All Posts Tagged With: "Ritz-Carlton"
Two-Time Baldrige Award Winners Show Impressive Results
Five businesses have earned the Baldrige Award twice: Solectron, MEDRAD, Ritz-Carlton Hotel Company, Texas Nameplate, and Sunny Fresh Foods (which is now Cargill Kitchen Solutions). They represent large and small businesses, manufacturing, and service.
The Baldrige program analyzed the results of these five organizations to determine how much growth in sites, jobs, and revenue they achieved during the six- or seven-year period between their first and second Awards. To protect the proprietary nature of the data, the program focused on median growth, which is a conservative number, as explained by Harry Hertz, head of the Baldrige program, here.
As a group, the five businesses that won two Baldrige Awards grew significantly during the span between Awards:
- 67% growth in number of sites
- 63% growth in jobs
- 93% growth in revenue
It’s important to remember that these five organizations had to demonstrate impressive results to win their first Awards. They did not achieve this growth by resurrecting struggling companies but by building on their success integrating the Baldrige model. They started at the top and then they went even higher.
This is what any organization can expect if it rigorously deploys Baldrige. In my experience, the benefits start to accrue in the first year with new knowledge of…
31Aug2011 | Steve George | 0 comments | ContinuedSustaining the Culture
Sustainability has become a major issue for organizations and leaders that want to sustain the positive changes they have made through programs such as Baldrige, lean, and Six Sigma, but the truth of the matter is that they can’t. Such programs often flounder as soon as new leadership takes over or priorities change or new ownership assumes control.
I’ve written about the impact of leadership changes in “Leadership Matters Most,” citing the example of AT&T Universal Card Services, which was launched using the Baldrige model, climbed to second in the U.S. credit card industry in just 30 months, and then changed leadership and dropped to eighth over the next 30 months.
In “Keep Your Eye on Process Improvement” (HBR, August 18, 2010), Brad Power recounts the story of Allied Signal, which used Six Sigma in the 1990s to produce 31 straight quarters of earnings-per-share growth of 13% or more. Leadership changed in 2000 and 18 months later, the Six Sigma culture had essentially disappeared.
Sustainability of the positive changes associated with Baldrige, lean, and Six Sigma is not difficult if leadership and ownership don’t change, but such changes are inevitable. CEOs move on, quit, or retire. Companies merge or are acquired. So the ultimate sustainability…
23Aug2010 | Steve George | 0 comments | ContinuedLearning 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…
21Jun2010 | Steve George | 0 comments | ContinuedThe No-Class Approach to HR
I recently wrote about the world-class human resources practices of The Ritz-Carlton Hotel Company. Its approach to hiring, training, and empowering its “ladies and gentlemen” is a sharp contrast to the no-class approach of three Hyatt hotels in Boston.
This summer, the housekeepers at those hotels were asked to train new workers who, they were told, would fill in during vacations. On August 31, about 100 housekeepers were informed that the trainees were actually employees of Hospitality Staffing Solutions who would be replacing them that day.
One employee had worked at the Cambridge Hyatt for 21 years and made $15.69 an hour plus benefits. The trainee replacing her will make $8 an hour with no benefits. So the Hyatt saves money, wrecks lives, and probably believes the change will have little impact on its business.
It’s wrong.
In an article about this travesty in the Boston Globe, Paul Sacco, president of the Massachusetts Lodging Association, argues that the move would save the Hyatt money without affecting hotel guests. “If you stayed at the Hyatt last night and you bumped into the housekeeper, would you notice a difference?” he asked.
That’s the difference between mediocrity and world-class: Mediocre organizations and the morons who defend them believe that employees…
30Sep2009 | Steve George | 0 comments | ContinuedWorld-Class Employee Orientation
According to its Web site, The Ritz-Carlton Hotel Company “sets the gold standard in luxury hospitality worldwide.” A recent Luxury Brand Tracking Study verified that The Ritz-Carlton has become the most preferred luxury brand among other hotels in its competitive set. Twenty-four of its hotels received AAA Five Diamond Hotel Awards in 2009 and 16 received Four Diamond Hotel Awards. The company has won the Baldrige Award twice.
The Motto of The Ritz-Carlton—one of its gold standards—is “Ladies and Gentlemen Serving Ladies and Gentlemen.” The company employs 38,000 Ladies and Gentlemen. Every one of them is empowered to use his or her own judgment, without seeking permission from a supervisor, to spend up to $2,000 on each guest each day.
In his enlightening book, The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company, Joseph A. Michelli devotes a chapter to describing how the company hires, trains, and empowers its employees to provide world-class customer service. I encourage you to read the book. Here are the key points:
- It selects people from the same candidate pools as everyone else and pays the same as others in its industry.
- It involves frontline employees who have been…
25 “Moonshots for Management”
Last year the Management Lab, with support from McKinsey & Company, assembled 35 management experts to discuss what management practices imperiled the long-term success of large organizations and what fundamental changes are needed in management principles, processes, and practices.
Gary Hamel, author of two leading books on business strategy, described three broadly-shared beliefs among the participants in the Harvard Business Review:
- “Management” is one of our most important social technologies.
- The management model of the last 100 years is out of date.
- We must reinvent management to make large organizations more adaptable, innovative, and inspiring places to work.
The Baldrige model can help any organization of any size reinvent its management system by identifying, prioritizing, and acting on the major gaps in that system. I believe Baldrige provides a systems perspective and sound guidance on achieving the 25 “moonshots for management” that the experts proposed:
- Ensure that management’s work serves a higher purpose. The first question in the Baldrige Criteria is: “How do senior leaders set organizational vision and values?” The Criteria then ask how senior leaders deploy them and how their personal actions support them.
- Fully embed the ideas of community and citizenship in management systems. Criteria Item 1.2 asks how the organization fulfills its societal responsibilities and…
Ground Zero for Customer Service
The Baldrige Criteria have several questions that, when asked, can trigger the “deer in the headlights” stare. In my experience, this question almost always gets that response:
“How do you ensure that customer support requirements are deployed to all people and processes involved in customer support?”
The questions that precede it ask how you determine the key mechanisms to support your customers, what those mechanisms are, how they vary with different customer and market groups, and how you determine your customers’ key support requirements. By the time people get to the last question of the bunch, they are frequently so exhausted from scrambling to answer the first four questions that this one pushes them over the edge. Most can come up with their key customer support mechanisms, although the processes for determining what they are can be dodgy. They can usually describe the variations in mechanisms, but few have good answers for how they determine their customers’ support requirements.
Answering the last question well requires sound, systematic approaches to the first four, which is why it can be frustrating
One organization that has world-class responses to these questions is The Ritz-Carlton Hotel Company. A two-time Baldrige Award recipient, Ritz-Carlton excels because of its legendary…
9Sep2009 | Steve George | 1 comment | Continued
