Inside the Ritz-Carlton's Revolutionary Service

Employee Engagement
Employee Engagement
If any company leads in setting the gold standard for service, it's the Ritz-Carlton, whose commitment to quality is not just part of the company's philosophy, it's part of the employees' DNA. Follow us through a day inside the organization.

It was 8:30 a.m. on an unseasonably warm Friday this past December in Chevy Chase, MD. As my cab whizzed by the blooming cherry blossoms and I rushed into the headquarters of the Ritz-Carlton, I hadn't the time to realize that the warmth inside would be just as surprising. A cold I developed late the day before had grown from a minor annoyance to a disruptive nuisance. Inside the elevator, I reached for a tissue. When the doors opened, I stood face to face with a cheerful receptionist. "It's so nice that you're here," she exclaimed. Did she really think that? I grew skeptical. "I'm so happy to be here," I muttered, with one eye on her and the other on the man beside her.

The man was Jeff Hargett, the corporate director of learning, content, and delivery at the Ritz-Carlton Leadership Center. "Hello, you must be Mila," he said. He whisked me into the room where five assiduous executives and I would spend the next eight hours under his tutelage. As I took my seat and reached for another tissue, a suited woman came to my rescue with hot water for tea. "Is it warm enough in here?" she asked. "Not really, would you mind turning up the heat?" I replied as I shivered from my cold. As my classmates and I took our seats, with our leather leadership training binders splayed in front of us, Hargett reentered the room and reiterated the reason for our visit: to learn the secrets to how the Ritz delivers its gold-standard customer service. "When a guest walks through here, we make an impression. We take care of them," Hargett started. So far, that seemed obvious.

A Day in the Life

A quick peek at his watch prompted Hargett to quickly shepherd us upstairs where the corporate employees were gathering. The time was 9 a.m. sharp, which is when the company and its 63 locations conduct lineup each day. Lineup is a format for all employees, from housekeepers to the floor managers, to discuss a company-related topic and to reinforce the company's service values. Every employee at every Ritz, from Shanghai to South Beach, attends lineup daily. On that particular day, the six of us were invited to participate as well.

President and COO Simon Cooper first welcomed us and then started the lineup with the "Gold Standard of the Day." Cooper challenged the employees to think of innovative products that the Ritz could potentially develop. He mentioned that the assistant to the HR director already emailed an idea for a prepaid children's debit card for use at the resorts in areas like the pool and snack bar. An employee in Asia sent an idea for a mechanism that allows guests to customize their television programming so when they stay at any Ritz in the world, they can watch the shows they like.

Cooper followed with the "Service Value of the Day" from the credo cards mandatory for every employee to carry with them at all times. If they don't have pockets in their clothing to hold the cards? Not to worry, a sleeve will do just fine. I actually witnessed a woman removing her card from her bra. Cooper told the employees to focus on number five. All the employees at the headquarters reached for their origami-like credo cards and silently read along as Cooper read aloud the number-five service value: "I continually seek opportunities to innovate and improve the Ritz-Carlton experience."

Cooper next reviewed the company financials. He compared that day's numbers with those of the same day the year before. "He tells [the staff] because they helped to make that difference," Hargett told us. Last on the agenda an employee shared a quote (also a daily occurrence): "If you tell someone where to go, but you don't tell them how to get there, you'll be surprised at the results." Everyone chuckled.

Later, back in the meeting room, Hargett explained the reason for the lineup: One of the most important things organizations can do to improve service is to involve employees, because they're the first contact with customers. "As leaders, we think we know what the problems are, but the ladies and gentlemen out there actually see it and then engage [customers] in how we can accomplish this," he said. That's what brought Vicky Carlson, president and CEO of Office Pavilion in San Diego, to the Leadership Center on the day I attended. "We want to provide differentiated service, but nobody owns the problem," she told us. Her colleague Ron Busch, vice president of operations, added, "We want to provide an environment for internal employees to grow. I'm here to instill that mind-set."

Gillian McKnight-Tutein, district director of training and development at Cuyahoga Community College in Cleveland, OH, also explained the reason for her visit. "I'm here to improve customer service. If we don't reinforce it, it will end. We want to set the expectation that customer service has a place at a college. It's been 40 years of 'this is how we do it.' Changes need to be made, but we have to invest in the process." Hargett dispensed his wisdom to her. "If you let that seep in there, it will continue to chip away. You'll never be known for great customer service if it only happens once in a while."

The Ritz Reputation

The Ritz-Carlton is well-known for providing consistent service throughout all of its properties. The company began its commitment to quality in 1983 with such simple touches as fresh flowers throughout its hotels, white ties and aprons, and gourmet cuisine. It also established its Gold Standards for customer service-which include its credo, motto, employee promise, three steps of service, and the 12 service values-leading the company to repeatedly outperform its competition, increase customer loyalty (the average guest spends $250,000 at a Ritz over his lifetime), and win the Malcolm Baldridge National Quality Award twice.

At the Ritz-Carlton Leadership Center, the company's goal is to emulate its winning service and become the preferred provider of training and organizational change for all industries, not just hospitality. Thousands of executives and managers have journeyed to the center since its launch in 2000 to benchmark the business practices that have led to the Ritz-Carlton's success.

Hargett taught us the company's three steps of service. Although they seemed basic to me, it turns out that many companies overlook them. The first is to deliver a warm and sincere greeting and to use the guest's name; the second is to anticipate and fulfill the needs of each guest; and the third is to give a warm good-bye, again using the guest's name.

What customers want, he explained, is personalized service, fast access to knowledge, and hassle-free interactions. That, he said, starts with employees. As Melissa Young, a pastry chef at the Ritz-Carlton in Washington, D.C., joined the discussion it became obvious to me that Ritz-Carlton employees stop at nothing to make that service happen. Young told us about a time when the front desk informed her of a family who was about to arrive at the hotel. They drove all evening in a blinding rain storm and arrived later than expected. Young sent up champagne and strawberries for the adults and an assortment of juices and warm cookies for the children. "To see the excitement in the kids was priceless," Young said. "It's amazing to love what you do. The positive energy starts from day one and continues every day. It's great to be part of a winning team."

Employee Empowerment

Hargett says interactions like the one between Young and the family in D.C. result from high levels of engagement between the Ritz managers and employees. Employees like Young who "get it" are called passionate advocates at the Ritz; they exhibit personality traits that hiring managers specifically seek out when recruiting and interviewing candidates. To ensure that interviewees are sincerely positive people, managers use two-part interview questions that weed out those who are insincere. For example, a prospect may be asked, "Are you a habitual smiler?" If the candidate responds "yes," the next question would be, "Why do you smile?"

Once through the interviewing and hiring processes, new employees begin orientation, which lasts two days and covers topics ranging from the importance of grooming to total quality management. "Talent plus fit, times investment, equal growth," Hargett said. "Companies drop the ball with employee investment. We have a commitment to the customer, butwe have to find ways to have the same level of commitment with our most valuable resource, [our employees]."

The Ritz views day 21 of employment as a significant turning point. Hargett explained that employees may feel the newness of their job begin to wear off and start to become disillusioned with some aspects of their responsibilities. On this day employees get a recap of the Gold Standards. Afterward they take a test. If they pass and stay, on the 365th day the employees receive their one-year anniversary service pin. This is important because it signifies a milestone and makes them feel part of the team. As a result, employee turnover at the Ritz has been consistently low. In 2005 employee turnover totaled only 23.1 percent in an industry that usually approaches 100 percent.

One reason that employees stay is that they're empowered to deliver the level of service Ritz mandates. Hargett discussed empowerment next. He cited a statistic to embellish his point: Sixty-seven percent of customers leave you because of indifference with how they're treated. Customers judge the quality of the institution, he said, by the responsiveness of the first person they come in contact with to discuss their problem. Given that, the Ritz empowers and trains the front-line service to resolve conflicts. Part of this entails allowing employees to spend up to $2,000 per guest per day to "fix" any problems, as well as giving employees ongoing problem-resolution training. They learn things like how to "personalize the resolution to truly delight the individual," and to "let the individual vent."

Hargett explained that recognition is an important part of the empowerment approach. Each quarter the company recognizes five employees for their "5-star behavior," service in which they've gone above and beyond for customers. They receive $500 each and their award is announced at lineups across the company. They also compete for the annual award-the company chooses one of 20 quarterly winners to fly roundtrip to any Ritz-Carlton location in the world, and rewards that person with $8,500 in cash.

These empowerment and training tactics seem to have had positive effects on the employees I met that day. It's not just the receptionist who was smiling; everyone seemed to be in good spirits. Employees cheerfully greeted each other in the corridors and I even noticed COO Cooper walking around the office speaking to all levels of employees-including Sythoun Joy, who works in laundry at the Washington, D.C., location but was at the headquarters that day to speak to our class. She revealed that she's attending school to learn how to speak English and that the company pays for her classes. "I love the Ritz-Carlton," she said. "It's about the opportunity. The Ritz-Carlton philosophy and the motto make me feel very special to be a Ritz-Carlton employee."

As 4:30 p.m. neared, the executives and I felt motivated and I hadn't thought about my cold since the morning. After class I listened as Cuyahoga Community College's McKnight-Tutein and Patricia Jackson, director of the school's customer service center, eagerly talked about takeaways to implement at their school. Hargett's advice echoed in our ears: "As a leader, you have to pretend to be a customer. Walk in the door, and what do you see, and go from there. If you have a shaky foundationyou'll never be able to build beyond that. You need that rock solid foundation in place before anything can be built on top of that."

Starting Small

Five days after my trip I called Jackson to find out how she felt about her experience at the Ritz. I was surprised to learn that as soon as she and McKnight-Tutein returned from the Ritz-Carlton, they began making changes at the college. "What I learned in that seminar far exceeded customer service," she said. "The biggest thing is they really value their customers and personalized service goes a long way. Now I'm more motivated than ever to instill it in our organization."

Jackson's first step was to completely revamp the college's agent monitoring process to focus on personalized service. Now it directly relates to quality. The form includes questions like "Did you think of the customers?" "Did you dazzle them?" "Did you offer additional service?" and "Did you use the customer's name at least once during the conversation?" Said Jackson, "It gives [customers] valueso they're not just the 250th person who called today."

In addition, Jackson implemented a call monitoring system in January and developed a new customer service assessment. The previous one didn't assess service skills-only typing and computer skills. The new one addresses listening, comprehension, and problem resolution. "I thought, 'why not give it to everyone and see where people's strengths are,'" she said. "Like they say at the Ritz, you can't have cookie-cutter training." She also plans to push for eight hours of mandatory personnel training. "The Ritz gives 250 hours to employees. I need to make that investment in my team."

I also called Office Pavilion's Busch to get his reaction to the Ritz course. He explained that timing stalled his initial action plans. "We came back with one week before our [holiday] break unable to get anything in place," he said. But Ritz's 12 service values really made an impression on him, so he and his colleagues decided to incorporate their own version of values.

Busch said the company unveiled its own 12 values at its annual meeting in mid-January. Instead of listing a different value every day, Office Pavilion slated one value per month. "My opinion is if you cycle through them every 12 days they become mundane," he said. "What we'll try to do is really find opportunities during the course of the month to exemplify the value and have a little something -- a reward -- to put that in place." However, Busch expects that reinforcing the approach will pose a challenge that includes hiring people who already embrace those values. "We have to get back to reinforcing that: getting the right people to be part of the organization and keeping those who exemplify that," he said. "Our goal is to get good people and to reinforce values in those people."

In doing so, Office Pavilion's hiring process will change to emphasize finding employees with customer-focused characteristics by using interview questions designed to reveal how they would respond to various customer interactions, rather than just focus on their work experience, Busch said. "It's easier to train someone to do a job; it's less easy to train someone to be customer focused," he said. "It's those next-level things in which it's tough to find someone with those abilities and talents."

When I called Hargett and told him about the changes that Office Pavilion and Cuyahoga Community College were implementing, he was genuinely pleased, but seemed surprised. He said the most common obstacle in getting started with implementing better service is a lack of commitment. "It's much like a New Year's resolution to lose weight. You may start in that direction and you may continue to do that until something pops up, like a cheesecake," he said. "It takes work to reach the levels where we are. It's not something that happens over night. The Ritz has been working on it for 20 years."