A Brief History of the Corporate Culture Transformation at Hilton | Part 1 : The People, Chris Nassetta
Most people think that culture transformation is mostly the job of a leader, and it can be achieved in a short period of time. Nothing can be furthest from the truth. A corporate culture transformation like the one Hilton experienced took 10 years on the making and many people working behind the scenes. But those ten years are just the tip of the iceberg; the reality is that this process started 36 years ago when Chris began to put together the pieces of what an excellent corporate culture was and what that entailed. He was 17 at the time, and much of the culture we see today at Hilton was a long-time process that was shaped by Chris’ experiences. When Jon Gray from Blackstone called Chris to discuss the opportunity at Hilton, he told him, “you have been training your whole life for this position.” and that was the truth (1). In these chapters I’ll explore the beginnings of this process and how continuously keep evolving. On chapter one will be focused on the people that led to the change, but later on, I will be highlighting the strategies and implementation I have perceived most effective.
To understand the cultural transformation at Hilton, it is important to understand its top leadership first. The vision and strategy laid out by Chris Nassetta, our CEO, and Matthew Schuyler, our Chief Human Resources Officer, has been key for the successful transformation of Hilton over the past 13 years.
Chris Nassetta is the 4th CEO in Hilton’s history, which is now more than a 100 years old company. Under Chris’ tenure, Hilton has opened more hotels than our very own founder, Conrad Hilton, ever did. When Conrad Hilton died in 1979 at the age of 91, Hilton had 260 hotels (185 in the United States and 75 International) (2). Just last year, Hilton opened near 470 hotels (3), almost twice as much as Conrad Hilton did in his entire lifetime. 2019 was the fifth consecutive year where Hilton opened more than one hotel per day (4).
Thanks to Chris Nassetta, Hilton is one of the best-run companies today in the world. Chris is perhaps one of the best CEOs of our time, and in some regards, he can be compared with superstars like Warren Buffet, in fact, there are many things Warren Buffet and Chris Nassetta have in common. Similar to Warren, Chris had a newspaper delivery company when he was just a kid. It was not the only business he ran in his childhood; he also ventured into the lawn mowing business and the snow plowing business. Buffet explored many businesses as well, one of his most lucrative ideas involved setting up pinball machines in barbershops, he said: “I bought a machine for $25 in 1946 and built a small empire out of it.” (5)
After graduating from Columbia University, Warren Buffet gained some experience working for Benjamin Graham, but a few years later, he opened his own fund that later became the Berkshire Hathaway empire we know today. In Chris’ case, the story is strikingly similar; he gained some experience working for Oliver Carr, a real estate developer, just after graduating from UVA’s McIntire School of Commerce in 1984. He did a great job there, wounding up as chief development officer and helping Carr’s ship to navigate the savings and loan crisis of the late ’80s. (1) The Carr firm would be sold to Blackstone for $5.6 billion in 2006, but long before Nassetta and Partner Terry Golden took the plunge and started their own private equity firm, Bailey Capital Corporation, in 1991. Both Warren and Chris went from employees to open up their own investment firms.
The origins of the executive immersion program
At 17 and the summer, before he started college at the University of Virginia, Chris Nassetta worked in the engineering department of the Holiday Inn Capitol Hill. The engineering department may sound like a great gig, but in reality, Chris was mostly plunging toilets and replacing broken televisions. In retrospect, he must have been very good at his work, because the very last day his co-workers threw him a party and gave him a golden plunger, which was actually a regular plunger but covered in gold spray paint (6). This job had a significant impact on Chris and shaped his view of the world in meaningful ways. From this time, Chris remembers a member of the engineering department in particular, a senior employee from Vietnam that was an engineer in his country but arrived in the U.S. without English, no money, friends, or family. He had an education, but he got into the business at the lowest level and worked his way up. Nassetta said he was blown away by how welcoming and helpful that man was. “I thought he was wonderful,” he said. “My first experience was super nice and super hospitable, and it struck me with the hospitable nature of the people and the immense opportunities created in our business ” (6). This work experience made Nassetta realized that corporate culture was essential, he understood that working as a team and providing an environment where people and organizations invest in you, is what makes amazing things happen. His memories of being a young adult working in the hotel industry make him want to empower young adults in the industry today.
From this experience, he also understood the wise words from his father, who told him that “the only way you can get any business if from the bottom up” (7). This experience gave him a real good understanding of how the back of the house works and what entails to serve customers. Getting behind the walls is the best way to understand a business; his dad once said (8).
This brief but intense experience was the beginning of what we know today as the Hilton’s executive immersion program, one of the first things Nassetta implemented when he joined Hilton back in 2007. The program consists of sending his senior executives one week each year to work at hotels, in diverse roles such as housekeeping, engineering, or the front desk.
The origins of family-oriented benefits at Hilton
Some of the family-oriented benefits we enjoy today at Hilton are the result of the importance that Chris gives to the family. For him, business and family need to converge (8). When he was offered the opportunity to become Hilton’s CEO, the first this he did was to consult his sweetheart high school prom date (now his wife) Paige. The decision was difficult because at that time Chris had a pretty comfy life, with a job he loved at Host Hotels and living in the city he grew up, surrounded by all his close friends and family, including his parents living a mile away in the same house he grew up. Not to mention that he had six girls that he was not interested in relocating. The new gig would require him to move to Beverly Hills, where the Hilton’s headquarters were at the time. Ultimately was Paige, who made the final decision, she convinced Chris that he would be happier with a larger, newer challenge. This move ended up being the most spectacular experience his family had; “departing from the family-support cocoon increased the unity of our family, and they became incredibly tight because we needed each other” — Chris said (1).
For Chris, the family is first; and they have been always part of his decisions. He has a big family to start with; he is the fourth of six kids, he has two brothers and three sisters, and with Paige, they have six daughters on their own (9). Despite spending 80% of his time abroad, Chris travels home every weekend, and most Saturdays he sends a text to the 40-odd members of his extended family living nearby, inviting them for dinner. Once Chris was asked, if you were not a chief executive, what would you be? “Truthfully, I cannot imagine being anything other than Hilton’s CEO, but if pushed, maybe a chef,” he said (8).
At Hilton family has become a priority as well, Chris and Matt Schuyler had implemented family-oriented benefits such as adoption assistance, parent leave, remote work, extended bereavement leave, generous paid time off and exclusive travel discounts to allow families to spend more time making memories together. When Chris announced our furloughs due to the coronavirus pandemic, he said: “like many of you I turned to my family for support and inspiration, my wife and I are parents of six wonderful daughters and my elderly parents live nearby, even as I make these difficult decisions I know I must lead this company in a way that will make them proud, in a real sense you are my family too, that’s why these decisions are so difficult, but that is also why I’m so committed to making sure we emerge from this challenge even stronger so I’m able to welcoming all of you back with open arms.”
Why employees matter at Hilton?
If Conrad Hilton is remembered for coining the phrase that Hilton’s vision is “to fill the earth with the light and warmth of hospitality,” Chris Nassetta would be remembered for the phrase that “this is the business of people serving people.”
At a very young age, Chris realized that a positive human interaction of employees with guests was the key to a successful operation. On a CNBC interview in 2018, Chris says: “I have the fortune of running this very big business with 400,000 people, serving people every day. ” Chris realized that having happy people at work was the equivalent of having happy hotel guests, so he relentlessly focused on the well-being and personal growth of all Hilton’s employees.
In an industry where turnover is above 70% (10) is not strange to find people working for Hilton for 20 years or more, and not only people at the corporate level but many people working in operations at the hotel level. CNBC found employees at Hilton Singapore working for decades, like the bellman working for 40 years, a linen attendant for 45 years, and a senior assistant restaurant manager for 25 years (11). When I started at Hilton, my second interview was with Chris LaRose, who had been working for Hilton 25 years, he is currently the Vice President of Revenue Management. My regional director at the time, Kristina Turner, who was my boss during my first years at Hilton, worked for the company for 18 years. I was very impressed from day one to see how many people were working for the company for such a long time.
Because Chris Nassetta prioritizes people, the engagement ad happiness at the company is at an all-time high. Even the people that had been furlough after the Covid-19 pandemic is looking forward for the day the can come back to work for Hilton. To encourage people’s development and engagement, Hilton had established incredible benefits and training programs that allow people not only to interact with others within the organization but also to find better opportunities for growth and development within the company. In March 2019, Fortune named Hilton to the top spot of its list of 100 Best Companies to Work For in the U.S. the first time a hospitality company has held the title and the first non-tech company since 2004. Over the past few years, Hilton has topped or be included in similar lists such as Best Company to work for LGBTQ (12), best workplace for millennials (13), best workplace for parents (14), second best place to work for women in the UK (15), and best place to work in Argentina, Canada, Saudi Arabia, UK, Peru, and many more other countries around the world (4).
All these awards are the result of the obsession and commitment of a man whose priority is to make his workforce the happiest on earth; the current pandemic is a huge speed bump on the road that may throw out of track Hilton for some time. But as long as Chris stays at the helm, nothing but good things can happen to Hilton.
Note from the author: This post is part of a series about the story of Hilton’s corporate culture transformation. If you want to read the other parts please visit this page.
References
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2. Encyclopedia of World Biography. Conrad Hilton Facts 2010 [Available from: https://biography.yourdictionary.com/conrad-hilton.
3. Hilton Worldwide Holding Inc. Annual Report Hilton Worldwide Holdings Inc.; 2019.
4. Hilton. Hilton Annual Report 2019. 2020.
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6. McCracken S. Hilton’s Nassetta started career with a plunger in hand: Hotel News Now; 2017 [Available from: http://hotelnewsnow.com/Articles/150809/Hiltons-Nassetta-started-career-with-a-plunger-in-hand.
7. Nassetta C. Leading Through Inspiration. In: CNN, editor. 2014.
8. Hancock A. Chris Nassetta: old values for a modern resilient company: Financial Times; 2019 [Available from: https://www.ft.com/content/555f9a90-ded3-11e9-b112-9624ec9edc59.
9. Inc. How Hilton’s CEO Led the Company’s Massive Turnaround: Inc.; 2014 [Available from: https://www.inc.com/associated-press/how-hilton-ceo-turned-around-his-hotel-business.html.
10. National Restaurant Association. Hospitality industry turnover rate ticked higher in 2018: National Restaurant Association; 2019 [Available from: https://restaurant.org/Articles/News/Hospitality-industry-turnover-rate-ticked-higher.
11. Nassetta C. Hilton CEO on the importance of the company’s culture | Managing Asia. CNBC International TV: CNBC; 2018.
12. Monster. Best companies for LGBTQ workers 2019 [Available from: https://www.monster.com/career-advice/article/best-companies-lgbt-0617.
13. Great Place to Work. Best Workplaces for Millennials™ 2019 2019 [Available from: https://www.greatplacetowork.com/best-workplaces/millennials/2019?category=large.
14. Great Place to Work. Best Workplaces for Parents™ 2019 2019 [Available from: https://www.greatplacetowork.com/best-workplaces/parents/2019.
15. Carrara A. Hilton named second best place to work for women in the UK: Hotel Owner; 2019 [Available from: https://www.hotelowner.co.uk/22124-hilton-named-second-best-place-to-work-for-women-in-the-uk.
