The Ritz-Carlton Hotel Company

Critical Analysis of Malcolm Baldrige

National Quality Award with regard

to to

THE RITZ-CARLTON®

HOTEL COMPANY

By:Kumar Pratik

History

Established in 1983, the former owner, W.B. JohnsonProperties, acquired the exclusive North Americanrights to the Ritz-Carlton trademark, the foremostname in luxury hotels. This status was largely due tothe legendaryCaesarRitz who developedandoperatedtwo ofthe legendaryCaesarRitz who developedandoperatedtwo ofthe world’s best hotels in Paris and London.The hotels achieved such fame in the marketplace thatthey attained what is often referred to as “The RitzMystique”. In 1995, The Ritz-Carlton was jointly acquired byMarriott International Inc. to achieve theirstrategy of entering the luxury hotel segment of theindustry; the takeover/merger occurred in 1997.

Three Steps of Service at The Ritz-Carlton

1. A warm and sincere greeting. Use the guest

name, if and when possible.

2. Anticipation and compliance with guest

needs.

3. Fond farewell. Give thema warmgood-bye

and use their names, if and when possible.

Warm reception at The Ritz-Carlton

PHILOSOPHY

“We Are Ladies and Gentlemen Serving Ladies and Gentlemen”

THE EMPLOYEEPROMISE

• At the Ritz-Carlton, their Ladies and Gentlemen are the most important resource in our service commitment to their guests.

• By applying the principles of trust, honesty, respect, integrity and commitment, they nurture and maximize talent to the benefit of each individual and the company.

• The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton mystique is strengthened.

THE CREDO

The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our

highest mission.

They pledge to provide the finest personal service and facilities for their guests who will always enjoy a

warm, relaxed yet refined ambience.

The Ritz-Carlton experience enlivens the senses, instils well-being, and fulfils even the unexpressed

wishes and needs of our guests.

The Ritz-Carlton Experience






THE RITZ CARLTON BASICS

1. The Credo is the principal belief of the Company. It

must be known, owned and energized by all.

2. Their Motto is : “We are Ladies and Gentlemen

serving Ladies and Gentlemen.” As serviceserving Ladies and Gentlemen.” As service

professionals, they treat their guests and each other

with respect and dignity.

3. The Three Steps of Service are the foundation of Ritz-

Carlton hospitality. These steps must be used in every

interaction to ensure satisfaction , retention and loyalty.

THE RITZ CARLTON BASICScontd...

4. The Employee Promise is the basis for the Ritz-

Carlton work environment. It is honoured by all

employees.

5. All employees need to successfully complete annual

training certification for their position.

6. Company Objectives are communicated to all

employees. It is everyone’s responsibility to support

them.


7. To create pride and joy in the workplace, all employees

have the right to be involved in the planning of the

work that affects them.

8. Each employee will need to continuously identify

defects throughout the Hotel.

9. It is the responsibility of each employee to create a

work environment of teamwork and lateral service so

that the needs of their guests and each other are met.


10. Each employee is empowered. For example, when aguest has a problem or needs something special ,you should break away from your regular duties toaddress and resolve the issue.

11. Uncompromising level of cleanliness is theresponsibility of every employee.

12. To provide the finest personal service for our guests ,each employee is responsible for identifying andrecording individual guest preferences.


13. Never lose a guest . Instant guest pacification is theresponsibility of each employee. Whoever receives acomplaint will own it, resolve it to the guest’s satisfactionand record it

14. Be an ambassador of your Hotel in and outside of theworkplace . Communicate any concerns to the appropriateperson. Each employee is responsible for creating a safe,secure and accident free environment for all guests andeach other.

15. Protecting the assets of a Ritz-Carlton hotel is theresponsibility of every employee.

Malcolm Baldrige National Malcolm Baldrige National Malcolm Baldrige National Malcolm Baldrige National Quality AwardQuality AwardQuality AwardQuality Award

PurposePurposePurposePurpose:

– To help stimulate American organizations to improve

quality and productivity;

– To recognize achievements– To recognize achievements

– To establish guidelines & criteria that can be used by any

organization in evaluating their own quality improvement

efforts

– To provide specific guidance for other American

organizations that wish to learn how to manage for high

quality, etc.

Organizations involved in award administration:Organizations involved in award administration:Organizations involved in award administration:Organizations involved in award administration:

– Foundation for the MBNQA

• Established 1988

• Primary purpose is to raise funds for Award program

– National Institute of Standards & Technology (NIST)

• Department of Commerce has responsibility for Award program

• NIST is part of its “Technology Administration”

• NIST Mission: To aid U.S. industry through research & services

• American Society for Quality (ASQ)American Society for Quality (ASQ)American Society for Quality (ASQ)American Society for Quality (ASQ)

– Assists NIST in administration (under contract)

– ASQ identifies, communicates & promotes the use of quality principles,

concepts & technologies

• Board of OverseersBoard of OverseersBoard of OverseersBoard of Overseers

– Advisory Board on the Award to the Department of Commerce

• Board of ExaminersBoard of ExaminersBoard of ExaminersBoard of Examiners

– Evaluates applications & provides feedback

– Makes recommendations

The Malcolm Baldrige Quality Criteria

• Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions Embedded in each of these categories or dimensions ----

the the the the idealidealidealideal is definedis definedis definedis defined

– Leadership

– Strategic Planning– Strategic Planning

– Customer Focus

– Information & Analysis

– Human Resource Development

– Process Management

– Business Results

The dimensions interact and demonstrate The dimensions interact and demonstrate The dimensions interact and demonstrate The dimensions interact and demonstrate the “systems” approach fundamental to the “systems” approach fundamental to the “systems” approach fundamental to the “systems” approach fundamental to

the Baldrige idealthe Baldrige idealthe Baldrige idealthe Baldrige ideal

LeadershipLeadershipLeadershipLeadership creates vision, values, and high performance

expectations that are translated into strategy and action plans

through StrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanning and CustomerCustomerCustomerCustomer FocusFocusFocusFocus. Thethrough StrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanning and CustomerCustomerCustomerCustomer FocusFocusFocusFocus. The

strategy and action plans guide overall HumanHumanHumanHuman ResourceResourceResourceResource

DevelopmentDevelopmentDevelopmentDevelopment and drive the development of ProcessProcessProcessProcess

ManagementManagementManagementManagement to ensure achievement of desired BusinessBusinessBusinessBusiness

ResultsResultsResultsResults.... InformationInformationInformationInformation &&&& AnalysisAnalysisAnalysisAnalysis are critical to effective

decision-making in all aspects of the organization.

Quality Criteria explained

•• LeadershipLeadershipLeadershipLeadershipLeadershipLeadershipLeadershipLeadership

– Examines senior leaders’ personal leadership and

involvement in creating/sustaining values, direction,

performance expectations, etc.performance expectations, etc.

•• StrategicStrategicStrategicStrategicStrategicStrategicStrategicStrategic PlanningPlanningPlanningPlanningPlanningPlanningPlanningPlanning

– Examines how the organization sets strategic directions, how

it determines key action plans, and how plans are translated

into an effective performance management system

Quality Criteria explanation contd…

•• CustomerCustomerCustomerCustomerCustomerCustomerCustomerCustomer FocusFocusFocusFocusFocusFocusFocusFocus

– Examines how the organization determines customer

requirements and expectations, as well as how it enhances

relationships with customers and determines theirrelationships with customers and determines their

satisfaction

•• InformationInformationInformationInformationInformationInformationInformationInformation &&&&&&&& AnalysisAnalysisAnalysisAnalysisAnalysisAnalysisAnalysisAnalysis

– Examines the management and effectiveness of the use of

data and information to support key organizational

processes and the performance management system


•• HumanHumanHumanHumanHumanHumanHumanHuman ResourceResourceResourceResourceResourceResourceResourceResource DevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopmentDevelopment

– Examines how the workforce is enabled to develop and

utilize its full potential, how it’s aligned with the

organization’s objectives, and efforts to build and maintainorganization’s objectives, and efforts to build and maintain

an environment conducive to performance excellence, full

participation & organizational growth

•• ProcessProcessProcessProcessProcessProcessProcessProcess ManagementManagementManagementManagementManagementManagementManagementManagement

– Examines key aspects of process management, including

customer-focused design, product and service delivery

processes, and partnering processes involving all work units


•• BusinessBusiness ResultsResults

– Examines the organization’s performance and

improvement in key business areas, including customer

satisfaction, attainment of performance goals/targets,satisfaction, attainment of performance goals/targets,

human resource, stakeholder and partner performance, as

well as operational performance

The Ritz-Carlton Business Excellence Roadmap

Approach

“Plan”

MBNQADeployment

“Do”

Results

“Check”

Improve

“Act”

Leadership

ApproachApproachApproachApproach “Plan”“Plan”“Plan”“Plan”

o A passion for excellence

o The seven pyramid decisions

(i) 10 year vision(i) 10 year vision

(ii) 5 year mission

(iii) 3 year objectives

(iv) 1 year tactics

(v) Strategy

(vi) Methods

(vii) Foundation

Leadership contd…

o Basic Empowerment ProcessBasic Empowerment ProcessBasic Empowerment ProcessBasic Empowerment Process

Leadership contd…

DeploymentDeploymentDeploymentDeployment “Do”“Do”“Do”“Do”

o All members of Senior Leadership personally ensure that each

new hotel’s goods and services are characteristic of The Ritz-

Carlton hotel company from the first day

o The results of the seven specific decisions from the annual

strategic planning process are arranged in a “Pyramid Concept”

and distributed throughout the organization.

o The Gold Standards are reinforced daily in a variety of forums

Leadership contd…

Results “Check”Results “Check”Results “Check”Results “Check”

Leadership effectiveness is evaluated

(1) On key questions of their semi-annual employee

satisfaction results (these questions reveal if the respective leader satisfaction results (these questions reveal if the respective leader

has gained the full support of the Ladies and Gentlemen regarding

our Gold Standards)

(2) Through audits on public responsibility (i.e. Life Safety

Systems, Security Systems, Food Preparation and Alcoholic

Beverage Service, Environmental Stewardship).

Leadership contd…

ImprovementImprovementImprovementImprovement “Act”“Act”“Act”“Act”

Gaps in leadership effectiveness are addressed with

development/training plans. For widespread

deficiencies , the corporate human resource function

develops/improves courses, processes of facilities.

Strategic Planning

Approach “Plan”Approach “Plan”Approach “Plan”Approach “Plan”

A description of the three major components of our planning

process, including the pre-work known as the Macro

Environment Analysis, is show in Figure

Strategic Planning contd…

Deployment “Do”Deployment “Do”Deployment “Do”Deployment “Do”


ResultsResultsResultsResults “Check”“Check”“Check”“Check”

Monthly performance reviews of the Strategic

Plan are conducted by the upper managers at the corporate and

hotel level. The framework of a typical review is shown in Figure,

which focuses on the pre-established performance indicators of

the Vital-Few Objectives as well as key processes.the Vital-Few Objectives as well as key processes.



The performance reviews are translated into

opportunities for improvement and innovation. Theseopportunities for improvement and innovation. These

decisions are determined by process owners with

assistance from the special organization of Directors of

Quality.

Customer Focus


At The Ritz-Carlton, customer and market focus

concentrates on the information needed for hotel development

and operation.and operation.

The many needs and sources of this

information (i.e. market research) are summarized in

the figure in the next slide.

Customer Focus contd…


DeploymentDeploymentDeploymentDeployment “DO”“DO”“DO”“DO”

The specific actions taken by our Sales and Marketing

Leaders to deploy our Market Research conclusions

consist of four major processes:consist of four major processes:

(1) The 6 P’s Concept

(2) Operation of the CLASS database

(3) Complaint Resolution Process and

(4) Standard Performance Measurements.



The effectiveness of their customer focus is evaluated

through reviews of their standard performance

measures daily, monthly and annually.


Improvement “Act”Improvement “Act”Improvement “Act”Improvement “Act”

The daily and monthly reviews identify performance

gaps to be corrected. The extensive analysis of thegaps to be corrected. The extensive analysis of the

Macro Environment drives confirmation or changes

in marketing strategy, objectives and plans.

Information & Analysis

Approach “Plan”Approach “Plan”Approach “Plan”Approach “Plan”

Two basic types of measurements are used at The Ritz-Carlton:

(1) Organizational measurements for upper

managers at both the corporate and hotel levels

(2) Operational (i.e. process) measurements for

planning, assessing and improving daily

operations.

Information & Analysis contd..

DeploymentDeploymentDeploymentDeployment “DO”“DO”“DO”“DO”

The specific actions taken by Senior Leaders to deploy

the information and analysis approach is based on the

concept of individual process owners.



Since they place such a strong emphasis on fact-based

decision making, reliability of the data is critical. They

rely on their highly trained Ladies and Gentlemen

(including statistically trained at all levels) to insure data(including statistically trained at all levels) to insure data

and information reliability. At the corporate level, they

assign individual process owners to assure that the data

can withstand scrutiny and provide background

information. They also retain third-party specialists to

provide independent reviews of information analysis

and processes.



Whenever their process owners and consulting specialists

indicate that a change of plan is needed, the plans are

rewritten, rebudgeted and reapproved. Their Ladies and

Gentlemen, on a daily basis, identify and implement

improvements in performance measurement as expected

in their culture and facilitate through the training and

performance management programs outlined.

Human Resource Development

Human Resource Development contd…


Their Senior Leaders have decided to increase both themeaning and satisfaction their people derive from theirwork. This approach consists of three basic components:

(1) Their Ladies and Gentlemen know what they are(1) Their Ladies and Gentlemen know what they are

supposed to do

(2) They know how well they are doing and

(3) They have the authority to make changes in theprocess under their authority or their own

personal conduct.


Deployment “DO”Deployment “DO”Deployment “DO”Deployment “DO”

The specific actions taken to deploy our approach range

across a broad spectrum, but most significant activities

consist of: consist of:

(1) The Quality Selection process and

(2) Employee Education, Training and Development.


Their education and training is designed to keep

individuals up to date with business needs.



Results of the selection, training and development

of our Ladies and Gentlemen are checked at key

stages of progression:stages of progression:

(1) Quality Selection Process Measurement

(2) Training Certification Review

(3) Performance Appraisal Review Evaluation

(4) Analysis of employee surveys.


ImproveImproveImproveImprove “Act”“Act”“Act”“Act”

Improvement activities in Human Resources relyImprovement activities in Human Resources rely

extensively on internal audits, site visits by Senior

Human Resources Leaders and analysis of employee

survey data

Process Management


Through our market research which concentrates on

the quality of hotel development and operations, we

have identified key production processes. In addition,have identified key production processes. In addition,

they conduct formal discussions between:

(1) Support and operations employees and

(2) Internal and external customers to identify

administrative and support processes which

impact our hotel products and our company’s

mission.

Process Management contd…

Deployment “DO”

The specific actions taken to deploy their annual

Deployment “DO”The specific actions taken to deploy our annual

process management approach flow from our strategic plan-ning process to every job level and category in our company.

process management approach flow from their strategic

planning process to every job level and category in their

company.



Although they control many sensory characteristics of

the products they produce, they try to “put it in

numbers” in their system of process measurements.



Standing cross-functional teams at all levels use “After

Operations Measures” and customer survey inputs to

improve key processes. These improvements canimprove key processes. These improvements can

come in two ways:

(1) Major changes that require funding, resources

and project management and/or

(2) Incremental day-to-day improvements.

Business Results

Business result includes these aspects:

CustomerCustomerCustomerCustomer focusedfocusedfocusedfocused resultsresultsresultsresults

FinancialFinancialFinancialFinancial andandandand marketmarketmarketmarket resultsresultsresultsresults

HumanHumanHumanHuman resourceresourceresourceresource resultsresultsresultsresults

SupplierSupplierSupplierSupplier andandandand partnerpartnerpartnerpartner resultsresultsresultsresults

OrganizationalOrganizationalOrganizationalOrganizational effectivenesseffectivenesseffectivenesseffectiveness resultsresultsresultsresults

“Elegance without warmth is

arrogance.”

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The Ritz-Carlton Hotel Company

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