For Greg Marcus, president and CEO of The Marcus Corp., wearing many hats is second nature, as his company focuses on two very different business sectors—lodging and entertainment.
The Marcus Corp. was founded in 1935 with a purchase of a single movie theatre in Ripon, WI. Today, the publicly-traded company is headquartered in Milwaukee, and has two divisions: Marcus Theatres and Marcus Hotels & Resorts.
On the theatre side, Marcus Theatres is the fourth-largest theatre circuit in the U.S. and currently owns or operates 890 screens at 68 locations across eight states—numbers that will rise to 1,098 screens at 90 locations in 17 states upon completion of its announced acquisition of the Movie Tavern circuit in early next year. On the hotel side, Marcus Hotels & Resorts owns and/or manages 21 hotels, resorts and other properties in 9 states.
Chief Executive recently spoke with Marcus about his thoughts on managing risk, the importance of corporate culture, how CEOs and boards can work together effectively, and more. Below is an excerpt from the conversation:
On his strategy for managing risk
Our mandate is to maintain a solid balance sheet. That is a huge way that we manage risk. For us, we don’t think it makes a lot of sense to carry a lot of leverage. We also don’t have a lot of long-term leases. Soon, the accounting rules will change and leases will be reported as debt obligations. That’s going to change a lot of balance sheets.
At the end of the day, we have two types of decisions to make: operating decisions and investment decisions. Operating decisions, such as pricing, advertising, etc. can be changed. But once we make a capital decision, we have no other way out than to sell it. You make investment decisions once, and it needs to be right. So we apply a fair amount of discipline to how we deploy capital. That includes a very rigorous investment committee approach to making these investments. We challenge our teams to thoroughly analyze the opportunity and do their best to mitigate the risk.
On corporate culture at the Marcus Corp. and how is it evolving
We are always striving for operational excellence and investment success. This is done within a framework of respect for our people and an obligation to our community.
When I talk to our people about giving back, I often mention that if you have the capability, you have the responsibility. My mom said, “You can’t be a taker of the world.” For our businesses in particular, which are generally investments in real estate, we need our communities to be strong. Now if you had a business you could move, maybe that would be a different story. But we can’t move our hotels or our theaters—they are where they are. So we must make sure that our communities are strong because it is also good for business.
How his leadership style has evolved over the years
My leadership style is persistent and sometimes intense. It’s also about hard work, intensity, balance, and fun. In the same meeting I can crack a joke, and minutes later ask you the tough question. I’ve looked at my personality profile and it basically says I like to have a good time, but I will do what needs to be done. Depending on which side you see first, you might be lulled into a false sense of complacency or you might think I’m quite challenging. But if you spend enough time with me, you learn that it’s both.
We have a culture of people who work hard where nothing is phoned in. That’s a multi-generational quality of our business. I was witness to my grandfather and father’s hard work, which gives me a deep sense of responsibility and obligation.
If you’re going to work that hard, you better enjoy it at some level. Which is great because the theater and hotel businesses are fun. I also like to lead by example. For example, I think the details matter. But if you’re so detail focused that you can’t see the forest for the trees, you’re not going to have success. At the same time, if you are always flying the plane up at 50,000 feet, you miss the details and can end up facing avoidable challenges.
How CEOs and boards of directors can work together more effectively
It starts with the authenticity of the relationship. Why is the board there? You want a strong board who can help you make the business better. If you’re putting people on your board to make sure you have a job, that’s short-sighted. What you want is to have people around you who can make you better.
I always tell people to make sure to hire people who are smarter than they are. With some, there seems to be this fear that if they hire somebody who’s smarter than they are, then they may not be needed anymore. I can’t think of a time when we said to a leader, “Wow, you hired somebody who is really smart. They’re getting your job now.” Instead, it’s more like “Wow, great job hiring a really smart person.” The same is true for our board. If you put people around you on your board who are going to be effective and make you better, then you and the business are better set for success.
The Marcus Corporation has two classes of common stock. I’ve seen companies that have a similar structure and abuse it by not having a nominating committee or simply stocking the board with family members. But for us, there’s no free ride. I think if you talk to our board members they would tell you that the management team looks at them for their opinion, guidance and experience. Our board is made up of really an exceptional group of people. You don’t attract a group like that just to attend a couple meetings or provide a rubber stamp.