How the Ritz-Carlton Hotel Company Is Redefining the Gold Standard

From Chapter One of The New Gold Standard by Joseph A. Michelli

The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company represents a follow-up to my book The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary. Where Starbucks leadership took an ordinary product like coffee and significantly added value by staging it in an environment of affordable luxury, Ritz-Carlton has elevated the luxury experience to a true art form.

The New Gold Standard is primarily intended to help managers, owners, and leaders understand the driving principles, processes, and practices that have generated unusual staff loyalty, world-class customer engagement, and significant brand equity for Ritz-Carlton. However, it also provides perspective on those same principles from the viewpoint of frontline workers (both customer facing and non–customer facing), customers, and other stakeholders. Whether you wish to attract, hire, and retain the "right" employees, are interested in producing transformational customer experiences, or are looking for ways to maintain the relevance of your product and service offerings, The New Gold Standard shares the wisdom of Ritz-Carlton leadership.

Ritz-Carlton leaders are responsible for stewarding an icon in the luxury market, through a constant quest for excellence, to continue its success in a changing global economy and with changing customer needs. Even in areas of international growth, succession planning, finding the best location for your business, or determining meaningful quality enhancements, Ritz-Carlton offers a rich tapestry of leadership successes and breakdowns that can help you shorten your path to greater success.

So what is at the essence of this iconic company? What is the Ritz-Carlton experience? While the answer reflects some variability based on the source you ask, there is a striking consistency of opinion.

For Robert E. Watson, managing director of Protravel International, Inc., the experience is characterized as "service value. What sets Ritz-Carlton apart is its service. Ritz-Carlton partners with us in the travel industry to get the most for our client. If we don't perform the service together, if we don't get that little extra something for the client, if we don't come up with that nugget, that little bit of something new, what would a client need us for? People are spending a lot of money today. And they don't mind spending it, provided they get value for their dollar. In today's world, however, value doesn't always match price. The experience at Ritz-Carlton is true value for us as travel partners and for our clients."

For community agency partner Colleen T. Brinkmann, chief marketing officer of the North Texas Food Bank, the Ritz-Carlton experience "is like a Lexus—they set the standard in their industry. But through their volunteer efforts with us, I would say the experience is very personal, very real, and colorful, but above all else respectful and gracious, even to the point of their Ladies and Gentlemen thanking us for providing them with the opportunity to participate in volunteer service."

Ritz-Carlton General Manager Tony Mira describes the Ritz-Carlton experience as "a Wow experience, like no other. It's one that you walk in and you know, whether you're a guest or an employee, that you are going to be treated like nowhere else in our industry. It's taking the genuine care and comfort of our guests to the highest level. That, to me, is the Ritz-Carlton experience."

Maybe the best way to demonstrate the unique value proposition achieved by Ritz-Carlton is to offer an example from a family that happened upon empowered Ritz-Carlton staff. Natalie Salazar, age 12, was a champion figure skater who began noticing pain in her legs while preparing for a regional competition as a step toward the Olympics. While originally thinking it was joint inflammation, the condition was ultimately diagnosed as a type of cancer known as osteosarcoma. Her chemotherapy treatments were unsuccessful, and at age 13, Natalie was told she was going to die.

Her biggest regret was that she would never be able to go to her high school prom. Natalie's eighth grade teacher, Mrs. Lewis, attended the same church as Laura Gutierrez, area director of human resources at The Ritz-Carlton, Dearborn, where Natalie's story was told. Laura and the Ladies and Gentlemen at Ritz-Carlton rushed into action. Laura described Natalie's special night:

"We hosted Natalie's Prom in our ballroom, and it was attended by 18 classmates and 7 of her championship ice skating team members. Our audiovisual technician was the disk jockey, our IT technician was the photographer, our banquet director provided security, and everyone pitched in to make this an extra special event. Our convention service team put pin lights up and laid a dance floor, and our business center put together a PowerPoint presentation with pictures of the kids from kindergarten to eighth grade, complete with some drawings Natalie's former kindergarten teacher had provided."

Laura goes on to add that "our team hosted a grand prom complete with Prince Charming who guided her down the red carpet to Natalie's favorite song 'Sweet Escapes.' There, she danced the night away with Prince Charming. What an emotional night for everyone. The best part was she smiled the entire night, she danced every dance, she ate all of her favorite foods (salami, cheese and vegetables, and lots of ice cream). She limboed, hula hooped, chicken danced, Hustled, and led the train around the room. Parents joined the celebration at 10:30 p.m. just before Prince Charming turned into a frog. The kids had so much fun they didn't want the night to end. After a tearful good-bye, Princess Natalie was led to her waiting chariot for much-needed rest at home. She commented as she drove away, 'Tomorrow I'm off to the hospital for some tests. I can't wait to tell them all about this.' And she did just that."

According to Laura, "The buzz around the hotel was incredible. We were making a difference in a child's life, and in the lives of her parents and teachers who for one full year had worried about Natalie, supported her, and cared for her." Natalie's father said, "We are immigrants to this country and have no family here. When Natalie became ill, we didn't know what we would do. But Natalie's teachers and friends and the staff at Ritz-Carlton became our family." Natalie's mother added, "I've been blessed with many friends, but I didn't know there were such wonderful and caring hearts as we've found with everyone at Ritz-Carlton."

Natalie was only 13 when she lost her battle on Thursday, September 20, 2007. The seamstress at Ritz-Carlton who had made Natalie's prom dress also made the dress in which she was buried. In Natalie's honor, Laura and the staff of Ritz-Carlton commemorated what would have been Natalie's fourteenth birthday on October 22, 2007, complete with the cake Natalie had described to Laura the evening before her death. Laura continues to keep in touch with Natalie's parents. While many other companies support members of their community, the Ritz-Carlton culture of service routinely delivers caring such as that provided to Natalie's family.

From my perspective, the Ritz-Carlton experience is reflected in leadership committed to unrelenting quality, respect for all that the company's staff encounters, and, oddly enough, also a great spirit of candor. As a result of this candor, I have identified five core business principles that I will use to structure your behind-the-scenes examination of the company. This inside look reveals the ideals that fuel the consistency and greatness of this legendary organization. Each principle presented in the following chapters not only offers insight into service, hospitality, and creating a luxury lifestyle experience but also provides opportunities to increase excellence in all aspects of business and personal life.

Through dedicated adherence to these principles, everyone can elevate his or her business to the Ritz-Carlton gold standard. The New Gold Standard reflects both intuitive and counterintuitive aspects of leadership, which may be fairly easy to comprehend, yet far more difficult to master. It is my belief that constant and steadfast focus on these Ritz-Carlton principles will result in your developing and maintaining The New Gold Standard for your industry.

Specifically, the principles are these:

1. Define and Refine

2. Empower through Trust

3. It's Not about You

4. Deliver Wow!

5. Leave a Lasting Footprint

These guideposts, while inspired by the journey and leadership of Ritz-Carlton, have application across all industries and geographical boundaries. They reflect an opportunity for you to strengthen and touch the lives of your staff, teams, customers, shareholders, community, and the bottom line. In the words of César Ritz, "People like to be served, but invisibly." Whether it's through washing bed linens or creating an international strategic plan, these principles can connect you to your invisible power as you fully serve staff and customers alike. Let's explore each of these principles derived from the Ritz-Carlton New Gold Standard to maximize your ability to drive relevance, quality, and, of course, world-class service, throughout your business and personal life.

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