Learning from the Ritz

The Ritz-Carlton hotel chain has won two Baldrige Awards because of the quality of its management system. A key element of that system is how well it trains and empowers its hotel workers to satisfy and delight customers. Any employee can spend up to $2,000 on his or her own to improve a customers’ experience. Would you trust your employees with that responsibility?

Now an unlikely company has brought in trainers from the Ritz to show their dealers how to create a consistent sales experience and create loyal customers. The company? Cadillac.

According to an article in Bloomberg Businessweek, “Cadillac has copied Ritz’s pocket-sized ‘Credo’ cards, which explain how customers should be treated.” Cadillac service managers now have greater flexibility to “wow” customers. One dealer in the Chicago area gave employees $300 to $500 in “wow” money, which may be an iffy proposition if the employees haven’t been trained in how to dole out that money responsibly. The last I heard, new employees at the Ritz receive more than 250 hours of training in their first year of work, and a good part of that training is in customer service. Without the training, the “wow” money may just become, “Wow, look at all the money we wasted.”

It’s all about the culture and the management system. Companies that try to emulate one chunk of a world-class system without having the culture and the other key elements of the system in place may see short-term improvement, but it won’t last. The system will absorb…

Question Your System: Operating Environment

The Baldrige Criteria pose questions that, when answered, can help you understand the strengths and weaknesses of your management system.

P.1a in the Organizational Profile asks fundamental questions about your operating environment. A few are easy to answer, such as what products and/or services you offer and how you deliver them. Others require more thought:

• What are the key characteristics of your organizational culture? You may not have thought much about this. For most organizations, culture is what happens when you’ve been around for awhile. Key characteristics others frequently mention include a focus on customers/patients/students, empowered employees with few levels of management, extensive use of teams, promoting innovation throughout the organization, valuing employee safety, and pursuing world-class quality and cycle time.

• What are your core competencies? How do they relate to your mission? Core competencies are your organization’s areas of greatest expertise that help you fulfill your mission and differentiate you from your competitors. If your core competencies don’t align with your mission, you’ve got a problem.

• What are the key factors that motivate your employees to engage in accomplishing your mission? Later, the Criteria ask how you determine these factors, so don’t just pull them out of a hat. High-performing organizations often pull their lists of key factors off employee surveys after systematically verifying that the factors addressed by the survey do, indeed, affect workforce engagement.

The Organizational Profile is the foundation upon which a Baldrige assessment is built. Everything that follows is supported by and linked to the information the Profile seeks.

You can read all of…

Lean and Baldrige

In “Lean Projects Are Defined by Lean Behaviors,” Hal, the author of the article, writes, “Lean is a mindset. It’s not a set of practices.” The same is true for Baldrige. He points out how lean has “a constant focus on learning…learning from everything that happens on an everyday basis. Lean companies are learning faster than their competitors.” That’s also true of Baldrige companies: Organizational and personal learning is a Baldrige core value.

I saw the parallels between Lean and Baldrige a few years ago when I contributed to a book on Lean called The Antidote: How to Transform your Business for the Extreme Challenges of the 21^st Century. The book’s authors, Anand Sharma and Gary Hourselt, are senior leaders at TBM Consulting Group, a global leader in business performance improvement and the effective implementation of Lean. In a section of the book that defines transformational management systems, Sharma and Hourselt seem to be describing a Baldrige organization:

They execute superbly. To integrate a new management system, an organization has to change. Roles and responsibilities change. Expectations change. The culture changes. To successfully manage this change, companies must execute their plans day after day, month after month, and year after year. This isn’t another “flavor of the month.” It’s not a short-term commitment.

Baldrige, like Lean, is more than just an improvement tool: It’s a way of thinking. Organizations are transformed by integrating the Baldrige model. They think and act differently and they, too, “execute superbly.”

Several Baldrige Award recipients use Lean to improve the quality…