shanghai Hotels and Starwood Hotels & Resorts all vowing rapid expansion in countries such as China.
Because Four Seasons manages hotels, but doesn't own them, Ms. Taylor and her team must find competent and well-financed partners who are willing to buy into the brand and sign long-term management contracts that give Four Seasons final say over virtually every aspect of their operations.
It's here that Mr. Sharp thinks he will be of the most help. He's intimately familiar with how to develop properties, and says he will take over the process once Ms. Taylor has decided to move ahead with a project. The new developments are in far-flung locations such as India, China and Brazil.
"The role I'm continuing to control is the new developments and the aesthetics of the company," he says. "Nobody else has ever done that, and it's what I enjoy. The fact is there are 50 projects under development, and it's a big chunk I can take off of her hands."
Luxury hotels were devastated by the recession, taking a bigger hit than the rest of the market as publicity-conscious executives shied away from spending on upscale rentals. Both Ms. Taylor and Mr. Sharp believe the worst is behind, although the industry likely won't return to growth until next year.
"We had the general recession, we had the credit crisis," Ms. Taylor says. "And for the first time in my experience we had a politicization of the business and it suddenly became inappropriate for people to travel to luxury hotels. I think that's dissipating now to a large degree."
In Ms. Taylor, Four Seasons has a seasoned business executive who built her reputation in law before moving to the operational side of business. She didn't know anything about the hospitality industry, but was a quick study. She was soon named head counsel, and her intellect shone through at management committee meetings.
Even in those early days, she left an impression on those who dealt with her on business deals. Alam Pirani, who is now the executive managing director of Colliers International Hotels, recalls negotiating a sale with her when she was in charge of corporate development.
"She's very straightforward and very transparent. People in this industry have a high level of respect for her," he says. "You don't always hear that about managers in any industry, especially this one. She's an exceptionally good fit at a CEO."
Her challenge now, is to establish herself as the company's leader. Only a handful of multinational companies have handed the CEO reins from founder to apprentice and the process is fraught with peril.
"When you are second-in-command for a long time you are more focused on the day-to-day than you are on the big picture," says Glenn Rowe, the director of the Richard Ivey School of Business Executive MBA program. "Some have trouble with that transition. But more importantly, the founder needs to step back and let the new CEO do the job. This is a case study we'll all be watching closely."
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BIOGRAPHY
Kathleen (Katie) Taylor
Age: 53
Education: Bachelor's in political science from the University of Toronto in 1980, an MBA from the Schulich School of Business and a law degree from Osgoode Hall Law School (1984).
Jobs: Began as corporate securities and competition lawyer at Goodmans LLP, and joined Four Seasons in 1989 as corporate counsel; appointed vice-president, general counsel in 1992; promoted to executive vice-president, corporate planning and development in 1997; appointed president, worldwide business operations in 1999; then president and chief operating officer in 2007. Appointed president and chief executive officer effective August 1.
Notable: Director, Royal Bank of Canada; board member, The Hospital for Sick Children Foundation.
Goal: "In the next five years the key focus is on expansion. I need to make sure it's executed successfully from the guest, employee and investment perspective. The definition of success will be to come out the other end still being recognized as the No. 1 hotel company in the world."
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FOUR SEASONS TIMELINE
1961
A 20-something Isadore Sharp opens his first Four Seasons in a sketchy downtown Toronto neighbourhood. "We opened our first hotel with a simple principle: treating every customer as a special guest," he said.
1970s
Opens a hotel in London, and another 10 Canadian hotels. Also signs first U.S. management contracts in San Francisco and Chicago, which will lead to the company's eventual transformation into a hotel manager instead of an owner.
1980s
Opens hotels in 12 U.S. cities, including Philadelphia, Boston, Dallas, Los Angeles and Chicago. Divests less-strategic properties, and begins to transform from an owner-operator of hotels into a hotel-management company. Goes public on the Toronto Stock Exchange in 1986.
1990s
Focuses on expanding its portfolio through Europe and Asia. First Asian holding is Tokyo's Chinzan-so Gardens; it soon enters other markets through the acquisition of Regent International Hotels.
2000s
Mr. Sharp sells the chain in 2007 to Bill Gates and Prince al-Waleed bin Talal, who take the company private in a $4-billion deal. Mr. Sharp retains a 5-per-cent stake. The company now manages some 80 luxury hotels and resorts in more than 30 countries.