Episode 68:

Welcome back to the Upstream Leader Podcast. I’m Heath Alloway, your host for today’s episode. And our topic today is focused on adversity. It’s something that I think everyone will experience at some point in their lives, and probably more than once throughout their career journey. And I’m happy today, I have Anthony Sanfilippo as our guest, the co-founder of Sorelle Capital. Anthony, welcome to the show.

Thank you, Heath. It’s a pleasure to be here.

Well, Anthony, something we do right out of the gates, we try to give our audience an opportunity to get to know you a little better. So what really molded you and made you the leader that you are today?

There’s a lot of things that somebody goes on down their journey to make them who they are at any given point in time. And I think that it continues to change. I think that you’re going to be somebody a little different at 20, 25 than you are at 30, 35, and on to where I am, you know, today in my mid 60s.

I would tell you integrity is important. And if a North Star is to say, look, I want to make sure that I lead with integrity, that people feel like I am very straightforward and I’m honest, and I look to try to. Inspire others to do their best work, that would be a good outcome. And I will tell you along the way, I have a career where I’ve been in the entertainment business, entertainment and hospitality—being with organizations that value integrity, I have three daughters, and I tell my daughters, I’ve told them, they’re all married now, but I told my daughters, look, pay close attention to whoever your mate is, whoever you marry. Pay close attention to the parents of that person because the apple doesn’t fall far from the tree. And I believe that.

I think that when you look at going to work for different organizations and when you work for different people, you’re going to pick up a lot of the characteristics of that company and you’re going to get molded by who that company is and the leadership of that company. And if it’s a company that doesn’t have integrity if it’s a company that thinks it’s okay to play on the edge when it comes to rules and regulations, you may start to think that that’s okay. So along the way, I have been in organizations that have a high level of integrity—and that’s the North Star of the company—and then I’ve seen along the way people who don’t have integrity. And you’ve got to decide at some point whether or not how you approach things, you approach them in a way that is fair, equitable, honest, whether the company does it or not. At some point in my life, it was probably in my mid 20s, I thought, look, I would rather walk away from a situation than compromise who I am or who I want to be as a person.

Yeah. Well, Anthony, in those situations with integrity, my guess is in some of those situations, you know, our topic around adversity, it’s not always an easy thing to do, to walk away from a situation. You mentioned “different,” when you’re in your 20s and maybe 20, 25. So let’s start there. Let’s go back on that journey. At that stage in your career, how would you define leadership? You know, what did you think the leadership was at that stage?

Now, when I was in my 20s, that would have been 40 years ago, 40 plus years ago, and the world was a bit different at that point than it is today. I would tell you, and I find it today, that you know the saying, you don’t know what you don’t know? And it’s just so true. When you’re starting off in your career, you’re trying to discover what business is about, what the world is all about, and I found you’d looked up to people and later realized the reason you looked up to them is that they just had more information than you did. They had more experiences in life, and you liked how they presented themselves.

I always looked at my 20s and even my 30s as a time that I was discovering, I was learning, I was building my toolbox, my portfolio of skills. And then the time I got into my forties, I had the confidence and really the experiences to be able to lead large organizations. And that carried on for the next three decades. So early on in those early years, you’re trying to figure out how to get things done, you’re trying to figure out how to be an effective leader. When adversity comes up, you are trying to figure out how to handle it. You see people that handle it well, you see people who don’t, and may take a path that is self-serving. I would tell you, I saw my 20s and I tell people this, from a coaching standpoint, you’re learning, and it shouldn’t be about how much money can I make, it should be about how do I continue to build my skill set, so down the road, I’ll have hopefully somewhat of a defined and unique skill set that I can use in positions that will allow me to lead. Whether it’s a small or large organization, but it will allow me to lead.

Anthony, I know this is not possible, but if you could—if you could travel back in time—what advice would you give yourself at that stage in your career?

I think I was pretty fortunate. I was around people, I was with the company—today is called Caesar’s entertainment. And then it was called Harrah’s entertainment. I was part of Harrah’s entertainment for 23 years. We acquired actually, Caesar’s Entertainment when I was with the company. The CEO of the company had really high integrity, and one thing that stuck with me, that I was very impressed with, was the first time I ever called the CEO—and we’re friends today, his name is Phil Satre—he’s actually the chairman of the board of Wynn Resorts today. But the first time I ever called him, I was a hotel manager at the Harrah’s in Reno, and I was also the head of the Reno Hotel Association. And I had a question and I thought, well, Phil would be the one that knows this answer. I’ve never talked to him, it’s a large organization, I’ll call him. I’m sure I’ll get somebody who will take the message.

And at the time, I would have thought, I don’t think I’ll get a call back. And I called him that morning, I did leave a message, and by 5 o’clock, I got a call back. Phil said, hi, Anthony, you know, I saw you called earlier today. I’m sorry it took all day to call you back. That was so impressionable, that the CEO of this company was calling me and I was, you know, many layers removed from Phil in the organization, and he called me back the same day. And I thought if the CEO of the company can make it a priority to call a manager in the company back, and does it in the same day, and then engaged me on the topic that we had, that says a lot. And it was motivational to me.

Watching him in that role, what he was best and most known for was how he treated people, and how my example was not a unique example that he would take the time to engage with you, and that his representation of the company was of the highest standards. I was fortunate that the first real company that I went to work with was one that had a CEO who, I’ll tell you, he was not self-serving, he was organizational-serving. If you can get into situations where you’re not working with self-serving individuals, you’re working with people that are serving the organization, you’re going to be pretty fortunate.

Last role I had was the CEO of a company called Pinnacle Entertainment, and I was in that role for about nine years, and I didn’t like the word corporate. I just didn’t like the word corporate. We had 16 locations and a fairly large company, we had close to 18,000 team members that worked there. And when I joined that company, we had about 400 people that were in the central office in Las Vegas. And I expressed to everybody, I said, I just don’t like the word corporate. I really think it’s our role to serve those people who are serving the guests, which are the properties, that where we’re having guests stay in the hotels, go to our restaurants, go into the casinos. And a day or two later, somebody came up to me and said, what do you think about the words, “service center?” What if we call it the Pinnacle Service Center? And I said, I love that. I think that’s exactly what we do.

And so we announced to everybody that we’re called the Pinnacle Service Center, and that we were there to service team members that were serving our guests, touching our customers. And I actually had somebody in legal come to me and said, you know, I’m offended by that, I’m a professional. I don’t want to be known as somebody that works in the service center. And my response to her was that I think you’re working at the wrong place, because that’s what we do. We service those people that are servicing the guests. And we called our leadership team The Steward Group. So they weren’t the executive leadership team, they were called the Steward Group, to send a message that we were stewards of the company and we were there to serve everybody else. So it’s a long answer to what  your initial question was, but—

I was tuned into it. It was a great answer. Well, let me ask this, Anthony—with what you just described, because, you know, going back to my opening with adversity, it will happen to any team, any organization. Things do not always go as planned. You were kind of talking about the culture that you were building. How important was that culture on the front end that you built, whenever things didn’t go right, how important was that on the front end? Because in my mind, hearing you talk about it, it was much more proactive than reactive of laying the groundwork. How important is that culture side when things don’t go as planned?

Very important. I’ll give you an extreme example. I was a president of a division for Harrah’s Entertainment when Hurricane Katrina hit. And it was devastating, happened as you know, on the Mississippi Gulf Coast and in New Orleans, we had properties in New Orleans, a large property in New Orleans, and then we had two, we had just bought another company, and so we had properties that were in Gulfport, Mississippi and Biloxi, Mississippi. The hurricane completely devastated Biloxi, completely devastated Gulfport, and then it greatly affected New Orleans, closing all three for a lot of months. I mean, we had to rebuild both Biloxi and Gulfport.

I actually went down, it happened on a Monday, I went down on Tuesday. I was able to get down there. And it was still first responders, there hadn’t been anybody else come into it. And the devastation was so it was like we were on a movie set of a disaster movie, and didn’t have cell service. I was able to get a hold of the CEO of Harrah’s Entertainment, who at this point was a different individual than Phil Satre, and he said, you know, tell me how it looks. And I said, it’s just, it’s terrible. And we had literally 3,500 people that work for us. And we made the decision on that call to pay everybody at least for the next 90 days and said, look, we need to let people know that they’re going to have support, that they can count on us paying them for the next 90 days, which we did.

So, you know, we immediately announced we were paying everybody for the next 90 days, that we set up in both New Orleans, and we set up in Biloxi and Gulfport, we set up centers where people can come and get toilet paper and canned goods and paper goods, etc. And nobody expected that none of us expected that it was going to basically devastate three of our businesses, and we didn’t think about what’s the financial impact, we thought about, what’s the people impact, and what can we do to give support to the team members that are there. That’s culture first, when you’re doing that and not thinking about what’s the financial impact is.

And that has been in the two roles I’ve had as CEO, the two companies, it was always culture first—we’re going to do what’s right from a cultural standpoint, we’re going to stand behind what we believe should be done, as opposed to worrying about first, what’s the financial impact. And that would send a loud, loud message to, to all the team members that knew if something happened that basically was unexpected that they could count on the company to think about the people first.

Yeah. Well, Anthony, in that situation, and you may not have exact numbers on this, but I would be curious in a situation like that, something completely unexpected happened, there was a lot of uncertainty about where you were going, or to them, even their personal lives, their professional lives, both. And you brought some calmness whenever maybe things weren’t that calm. I would be curious how that impacted your retention and with the team that you did, when you stepped up and you paid them the next 90 days and you were there to help them. Again, you may not have the numbers, but I’d be curious on how that impacted your retention with your employees, your team members.

Yeah, this is a tougher example because Hurricane Katrina in those three cities devastated people’s lives, there’s so many stories of you know, people moving, families breaking up. I mean it was really terrible if there was a true analysis of what happened. A lot of people left New Orleans. The state of Mississippi did a great job in cleaning up. Haley Barbour was the governor at that time. He did a wonderful job in getting things cleaned up. It clearly sent a message company wide that we cared about people, but this was about as extremely an example as you could get on something happening in my career, that it just wholesale changed people’s lives. We had one person who was killed in New Orleans during it—she drowned.

But it probably had a bigger impact on people throughout the company, when they knew what we were doing, the people that were experiencing it at the time were, you know, they were just trying to survive, and they were trying to understand what their next move was going to be. A lot of people relocated, especially out of new Orleans, as a result of that.

Well, Anthony, one of the things that I’m curious to get your take on, and I’ll share the story that kind of sparked this question, but there’s a, he was a managing partner and he kind of has a different role now, but he shared in his book and in another podcast discussion, his journey of becoming the firm CEO and managing partner. And whenever they were up for their vote and they were looking at who was the predecessor, he said it kind of hit him from an emotional standpoint, and he was on his way to a hunting trip, he pulled over and just started crying. He just kind of emotionally, it hit him. And I’ve heard from others in leadership positions, sometimes it can feel lonely in a way, or maybe you’re by yourself trying to figure things out. If someone is feeling that from a leadership position, as they go through, you know, situations, adversity, any advice that you would give to them on how do they work through that? How do they work through the emotional side of it?

Yeah, that’s, I mean, that’s a good question. And I think everybody’s built a bit differently. In roles that I’ve had, I was very close to our team members. And so I was very accessible at every level of positions that I had along the way. I don’t think I ever felt overwhelmed, even in the case of Katrina. And I felt really bad for what people were going through. We relocated—I was living in Memphis a lot—we relocated a number of people up to Memphis just to help them stabilize their lives, and provided housing for them.

I think in every position that you have, I think some people have, a builtsin sort of self check on how they’re doing. I think if you do, if you’re able to sort of look inward and analyze or figure out or understand your feelings, that’s a healthy thing to do. And if you can recognize what you could have done better at the time, that’s a healthy thing to do. If somebody needs help, hopefully, you know, in a public company, hopefully they can talk to members of the board. You know, if that’s part of it. In a non-public company, you know, hopefully there’s colleagues that even though you may be at the top of the leadership, that you could at least bounce things off of it. To me, that’s a healthy organization, when you can have discussions on getting feedback from people on what’s the right path to go down.And I always felt like I could do that, always at least check ideas with other folks.

Now it is true as the CEO or, or managing partner, you know, ultimately you should be responsible for what happens in the company. And there were plenty of times I would take input, and I always realized that ultimately I was going to have to do what I thought was the right thing to do. And sometimes it wasn’t popular, but that’s part of it, too, to say, hey, this is what I think is the right thing to do, and I did get input. So people would frequently feel like, well, at least he got my input. You know, we maybe didn’t go the way that we should have. That I wanted it to go, but at least he got my input.

Right. Well, Anthony, gosh, in large teams or organizations, you know, and I guess I shouldn’t say no one, but you’re going to have different perspectives. And I think by listening and hearing that we can learn from that and that it can help influence or guide our decisions, but you’re right, there’s going to be times where you just have to make a decision and not everyone will, will be on board in those situations.

So Anthony, I’m going to shift gears with this question. I’m going to go back, you talked about your mentors or even a situation where you were a manager, you called the CEO, got back with you within a day. Have you ever had the flip side of that where you had maybe a coach or boss or whatever it may be, that maybe didn’t believe in you or maybe didn’t think you were capable of going to the next stage, or have you ever ran into a situation like that, and then how did that impact you?

Yeah, that’s really a good topic. Let me address it from sort of a different point of view. I, early on, in my career would see people admire other people in leadership positions. And I figured out, like I said earlier in our discussion, that a lot of times people appeared more knowledgeable because they had more information, and so they had access to more information on what was going on.

I, early on, saw people that people admired, that they disappointed them in some way. And that disappointment might be, they’d say, somebody would say to somebody, hey, would you mentor me? And the person without thinking would say, yeah, I’ll mentor you. Well, then they’d never hear from them, and then the individual was crushed, because they thought the individual was going to mentor them. Or they would hold somebody up on a pedestal, and then that person would have an indiscretion of some kind and they’d be deflated.

And so I figured out early on, I wanted it to be the best of who I was, and I wanted to improve skills that I had. I wanted to learn from others, but I never wanted to be somebody else. I never wanted to be a different individual. So during my career, when I’d have people come up to me, and say to me, I really would appreciate if you would mentor me, I would say, I’m going to tell you, I’m not going to do that. I don’t think it’s healthy to commit to being a mentor. I’ll always be available to answer questions if you have any questions, and I’m happy to give you advice, but I don’t want the burden of being your mentor. ’Cause I didn’t want to disappoint people. I didn’t want people to think it was going to be something, you know, I couldn’t do. And so it would always seem to take people back when they’d come up and say, I’d really like you to be my mentor, and I’d say, I don’t do that, you know, and let me tell you why, because I don’t want to disappoint you, being a mentor.

During my career, you know, you do come across people that they value other things. I’ve always been very people-focused and they may not value that. And so they may not give you the same attention that you would hope they’d give you, but I was always okay with it. I also, early on, thought my career is going to be a long period of time and my career is not based on an individual. And so if I was in a situation that I’m reporting to somebody and I feel like that individual is not supportive, I never worried too much. I always focused on doing the best job I could do, and let my work speak for itself. I never focused on trying to make that individual happy because I thought that was just, not the right way to spend my time.

If you focus on making sure that you’re doing the very best work you can do and improving the organization, people will notice that. People will—and during my career, people would see that I would identify problems and also bring solutions to problems, and I would do it happily. I would do it with a positive attitude more times than not. I would have somebody come up and say, yeah, I see how you’re handling that, and I really appreciate it, and then they’d want to give me more responsibility. So I never felt like my career was tied to an individual. The only way I’d ever leave an organization, if I thought that individual was dishonest, and was doing things that was dishonest, and I didn’t want to be associated with that. And fortunately for me, that was pretty rare along my career.

I’ll tell you a quick story on early on getting promoted. So I was 17 years old. I was living in Longview, Texas, where I grew up. There was a power plant called Martin Power Plant that was being built. I got a job there in the summer. And it was very, very hot in Longview, Texas, in the summer. And so the first week I’m working there, I’m actually digging ditches. I mean, literally digging ditches. And I thought this is the most difficult work I’ve ever been around. Well, at three o’clock, a whistle would blow, we’d start at like six in the morning, but at three o’clock, a whistle would blow and you would go to a gathering place, and everybody would sit down. Everybody was so exhausted, and everybody would sit down and wait for the next 10 to 15 minutes where then you would get let go for the day.

When I’d get to that gathering place, I knew if I sat down, I didn’t know if I’d get back up. I was so exhausted. And so I would pick up a broom and start cleaning the area. I did it for three days in a row, and I would do it, literally, so I wouldn’t fall asleep. I thought, oh my god, if I sit down, I don’t think I’m getting back up. After the third day, somebody came up to me and said to me, look, I’ve noticed the last three days that instead of you sitting down like everybody else, you clean the area. And I shook my head and he said, I want to thank you for that. And I said, you’re welcome. He said, tomorrow you’re going to be an Electrician’s apprentice, you’re going to be working, helping an electrician. And I thought, holy cow. I mean, you know, I didn’t want to tell him, hey, sir, I only did it because I couldn’t stay awake, but I thought, okay. And it was an early lesson on, people will notice the effort you put into something. It was a very early lesson about if you do what everybody else does, you’re going to end up like everybody else. If you do things that are above and beyond what others do, then you’re going to be singled out. You’re going to develop a skill set that others will look to to say, this is somebody that can do some things that others can’t do.

While that is a really small example, it was very impressionable for me to say, because I was putting in extra effort, and I knew everybody else sitting around was looking at me thinking you’re crazy, I can’t believe you’re sweeping. I was doing it just for self preservation at the time.

Well, Anthony, I guess at that age, too, I have to think that that was a pretty impressionable time. And so as you described that, Anthony, the word that kept coming to mind was grit. And when things that don’t always go our way, what role does grit play? And you said, kind of a separation of doing something everyone else is doing because it is hard. But it sounds like it pays off. So what, what role does grit play in situations like that?

Well, you know, I think it’s important, both grit and to go against the grain, because, I’ll give you one other example. When I moved from Reno to Las Vegas with Harrah’s Entertainment, I had a lot of people encourage me not to move to Las Vegas, but I did it, because I felt like that was a better place for me to continue to grow my career. And then new gaming opened up throughout the United States, and the CEO who I referenced Phil Satre said to me, look, we think you’re really honest. We think that you’ve got a great attitude. We’ve got four new properties opening up and we’d like you to consider being the general manager of one of these properties. And I chose Shreveport, Louisiana. And I chose it because the only living parent, either my wife or I had, lived 50 miles away in Longview, Texas, and I thought, one, it would be great—we had small children—to be able to base out of Shreveport and, you know, two, this was going to be building a ground up property and opening up what was the first casino in Shreveport, Louisiana.

I had so many people that I worked with telling me, you’re crazy. Why are you doing that? You’re in the Mecca of gaming, you know, a lot. And I said, I think it’s a great opportunity. And I established a skill by going there of understanding gaming in new markets and in new states and everything that went with it. It allowed me then to grow into fairly quickly as the company grew, a president over a portfolio of properties, all outside of Las Vegas. That was a pretty pivotal moment for me because I was able to separate myself from a lot of people, because I had a skillset a lot of people didn’t have, and that was being able to go into a new state, take a a business that they’ve never seen that had a lot of stereotypes, you know, attached to it, and prove that different, but also, go in there and then establish a new business, which probably was a singular thing that excelled my career. But being willing to do something and establish a skillset that is unique to what others have, can be beneficial later to you.

So Anthony, and you know, kind of, we talked through this. Well, one thing that we see a lot is when a team or a firm, they’ll start to implement something new. They have a firm initiative. People are pretty excited about it. And then, you know, you get a few months in and things aren’t going exactly as planned. We typically see it two ways: One, we either buckle down, we work our way through it, or two, we experience failure and maybe give up. What do you think it is about an organization or a team that separates those two paths whenever something is not going the way you want it to?

Yeah, you know, today I’m on a public company board today, we announced an interim CEO for the company, the company’s Papa John’s international, and the former CEO has gone to work for another public company. And I had a conversation just hours ago with the interim CEO that’s going into place. It’s the CFO, by the way, so it’s the CFO of Papa John’s today, that we as a board have asked to step into the interim CEO role. And really the one piece of advice that I gave him, we talked a lot. One, it was integrity, and two, it was taking the time to allow people to share with you what their thoughts are. If people know that you’re going to listen and take input, and in this case with him, it’s not just team members, but it’s board members, it’s franchisees, it’s investors. But it just doesn’t matter who the group is—people want to feel heard. They want to feel like they’ve got ownership. And before you execute an initiative, if you take the time to get as much buy-in as you can and ownership from the constituents, who it’s going to impact, there’s less likely of a chance it’s going to fail. A lot of times things fail because people just aren’t bought in and they don’t believe in it.

And there’s times it just didn’t make sense. So it sounded good at the time. And even if everybody was bought in, it’s okay to be able to say, look, we thought this was going to work and it is not working, and we’re gonna go a different direction. So to have the courage to recognize this isn’t working and I’ll tell you another story. So when I was CEO of Pinnacle Entertainment, I really thought it would be important for us to be in Asia. And this was probably around 2010. And so we made a very sizable investment into a company that was developing a casino right north of Saigon. And I spent a lot of time over in Vietnam. And for a variety of reasons, it just didn’t turn out like we thought it was going to turn out. And I had a couple of very prominent individuals who I used as sounding boards, which was helpful. I mean, these were two people independently, very successful, I used as sounding boards that really had nothing to do with the company, but I respected them a lot, and they were willing to spend time with me.

Both of them told me the same advice. They said, I know you think you can fix what’s wrong in Vietnam. And I was spending a lot of time there at this—we ended up managing it. And I ended up spending a lot of time there managing this facility. They said, and I know you’re concerned about the amount of money that you’ve invested on behalf of the company into this new company. They both said this to me: Sometimes you just got to walk away. Sometimes you just got to say, no matter how much I try, I’m not going to fix this. They both gave me examples of things they walked away from. They said, when you continue to pursue something that is providing the same outputs, the same results, and you’re not willing to change, that’s when you lose credibility.

People will understand a mistake, and people will understand walking away. People don’t understand if you do something, and it continues to have bad outcomes that you continue to go after for your own ego, for you thinking, I can fix this. It just either may not be fixable, or it just may not be the right way to spend both your time and the company’s money. And I would frequently say it at, well, I’d say all the things I’m involved with: If something’s not right, and you don’t change the inputs, you’re just going to get the same outputs. So if there’s just something that you’re not happy with and you allow the same inputs into that, you’re going to get the same outputs. So we all make mistakes and we all, things are going to go one way and they go another way. It’s the ability to sort of check your ego and say, I’m going to take a different path.

Yeah, Anthony, I think sometimes in those situations, too, it’s the fear of failure of, you know, how people might perceive that. But then again, as you mentioned, if you keep doing the same thing and same result, that’s the strategy of hope. It’s not going to just automatically change because you’re working harder. So, well, Anthony, I know we’re getting close to our time limit here. Something we ask all of our guests, any resource that’s been impactful to you, whether that’s a book, podcast, whatever it may be, something that’s just really made a difference in your life, in your career journey, do you have any recommendations for our listeners?

I don’t have a specific recommendation on a book. I would tell you the most successful people that I’ve come across are people who are very curious. You’ve got so many people around you who have vast knowledge. Most people want to tell their story. And so if you see somebody doing something extremely well, and I give this advice to folks all the time, if you’re admiring what a CFO somewhere is doing and how he or she does it, to set up 15 minutes with them and say, I just would really like to understand almost like you and I were doing right now, what has been the keys to your success? What advice would you give? And you would typically probably get somebody talking 30 to 45 minutes because, you know, they really want to talk about it.

But people that aren’t curious and you start to figure that out. You start to see people who ask questions and really want to know the why, and then you see people that they just don’t ask questions. They don’t learn. There’s a lot of places to learn. There’s a lot of ways to do it. It’s important to manage your time and make sure your time is used in the best possible way. But I would say, Heath, be curious. And if you’re not curious, then you just don’t, you don’t care about what the subject is. Be a part of something that you really care about.

Well, Anthony, I love the response and I use my kids as an example. They ask a lot of questions about a lot of different things, and at some point in our lives, we start to lose some of that. So even just falling back on that mindset, I love that around curiosity.

Well, Anthony, I greatly appreciate your time. It’s been a great conversation. I feel like we could probably go another hour pretty easily, but I appreciate this time, looking forward to the next time we’re able to connect.

Well, thanks for inviting me and allowing me to do this.