Robert Reid: Marriott obviously has had a long history of the Marriott family being at the center of what you do, and they have obviously brought a culture to the company. How do you incorporate Ethical Business Leadership into what you do day in and day out?

Amy McPherson: Well, as you say the Marriott family basically sets the tone, and they set it at the top with Bill Marriott. The culture is all about treating the associates with respect, and that it’s just as important how we do business as the business that we do...I think the company culture continues to support that and it’s really driven from the chairman on down.

RR: How has that culture evolved?

AM: Well the culture itself is pretty much about: We take care of the people, and they will take care of the guest, and the guest will keep coming back. What has changed is, with all the new regulations and practices that businesses have to adhere to, the focus on compliance is greater. Part of the culture is holding people accountable for results. Well it’s also holding people accountable for ensuring ethical business is conducted in everything that we do, and with the people that we do business with. I would say that the culture itself has only gotten stronger –
about how we want to act as a business – but the focus on compliance with new regulations becomes that much more important.

RR: Marriott has literally hundreds of thousands of associates scattered in many countries around the globe, so hiring new associates is a challenge. How do you ensure that you hire people at the entry level and other levels who will uphold and adhere to the set of values the company espouses?

AM: The great thing we have going for us is that people really want to work for Marriott. Not only do we have a great reputation for business, but because the culture in and of itself is very well known, people really, really want to work for Marriott. So we get to draw from a much larger pool, and we’re very careful about how we do background checks – depending on the position it might be a criminal background check – and we make certain to adhere to our standards. We know that we want the best people. It is all about getting the best people in the hospitality business. We want to make sure the selection of those is important.

RR: Are you ever surprised by what comes out in a background check?

AM: The only real surprise is, actually I should say, the only thing that is somewhat consistent is people tend to expand their resumes, or pad their resumes…Enhancing their resume about the types of work that they’ve done and how much responsibility and accountability they really had to do something – I led something, I initiated something, some major transformation – and it turns out they are on a work team. That obviously, if you are hiring a leader, is a big difference when someone’s saying they were responsible for creating and designing something and rolling it out when really they were responsible for being part of a larger group. Those are the things that can come out in background checks or through reference checks that you can get a better sense for.

RR: If an employee or an associate sees some things or perceives some things that they’re just not comfortable with, what kind of processes do you have in place to allow that person to bring forth those perceptions, or those observations?

AM: We have two things. One is an open-door policy. That is standard, that they can go to their supervisor and express any issue that they’re seeing or experiencing. If the supervisor is potentially the problem, there is also the second opportunity for them, which is to use a 1-800 business integrity line. That’s available to them 24 hours a day, seven days a week. That’s staffed with people outside the company, we outsource that, and basically, anonymously they can describe the issue and then there’s follow up beyond that.

“We’re not compensating more for (ethical behavior). It’s the minimum that we would expect; that people are adhering to strong business ethics and our code of conduct. So if anything it’s a stick. It’s not a carrot because that’s expected.” Amy McPherson Executive Vice President, Global Sales and Marketing, Marriott International, Inc.

RR: And that company does whatever level of investigation seems appropriate?

AM: Actually what happens is that for each instance that is reported on that integrity line an attorney is assigned, and then that attorney will work with, as appropriate, human resources, an internal investigations group that we have here, and if it’s a financial related issue our internal audit department. So they’ll decide who needs to be involved in addition to the business resource. If it happened at a certain hotel the general manager may be apprised of the situation. There is a business person that is actively working on it with the attorneys, human resources, internal audit, or internal investigations depending on the situation.

RR: So you take it pretty seriously?

AM: Yes, I mean I’ve been involved in something in one of my business units at a lower level and I was asked to come to internal investigations. I knew the individual involved. I gave a little background of what I knew about it because I did know a little bit about the situation, not so much the person’s interaction in the situation....They took that and worked through the operating unit that he was involved in, and investigated it thoroughly and then came back with a recommendation. So it was a big deal.

RR: Looking at the way evaluations are done, the way people are rewarded, promotions, what role does ethical leadership play in someone’s promotability, reward structure, etc.?

AM: (Ethical behavior) is expected. We’re not compensating more for it. It’s the minimum that we would expect; that people are adhering to strong business ethics and our code of conduct. So if anything it’s a stick. It’s not a carrot because that’s expected. It’s a stick to the extent that we find out somebody is not doing that and potentially it’s going to lead towards termination if that behavior continues to exist.

RR: Marriott obviously is an international company with hotels in many other places, other countries. How does Marriott ensure that its values align with international partners, knowing that some other parts of the world operate with a very different set of standards?

AM: I think what our experience has been is, yes we operate all over the world and it’s not necessarily that international laws are significantly different as it relates to business ethics, it’s what is accepted practice and that’s where you get into trouble. While there might be a law in a country, the accepted practice is something completely different.

(Of all) our people internationally we only have 2 to 3 percent of our workforce that are expatriates, so they’re (mostly) local hires. If they’ve lived in environments where the accepted practice is to give $50,000 to the guy that does your trash, or whatever it is because that’s part of the game, you know we don’t accept that. We have to then do coaching, training that says this is not accepted practice as it relates to Marriott, and how we conduct our business. That’s where we’ve really tried to focus our training. The head of international has his regional meetings and there is always ethical business reinforced training at these meetings with their operation leaders, with our legal group to remind them what’s acceptable.

RR: Is that training mostly a case-based approach, or how do they try to convey, “Here are the standards we are operating under,” and “Here’s what you will find in this place, this place, or this place?”

AM: We do conduct training based on ethical case studies. We also take the latter approach and say, “here’s basically our accepted practices, our standards, you know this is the way you should be doing business. Here’s where we’ve seen some countries have some deviations. We’ve experienced differences in the accepted practice. Here’s what you need to do about this.” Again, we don’t change our standards, we’re going to go by the law, and we’re going to go by our standards. What we try to highlight to them is the accepted practice; while it might be an accepted practice in India to do that, it’s not (to us). We do not support that or condone that, and so here’s how you need to act and how you need to train your managers to respond to that situation.

RR: Would it be safe to say or appropriate to say that when confronted with a situation like that, in another country or even domestically that you would rather walk away from a deal than compromise what Marriott stands for?

AM: Yes, we would rather walk away from a deal. How we communicate that position may depend on what the context of the relationship is. If it’s somebody we’ve never worked with before, that’s easy. If it’s somebody that we have a long-standing partnership with and this was an aberration or some new thing that’s come up, we do our best to convey our position diplomatically–but just as clearly–and preserve the relationship. You’re going to try to work through the situation; I need to get you to here by this date. You know, you’re violating something that’s against our standards, but I understand that this is a different practice here, but I’m going to work with you. By this date we have to have this resolved in a way, or we have to sever the relationship.

RR: Let me change context from international to just sort of more general life. Is there a difference between ethical business behaviors in a business setting versus private life?

AM: I think that one is on a case-by-case basis too, because clearly what people do in their personal lives, we might never even hear of. To the extent that we are aware of something or are made aware of something, it almost depends on the situation, and what that situation was.

RR: In terms of the Marriott culture, and how it has evolved, do you see it changing significantly or moderately in the next five to 10 years?

AM: We believe that our culture gives us a competitive advantage...We believe that the core of this company, what makes us better, is that we promote this culture where associates are so much more engaged to work here and we track that. Our human resources group has an associate engagement index that we benchmark ourselves off of other industries, not only within the hospitality industry, but outside the hospitality industry, and our people are more engaged. They will do anything to promote the values and the culture of the company because it aligns more with their values and their culture. And because of that we have more productivity and less turnover. It’s (good) business for us to have them engaged in the culture because we don’t have the churn that other companies have. We don’t have some of the issues with ethics and all of that that other companies have, and as a result we get more profits because of that engagement by our workforce.