Marriott family values

The $11-billion hotel chain reflects its founding family's values, says Fortune's Marc Gunther.

By Marc Gunther, Fortune senior writer

NEW YORK (Fortune) -- In 1927, J. Willard Marriott and new bride, Alice, opened a nine-stool root beer stand in Washington, D.C. It grew into a restaurant chain called Hot Shoppes and much later became a hotel company. Their son Bill Marriott worked in the kitchen as a young man.

Last week, to celebrate the 80th anniversary of the $11.5-billion-year Marriott Corp (Charts, Fortune 500)., Bill Marriott returned to the kitchen - this time as a volunteer, to prepare food for Washington's poor people at a nonprofit called the DC Central Kitchen. He was joined by about 25 Marriott employees. (You can watch Bill Marriott in a corporate video of the event on YouTube.)

Shaklee, a direct seller of nutrition, personal care and household cleaning products, embraced environmental responsibility decades ago, says Fortune's Marc Gunther. (Read the column.)

It was a fitting way to mark Marriott's anniversary, not just because it echoed the company's humble beginnings, but because it reflects a corporate culture built on an ethic of service.

Elsewhere, thousands of the 150,000 Marriott employees volunteered on company time as part of the company's "Spirit to Serve" day. They cleaned up the city's largest park in Atlanta, built homes with Habitat for Humanity in Thailand and walked to benefit hungry children in Dubai.

In a car on his way to the event in downtown Washington, Bill Marriott - his full name is J. Willard Marriott II - told me that his parents taught him to put the employees of the company first.

"If the employees are well taken care of, they'll take care of the customer and the customer will come back," he said. "That's basically the core value of the company."

Of course, many companies say that employees are their most important asset. But Marriott Corp. acts that way, too. Consider:

  • In the 1930s, long before employee health care became a big issue, Willard and Alice Marriott put a doctor on the payroll to take care of employees.
  • More than half of the hotel company's managers started as hourly workers, and nearly all of the firm's senior executives were promoted from within.
  • Hotel managers are regularly rated by their employees. Their compensation is based on the reviews they get from the people they manage, as well as the hotel's profitability and guest satisfaction surveys.
  • Finally, if a Marriott employee has a beef with his or her boss that cannot be resolved, the employee has a right to bring a complaint to a peer review panel that has the power to overturn the management decision. "It's almost like a jury trial," Bill Marriott says.

Marriott, who is 75, replaced his father as chief executive in 1972 and is only the company's second CEO. He remains active, visiting about 250 Marriott properties a year.

Why spend so much time on the road? "The purpose is to see the people, basically," he says. "By and large, it's a cheerleading exercise."

Marriott does his best to take the pulse of each property. "Do the employees seem enthusiastic? Do they like their manager? Does the manager know his people? That's key. You walk around, and he should know them without looking at their name tags," he says.

With the company's growth - it operates in nearly 70 countries - preserving the corporate culture has become a challenge. Marriott's brands include Ritz-Carlton, Courtyard, Residence Inn and Fairfax Inn. About half of Marriott's 2,900 properties are managed by the company, and about half are franchises.

Still, the family retains considerable influence. Three of Bill Marriott's four children work for the company in middle-management roles. The fourth, John W. Marriott III, was once considered a potential CEO, but he left at the end of 2005 to run the family's privately-held real estate firm. He remains vice chairman of the board.

The Marriotts are Mormons, and Bill Marriott has talked about his religious values shape his work. In a comment to the Washington Post's Web site On Faith, he wrote about a 1985 boating accident and what it taught him:

"With terrible burns over much of my body, life flickered like a candle in the wind. Very little mattered except the three things in my life that were really important - my family, my deeply held faith, and my ability to sustain those in my business who depended upon me."

Marriott family members own about 20 percent of the company's stock, which has done well lately. It's up by about 120 percent in the last five years, compared to the 40 percent growth of the S&P500 over the same period.

Odds are the firm's next CEO will not be a Marriott. Bill Shaw, the president and chief operating officer, and Arne Sorensen, the chief financial officer, are among the leading candidates to succeed Bill Marriott, who says he has no plans to retire. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.