John J. Russell, Jr. CHA, CHME - Learning Through Experience

By Rosalie E. Leposky

Last month: John J. Russell Jr., president and chief executive officer of Resort Condominiums International, Inc., and vice-chairman of the travel division of RCI's parent company, Cendant Corporation, grew up in a small Delaware town. He graduated from West Point and spent five years in the Army. After entering the hospitality industry in 1974 with a marketing and sales position at the Sheraton Park Hotel in Washington, D.C., he rose through the ITT Sheraton Corporation organization until 1983, then joined Days Inns of America, Inc., as vice president of marketing.

An Entrepreneurial Interlude

Russell left Days Inns in the summer of 1987 to form his own company, Regna Russell Associates Lodging Enterprise (RRALE), with hotelier Paul Regna, now senior vice president of sales for the resort division of MeriStar Hotels & Resorts in Washington D.C., which manages most of the MeriStar Hospitality Corporation properties. "We rocked and rolled along life's edge for about 18 months, managing three hotels and marketing about 30 others," says Russell.
John J. Russell, Jr. 

Then Juergen Bartels, president and chief executive officer of Carlson Hospitality Group, invited Russell to be a Carlson vice president and chief executive officer of Colony Hotels and Resorts, a division of The Carlson Companies in Minnetonka, Minnesota. Eventually Russell also became a Radisson Resorts executive vice president.

Russell joined Colony in the fall of 1988 with the understanding that Bartels would move Colony's corporate office from Sherman Oaks, California, to Minnesota. Colony was primarily a management company for condominiums and timeshare resorts in Hawaii and on the U.S. west coast. "I wanted to consolidate the company and aggressively develop -- nationally and internationally -- more condominiums, hotels, resorts, and timeshare properties," Russell says. When he joined Colony, it was managing 22 properties; when he left in 1991, Colony's portfolio had almost doubled and included properties in The Bahamas, Israel, Jamaica, Mexico, St. Martin, and Thailand.

Building Bridges of Understanding

As part of Colony's international initiative, Russell visited Israel for the first time in 1989 and began a longstanding relationship with the University of Tel Aviv. He has since traveled to Israel for other international hospitality and real-estate development projects. On one trade mission to Israel and the Middle East, he was among 30 executives and wives from the financial, high-technology, and hospitality sectors.

"Israel is the launch pad for the Middle East. It's a good place to do business," Russell says. "I have established personal friendships and business associations in Israel with Israelis, Jordanians, and Palestinians. Our mutual interests in travel and tourism help to bridge the gap between peoples. As we discuss business, we break down borders."

In 1997 the American Friends of Tel Aviv University bestowed upon Russell an award for tolerance and understanding, which he values more than any other recognition he has received.

Taking Root in California

In 1991, having tired of almost continuous worldwide travel, Russell became vice president of Benchmark Management Company, a conference-center management firm with eight resorts, and general manager of one of them, the new 405-room Resort at Squaw Creek in Olympic Valley, California. The resort included an 18-hole Robert Trent Jones, Jr., golf course, ice-skating rink, restaurants, and retail shops; the job included a residence on the property.

"It was the right time, personally and professionally, to take control of our destiny," Russell says. "From 1974 to 1991, we moved eight times, about the same as if I had stayed in the military with a new duty assignment every two to three years," he says. "With many corporate jobs, you see nothing for years from what you do day to day. Managing a resort is more rewarding because you have immediate results." Moreover, Russell likes to ski in winter, hike in the mountains the rest of the year, play golf and tennis, ride horseback, and go canoeing and whitewater rafting. "I enjoy outdoor activities that allow me the opportunity to clear my mind," he says. Russell started with Benchmark in December of 1991 and loved working and living in Lake Tahoe. "I thought we would be here for years," he says, "but my wife, Betsy, is a city person. She hated the small Lake Tahoe community (population just 22,000 at the time) and she missed our families."

Back to Days Inns

In June of 1992, Russell received a call from Henry R. Silverman and John D. Snodgrass, CHA. (Silverman today is president and chief executive officer of Cendant Corporation; Snodgrass is chief executive officer of Great American Venture, a private investment company, and a member of the Cendant board of directors.) Silverman and Snodgrass owned Ramada Franchise System, Inc., and Howard Johnson Franchise System, Inc., and had just bought Days Inns of America, Inc., out of bankruptcy.

"They wanted me to be Days Inns' president," Russell says. "They needed someone familiar with Days Inns and with my background to help clean up Days Inns' image after the bankruptcy; to focus on marketing, quality, and franchisee relations; and to grow the company."

"I had no personal interest. I turned them down twice -- but Betsy wanted to move. One day in mid-June, while I was out playing golf, John and Henry called again. This time Betsy answered the phone. They gave her the hard sell, and she accepted the job for me. This ended up being the best move we have made."

Russell had worked for Silverman before, during his first Days Inns stint. Shortly after Russell left Days Inns in 1987, Silverman sold the company to one of his largest franchisees. It quickly went public, then private again, and was resold.

In 1990, Silverman had a vision that franchising would become a very lucrative business, if someone could figure out how to manage and grow it. He saw two opportunities: offering limited-service mid-market hotel rooms on a franchise basis, with the franchisor earning money on the purchase of a franchise and on a percentage of the franchisee's sales revenues; and a trend -- particularly in the United States -- toward brand consciousness among consumers who appreciate the consistency, quality, and security that accompany brand names.

"Henry acquired two hotel brand names -- Ramada and Howard Johnson -- and formed Hospitality Franchise Systems Inc. to grow these brands through franchising," Russell explains. "He started to hire back people he was comfortable with from his Days Inns experience and to emphasize quality, service, and opportunity. In 1991, Days Inns was bankrupt. In January of 1992, Henry bought it and hired John Snodgrass to run HFS, and in December of 1992, Henry took HFS public."

When Russell returned to Days Inns as president in July of 1992, the Days Inns system had about 1,080 properties. When he left again in September of 1995, the system had grown to about 1,700 properties. "To build credibility, we hired NBC's Today Show weatherman, Willard Scott, to be our spokesperson," he says. "We also improved quality, instituted a rating system, created some competitiveness between franchises, developed operation and financial programs, and helped individual franchisees improve their properties."

From 1992 to 1997, while Days Inns grew its presence outside the U.S. from four to 14 countries, Silverman was increasing HFS's portfolio of hotel chains with the purchase of Knights Inn Franchise System Inc.; Super 8 Motels, Inc.; TravelLodge; and Villager Lodge Extended Stay (Village Franchisee Systems, Inc.). He also was developing Wingate Inns, L.P. From about 800 franchised properties, HFS grew to about 6,000 hotels and motels with about 530,000 rooms.

"Henry learned an important lesson in franchising -- that one company can provide management and services, without duplicating efforts, to eight or more hospitality companies bearing strong brand names for the same cost as for four such companies," Russell says. "Then he used the same strategy to franchise real-estate companies owned by Cendant: Century 21, Coldwell Banker, and ERA."

HFS purchased Century 21 late in 1995. Its managing partner and chief executive officer was Robert W. Pittman, who in 1981 had founded MTV. Now he is president and chief operating officer of America Online, Inc. Pitmann asked Russell to run franchise sales for Century 21 and help to infuse it with the HFS culture and philosophy. Russell spent six months there, and then went back into hospitality.

"John Snodgrass was becoming concerned that we were losing our focus on our core hotel business," Russell says. "He thought we needed a chief executive officer and chairman for our hotel division, and he offered me the position. They call me their utility man."

Russell ran the HFS hotel division from 1995 to September of 1998, when he moved to RCI and the HFS travel division.

HFS Acquires RCI

In 1997, as an extension of its hospitality business, HFS purchased RCI. Because Russell knew something about timeshare from his Colony Hotels days, he did some of the due-diligence work that preceded the acquisition.

Then, in December of 1997, HFS merged with CUC International Inc., to form Cendant Corporation. "CUC was an affinity-based club-membership, direct-marketing, and electronic-commerce company with a large database," says Russell. "We were brand-management and franchising experts. Boy, we thought we had a business marriage made in heaven." The results were not entirely what HFS executives expected, due to accounting irregularities at CUC that became evident several months after completion of the merger and caused the share price of Cendant's stock to plummet.

In September of 1998, when L. Steven Miller left his post as chief executive officer of RCI to join Sunterra Corporation, Russell was called in to complete the assimilation of RCI into Cendant. "Henry and Stephen P. Holmes (a Cendant vice chairman) and I talked about what was good about RCI, how to make it better, and how we could optimize and capitalize on other Cendant resources to create synergies and add value for RCI's consumer members and affiliated resorts.

"Assimilation of business cultures is one of the challenges when you acquire or merge a strong, entrepreneurial, family-run business such as RCI with a publicly held company such as HFS. They have different objectives," Russell says.

"Employees in every acquired or merged company expect the worst, and these fears have to be addressed immediately. Remove the fears and half of the uncertainties will disappear. The key to accomplishing this is open, honest discussion. It is always important for the acquiring company to preserve what is good in people, concepts, and practices, while changing things that may need to be changed to take the acquired company to the next level."

A Simple Philosophy

Given the peripatetic nature of his career, Russell says, "it is well known that after two or three years I get itchy and bored, and that I love new challenges. Every time I start a new job, I give it 150 percent to learn the business and the people, and to be sure I understand the mission. I like it when someone tells me that I do not know anything about something. I know I can learn. When I am told that something is impossible, or that I will fail, I really like to find a way to do it."

Russell defines his professional strengths in three ways: "First, I have good leadership skills," he says. "Second, I am a good business manager. Third, I have good vision and see opportunities when and where no one else does.

"Cendant knows how to hire good people and develop their talents, and most important, Cendant knows how to get results."

For more than 20 years, Russell has kept on his wall a simple placard that says "Think Smart." "I made up the phrase to define my management style," he says. "It reminds me to think service, marketing, attitude, respect, and team."

Quirks and Foibles

Modulating John J. Russell Jr.'s calm demeanor and intuitive grasp of business situations are the odd quirks and foibles that make him human.

"Johnny has the worst case of Russellitis," says his brother, Dean. "We misplace car keys, wallets, and checkbooks. You name it. We will misplace it.

"Business-wise, Johnny has everything squared away, but socially and in everyday activities, he depends on his wife, Betsy. Johnny likes gadgets, but he's a dinosaur when it comes to computers. Fortunately, his son, Jess, is good with computers."

"Until I showed him," Jess says, "my father did not know how to turn off his laptop. I am not sure why he has it. He usually leaves it in his office. Recently when he had to give a presentation using PowerPoint, he asked me how to use PowerPoint and how to open and turn on his new laptop, which operated differently from his old one."

"When we were dating," Betsy says, "John was at Fort Benning and I was at Fort Bragg. Every week he would send me a blank check to cover the cost of my airplane ticket. Each week I filled in a different amount. After about two months, John asked me about the difference. I told him I bought a new outfit each week and added it to the cost of my plane ticket. That is absolutely how trusting John is. Today he carries a credit card, but not a checkbook because we don't want to leave him penniless. Personal funds are not on his radar screen, so I take care of all family finances."

William E. Weld, CHME, worked with Russell at the Sheraton Park Hotel in Washington, D.C. "The first day I took John on a sales call, he bought a new car at a dealership we drove by at lunchtime," recalls Weld. "That car was the worst John has ever owned."

Betsy spent 18 months supervising construction of a new home on Lake Oconee in Reynolds Plantation, about an hour and half east of Atlanta near Greensboro, Georgia. "We fell in love with Georgia when we lived there from 1983 to 1988," John says. "We like the outdoors life on the lake and the golf courses nearby."

Betsy gave the architect and contractor 30 years of accumulated designs and pictures to create what may be the Russells' retirement home, a clapboard structure with wraparound porches on about an acre of land.

In October of 1998, John and Betsy flew to Georgia for John's first view of their finished house. "John turned to me enroute and asked for the first time how much the house cost," she recalls. "He knew the range but he had never asked the specifics. He's not a detail person. He's more marketing and sales oriented, and I am more into operations.

"John never judges people or lets it bother him that other people are not as trusting. Maybe it is his West Point training, but he goes into meetings and business relationships assuming everyone practices his same high level of business integrity. He looks for the good in everyone and is rarely disappointed."

Great Sense of Humor

William J. Hanley, a longtime friend and professional colleague, says Russell is "a remarkable, people-oriented person with a great sense of humor and the talent to get the most out of people because he enjoys working with people.

"John likes to abbreviate people's names," says Hanley. "Hanley became Lee. He still calls me Lee."

"Russell's nicknames for me are based on my initials, HP, so he calls me 'high profit' or 'hungry person,'" says Hasmukh Parbhu Rama, CHA. A Cendant franchisee and current AH&MA chairman, Rama is chairman and chief executive officer of JHM Hotels in Greenville, South Carolina.

For the past several years Russell has participated in two golf foursomes of West Point classmates who meet annually for a weekend of golf, beer, and adventure. This year the gathering took place at the Russells' new Georgia home. "He provided us with Cendant logo golf balls. We're all terrible golfers [Russell's handicap is 21] and we seeded the woods of the three golf courses near his house with little round Cendant commercials," recounts Barry J. Robella, executive director of strategic programs in the McLean, Virginia, office of Entrust Technology, Inc., a security company based in Plano, Texas.

The weekend also included a memorable boat ride. "Captain Russell set out to take us to a local watering hole on his new 21-foot Mariah named Thanks Hank," Robella says. "We saw a Lake Oconee buoy with a red ghostbuster sign with a slash through it. We're all army men, so no one knew what the sign meant. Captain Russell headed for it, thinking it was a channel marker. Too late, he realized it marked a large submerged rock. We limped back to his dock with a severely crippled propeller."

A Belief In Relationships

John J. Russell Jr. is a people person. While migrating through a succession of executive roles, he has relied through the years on many of the same people. "I believe in building personal and business relationships in the hospitality industry that stay for a whole life," he says. "I find people I can work well with, and hopefully there are other times we can work together."

A case in point is William J. Hanley, who hired Russell at the Sheraton Park Hotel in Washington, D.C. Also a former military officer, Hanley then was the hotel's manager of sales, tours, and travel. Hanley also recommended Russell for Russell's first position with Days Inns of America, Inc. Now Hanley is Cendant's senior vice president and managing director of worldwide sales, overseeing the sales organizations for all of Cendant's hotel brands. "I gave him his first job out of the service, and now I work for the travel division he heads," Hanley muses. In November of 1998, Hanley purchased Russell's Cape Cod-style house when the Russells moved into a nearby townhouse.

After Sheraton promoted Hanley to another location, Russell worked for Frank Hignett. In 1983, when Russell worked for Days Inns as senior vice president of marketing and sales, he hired Hignett to be vice president of marketing and sales.

At Sheraton, Russell was hired to replace William E. Weld, CHME, who had been promoted to responsibilities for the hotel's national association accounts. Weld now is vice president of international sales and services for Cendant's international hotel division. In the year 2000, he will be president of the Hospitality Sales and Marketing Association International. "Bill worked for me twice since 1975," says Russell, "first at The Carlson Companies as my vice president of marketing, and seven years ago I hired him to be marketing vice president for Days Inns. Now he works for Bill Hanley."

"Bill Hanley told me about this guy with great potential," says Weld. "I helped to train him." In October of 1992, Weld came to work for John Bonifield, Days Inns' vice president of marketing, who reported to Russell. Three years ago, Weld switched to the HFS (now Cendant) international division.

John D. Snodgrass, CHA, met Russell in the mid-1980s when Snodgrass was Days Inns' senior vice president of franchising and Russell was senior vice president of marketing and sales. "Eventually," Snodgrass says, "I became the president of Days Inns, and later president, chief executive officer, and chief operating officer of HFS." In April of 1992, Snodgrass hired Russell back to head Days Inns. In December of 1997, when FHS and CUC merged, Snodgrass left HFS and set up his own company in Atlanta, but he remains on the Cendant board of directors.

"John Russell works well with everyone," Snodgrass says. "He is a great strategist who can develop and execute a plan, and he has the ability to touch the human heart and brain and bring people together."

Rosalie E. Leposky is managing partner of Ampersand Communications, a news-features syndicate based in Miami, Florida.

Copyright 1999 Ampersand Communications
All Rights Reserved
Published in The Resort Trades, October 1999.

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