Burt Cabanas, who on January 1 stepped down as CEO of Benchmark Hospitality Group, has been in the hotel business since age 14, when he cleaned pools at a Miami resort. His legacy of business success: Taking a five-property management portfolio he purchased from Mitchell Energy & Development in 1986 and building what's now a 40-property portfolio with nearly $500 million in annual revenue. In 2014, he continues on as Benchmark's chairman.Business Success

The National Center for the Middle Market (NCMM) interviewed Cabanas (BC) in his final days as CEO, drawing on his best advice for business success as well as personal success, and for overcoming setbacks.  

NCMM: When did your company really pop, or was growth a steady climb?

BC: We've grown at a nine-percent compounded rate over the long term, but the path typically would be four or five years of growth followed by a 10-percent decline in a recession, and back to growth. Then again, the recession that started in early 2009 was much longer than expected - but we managed to grow revenues by 82 percent in the four years it lasted.

NCMM: How was such growth possible in that climate?

BC: A few things came together at the right time. First, we had decided to invest $2.5 million in technology right at the start of the downturn, to put ourselves ahead of our competitors at a time when they probably wouldn't do the same. And as the recession dragged on, a few smaller hospitality portfolios came up for sale; we bought MTM Luxury Lodging in mid-2011. We grew through that time because we could now offer improved services to all our properties through the technology, which put us on a better competitive footing. We had a story to tell at a time when others did not, and it built momentum and market share.

NCMM: As a middle market firm, what must you do to compete effectively against the giants in your industry?

BC: When we first had conference centers as our sole product, it was about building relationships with the meeting-planner buyers, and our ability to do that was better than the big brands and franchises because our product was distinct and different and not cookie cutter. The weakness was that they had the 800 phone numbers, so they could just keep one door open to funnel people into.

But as we became more diverse with resorts and luxury hotels, that coincided with the fact that transactions were moving onto the Internet, and the playing field got leveled. It got to where the destination is the first thing people search for online rather than a chain affiliation. So once the prospect gets to that particular search page, it is our responsibility to be listed near the top. If we can put together a solid website with a good overall representation of the property and mention that it is four-star or Conde-Nast rated, it puts us on equal footing with the biggest brands in that destination. Actually, with millennials, it puts us on a better footing, because they don't want to go to a property where they already know what it looks and feels like. They want the unique experiences, and we still have that as an advantage.

NCMM: How did you have to adjust your leadership as the industry changed and the firm grew?

BC: I have had to retool my job description at least six or seven times in 30 years. First was early on, when I added a COO to take over my operations duties. A few years later I hired a chief development officer to take those responsibilities from me. And every five or six years, things changed to where I had to adapt to remain most effective.

Years ago you would just continue to stack the same discipline on top of each other; that's how you grew. Today, you have to grow horizontally and add activities and disciplines that did not even exist before. For instance, the technology on both the revenue side and the control side makes a new leap every year. So I surround myself with people who know more about the new disciplines we need for our firm to keep growing. This is a cliche because it's true: You'd better hire people who are smarter than you. Critical personnel need to be able to jump on the train while it is moving.

Once our growth finally kept me from personally touching every employee and being able to discuss our culture with them, that was my toughest time. I made one last adjustment by adding a CEO whose cultural point of view mirrors mine, for continued growth without the loss of our approach.

NCMM: What is your corporate culture?

BC: We call it "be the difference." It means you have to set yourself apart in how you deliver service. We are constantly talking about the things that service people do to make a difference in people's lives while they are staying with us. It could be driving someone to the airport when they miss their ride and are late, or replacing a bottle of wine they dropped as they got out of their car, or making little animals out of their bathroom towels if they have kids with them.

The basic skills of each department are easy to teach. But the attitude and determination are things you must cultivate in people, and getting those things to flourish within the framework of their own personality so they can make people feel as comfortable as they'd be at home, but still have an experience that's different and exciting too. So we train for that, but also give our people the freedom to be creative in how they do it.

NCMM: What was the worst setback the company experienced, and how did you get the company through it?

BC: In 1987, when we had five properties and two mortgages in place, we lost one of our major properties along with a lot of revenue. We not only had to keep everyone focused on moving forward, but we also needed to figure out how to carry the key people from the property who we were going to need in the future. The thing that kept us above water was that we borrowed money to keep those people in the fold. To this day, we have never left anyone behind - nobody has gone unemployed when change happens. They get transferred to another property or we help them find a job elsewhere.

That borrowing and the constant discussion about our future - what we wanted to do and how we needed to differentiate ourselves - carried us for the year we were scrambling. And by the end of 1988, we were moving forward on plans to open two big properties on opposite ends of the country: in the DC suburbs and in Squaw Valley, CA. From there, the future was brighter, and when those two conference resorts opened in 1991, they literally doubled the size of our company.

NCMM: What is your vision for future growth? What is reasonable for this firm?

BC: We want to double our size in the next ten years, which is actually a bit more conservative than our long-term growth curve has been. We would entertain the possibility of purchasing smaller firms who, during the downturn, were not able to technologically advance themselves like we did. Combining with us would allow them to have the arrows in their quiver to let them be successful. It's possible that we continue into different hospitality product lines too.

For any middle market CEO, it's critical to establish where you think the upper limit of growth is so that you don't reach a point where the company cannot serve its customers and its employees the right way. Even if that limit turns out not to be totally accurate, you need to work from a blueprint or things can get away from you.

NCMM: What final advice would you have for middle market CEOs to ensure business success as well as personal success over the long term?

BC: You have to leave time for thinking, and that is the hardest thing to do. Dedicate about 20 percent of your time to thinking about strategy, your product, your competitors, potential disruptors, all those things. I'd say to join clubs where you'll rub shoulders with people in your same position no matter the industry, because you pick up a lot from that. I am lucky to have friends in other industries with whom I have dinner on the first Monday of every month for the past 20 years. We exchange so much real-world perspective.

In the middle market, growth is most important, but you cannot simply focus on immediate growth. If you actively step back to collect and reflect on morsels of information, some of that is going to turn into big loaves of bread down the line.