The U.S. Secretary of Commerce, Penny Pritzker, says that part of leadership “is giving people permission to give you bad news, and making sure you really hear it.”

What were some early influences for you?

On the weekends when I was younger, I would sometimes go with my dad to the office. I would play on the adding machine, and then we would walk across the street from the office to our motels. He’d send me into the ladies’ room and he’d go in the men’s room to make sure they were clean. I grew up in the motel business, and it evolved into hotels. [The Pritzker family built the Hyatt hotel chain.] I wanted to build businesses from the time I was little.

I grew up in a household that revered building businesses. It wasn’t thinking about leadership; it was more about building something. To build something, you ultimately have to lead.

Were there specific insights that your father would pass along to you?

One thing he would talk about is how, when you’re building a fast-growing business, the bellman might very shortly be the general manager. He was focused on talent, and that you need to realise that talent doesn’t necessarily come in at the top, and that it’s maybe somebody you grow. He had a real appreciation for the person who is passionate, committed, energetic and wants to learn, as opposed to the person who’s already done everything you need them to do. A lot of my approach to hiring came from that experience.

What was your first management role?

After I got my law degree and business degree, I went to work for my family, and I spent two years at Hyatt doing a training programme. I was really interested in real estate — one reason was that nobody in my family was doing that. I was looking for a place where I could be successful doing something that was my own.

There was an idea floating around the office to start a senior-living company. This is 27 years ago, and the industry didn’t exist. So I started that business, just me and a secretary. There was just a white sheet of paper, and the industry was just a white sheet of paper, too. I had never hired anyone. I’d never fired anyone. I had to put together a strategic plan, figure out the product, how to market it and how to get it built. I learned by doing.

What were some early leadership lessons?

I learned to do a lot more work on the front end about hiring — to force yourself to really understand what you’re looking for and do more research. I’m also a big believer in triangulating. When I’m interviewing someone, I also want the opinion of others — people who share the same values as me but who might look at the situation a little differently.

What else are you looking for when you hire?

Integrity is extremely important. Do they have a lot of energy? Are they passionate? And I use this test: Your 11 p.m. flight is delayed, and you’re going to be sitting next to that person during the trip home. You’ve had a long day and you’re tired. Do you want to be travelling with that person?

What other questions do you ask?

I want to know about the tough situations you’ve been in and how you handled them. And I’d want to talk about trust. Talk to me about when your trust has been betrayed, and what did you do? I tend to be a person who starts with the presumption that I should trust you until you abuse the privilege, and then our relationship is forever changed. That’s a very big line and chances are it’s not going to work if it’s crossed. I warn people that this is how I’m going to deal with it.

And when we get close to saying we want to hire someone, I will talk to them about what could get them fired. If you want to get fired, here’s what you need to do: first, lie, cheat or steal.

But the other thing that will get you fired is if you have a problem and you keep it to yourself. Problems are going to happen, and it’s my job to help you with your problem. What I’ve learned is that the most troublesome people don’t tell you 100 per cent of the story, and keep some facts to themselves. They just don’t give you the full picture, and that’s very worrisome to me. Oftentimes it’s because they don’t want to tell you the things you don’t want to hear.

Because they just want to give you two thumbs up — everything’s great, boss.

Everything’s great, boss. I’ve got it under control. And typically what happens is it gets worse. So you constantly ask probing questions and you need them to give you honest answers. You also need to give them permission to give you bad news.

Are some people taken aback by your directness in saying, “This is how to get fired?”

Yes. But one of the challenges I have is that people make a lot of assumptions about me based on my last name. So I figure my job is to put it out there, be direct and do my best to be consistent. I’m not always perfect but I try to do that.

What are some things you’ve tried to get better at over the years as a leader?

One lesson is to try to be the best listener you know how to be. You’ve got to hear, and sometimes in the rush you’re not really absorbing what’s coming at you. Probably the biggest mistakes I’ve made were when I wasn’t listening carefully enough.

Sometimes you need help with that. I have often said to my closest advisers that your job isn’t just to tell me what you think, but you also have to get in my face and make sure I heard you. It’s hard to deliver bad news, and part of leadership is giving people permission to give you bad news, and making sure you really hear it.

I learned a lot about the importance of listening from my Uncle Jay, who was a brilliant businessman and asked lots of people their opinions about things. I’ll never forget how he asked me once about some deal he was doing in Japan. I was 25. It wasn’t my area, but he gave me the facts and said, “What do you think?”

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What I’ve learned is that the most troublesome people don’t tell you

100 per cent of the story, and keep some facts to themselves. They just don’t give you the full picture, and that’s very worrisome to me.

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