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WELCOME TO THE RITZ-CARLTON The Secret System of Legendary Service JAMES SKINNER ROICE KRUEGER MARK VICTOR HANSEN
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Page 1: TO THE RITZ-CARLTON - Amazon S3 to the... · Ideas That Can Change Your Life™ in Business Welcome to the Ritz Carlton Golden Handcuffs The Ritz-Carlton is an amazing hotel company

WELCOMETO THE

RITZ-CARLTONThe Secret System of Legendary Service

J A M E S S K I N N E RR O I C E K R U E G E R

M A R K V I C T O R H A N S E N

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© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 1

Ideas That Can Change Your Life™ in Business

Welcome to The Ritz-Carlton The Secret System of Legendary Service

James Skinner, Roice Krueger, and Mark Victor Hansen

“Welcome to The Ritz-Carlton” is an inside look at

some principles and processes that will help you

achieve a legendary level of service in your own

business.

“The Ritz-Carlton®” is a registered trademark of The Ritz-

Carlton Company, L.L.C.

___________________________________________

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Ideas That Can Change Your Life™ in Business

Welcome to the Ritz Carlton

The Authors

JAMES SKINNER is the founder of two global financial

groups that manage billions of dollars of assets. He is

also recognized as one of the world’s foremost business

thinkers and appears regularly on Japanese television.

ROICE KRUEGER co-founded Franklin Covey, the

world’s largest training company, and has supervised

consulting projects for 80 percent of the Fortune 500.

MARK VICTOR HANSEN is the co-creator of the Chicken

Soup for the Soul empire and is the best-selling nonfiction

author of all time. His goal is to make the planet work

for all humanity!

NOTE: Ideas That Can Change Your Life™ is a

collaboration of three of the world’s most amazing

authors, speakers, and thinkers. The first person “I” may

refer to any of the authors.

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Ideas That Can Change Your Life™ in Business

Welcome to the Ritz Carlton

Golden Handcuffs

The Ritz-Carlton is an amazing hotel company founded

by the hotelier Horst Schulze.

Schulze used to work in a different hotel company,

and he ran dozens of properties. He had on his hands

what he called “golden handcuffs”—they were paying

him so much money he couldn’t quit.

One day, he finally said that the hotel was not the

kind of hotel he wanted to be running. He wanted to

run a completely different kind of hotel, a service hotel.

If you want to have legendary service, you have to

break loose the golden handcuffs that tie you to the

past, and have a dream of how things really ought to be.

Chocolate Chip Cookies and Milk

The Ritz-Carlton is legendary throughout the world in

terms of doing things that consistently surprise, inspire,

and, quite frankly, blow their guests away with service.

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Ideas That Can Change Your Life™ in Business

Welcome to the Ritz Carlton

You want to blow your customers away with

service!

I have heard a story of a guest staying at The Ritz-

Carlton Hong Kong who lost her contact lenses in the

shower. The guest mentioned to the staff that she was

having trouble because she did not have her contact

lenses with her, so the hotel staff knocked out the wall

and took out the pipe to get the contact lenses back.

The first time I stayed at The Ritz-Carlton,

Buckhead, in Atlanta, Georgia, I checked in late at night,

went into the room, and looked at the menu. On the

room service late-night menu they had chocolate chip

cookies and milk.

What a great idea, even if no one ever orders it! In

the United States, mothers are always handing out

chocolate chip cookies and milk to their kids as a

bedtime snack. Having these cookies on the menu was

like you were at home with mom.

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Ideas That Can Change Your Life™ in Business

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I thought it was really terrific that this place was so

warm that they put chocolate chip cookies and milk on

the late-night menu!

After they built The Ritz-Carlton in Osaka, I

mentioned this experience to someone who worked

there because it was such a terrific idea. The next week I

checked in to The Ritz-Carlton Osaka again, and in my

room there were two chocolate chip cookies sitting on

my nightstand for me. I was blown away.

I told the individual who escorted me to my room

how impressed I was and asked them to tell whoever did

this that I said thank you. I came the next week, checked

into my room, and found four chocolate chip cookies!

The cycle just goes on and on and on.

Beyond Expectation

There was an individual who left his glasses at a Ritz-

Carlton in Osaka. He was on his way to give a

presentation at a symposium in Tokyo, and he couldn’t

read his manuscript.

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The hotel operator who received the phone

immediately ran to the room, found the glasses, left the

hotel, and boarded a bullet train for Tokyo, taking the

glasses to the customer.

I often tell people that service is not doing what the

customer asks; service is doing what the customer didn’t

even have the courage or the imagination to ask.

What guest would tell the hotel, “You need to get

on a bullet train and bring my glasses up here right now

because I forgot them”?

Service is doing the things that the customer

didn’t even have the courage to ask!

I want to share with you what The Ritz-Carlton does

exactly and specifically so you can apply the same

principles and processes in your own organization to

achieve a legendary level of service.

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Ideas That Can Change Your Life™ in Business

Welcome to the Ritz Carlton

The world needs more legendary service, we need

service heroes, we need service cultures, we to get the

job done for our customers, we need a philosophy and

system of service.

It Starts with Philosophy

The number-one thing The Ritz-Carlton has that is

absolutely essential to running a legendary business is a

philosophy.

The philosophy of all the most successful companies

that I have studied, whether it is The Ritz-Carlton or

Disney, or any other successful service enterprise

answers three questions.

When you are framing your philosophy for your

company, you need it to answer these questions too:

Who are we? How do we see ourselves? How do

you see yourself? What is your role? What is your

persona? What is your character? What is your identity

when you show up to work in the morning?

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Who are they? How do you see the customer? How

do you define your customer? What is the identity you

hold for your customer?

Why do we have a relationship? What is the one

thing that we must get right for the relationship to

succeed? In the absence of this one thing, we could get

everything right, and the relationship would be

meaningless.

The Credo

In any Ritz-Carlton Hotel property located any where in

the world, you can approach any employee—door man,

housekeeper, waiter, waitress, front-desk person,

maintenance man, anyone—and ask them for a copy of

their Credo.

I have done this all over the world with all types of

employees, and I have never had a Ritz-Carlton

employee fail to reach into their pocket and pull out a

copy of the Credo.

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This is the level at which the philosophy needs to be

installed, owned, and used.

Every employee has a copy of the Credo with them

at all times, which says, “We are ladies and gentlemen

serving ladies and gentlemen.”

“We are ladies and gentlemen serving ladies

and gentlemen.”

Does it answer the three questions?

Who are we? We are ladies and gentlemen.

Who are they? They are ladies and gentlemen.

Why do we have a relationship? Service—it’s as plain, as

clear, and as simple as that.

If we get everything else right and we do not

embody and deliver service, has the relationship

succeeded? No.

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Every employee, in making every decision, only

needs to answer one question: If I were serving ladies

and gentlemen, what would I do in this situation?

In making every decision, every employee needs

to answer only one question: “What does our

philosophy dictate that I should do?”

Say you are the hotel waiter or waitress and

somebody has just ordered something that is not on the

menu.

What do you say?

“Certainly, Sir, my pleasure”—it’s as plain, as clear,

and as simple as that.

That is service.

You go back and get the chef to make it, invent a

price for it, put it on the bill, and deliver it. It’s as plain,

as clear, and as simple as that.

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You are attempting to provide service, which is the

only reason we have a relationship in the first place.

Can you see how important and empowering the

philosophy can be? It answers all the questions, every

day.

Disneyland is not in the service business. This is

surprising to some people. Each company has one word

why it exists, not two words, not three words—one

word.

At Disneyland they say, “We are actors and actresses

on a stage entertaining guests in an audience.”

What is the reason for the relationship?

Entertainment.

They could have all the service in the world; but if it

weren’t entertaining service, it would be meaningless.

I have a company in Japan that does seminars. We

are not in the service business, we are not in the

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entertainment business—we are in the edutainment

business.

If it is not entertainingly educational, it is

meaningless; and this philosophy guides all our

decisions.

That is the first thing that you must have: a

philosophy that answers three questions—Who are we?

Who are they? and Why do we have a relationship?

The simple answers to the three questions will guide

all your decisions and the decisions of all the employees

every day.

Does this simplify your life?

The philosophy is vital. It simplifies everything. But

philosophy alone is not enough.

You have to have systems and processes that will

actually make it happen.

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In addition to having a well-defined philosophy,

you have to have systems and processes that make

it happen every day!

The System of Legendary Service

I want to share with you five systems and processes that

The Ritz-Carlton Company uses to generate and make

these miracles happen every day.

The Ritz-Carlton has many systems and processes,

but after many years of studying the company and their

various properties, I am convinced that these five are

what set them apart.

Modeling these five systems with consistency will

allow you to achieve a level of service in your business

that can only be described as legendary.

System 1: The Morning Line-Up

The first process that is essential to The Ritz-Carlton is

called the “Morning Line-Up.”

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Ideas That Can Change Your Life™ in Business

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The Morning Line-Up happens at the beginning of

every shift: every morning, every afternoon, and every

night.

It is basically a meeting held by all of the employees

of very department at which they discuss the philosophy

and the Gold Standard behaviors that all Ritz-Carlton

employees must exhibit at all times towards their guests.

For example on of the Company basics for many

years has been, “Instant guest pacification will be

ensured by all.”

Employees are to instantly make sure that the guest

is satisfied.

Every day they take one element of the Credo, the

Basics, or some other element of what they call their

Gold Standard and they discuss it.

It’s as simple as that.

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Ideas That Can Change Your Life™ in Business

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They say, “In housekeeping, to ensure instant guest

pacification today what can we focus on and do?”

There has never been a single shift on any day in any

Ritz-Carlton Hotel property that did not begin with a

Morning Line-Up.

Religious Consistency

A system is one of two things: either a meeting or a

report. Think about it. A system is a meeting, a report,

or a process that you carry out religiously, meaning that

there can be no variation—they hold the Morning Line-

Up every single day.

A system is a meeting, a report, or a process that

is carried out with absolute consistency.

They review the repeater VIP guests who are going

to be coming in, and what their preferences and desires

are, so that everyone in the hotel knows that Mr. Mark

Victor Hansen will be arriving and like’s strawberries

dipped in chocolate, or Mr. James Skinner is arriving

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and he likes the clock on the night stand to be pointing

in a certain direction.

It really is to that level of detail.

They also share a story from someone within the

company who embodied the Gold Standards at the

highest level for that day, so they have a story about

instant guest pacification.

Then they deal with any other issues that need to be

dealt with that day, and off they go.

It is pretty simple.

They do this every single day.

I have actually attended the Morning Line-Up of

different departments on several occasions; it’s a

wonderful process.

It usually takes five to 10 minutes.

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You need to have a process that consistently reviews

your philosophy and the standards that your

organization aspires to, because people need to have

repetition.

We need to hear the same message over and over

again before we begin to believe that management

believes it.

That is the first system.

You must have a system for reviewing,

repeating, and instilling the philosophy everyday.

System 2: The Guest Incident Action Report

The second system is profound in its simplicity, but

there are very few organizations that do it with any

consistency.

This idea will change your life.

It is called the “Guest Incident Action Report,” or

GIA.

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The GIA is very simple: If any employee notices

that a guest has not been completely satisfied, then that

employee must fill out a Guest Incident Action Report.

Notice that the guest isn’t filling it out.

Most companies want their guests to fill out their

complaints.

But by the time the guest is writing it down, it is way

too late.

Will most customers write it down?

No, only one in 100 will write it down, so you only

know one percent of the problems with your company,

and you know them too late.

At The Ritz-Carlton, using the GIA system, the

guest doesn’t even have to complain.

If the customer has to complain, it’s too late!

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I still write a GIA if I notice a guest is not satisfied.

The GIA says who the guest is, what the problem

was, what the current status or satisfaction of the guest

is, whether or not they ran out of the restaurant

screaming… Did we leave them in a state where they are

now calmed down but maybe not feeling terrific about

the hotel? We need to know that.

Is that useful information?

Yes, especially if you want them to become a

repeater and a fan of your hotel.

What Stephen Covey and many other people have

taught me is that the guest does not remember the

problem; they only remembers how you dealt with the

problem.

The customer does not remember the problem,

they remember how you dealt with the problem.

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If your guest has a problem and you attend to it

superbly, you turn your customer into a raving fan.

The GIA Report is immediately sent to the Quality

Leader of the hotel, who is responsible for making sure

that your customers systemically become your raving

fans.

The Quality Leader looks at this report and checks

to see if the guest is still in the hotel.

If they haven’t checked out yet, the Quality Leader

immediately sends a copy of the GIA Report to every

department of the hotel, where it is disseminated to

every hotel employee.

Every employee knows every current problem of

every guest in the hotel—every single one!

Every employee is familiar with every problem!

Most organizations try to hide this information.

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The Ritz-Carlton wants everyone to know.

The guest had a problem in the restaurant in the

morning; the hash brown potatoes were not quite the

color that the guest liked them to be.

We are getting down to a level of detail, because

guests and customers today are getting pickier than they

were 10 or 20 years ago because the competition is

evolving.

Customers are more demanding than ever

before!

The GIA has been sent to every department in the

hotel.

Now the customer goes to the fitness center to work

out, and the attendant in the fitness center says, “Mr.

Skinner, I’m so sorry about the hash brown potatoes

this morning. We’ll make sure that it doesn’t happen

again. Is there anything I can do to make your stay at the

fitness center more enjoyable for you?”

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And the guest is thinking, “I like this hotel, even

though the hash brown potatoes were disappointing.”

But it doesn’t end there. The attendant’s comment

was just a follow-up, making sure that the guest knows

he has been heard, that he has been noticed, and that

the hotel staff cares.

Most companies never become aware of the

problems in the first place and therefore cannot fix

them.

You cannot fix a problem that you are not aware

of!

Most companies that become aware of the problems

only try to process the claim so they can get the

customer to quiet down and go away.

No wonder they experience the same problems and

the same complaints over and over again, and have to

develop claims processing departments.

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The Ritz-Carlton does not have a claims processing

department. Why? Because every department is a “claims

processing/follow-up/delight the customer”

department.

Stop processing claims, and start fixing the

problem so you don’t have the complaint in the first

place!

Systemic Improvement

The quality leader must now ask a question, and it is a

very specific question—because if you ask the wrong

question, you can kill your company.

The question that you need to ask is “Why?” Yet,

the question that most organizations ask is “Who?” Do

you see the difference between them? Who did those

hash brown potatoes this morning? Who is it that made

Mr. Skinner angry?

It is not useful to know. We can fire the person and

hire somebody else, but we will still get the potatoes

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wrong, because our system has made it possible to get

the potatoes wrong.

We need to know exactly why it was possible in our

system and in our process to get them wrong in the first

place.

Stop asking “Who?” and start asking “Why?”

and “How?”

Right Inputs

We need to ask whether we purchased the right

potatoes. If we are purchasing the wrong potatoes, we

can cook them all day long and it is not going to help.

We want to look at our inputs.

Right Equipment

Are we using the right equipment for our potatoes? Do

we have the best equipment for cooking these potatoes?

Do you see how you have to make this systemic?

Right Process

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Are we cooking them with the right process? Do we

even have a process? Do we have the right recipe? If we

give the cook the wrong recipe, the guest is going to get

the wrong potatoes. We can yell at the cook all day, but

it is not going to help. Are we using the right process?

Are we using the right recipe?

Right Environment

What about the environment? Have we given them the

right environment to cook the potatoes in? Was the

kitchen dirty? and if so, was it because the wrong

cleaning products were used? Can we still get the

potatoes wrong? Yes, we can still get it wrong. Can you

see where systemic improvement comes from?

Right People

We also have to ask “Do we have the right people?” We

need to know if we have the right hiring process to

attract great chefs.

Is getting the right chef more important than

instituting the right hiring process to get the right chef?

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Which would you rather have? The right hiring process!

Then you would get the right chef every time.

Then, look at the training process. Did we train our

chef properly in the cooking of hash brown potatoes?

Improved Forever

We look at all these things, because if we get the right

inputs, the right equipment, the right process, the right

environment, and the right recruitment and training

process, we will consistently make the world’s best hash

brown potatoes, forever.

Systemic improvements last forever!

The quality leader’s job is to find out why this

morning’s deficient hash brown potatoes happened in

the first place.

I am going to give you an example that really

happened that will blow you away.

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I went into The Ritz-Carlton Osaka three days after

it opened. Now I want you to imagine a newly opened

hotel.

Is everything going to work smoothly?

No.

Running a hotel is one of the most complicated

endeavors on earth, because everything that happens in

human life happens inside a hotel.

Do people get sick inside hotels? Yes.

Do people die in hotels? Yes. An old person can

come in, have a heart attack, and die. It happens.

Meals happen in hotels, weddings happen in hotels,

parties happen in hotels.

You have to be able to run a dry cleaning business, a

laundry business, a restaurant business, a room-

supplying business, an event planning business—you -

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have to be able to run about ten businesses to be able to

run a hotel.

If you are trying to open all of these on the same

day, it simply doesn’t work smoothly the first time out.

I checked in, and the first night the hotel generated

28 GIA Reports just on me!

The Quality Leader goes through each GIA one at a

time.

One of the GIA Reports that was written on me

that I had commented to an employee that the check-in

took too long; it took five minutes, which is a very long

time after a long air flight.

The Quality Leader got together with the people

from the Front Desk and they had a meeting to review

the GIA and systemically solve the problem.

They asked themselves “Why?” questions:

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Why did the check-in take too long?

Why is it possible for our check-in to take five

minutes?

The answer they came up with is very interesting: It

takes five minutes because they have a check-in.

The simplest answers are the most powerful!

The quality methodology that W. Edwards Deming

taught is that you ask “Why?” at least five times, so that

you can drill down.

Ask why five times!

Why do we have a check-in? We need to collect

credit card and guest information.

Why do we need the credit card and guest

information? To ensure we will get paid.

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Why do we need this information to ensure that we

will get paid? We don’t trust our guests!

That was a shocking moment for them. What is

their philosophy? “We are ladies and gentlemen serving

ladies and gentlemen.”

Well, why don’t we trust our guests? Well, it is after

all the first time we are seeing them…

Well why are we doing it for repeat guests as well?

By the time you ask why four or five times you are

getting down to some deep root causes of the problem.

Maybe we can understand it for our first-time

guests, but what about our guests who come repeatedly

and whom we know? What would happen if we just

trusted them? We wouldn’t need their credit card.

Would that shorten the check-in time? Yes, big time.

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I came back one week later. I got out of the taxi.

The doorman said, “Mr. Skinner, welcome back to The

Ritz-Carlton.”

We walked in through the door. What I didn’t know

was that the doorman had a little microphone on his

lapel that the staff at the front desk were able to hear.

The man came out from the front desk with my

room key. As I came through the door, he said,

“Welcome back, Mr. Skinner. Here is your room key.

Let me escort you to your room.”

No check-in! Five minutes became zero.

The GIA is the basis of that improvement.

The employee fills out the GIA Report, not the

guest or customer. Isn’t that profound?

If you and your employees knew about every

dissatisfaction of every one of your customers, your

business would be transformed.

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It would be transformed even more if you had a

Quality Leader whose job was to ask “Why?” in

response to every case of dissatisfaction that ever

happened.

The system is absolutely earthshakingly simple and

profound. Even so, most organizations don’t have it.

I remember I was starting a training company in

Tokyo, and I wanted to list our company in the

telephone directory, but there was no category in the

business section for training companies.

I went to the telephone company, and I asked why

there wasn’t a category for training companies, a billion-

dollar industry.

They told me that nobody had ever asked for it

before, and my response was “How do you know?”

Think about that for a moment. How would you

know?

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Without a system to tell you, you do not know

what your customers want or what they are

dissatisfied with!

How do you know what your customers want or are

asking for if you don’t have a system that consistently,

every single time, captures that information?

You have no idea what they want or what they are

dissatisfied with or what they ask unless you have a

system that tells you.

You need to develop a culture that rejoices in the

guest incidents, because today’s GIA Report is

tomorrow’s miracle.

Today’s GIA is tomorrow’s miracle!

System 3: The Guest Preference Pad

The third system that The Ritz-Carlton uses to achieve

legendary service is a report called “The Guest

Preference Pad.”

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Remember, systems are all meetings, reports, or

processes that are executed with consistency.

The Morning Line-Up is a meeting. The GIA is a

report. The Guest Preference Pad is also a report.

Whenever an employee notices an individual

preference of a guest, that employee fills out a Guest

Preference Pad: Lincoln Taft likes pencils more than pens. It

could be as simple as that.

It is then logged into the computer, so that the next

time Mr. Taft checks into the hotel, the housekeeping

staff is alerted that he prefers pencils to pens.

He checks into his room, goes to his writing desk,

and sits down. Pencils.

It happens every time he comes to the hotel from

now on, because we have the data. We know.

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I feel sorry sometimes now for The Ritz-Carlton

when I check in, because I have stayed there so many

times that they have noticed so many things that I like.

They know that I like my alarm clock not to face out

towards the room, but to face in towards the bed. They

know that I like to do yoga in the morning, so they put a

yoga mat at the foot of my bed with a towel and a bottle

of water. They know that I like to have a fresh fruit plate

in my room, and they also know that I like sun-dried

tomatoes, so there is always a little glass filled with sun-

dried tomatoes sitting on my desk. They know, because

I’ve stayed there so many times, that I don’t like the

room-service menus or hotel papers sitting on my desk,

so those all have to be put away. They know what room

number I like. If for some reason they have a long-term

guest staying and the room number that I prefer is not

available, they know and will apologize about it.

Do you see how after several interactions with your

guest or customer, it could rapidly become impossible

for your customer to shop anywhere else?

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After several interactions with your customer, it

should become impossible for them to shop

anywhere else!

It is as simple as noticing that there is something

they like, then writing it down to capture the

information.

This is something that goes into the Morning Line-

Up. The Ritz-Carlton people know the names of the

guests who are going to be arriving, and they go over

their preferences.

Simple?

Is this applicable to your organization?

Could you do this if you are selling to corporate

organizations?

Certainly.

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Could you do this with the individuals in the

corporate organizations that you are selling to?

You could know their individual and company

preferences. Those could be data-based, available online

so that all your employees could immediately find out

how to best serve this person in the way that they want

to be served.

The Ritz-Carlton, in several countries, keeps a

record of the type of salad I like to order.

You can go to The Ritz-Carlton in Singapore and

ask for the salad that James Skinner always eats, and

they will serve it to you.

In Osaka they had a salad that they used to serve,

but they took it off the menu; however, they know that I

like it, so it is available to me. I just call up room service

and say, “I would like my usual salad,” and they will

know that they have to pull out the old recipe and make

the salad, because that is my preference.

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Would you like to be able to surprise your customers

and clients with that level of service?

If so, you need a system that is either a meeting or a

report that is going to give you the information you

need so you are able to do it.

Do you think that employees love to make the

customers happy?

When you go to work in the morning, would you

rather have your customers be ecstatically happy or

angry with you?

If you give this information to your employees, do

you think they will use it to help make your guests and

your customers happy?

Yes, because it makes their life easier.

Employees know that making the customer

happy makes their life easier. You just have to help

them do it!

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System 4: The Hiring System

The fourth system used by The Ritz-Carlton to

consistently achieve extraordinary service is their hiring

system.

The type of employee that you need in any

organization changes, depending on the type of work

that needs to be done.

For example, there are some organizations that need

people with extremely high spatial skills, the ability to

see in three dimensions, to look at a two-dimensional

map and convert it into a three-dimensional space in

their mind.

There are some jobs that require that.

There are some jobs that require physical prowess.

For example, if you are going to be on a sports

team, you have to have very specific skills and very

specific physical abilities.

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There are some jobs that require very specific

training.

The hiring process is going to have to be highly

customized to an organization, so I am not going to give

you as much detail on it as the others.

The one thing that you should know is, The Ritz-

Carlton hires for the personality more than for skills.

Job fit is more important than job skill!

They want to know that the person is predisposed to

do the job they are being given.

If a person doesn’t enjoy serving and helping other

people, you can train them all you want. Could they do

the job? Yes. Will they do the job satisfactorily? No,

because the job is repeatedly serving other people and

having a consistently great attitude about it.

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They could do the job, because most human beings

are capable of doing most jobs, even if they don’t

choose to do them.

Can do is not the same as will do!

For example, I am a big-picture person. I like doing

strategy and vision. I could do the detail if I had to, but

would I do it well and consistently over time? No.

I know the principles of accounting. I can do it, but

you wouldn’t want me in your accounting department

because I’ll get bored, and I’ll complain, and I’ll whine,

and I won’t be happy for one single day.

I would be a cancer in your accounting department.

You don’t want me there, and you want to identify that

in advance.

The best way to hire the person best suited for the

job is by asking questions that identify traits in the

person without the person knowing the traits that are

being identified.

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Test for pre-disposition using indirect

questioning.

For example, there is an airline that does something

very interesting in their recruiting process.

They bring all the people who want to be flight

attendants into a room, and they have them give a short

speech about why they want to become a flight

attendant. This is part of the evaluation criteria, and you

believe you are being evaluated on your smile, your

motivation, and your confidence.

However, the recruiters aren’t even listening to your

speech and they are not even watching you at all.

They are watching all of the people who are

watching you!

It is absolutely brilliant.

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Some of the applicants will be nodding up and

down, on the edge of their seat, sort of rooting for the

other person and encouraging them; and some of the

people will be thinking what they are going to do to get

this job.

You have one set of people who are others-

centered, and you have another set of people who are

self-centered.

They tell all the self-centered ones to go home,

because they could serve other people on the airplane,

but it is not likely that they will.

The airline wants people who naturally pay attention

to others, who naturally notice what others are doing,

and who are naturally encouraging of others.

The fourth system that you must establish in your

organization is a system that captures people who are

naturally disposed to the jobs they are being given, so

that they not only can do the jobs but will do them

consistently, cheerfully, and joyously over time.

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You want your employees to be cheerful and happy

about what they are doing. You want them to feel

fulfilled. It is just that simple.

System 5: The Empowerment System

The fifth system that allows The Ritz-Carlton to

consistently produce extraordinary results and miracles

is what I call “The Empowerment System.”

It is also quite simple.

Every employee in The Ritz-Carlton knows that they

are allowed to, at any time, without consulting a

manager or anybody superior to them in the

organization, if necessary, spend an amount of money

up to $2,000 to keep a guest happy.

Your employees need to be able to take instant

action in response to changing conditions on the

ground!

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The reason the employee was able to get on the

bullet train and take the glasses to Tokyo is that he knew

that he didn’t have to go through a budget approval

process to make it happen.

The guest was in trouble; he was an important guest,

and the hotel was going to make a lifelong fan who

would tell the whole world that a Ritz-Carlton employee

got on the bullet train to give him his glasses.

Employees are empowered to make these decisions,

and it is very simple.

Empowerment is the process of training,

developing, encouraging, and building systems around

employees that enable them to be able to take any action

or make any decision that you could and would make if

you were there.

This “Let me talk to my manager” stuff is a

complete waste of time and resources.

It is a very simple process, but it is very powerful.

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If the hotel has damaged someone’s shirt in the

laundry, the employee who hears from the guest can

immediately say, “Let me replace that for you. What can

I do to make this right?” and can immediately take

action.

They don’t have to go through some long, drawn-

out process.

You need guidelines, of course, because you don’t

want the employees to do things that you are not

anticipating. You want to have some anticipation, some

framework, and some rules that say that within these

parameters employees can make decisions.

At Nordstrom’s, it is called “The Rule,” and it is

“Do what’s right; serve the customer.”

You need to have a framework. Yes, you need to

have some rules, but within the rules the employees

need to have the power.

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Success in today’s world is all about speed, and

speed is all about empowerment!

Empowerment=Speed

One Philosophy, Five Systems

It is really one philosophy and five systems—that is all

you need.

The Ritz-Carlton developed this methodology

through and as a result of the quality movement, and

then proved the power of their methodology winning

the Malcolm Baldridge Award in the United States.

Then they decided to prove it again by winning it

twice!

You need to have processes and systems that make

sure that you will provide quality service consistently

over time.

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Deming taught that it is all about having a system

that brings you to within statistically measurable

variances.

With any one system you are always going to be

within this zone; you have to change the system to go

up to another zone.

You need to practice this methodology.

You need to build these systems that are very

simple.

You need to have a philosophy that answers Who are

we? Who are they? and Why do we have a relationship?

You need a meeting that is held on a regular basis

that instills the values and basic behaviors in the

employees.

You need a system for catching all of the

dissatisfactions of your customers and a system for

capturing what wows them on an individual basis.

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You need a system for hiring people who not only

can do the job but also will do the job and be happy

doing it.

And finally, you need an empowerment system that

tells employees when and how it is okay to make

decisions to serve the customers.

These five simple systems will change your

company.

With best wishes and gratitude to The Ritz-Carlton for

all the years of outstanding service,

James Skinner, Roice Krueger, Mark Victor Hansen

___________________________________________


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