Management: Only People Can Make People Happy

Instagram’s “Icons + Images” conversation with Steve Wynn is the most fascinating CEO interview I have watched in years.

During the entire exchange, the casino tycoon and creative genius¹ demonstrates his strategic vision and unrelenting passion. He discusses many topics, including the moving story of his father, the unprecedented way he involved Las Vegas’ 2,000 taxi drivers in the launch of the Encore resort, and the filming of the most spectacular ad ever shot in Sin City.

Still, the most impressive part of the interview to me is when Steve Wynn explains his management philosophy. He touches on many topics that I regularly address on Superception: The relevance of meaning in motivation, the role of respect in leadership, the development and management of a corporate culture, the importance of making a good impression on customers when things go awry, as well as the ethics and added value of a manager.

I have transcribed and only lightly edited for clarity some highlights of the almost-hour-long interview (the full video is at the bottom of the article):

“The Wynn experience hasn’t a lot to do with the stuff – the buildings, the crystal chandeliers, the handwoven carpets, the onyx, the marble. All of us understand that things have gotten bigger and fancier and more beautiful in Las Vegas. This city has always been the place where people come to live big. That’s the kind of experience they can’t get at home.

But, at the heart of it, is yet a more dynamic and more profound truth. And that truth is that only people can make people happy. So, at the heart of this experience, has been a constant striving to create a human resource dynamic that is special and personal. What we try and do here, besides showing everybody good taste and beautiful things, is to give folks who come to this building an experience in a way they are touched by the people who work here, that is personal, warm, and special.

In a business, money often enters the conversation. How much do people get paid? How do you pay them? Do you give them incentive compensation? All of that matters but, when people are being paid a fair wage, money is pretty much off the table. What really matters is self-esteem. If you can make a connection between self-esteem and working in a business, you have harnessed the ultimate energy in a human dynamic.

So what we do here, in order to get all of us to take care of all our customers, is we have used every idea and technique that we could imagine to try and get our employees to reach out and touch personally people who are here. And we do that by constantly reinforcing the connection that, if we can do that, if customers have that experience, then this place is truly the best place of its kind in the world. That human resource focus eclipses even technology because, at the end of the day, if someone takes care of you, if someone demonstrates a real earnest concern for your experience, then it becomes a self-fulfilling prophecy: You will feel wonderful and you will love this place. It’s a simple truth, it’s easy to say I guess – I just did – but it’s hard to do. […]

Respect is a key word. Unlike in other resorts, our employee cafeteria is like the finest restaurant. How can our employees understand luxury if they didn’t experience it themselves? How can they understand respect for customers if we didn’t show it to them? How simple is that equation? Respect is the way that human beings come together in a constructive way. The minute that’s lost, everything goes to hell in a hand basket. […]

There is no secret about what we are doing here; we are talking about it. When we sold Mirage Resorts to MGM and they got Treasure Island, Mirage, Bellagio and Monte Carlo, a lot of my former employees stayed with the company because I bought the Desert Inn, we were going to tear it down and start over again, I didn’t have a place for everybody. So the kids that had built those companies with me, who had executed this program that we are talking about, they knew all about it. No secrets. And yet, for some reason, the culture is elusive.

To us, payroll is usually the biggest expense in most businesses. To me, the payroll, the staff is the biggest single asset to exploit to create an extraordinary enterprise. I think of the employees as the culture. That’s why we have never done a layoff. Keep people safe, secure, make them feel good about themselves. If you can make the people who work here feel about being here that they are the kind of people they want themselves to be, if their self-esteem is somehow linked to being part of this family, well you light it up. And there’s no other alternative to that truth. That’s what it takes to have a culture of excellence. […] That’s how we are as people: We respond to respect and personal attention. Keep that mind when you run a business and you will be ok. […]

We have the lowest turnover in the industry by an enormous margin. If you look at any industry and see which company has the lowest turnover, I tell you you will identify the market leader in that industry. Because they have the culture of their staff. It’s about how we handle each other. Period. Marketing is what we say to each other more than what we say to the public. Who touches customers here? Me? I’m lucky if I meet six guests during the day. The people who define this place are the people who touch you. My job is making them happy and anxious and really thrilled with the possibility of making a big difference to one of you when you walk in this building. […]

Our employees know that the greatest single moment that we have to define ourselves to the people is when something goes wrong, as it will inevitably will. You know, the food comes wrong, a phone doesn’t get answered properly and we miss a message or you are confused about where to go in the building. My employees are looking for the moment when things go wrong because that’s the moment when we define ourselves the most perfectly. […]

Businesses go up and down. Businesses do great and then they get in hard times. The cycle of business in our society is as certain as sunrise and sunset. The difference is we know when the sun is coming up tomorrow but we don’t know when business is going to go down and we don’t know when it’s going to go up. As a businessman, my job is to keep the financial condition of the company in a position where we never bounce around our service levels or our staffing just because of the business cycle.

The recession hit in 2008. We opened up Encore – for over 2 billion dollars – on December 22, 2008. How is that for timing? Ohhhh. You couldn’t have picked a more awful moment to launch a 2 billion dollar resort. It was disastrous. I said to myself: ‘The you know what has hit the fan. This is a big chance for us.‘ All the places up and down the street did layoffs. We did none. It was my moment and my colleagues’ moment to define who we were. Either this was a place where every man for himself – the bottom line is all that counts – or it was a time to define that we were a family and that we were going to handle this as a group.

So we cut all the executives’ salaries by fifteen percent, and we put all the employees on four days instead of five, so that they kept their insurance and most of their income. We faced the problem together. And it brought us closer. We took better care of our customers even tough occupancy was lower. And, during that period of hard times in 2008 and 2009, we built our market share because we sent the message to our employees first, to the staff of people who made up this family, and the people who came here, that this place would be consistent, that we wouldn’t bounce around, that we weren’t a cork on a big wave in a stormy sea but we were a big ship that could plow through. Hard times are good times for defining yourselves. […]

At the end of the day, you keep sticking with primary truths. In your life, you will find, at any given moment, that the status quo isn’t any good anymore. It’s not working. So you have to make a change. Let’s make it binary. You have to do either A or you have to do B. And the trouble with moments like that in life is that both A and B are not purely positive. There is a downside to A and there is a downside to B. What do you do at moments like that when you have to make a decision? You go back until you get to something you know is true and then go back to the dilemma and to the decision. Repeat what is primarily true and, all the sudden, B will look better than A or vice-versa.

I find in my job as a CEO that the only time people come to see me is when something is wrong. They think that, if it’s good news, I found out already. When one of my colleagues comes to see me about a problem, it usually means it is because there is an exposure that they are concerned about, that something could go wrong and they have to make the decision. And, invariably at this moment, the person who comes to see me knows more about the technical detail of the subject matter than I do because they are closer to it.

So what’s my role as a boss? My role as a boss is to act like a, I guess you could call it an advisor, a helper. My job is to clarify and remind each of us what is really important and then go back and look at the decision. Almost a hundred percent of the time, they come up with the answer. And all I have done is being a facilitator. I enjoy that role, I think it’s healthy: It’s healthy for me and also demonstrates my respect for my colleagues. And that’s how we face the future.”

Obviously, Steve Wynn operates in a service company where the customer experience is determined by the interaction between employees and the guests. Still, his management philosophy is accurate for all industries: Happier, safer and more respected employees are more efficient whatever their company’s business.

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¹ Only in Las Vegas, he has created the Mirage (1989), Treasure Island (1993), Bellagio (1998), Wynn (2005) and Encore (2008) resorts. He has also helped revolutionized Sin City with the development of family-oriented entertainment offerings (Cirque du Soleil shows, art collections…).