I recently interviewed former Royal Caribbean CEO Richard Fain on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:
Adam: Our guest today spent more than three decades leading one of the largest cruise line operators in the world. Richard Fain was the CEO of Royal Caribbean Group, the parent company of Royal Caribbean, Celebrity Cruises, and Silversea Cruises, with more than 100,000 employees and a market cap of roughly 80 billion dollars. Richard is the author of the new book, Delivering the Wow, Culture as Catalyst for Lasting Success. Richard, thank you for joining us.
Richard: Adam, thank you very much for having me.
Adam: You grew up in Providence, Rhode Island, and after graduating from high school, you moved all the way across the country to go to UC Berkeley. It was in the 1960s, back when Berkeley was Berkeley, right at the apex of the Free Speech Movement. Can you take listeners back to those days, those early days? What early experiences and lessons shaped your worldview and shaped the trajectory of your success?
Richard: Thank you, Adam. I was lucky enough to go to Berkeley, as you say. It was an exciting time to be there. I also was fortunate enough to meet my first mentor, the first person who really took me by the hand and said, no, this is the way to do it, do it this way. We got along so well that I ultimately married her, and that was 60 years ago, but being in Berkeley at that time was such a great experience. And actually, the way I got to know her was interesting, because we together worked on raising money for a charity at Berkeley called Cal Camp, and to see the power of people. We brought each were sharing our respective dormitories, and we brought together a lot of people to make it happen, and to see the power of people who were really passionate about making something work allowed us to change the way our fundraising had worked. We got eight times the amount that had been raised the previous year, basically by bringing everybody into the fold and having everybody work to the same objective, and that is a lesson that I learned from what is now my wife, and from the experience there that I still find very instructive.
Adam: I love it. And you graduated from Berkeley, went on to go to business school at Wharton, worked in the corporate world, and ultimately rose to becoming the CEO of Royal Caribbean Group. It was Royal Caribbean Group in name, but not the Royal Caribbean Group that we know today. What were the keys to growing and scaling Royal Caribbean Group, taking it from a company doing a little bit over 500 million dollars to the behemoth that Royal Caribbean is today?
Richard: Well, I am the luckiest person on earth. I fell into the best job on earth, working with the best people. Royal Caribbean, at the time, when I first got involved with it, had three ships of 720 guests a piece. It was a really well-run company. It had been founded by Ed Stephan with a culture of passion, of doing the right thing, and of offering the best cruises, and it was successful at that, but it was small, and cruising in those days was a niche market. It was for older people and only in the wintertime, etc. And fortunately, it was a very good base, but we really saw an opportunity to expand it to be not just the best cruise line. And by the way, Adam, there is no question it is the best cruise line. I have to start out there. No plug intended, of course, but we did not want to just be the best cruise line. We wanted to be the best vacation provider, and having that as a North Star really helped us to define who we were, what we were trying to do. Gave everybody something to work towards.
Adam: Setting a vision, clarity of mission, and then ultimately alignment, essential to attaining success, essential to getting to that next level.
Richard: You know, I am really happy you use the word clarity, because it was clarity. It was a clear understanding. It was also, you use the word alignment, which I use a lot in the book, because it is really getting everybody to pull in the same direction, that is so critical to success.
Adam: I would love to break down those concepts, those words. They are buzzwords that we use in business. They are buzzwords that are used in business school. But how can listeners really understand how to bring them to life?
Richard: And you have put your finger on something, because we all hear a lot of buzzwords, and everybody wants to talk about seven principles of great leadership, and they all sound very good. It is a little bit of a cookbook approach. Part of what I tried to convey, and what I strongly believe, is people working together, and alignment, I will use that one in particular, really just means that everybody has got the same goal, everybody is pulling in the same direction. When you do sculling, rowing in a skull, you have a coxswain who sets a beat. And it does not matter whether that coxswain has got the exact right beat. You may think it is better if you have more of a power stroke or a shorter stroke or a longer stroke, but if you are not altogether, if you are not all coordinated, the boat is not going very fast. And that was really the thing that I learned over time at Royal Caribbean. We all needed to be moving in the right direction. We needed to align ourselves. We needed to agree, not to reach compromises that everybody could agree on and go to the lowest common denominator, but to have a clear North Star, a clear idea that everybody could say, ah yes, I understand where we are going, and I am making a thousand decisions. Not I, Richard Fain, the CEO, but I, Joe Blow, the head of purchasing, I, a waiter, I, a cabin steward, any area you want to talk about, my decisions matter, and I need to know what I am trying to accomplish in total. And so that clarity, that alignment, was very important to us, and we also talk a lot in terms of a North Star, because to have alignment, you need to know where you are going. And I use the term North Star, there are other terms that happens to be one I like, but it is also appropriate, because we are navigators, and in navigation, the North Star is key. Has been for centuries to where you are going, but the North Star literally is thousands of light-years away. Nobody expects to get to the North Star. It is just to understand the direction. And that is what I think can be very powerful in business, and by the way, other areas too.
Adam: As a leader, when you are working toward getting that alignment, what are the biggest hurdles that you have to look out for, and how can you overcome them?
Richard: It is interesting that you talk in terms of hurdles, because there really are hurdles, and one hurdle is just, I think my way is right, and the boss is telling me to go some other way, and I will do what I have to to comply with his or her directions, but I will tweak it. And you see that in any organization, whether it is a corporation or a nonprofit or whatever it is, you see people saying, well, the boss does not get it right. I will do what I need to to comply with her or his direction, but I will adjust it so that it gets where I know it should be. And once you have that, you are really having people operate at cross purposes. So it is not really just a question of articulating a principle. You need people to really accept and like the fact that we are all moving in the same direction. And that is why in the book I do not so much do it as here are a couple of principles, here is a series of cookbook approach, but here are stories. Here is how it worked in practice. Here is how we evolved that over time.
Adam: I love that. As a leader, you have to get people to accept and like the fact that they are all moving in the right direction. It is not enough to say, let us all move in the right direction, but it is your job as a leader to persuade, to compel, to motivate, to influence. That is what great leaders do.
Richard: Well, I think that is part of it, but it is not just a question of the leadership that somebody like me has. It is an organization. It is a culture. And I think the culture is that everybody has good views on these things. And so it is important that people have a sense that they are participating in the ultimate decision. So I happen to like playing devil’s advocate. When we look around the corporation, we have people who are passionate, and when people are passionate, they want to express their view. And so I think one of the things that worked so successfully for us at Royal Caribbean was that everybody got to weigh in. This was not a question of obedience. This is not a question of follow the orders from above. This was let us talk these things out. Let us argue them. The people at Royal, everyone loved to argue. A lot of the time, I like that, some of the times I wish they were just a little bit less certain of their position, but in any event, we loved to argue, and when we argued, we all learned something. It was not argument for the sake of convincing people. It was argument to get it all out, and then at the end we would say, okay, yes, leadership has to come in and make a decision, but everybody has had a voice in getting there. So one of the expressions that I heard, that I liked, was everyone has their say, not everyone gets their way. And so that really was a key to us in reaching alignment.
Adam: I love that. That is such important advice. And for anyone who is in a leadership position, it is imperative to create an environment where everyone within your organization feels empowered to speak freely, speak openly, share what is on their mind. And to your point, Richard, very rarely is everyone going to be able to get their way all the time. In fact, that is impossible, because there are going to be conflicting opinions, and many of the views are going to be wrong. Not all ideas are great ideas. In fact, many ideas are often terrible ideas. But by giving everyone within your organization the opportunity to speak up, by giving everyone within your organization the opportunity to weigh in, the opportunity to be heard, they feel empowered. They feel greater ownership in whatever the decision is. Whether the decision is a decision that they agree with or disagree with, they are a lot more on board with it than if they did not have the opportunity to have their voices heard.
Richard: And the truth is, there is often, in fact, there is usually more than one way to do things. And it is not that this idea is bad or that idea is bad. You are often choosing between several good choices. We all like to come up with a solution where this is the only right way to go, and the other ideas are all stupid. That is not the way it works. You usually have a lot of quite decent ideas, and you have to end up choosing one, and you try and do so in a good way, and then you want everybody to go along and work towards making that good idea even more successful.
Adam: Clearly a big focal point for you as a leader, building a winning culture, to write in the title of your book. What are the keys to building a winning organizational culture?
Richard: I would say part of it is to acknowledge that that is important. Culture is absolutely key to any success, and you need everybody pulling in the same direction. And the problem I see in many corporations is they talk a good game about culture. I keep hearing, oh yes, that is in our DNA, whatever it is, whether it is integrity or innovation or something, that is in our DNA, as though this is something you are born with. This is innate in the company, and you do not have to focus on it. I would argue that culture is an essential element to success in any organization. And by the way, there is no one good culture. Every organization can have a different culture. But you really have to say, I want to make this culture work. I want to make this culture go in a certain direction. And so I am actually going to spend explicitly a lot of my time and a lot of my thought process in doing just that. Not, we are making key decisions and then we disseminate them. We do not disseminate them. We inculcate them.
Adam: How can leaders do that? Do you have any tips on what anyone can do to actually make that happen?
Richard: That is a great prompt for me to say, well, I wrote a book about that, and that is exactly the way I view it. It is the whole thing of saying this culture matters. This is the culture I want. Do I really want people to look for the cheapest way to do things, or do I want people to look for the most innovative, or maybe the most efficient? There are different ways. It does not matter what you are trying to accomplish. The key is to make sure that everybody understands what it is and that you are constantly reinforcing that culture. And it does not happen quickly. I was incredibly lucky to have 33 years with a board that tolerated me for all that time. That actually gave me an advantage, because I had time to create the culture, and we had time to revel in the successes where there were successes, and success breeds success. So when you start out and you say, this is the way we are going, and this is the culture we want, these are the decisions we are making to include that, and that works, then the next time you say that, everybody says, well, you know, it seemed to work the last time. Let us try it again. And pretty soon you not only have everybody within the organization saying, oh wow, this is the way to do it. This is the kind of culture we want. But it also means you attract other people who want that kind of culture. So when we are looking for new hires, new employees, we get people who share our passion, who have a similar goal, and say that is the kind of company I want to work for. Because the culture is a result of the people. It is always, it is the people, it is the people, it is the people. And then they create the culture. It is symbiotic. We get the right people, they help develop the right culture.
Adam: And you had 100,000 people in your organization. Who were those people that you looked to bring on? What were the characteristics that you looked for? What are your best tips on the topic of hiring?
Richard: First of all, it really helps to be the employer of choice. You want to make it so that your employees like going there. So one of the things that we did was we made employee engagement a key component of your bonus plan. Everybody’s bonus plan depended on our continuing to move up every year. Year after year, we would do better. Continuous improvement is a key thing in everything, but every year we said we are going to have people here happier to be here and more engaged. We made that part of the bonus program. Then what we did was we said this is something that matters to us. We are going to treat our employees, treat our colleagues, with a level of respect and with a level of engagement so that they want to work here. When we looked at people’s hires, at hiring new people, the starting point was always could they actually do the job. So that was always a key. But the other thing was were they simpatico with where we were going. Were they the kind of people you want to work with. Were we the kind of people they would want to work with? And so after we got through the first stages, are they qualified, then we spent a lot of time looking at how they would react to our culture.
And one of the things everybody knows is, it is sort of a cliche today, people do not quit companies, they quit their boss. So one of the things we said, and again, it is intentionality, it is fit, not fitness. Everybody we talked to that cleared the initial review was qualified. They could do the job. The question was could they do the job and enjoy our culture. It was both a question of finding the right people and then bringing them along so that they became part of this culture, and they grew the culture with them.
Adam: I love the way you frame that, fit, not fitness. If you are taking the time to interview someone, there is a pretty good chance they have the fitness. If they are advancing past that first round interview, past that second round interview, there is a pretty good chance they have the fitness at that point. It is assessing fit. How do you assess fit?
Richard: We probably spend a little more time just talking about stuff that is not can you do this particular job. I remember my successor now is Jason Liberty, and I remember interviewing him over 20 years ago, and at the time it was a mid level job, head of internal audit. It is an important job, but it was not the highest ranks, and he was coming from KPMG. They were dangling the idea that they would make him a partner, so we knew we had to do something to win him over. But I did not talk to him at all about accounting or auditing. We changed the role so it was more of an advisory role. I did not talk to him about any of those things. We ended up talking about his exercise regime, which frankly I could not understand, because that was 20 years ago, and it had been five years since I had last exercised. But he exercised every morning, and I tried to understand that. And so we spent time talking about that. We spent time talking about his family. Hopefully we felt it was important to get to know the person as well as the executive.
Adam: At the end of the day, you are hiring people, you are hiring human beings. You are not hiring numbers on a spreadsheet. You had 100,000 people, not 100,000 numbers, 100,000 human beings.
Richard: Just to be clear, I have to correct you. We had 100,000 extraordinary human beings, and so I hope you will accept that correction. And that was the question that I was always asked: do you hire extraordinary people, or do you hire ordinary people who become Superman? And what we found was if you have people who are passionate about what they do and care about the world and have a good ethical background, and you put them in an environment that cares about those things, they do become superheroes. Most people see them mainly on the ship. I get to see them on the ship, but also at shore. And that is where we really came up with the term delivering the wow. Because you need to deliver the wow to our cruise guests, but you also need to deliver the wow if you are working in the office to another office person who needs something done. And it was the idea that we were not just trying to do ordinary. We wanted to do really at the top end of innovative work, and that is what delivering the wow was all about.
Adam: Richard, I recently did an interview with Dick Vermeil, legendary football coach, NFL Hall of Fame football coach, and I asked him, what is your best advice on the topic of motivation? And he said, I think I was a pretty good motivator, but I was a much better evaluator. And the best tip on the topic of motivation is be a good evaluator. Bring in people who are already motivated. Bring in great people. You had 100,000 extraordinary people. That makes your job as a leader a lot easier.
Richard: Well, it does. But the other thing is, one of the things you are talking about, motivation and looking for great leaders, one of the things that we found is the best motivation is self motivation, and we were lucky that our people are never satisfied. By the way, that can be trying, but they are always trying to do better. And it is that insatiability, that constant quest for improvement, that I think is so important. And by the way, it makes your job easier. My father used to say, if you love your work, you will never work a day in your life. And that is the way I felt, and that is the way so many of the people in Royal Caribbean feel.
Adam: You talk about your successor Jason Liberty, talking to you about working out every day, and that is a signal of being dedicated to improvement.
Richard: No, he is crazy. Working out every day is crazy. We can all get along, even if we disagree. He and apparently you believe in exercise. I am a real couch potato, and I think that is the right answer. Fortunately, we did not have to resolve that dispute.
Adam: Whether you agree with his lifestyle or not, whether you think he is wasting his life, wasting his time or not, what are some other things that you can look at as a leader, as a hiring manager, to recognize whether the person across from you is someone who has that desire to get better every day?
Richard: If you really feel that way, there is no doubt the passion comes out very quickly, and you begin to see it. But I am also a big believer in data, and data today is often thought of as a way to check on people. Actually, it is a way to motivate people. And I found over and over again that if we set goals and we measured progress, I never had to do anything. I told you I had the best job in the world. I could sit back, and these people would vie with themselves. Their biggest competitor was themselves. Vie with themselves to do better than they had done before. And I still think that proves it. You simply measure stuff. You give people goals. You show you are making progress to those goals. And there is nothing like the satisfaction of taking something that was good, making it better, and then making it even better. It is a wonderful feeling.
Adam: The title of your book, Delivering the Wow. How do you deliver the wow to customers? What are the keys to creating a customer-centric organization? What are the keys to creating an extraordinary customer experience?
Richard: I think first and foremost, and probably not the answer you are looking for, but I think it is the answer I would give, and it is that you yourself know that you are improving on what it was before and that you will make it even better next time. But it is going that extra little bit. It is not being satisfied. An expression that actually I did not come up with this, I heard it from a famous marketer named Jay Chiat. He started a firm called Chiat Day, and it was good enough is not good enough. And it is that caring. It is the I am going to go that extra step. If it is a guest, I am going to be smiling more. I am not just going to answer the direct question but answer it with panache, answer it with care, and take them to the next level. If they say, what should I do in such and such port tomorrow, do not just reel off what is in the brochure, but tell them something that you have experienced. Somebody asks where is the restroom? Do not just say it is down the corridor and on your left. Take them over there and show them where it is. If you are a logistics person, do not just arrange that the trucks are all there on time, but figure out how to arrange them so that they are efficient, so that they are there exactly when you need them and not before, because then you get a traffic jam, and not after, because then you have a disaster in not having what you need. It is going that extra little bit and really feeling in your gut I have done more. I have made that person happier or more successful. And the other thing is it is continuous improvement. I am not satisfied with what I have just done. Tomorrow I am going to do better. Next year, I am going to do better. And it is that process of continuous improvement that I find so self-satisfying. And I am happy to say if you look at the performance of our people, clearly they think delivering the wow is the right thing to do.
Adam: What do you believe are the keys to great leadership, and what can anyone do to become a better leader?
Richard: You know, I do not really believe that it is a cookbook, that these are the great leaders. One of the things when you look at the top management team in the Royal Caribbean Group, we could not be more different. We have different passions. I may like green and Laura may like blue, but we all care about our people. I think that is one thing that if you do not have that, there is nothing else to talk about. But there is also a commitment to always doing better, to focus on what I can do to get me to an ultimate destination. I think that is something which is both inherent in people but also can be learned. I would argue that is really the keys.
Adam: Before you retired as CEO of Royal Caribbean, you were faced with a massive crisis, a crisis that was potentially an existential crisis not only to your company but to your industry, and that was Covid. How did you navigate that crisis? What did you learn from leading during that crisis? And what are your best tips for leaders on how to lead during times of crisis?
Richard: Well, I am going to start by thanking you, Adam, for making me relive some of the worst moments.
Adam: You’re welcome.
Richard: And I think we are generally seen, you are absolutely right, this was an existential crisis. That is an overused term, but it is absolutely true. Almost anybody I talked to said here we have gone from having revenues of a billion dollars a month to having revenues of zero, literally zero. And you did not know how long it was going to last. And we both went to business school. There were no courses in being successful with zero revenue. So it was scary. And everybody wanted to vie with each other for talking about how terrible it might be. There seemed to be almost a penchant for saying, oh this is terrible. And the result was, anywhere you look there was a focus of our job is to get through this. Leadership was our job is to get through this, and we will get through this. We are going to survive. Well, woe is me may be satisfying, but it is not a strategy. Woe is me does not get you anywhere. And so fortunately our leadership team got together and we said our issue, we all agreed on this, we had a lot of discussion about this. You can imagine the discussion. But our goal is not to get through this. Our goal is to emerge from this strong. And we are just not going to make any decisions that are geared to we need to survive long enough to get through this. If we do not survive through March, June, or September, we are in trouble. No. Our goal is whenever this ends, we are going to come out racing out of the gate. We are going to be strong and ready to go. We absolutely refused to have conversations about how we might survive. We refused to have conversations about things that would help us in the short term but not in the long term. And we kept focusing on it. So we invested in things that a lot of people said, no, you cannot afford that. But it was small in the total. But we invested in computer programs that we would need when we were going to come out of this and we wanted to come out running. We invested in the travel advisor community, which was essential to our long term future. We invested in our employees. And by the way, that also made living through the pandemic, which I admit was still one of the worst times of my life, more livable. We had a goal, and it was an aspirational goal. It was not woe is me.
And I remember at the end of it, at the very end of the pandemic, we were the first ships in the United States to come back. And we had, I remember the first ship was Celebrity Edge. Yes, Edge. I went to the ship the day before the guests were to arrive. And this is at the end of a year and a half of just total misery for everybody, but especially for our crew members, many of whom had been trapped on the ship for months on end, could not see their loved ones. Then they get home, they are finding devastation. They are finding mortgages being called, people dying, anything you want to mention. It was just horrible.
So I was coming to the ship, and I was due to meet some people in the plaza, which was up on deck five, and came in through the crew gangway and took the elevator up. The gangway is 20, 30, 40 feet from the elevator lobby. And I am just thinking I am going to go on the elevator and go up. And it looked like every crew member was there. Obviously, they were not, but the place was packed. People milling around. Everybody had a story. Everybody wanted to tell their story. It took me an hour and a half to walk that 20 or 30 feet. I have never taken so many selfies in my life. It was just amazing.
And to hear the stories. And again, they were not saying, was not this terrible? They were saying, are we happy to be back? Are we ready to go forward? One of the things a number of them said, and I remember one guy in particular, was the guests who come on board this next cruise are going to have the best cruise anybody has ever had in the history of cruising. That is what they are thinking about. They are looking forward. They are looking to a longer-term future. And they should have been yelling at me and screaming, why did you not do more for us? They were just amazing. And talk about culture, that is the thing that I was just so blown away by.
Adam: Richard, what can anyone listening to this conversation do to become more successful personally and professionally?
Richard: Do what you love. Love what you do. Commit to it. Do it with intentionality. Understand this is what I am going for. Whatever your role is and whatever your industry is, this is where I am going, and I am going to go at it with your full heart.
Adam: Richard, thank you for all the great advice, and thank you for being a part of Thirty Minute Mentors.
Richard: Adam, thank you for giving me a chance, and good luck to you and your listeners.
