Ritz Carlton Ritz-Carlton Case Study

"Service" can be an elusive concept. What is the essence of The Ritz-Carlton Experience? What is Ritz-Carlton selling?

The Ritz Carlton's business model is focused on a narrow target market that expects world class luxury accommodations as well as extraordinary service by the hotels staff. Developing a staff that consistently provides quality service is not an easy proposition. To maintain this level of service it requires an advanced human resource function that can attract and train some of the best talent in the industry.

In order to meet this challenge the Ritz Carlton has implemented many of the concepts embodied in the TQM body of research. This method first identifies and quality issues and continually works to improve any weak links in service. TQM never has a stopping point and is more of a perpetual process that requires that the organization continues learning perpetually. The Ritz-Carlton is selling an experience as well as a lifestyle. They are ladies and gentlemen who serve ladies and gentlemen -- the focus is on the experience and less on the rooms or food/drinks.

2. As a prologue to the case study, Sandra Bucher and Stacy McManus open with a quote from the Analects of Confucius, which states: "The Master said, Govern the people by regulations, keep order among them by chastisements, and they will flee from you, and lose all self-respect. Govern them by moral force, keep order among them by ritual, and they will keep their self-respect and come to you of their own accord." What is the significance of this quote and how does it relate to the Ritz-Carlton Hotel Company and the effective practice of management in general? What strategies and processes does the Ritz-Carlton Hotel Company employ in their effort to "govern them by moral force and keep order among them by ritual" while ensuring that the "ladies and gentlemen" of Ritz-Carlton keep their self-respect?

The employees at the Ritz-Carlton are given vast amounts of respect and dignity for the work they do. There employees are more than FTE or "labor," they are humans with hearts and souls and should be treated accordingly. The employees are not servants -- they are ladies and gentlemen who work in the service industry. The Ritz-Carlton empowers there employees rather than "chastising" them and in return they give their full effort and extraordinary performances. By focusing on the fact that they are not considered "servants" and rather are in the service industry, I think this perspective is important because it lets the staff keep their self-respect.

3. Creating a customer-centered organizational culture that motivates associates to deliver exceptional, personalized service is critical to Ritz-Carlton's success. When opening a new hotel, what process does Ritz-Carlton employ to quickly establish the appropriate organizational culture within just a seven (7) day period? Explain the process step-by-step. Please utilize the "Cycle of Capability" as a framework for explaining how Ritz-Carlton establishes a customer-centered organizational culture.

The seven day culture building exercise is built upon the idea that adults do not change slow and gradually. Rather they change quickly and in a response to an emotional event. So the new employees are provided an emotional experience that can affect them on a deep level and can actually change patterns of behaviors to align them with the organizational goals.

The organization starts with the vision in the morning. This has been identified as the best time for employees to be receptive to this message. The Ritz-Carlton makes an enthusiastic use of its seven days with messages from the leadership that is played long with songs from famous musicians. The seven day process has been constructed to provide the emotional experience that can quickly align the employee with the organizations culture. Doing it quickly and emotionally most likely has many advantages over a slower or more gradual process.

4. Outline the Ritz-Carlton service processes (e.g. Three Steps of Service, The Motto, The Credo, etc.) that Ritz-Carlton employs to ensure that their service consistently exceeds the expectations of hotel guests.

The Gold Standards serve as something like bullet points that allow the employees to internalize the main concepts of the desired culture. The motto empowers the employee to look at themselves as ladies and gentleman who are on par with the people they are trying to serve. This empowers them to feel comfortable with high achieving clientele as well as empowers them to provide world class service. The three step process for service reminds employees to greet customers in a friendly and professional...

The employee promise and the credo set the values of the company and the experiences that they are creating for their customers.
Two of the "Three Steps" involve greeting the client. Greetings are an important aspect to showing respect and facilitating communication. A greeting can also create a good first impression of the employee who is representing the entire organization when they are interacting with any particular client. Because of the importance of greetings, employees are given a list of approved greetings and practice these regularly. This ensures that the guest are greeted with curtesy and respectfully lets them know that they have the employees full attention.

The category in between the greetings is stated as "anticipation and compliance with guests needs." This is a broad category that can cover many scenarios. The anticipation factors is also important because it has the employee in a position in which they try to preempt the guests needs. This creates a state for the employee in which they are actively trying to figure out what a guests needs many be. This creates the opportunity for them to scan for opportunities to provide for a need that the guest many not been actively seeking. Thus the employee could go above and beyond the fulfillment of the guest's basic needs and provide superior customized service.

The Ritz-Carlton realizes and has internalized the fact that its employees and human resources are really its biggest asset. In order to provide the levels of services that they are aspiring to, the employees must continuously operate with the highest performance levels. Thus the Ritz-Carlton human resources team must support their employees in every way imaginable to help them develop not only as employees but as people too. The organization has the utmost respect for their staff and treats them with the same kind of respect that they expect them to give to guests. It is this level of respect that provides the foundation for the employees maintaining high performance levels.

5. What steps does Ritz-Carlton take to improve the guest experience? What are the risks, challenges, benefits, and rewards associated with service innovation.

The Ritz-Carlton uses the TQM approach to try to create a zero defect service quality. This perspective has become popular in the luxury hotel industry and many other organizations have borrowed this from the Ritz-Carlton. It can be defined as a process to further corporate goals via an educational, empowering and positively rewarding relationship entered into by staff with their subordinates (Baldacchino, 1999).

Empowering employees is the critical component in the Ritz-Carlton service model. If employees are empowered then directly correct or improve services at the time it is recognized or the time of occurrence. They don't need a manager's approval to correct or improve most things. Thus if an employee recognizes some form of defect they can quickly correct it before the customer notices. The same ideas can also be applied to opportunities to provide customized service. Whenever an employee finds an opportunity to meet a client's needs, they do not have to get approval -- they are empowered to represent the organization and provide the service themselves.

One report states that the Ritz Carlton policy is that employees have the ability to make any decision on the spot that requires less than two thousand dollars to improve the customers' service experience. This gives the employees a lot of responsibility to use the company's resources. However, it is found that the employees almost always use their empowerment responsibly and the costs of not empowering the employee in this market can be even higher.

6. Brian Collins has requested that James McBride, the General Manager of the new Ritz-Carlton in suburban Washington D.C. consider changing the seven (7) day countdown. Why does he suggest changing the process and, based upon your analysis of the case, do you feel that the process should be changed? Why or why not?

I do not believe that the Seven Day Countdown should be changed. Part of the reason that this approach works is because it is completed in a busy and frantic kind of way. It creates an emotional environment for the employees in which they are pushed into accepting the organizational culture quickly. Although skill development is an important aspect to training, it is more important that the employees fully grasp the organizations culture. Since the culture incorporates the total quality management approach, there will be plenty of time to continue refining the hotels processes and improving services. The…