Ted Teng ’79 graduated from Cornell University’s School of Hotel Administration. Post-graduation, Mr. Teng worked for various hotel companies including Starwood, Sheraton, Westin, Wrather, and Wyndham International. He went on to lead as CEO of Prime Opus Partners and later led The Leading Hotels of the World as President and CEO for almost 11 years. Throughout his 40-year career, Mr. Teng has helped grow some of the most prominent brands in the industry. He now serves as First Vice President of Cornell Hotel Society and takes part in various organizations in the Hotel School. Mr. Teng now enjoys owning 100% of his time and, along with volunteering his time to Cornell University, enjoys life by going on runs and spending time in his Texas, Cayuga Lake and Kahala Beach homes.
How has your background and identity contributed to your initial interest in working in the hospitality field and how has the Hotel School played a factor in that?
I came to Cornell as an engineering student. I was going to be a civil engineer. So, I’m a failed engineer. And I think the choice of the hotel industry was somewhat accidental. I didn't want to leave Cornell after two years of engineering--I wanted to stay at Cornell. And I found that the hotel school has a good business education and I like food and people. So I thought, ‘give that a try’ and here I am 45 years later. So it was somewhat by chance that I became a Hotelie.
How was the Hotel School back when you were at Cornell compared to what it is now?
Well the education was different. I felt that for the generation before me, the school was preparing them to be department heads. In my generation, I think they were preparing us to be hotel managers. And today, I think the Hotel School’s education is preparing people to run a business. I would say there were probably a handful of Asian Americans at the Hotel School, so the student body was very different back then. Now, there are certainly a lot more Asian and Asian American faces and it’s a bit more international. Inclusion is not just what it looks like, but how people treat each other and I think we made a lot of progress, but we still have a ways to go at Cornell.
How did you come up with your motto “Preserve, Enhance, and Invent” and how did you take this to heart as CEO of Leading Hotels?
When I went into Leading Hotels, I developed five guiding principles to guide me in leading Leading Hotels and “Preserve, Enhance, Invent” was one of the five guiding principles, but I guess it's a catchy phrase that gets picked up more than the other four. “Preserve, Enhance, Invent” for me was about connecting yesterday, today, and tomorrow. It’s about the past, present, and future. If I was running a startup, there’s nothing to preserve; it’s all about inventing. And for an 80 year old company, I wanted to make sure that people didn’t see me coming in just focused on the changes I’m going to make because that makes people very insecure and defensive and tends to block the progress you want to make. Clearly, the company was not as successful as it could be, so things had to change, but yet, not everything had to change. And I think this was my way of reassuring a very conservative company. While my mandate was to disrupt and change, I was still going to preserve the things that were of value to the company going into the future. There’s a school of thought called Appreciative Inquiry and it’s a wonderful tool as you examine companies and one of the teachings is “don’t trash the past.” So, I went through a process of really acknowledging what’s been great about the past and the successes so that we could start looking at where we are today. What needs to change? And what needs to be invented? What do we need to preserve that’s important to us into the future? What are we doing today that needs enhancing? And what are we not doing today that we need to start doing? It was a way to connect people to the future, but also hold onto the past. There are some things in the past we don’t need to preserve; we’d be better to just preserve them as history and be proud of it, but not necessarily practice into the future. But there are a lot of things that we’re doing today and we just need to do them better. And then there are things that we’re not doing that we need to start doing.
As someone with a vast range of experiences in the hospitality industry, what would you say have been your favorite projects or aspects about working in this area?
I’ve worked with many different companies, many projects, many situations, many expansions, a lot of turnarounds. I would say it’s the people that I work with. Some people I work with like me, some people don’t like me. It’s fine. But if you ask people about me, the answer is very commonly that “I learned a lot from Ted.” It doesn’t mean they like me. And it’s different than Ted taught me a lot. It’s different in the sense that they learn. They took the initiative to learn. I am proud to have created an environment that they learned from their work. Learning is very personal. It’s very individualized. Different people learn in different ways. And I’m proud to say that probably the most common answer is, “I learned a lot from Ted.” During my time at Cornell, I had the fortune of being a teaching assistant in four different classes. And I think that’s what got me started in training and developing people. I knew that different students learn differently and if you can somehow help them turn on the light and they learn it themselves, it’s really powerful. And I think I took that with me. I enjoy sharing knowledge and seeing people grow. There is a saying: “If you want to really learn something, teach it.” Sitting in class learning is very different than having to get up and teach it. You have to gain greater insight. But as you prepare to teach it, it’s amazing how much more you’re learning, so sharing knowledge and helping people learn has always been a passion of mine.
What are some of the greatest challenges you faced during your career in hospitality?
The imbalance between labor and capital, and this is particularly highlighted in our current crisis. Throughout my career, I started to really learn what business is about. Most people will say, “Oh, business is about maximizing shareholder value.” Well, that’s one angle to look at it. I’m not a socialist. I don’t particularly prescribe to the triple bottom line type of theory. Some people will say, “Well, we have employment for people so that we can drive ROI.” I look at it the other way around: I have to be able to drive ROI in order to create and sustain employment. Creating employment is a big joy because I know most people in the U.S. or maybe even around the world are able to live a life that they want because of their job. And if I can create meaningful, well-compensated, sustainable employment, then I have done a lot of social good. Now, I’m not naive to think that I don’t have to deliver a return to the holders of capital in order to keep the business running, so I know I have to deliver ROI. But creating and sustaining employment is the vehicle to what I really want to accomplish. The trouble is that whenever there’s a crisis, the holders of capital will rush to preserve capital. I understand that. But it’s often done at the expense of labor. Look at the current crisis: very quickly, owners are saying, “Well, we’re going to layoff employees because we have no revenue. Well, you have 10 good years. You made a lot of money in those 10 years. Why not reinvest in the company? Why not take a loss? Why not inject some cash and keep people employed; give them something else to do that you didn’t have the time to do when the business was busy. There’s a lot of jobs that can be created within the same business in order to keep people employed. Right now, the first thing holders of capital will do is layoff employees. This crisis will be just a bleep on the radar. If you have a bad January, you’re not going to lay off people because you know you’re going to need them in February. I joined Leading in September 2008. Two weeks later, Lehman Brothers declared bankruptcy and the world changed. But I stood in front of the town hall meeting and said to all the employees, “There will be no layoffs in this crisis.” When I made that promise, I didn't know how I was going to keep it. But I figured I'll figure it out. Because the business of Leading Hotels is about product knowledge of our hotels in relationship with our hoteliers and the intermediaries. I can easily justify laying off 30-40% of the staff. But then six months, eight months later, when the economic expansion returns, I have to rehire people, but they won't have the product knowledge nor relationships they have today. So I knew it was a crisis. And I need to get through it, but laying off staff was not my first option because that is a critical success factor to the company. Now, that's not to second guess what's happening in this crisis. But I just hate the fact that labor is always on the receiving end of preserving capital. Now my belief is labor needs to wise up. You cannot rely on capital in times of crisis. And it's fine for holders of capital to do what they do, but the labor needs to be smart and have their own safety net and demand compensation that's fair to them when the employer needs them. Don't believe in the, “Oh, we're in this together,” and, “There'll be a bright future; stay with us” because that's an empty promise. What do you tell the families who got bills to pay, rent to pay, and food to put on the table? The trouble I have is now the continuation of deepening the imbalance, but I think it's going to swing the other way--labor is going to wise up. So that's a challenge I see in the industry. And I struggle with it. I can try to do what's within my authority and sometimes that's an idea that has to be sold to a lot of people because they don't share that. And I have to look at what's in their best interest as well and enroll them into it.
What do you think are some of the most important skills required to succeed as a business professional in the hospitality industry?
I think there are several skills that I find are not taught in classes. One of them is pattern recognition. There is no Pattern Recognition 101. Pattern recognition is a skill where you can visualize what’s going on and get to the essence of things. If you see a pattern over time, or over different markets, you can start to address those. Another important skill is about managing conversations. If you asked me what I do every day as a CEO, I would tell you that I do nothing but manage conversations. Everything is about managing conversations. Managing conversations is the interaction between listening and speaking, and that is a skill that is critical to anyone who wants to be successful in business, particularly a business dealing with people, whether it be customers, employees, Board of Directors, suppliers, anyone. If you have people involved, you’re managing conversations. And the more skilled you are at managing conversations, the more you’ll get accomplished. I’d say the third skill is a healthy amount of self doubt. That sounds contrary to what you hear a lot. You have to have confidence, but it’s wonderful to question yourself. We’ll never have all the information that we need to make decisions, but you’re going to make them anyway. But really question yourself. It’s fine to say, “I was wrong” or “I don’t know.” Discovery starts with three little words: I don’t know. If you don’t know, then you’ll learn. If you already know, there’s nothing to learn.
Do you believe that hotels at this time have a social responsibility to aid in the fight against COVID-19 (i.e. housing doctors and nurses)?
I don’t think businesses have social responsibilities. Certainly not obligations. I think it’s an opportunity because at the end of the day, investors don’t invest for us to be charitable. If you look at Four Seasons Hotel in New York, they were the first one to open the hotel up for healthcare workers free of charge, and Governor Cuomo even tweeted about it. That’s an opportunity to build the Four Seasons brand as a brand that cares about people. Dorchester Collection didn’t have the obligation or responsibility to retain all their staff and pay them in full. But they did. That’s an opportunity because now people know that when this is over, Dorchester Collection is going to have very grateful staff, and grateful staff deliver better service, so they don’t need to retrain new people. So there is a business reason, but it’s a choice. It’s a choice that a company made that they believe is good for their business in the long term, not just in terms of how they manage costs in the short term. Even if it doesn’t return any profit at all in the future, this is what they choose to do because they believe it’s the right thing to do, and this decision is up to each business.
How do you think firms within the hospitality industry have been impacted by COVID-19 and how should they shift their organizational strategy?
Well, I think in the short term the impact is severe. In past recessions, we would drop maybe 10-20% in volume and 10% in rate. This is chopping at 90% and it’s very, very severe. My own belief is that the recovery is going to take longer than what the market is anticipating. But I think when the recovery starts, it will be much quicker. Every recession, every crisis is different. Every time we face a crisis, we have to stop what we do. Stopping what we do is a short term solution, never a long term solution. In the long term, we keep doing what we do, but we change how we do it. In the 70’s, there was an oil shortage, and of course people stopped driving in the short term. But in the long term, they didn’t stop driving. And it wasn’t just about pumping more oil, but the solution was in higher fuel efficient cars. So my sense is also here, we won’t stop what we do, we’ll do them differently. The challenge sometimes is that people look at current solutions and try to extrapolate them into the future. Six feet apart is a current solution for stopping the spread of the virus, but six feet apart is not a viable solution for restaurants--the real estate and space is just wrong. So rather than looking at applying the current solution, we have to look and say, “What is this solution trying to accomplish?” Well, it’s not trying to keep people apart, it’s trying to keep from spreading the virus. Well, I predict restaurants will have more partitions between tables and it’ll be built into the design. Maybe the waiter won’t come and take your order. Maybe it’s done by a video and maybe the food gets delivered by robot carts. I don’t know what the solution is, but I think applying the short term solution to the long term won’t work. I think we have to be creative and come up with solutions that accomplish what the short term solution is trying to accomplish. I think in the long run, a vaccine and cure for this virus is the answer. Social distancing is a short term solution. I think in the long run, things are changing everyday anyway. The crisis just causes us to react much faster to change.
Which experience has influenced your career and your eventual becoming the CEO of Leading Hotels the most?
I think it’s multiple experiences that got me to where I’m at. I started out in the business in financial management because I wanted to see the entire business from a financial standpoint. And then eventually I got into operations and development, and eventually got into the executive branch, the C suites. I think if you compare that to a symphony, some people like to play one instrument really, really well. And I enjoy being the conductor and bringing the symphony together. I like to see many things operating together and then seeing them work. So that's that's something for me. Maybe that's the engineering part of me still there. I really enjoy running a business and turning different knobs and levers and making them work. The other part of it I think is I got to see the business on a global basis. A lot of people like to stay in one place and be a specialist. And I learned so much going global and learning about different parts of the world, what we have in common with each other, and how we are different. And I think that part particularly built my experience when I joined Leading 10-11 years ago. I knew I brought certain skills to the company, whether that be knowledge of the hospitality industry, knowing how big brands work because my entire career was in chain brands, and just the business skills of fixing and building businesses. But there were also parts of the company that I knew I would be learning from. And that's what excited me. One was working in the luxury segment. In the past, I occasionally had luxury properties, but the brands were not of luxury. Another part that excited me was working with European businesses; most of my career was in North America and in Asia Pacific, so the change was interesting to me. And so there are things that I knew I could bring to the table and I also knew that there would be things that I will learn, so that's what attracted me to that particular opportunity.
What advice would you give a Cornellian in the Hotel School or any other college student interested in entering the hospitality industry?
I think we all learn differently. It’s very personal, very individual. The same person in a different company at different times is going to react differently. What worked in one company may not work in another company, what worked in one situation in the same company won’t work in another. What worked years ago won’t work today. Learn from many mentors and make sure those mentors are all very different. I was fortunate to have mentors that came along in my career at different times when I needed to learn different things. You have to be present to know how people can help you, you know, you’re not going to get an invitation saying, “I’ll mentor you.” There’s nothing wrong with asking. Start by just asking for advice.