Carnival's CEO on Steering a Turnaround: Listen to Your Employees
14 June 2018 - 12:29AM
Dow Jones News
By Vanessa Fuhrmans
A knack for blackjack turned Arnold Donald into a cruise-goer in
his 20s. He had heard ship casinos didn't shuffle their decks all
that much, making it possible to count cards. His winnings, he
says, often paid for much of the vacation.
Taking the helm of Carnival Corp. in 2013 was more of a gamble.
The year before, Carnival's Costa Concordia capsized off the
Italian coast, killing 32 people. Then in early 2013, an
engine-room fire aboard the Carnival Triumph sparked another
crisis, leaving more than 3,000 passengers to contend with
overflowing toilets and no air conditioning for days in the Gulf of
Mexico.
Mr. Donald, a director on Carnival's board who had built much of
his career at agrochemical giant Monsanto Co., was pulled in to
right the corporate ship. He spent his first months as CEO sounding
out employees.
"If you listen to your employees that do all the work, they'll
tell you how to execute," he says.
Mr. Donald, 63 years old, has since steered a turnaround.
Carnival's market value has nearly doubled to $45 billion and net
profit has climbed to $2.6 billion in 2017 from $1.1 billion in
2013.
One of his biggest tasks today is convincing more consumers that
cruises aren't just for the "newly wed and almost dead," he says.
Mr. Donald recently sat down with The Wall Street Journal. Here are
edited excerpts from the interview:
The Wall Street Journal: You took over at a difficult time. How
did you boost employee morale?
Mr. Donald: I pulled the top leadership together and said, "What
does success look like for you and your family five years from now?
What does success look like for you and your department? Now share
that with each other." I wanted us to get listening established in
the organization. I said, "Wait a minute. If I had told you guys
this stuff, you wouldn't feel the same. That's how your people are,
too. We have to pull together your direct reports around the world
and have them do this too."
WSJ: What's the coolest new cruising technology?
Mr. Donald: It's technology enabling our crew to deliver to
guests highly personalized service. You carry a little disc and
wear it on a bracelet, or in your pocket, and that disc is like a
license plate. For example, you're at a bar -- the bartender will
know your name. They know what drink you'll have. Or you're in
Alaska, there's a whale off the bow of the ship. You run out with
everybody else to see the whale, and the drink will come to
you.
WSJ: Last year's hurricane season was especially intense. How
has that affected Carnival's business in the Caribbean?
Mr. Donald: The reality is five ports that are heavily
frequented by cruise liners were directly impacted. There are 80
ports in the Caribbean. So even though there was a bad hurricane
season, the Caribbean was open for business the whole time.
WSJ: Carnival was briefly the target of an anti-Trump boycott
campaign last year because it helped sponsor the New Celebrity
Apprentice and the president was an executive producer. How did you
weigh the decision to no longer sponsor the show?
Mr. Donald: We didn't really stop the sponsorship. We were on
two episodes, the show ended and that was it. We weren't making any
kind of statement one way or the other. There are a lot of people
who are Trump supporters and there are people who are not -- all of
them cruise with us.
WSJ: Are there political issues you would feel compelled, as a
CEO, to take a public stand on?
Mr. Donald: We all have our own personal feelings, but I don't
own this company -- the shareholders do. I have a responsibility to
my employees, to the shareholders and to the communities we touch
and operate in. You have to look at each case that way.
An example is Bermuda [which banned same-sex marriage this year
before its top court overturned that law last week]. We have ships
that are flagged in Bermuda. We also have a lot of people who get
married on our ships, and our company position is that we are
supportive of same-sex marriage. We have to comply with the laws,
but that doesn't keep us from saying to Bermuda, "You may want to
think about this." I wrote a letter and asked it to reconsider.
There are other issues where we wouldn't take a position, because
it's not relevant to our business.
WSJ: You've been a vocal champion of greater diversity in
corporate America. Why is it so tough for companies to move the
needle on this?
Mr. Donald: Most places don't get there because people don't own
diversity as a business imperative. It can't be just the right
thing to say. If you have very different people who are aligned
around a common objective, they will out-solution a homogeneous
group almost every time -- that's real. So if you own it, you make
diversity an integral part of your whole thought process on how to
create shareholder value.
WSJ: What advice do you privately give other business leaders on
boosting diversity?
Mr. Donald: Start at the top. Everybody wants to start at the
bottom or the middle. They say they can't start at the top because
"the people don't know our culture," or "they don't have the
experience." Well, yeah, start at the top and take a risk. And then
don't quit on them immediately when they don't fit. What you have
to do is say, "This person is different -- that's why we brought
him here. What are we going to do to accommodate that
difference?"
Write to Vanessa Fuhrmans at vanessa.fuhrmans@wsj.com
(END) Dow Jones Newswires
June 13, 2018 10:14 ET (14:14 GMT)
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