Sea Changes: Carnival Cruise Corporation CEO Arnold Donald On Transformation

As Arnold Donald’s turnaround of Carnival Corporation hits stormy seas, it offers lessons for any CEO struggling with transformation.

You mentioned the importance of learning experiences from elsewhere. Do you take notes from other hospitality businesses?

Absolutely. We stole innovations from Disney. I look at everything and ask, “Will it fit for us, and can we improve on it?” If it just fits and it works, that’s good enough. But if we can improve on it, that’s even better. We look at everything from the automobile industry to pure service industries. We’re looking for practices and behaviors, tools that we can use to exceed our guests’ expectations.

At any of [Disney’s] parks, you’ll notice when a Disney employee talks to a child, they usually bend over or kneel to get eye-level with the child. It’s a subtle thing that enhances the interaction. We’re constantly studying little things like that or big things like lighting technologies.

You’re one of three or four African-American business leaders of Fortune 500 companies. How do you feel about being in a club that has diminished in numbers?

The lack of diversity in the C-Suite and the relative lack of diversity in board representation is a challenge for American business. It’s sad that since the ’80s the number of African American CEOs on that scale that you just referenced has peaked maybe at 10, but whatever the number, it’s very few and far between.
This is not a good thing. Consider what someone like Ken Frazier was able to do at Merck. Without more people like that the country will miss out because businesses won’t be as successful and they’ll be surpassed by competitors.

What should businesses do about this?

Start with people who are diverse themselves. When I came here, I purposely engineered diversity at the top. I didn’t try to program this at the entry level and hope people would percolate to the top over time. I brought in a young man, Orlando Ashford, who had been very successful running a profit center at an HR consulting firm. I hadn’t met him, but I knew enough about him.

I made certain that I had people below him who knew how to run a cruise business because he had never run a cruise business. I made sure the people above him would put him in a position to be successful, but with enough authority where he can leave his own footprint.

Oprah Winfrey became the godmother of Holland America’s Statendam where her Girlfriend Cruises twice created a great deal of excitement. This never would’ve happened if Orlando hadn’t come here. But it wasn’t just the one event. He’s generated brand excitement. Meanwhile, on the leadership team, he’s an HR expert, so that expertise can be shared across the entire team.

Similarly, [Carnival Cruise Line President] Christine Duffy came out of the travel-agent community. She had run a service business but never a cruise business. Now she runs the Carnival brand. If one was just ticking boxes, neither she nor Orlando would’ve gotten their jobs. Leaders have to think outside the box and be innovative in selecting people. People have to own it and believe it really matters. If they don’t, it will never happen the way it should.

Is there a reward system for hiring “outside of the box” as you put it?

I haven’t had to set up a formal metric because there’s enough interaction and contact that people can see its importance. I can see whether or not it’s happening and have a conversation with people if it’s not. When we do people reviews, on occasion I’ve said, “Ah, you’re a little light on diversity here. Let’s talk about that. What are you going to do about it?” We’re not perfect. Far from it. At the top, we have much more diversity today than we had five years ago, and it’s going to continue.

What else should people know about you?

I came from humble beginnings. I grew up in poverty. I have a loving family. I enjoy people and genuinely care about them. What do they want to achieve? If I can play some small role in helping them achieve what they want, I get a huge amount of personal satisfaction out of that. I think people know that, but that’s the one thing I want people to know about me.… and that I’m a diehard Saints fan, go Drew Brees!

Read more: How to Create the Team Cohesion Needed for Digital Transformation


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