How Ritz-Carlton applies 'TQM'

Cornell Hotel and Restaurant Administration Quarterly

Ithaca
Aug 1!
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"olume# !$
Issue# $
%tart &age# 1'
I%%(# ))1)**)$
%u+,ect Terms# Total -uality
Quality o. ser/ice
Implications
Implementations
Hotel chains
Case studies
Awards
Classi.ication Codes# 1)# 0%
11)# Company speci.ic1case studies
*!*)# Hotel 2 restaurant industries
3!4)# Quality control
5eographic (ames# 0%
Companies#
Company (ame# Ritz-Carlton Hotel Co
A+stract#
In 6all 147 Ritz-Carlton Hotel Co8 +ecame the .irst hotel company to win
the Malcolm 9aldrige (ational Quality Award8 Ritz-Carlton implemented total
-uality management :TMQ; as a means o. winning the award and impro/ing its
ser/ice8 &atric< Mene ,oined Ritz-Carlton ! years ago as corporate director
o. -uality to coordinate and spearhead the company's TQM program8 Mene
e=plains issues concerning application o. TQM to the hotel industry and
applying .or the 9aldrige award8 >ne o. the plan<s o. TQM - empowerment
- was an easy step .or Ritz-Carlton8 Measurement was a di..icult hurdle
+ecause the industry does not ha/e ser/ice--uality +enchmar<s8 ?ey product
and ser/ice re-uirements o. the tra/el consumer were translated into Ritz-
Carlton 5old %tandards7 which include a credo7 motto7 ! steps o. ser/ice7 and
4) @Ritz-Carlton 9asics8@ Team +uilding was also a time-consuming e..ort8
Ritz-Carlton is now re-uiring its /endors also to apply TQM or a similar
process8
Copyright Cornell 0ni/ersity8 %chool o. Hotel Administration Aug 1!
6ull Te=t#
The search .or sustained7 competiti/e ad/antage in the hotel industry has
+ecome .ocused to a large degree on product and ser/ice -uality8 Achie/ing
this -uality on a consistent and low-cost +asis7 howe/er7 has pro/en to +e an
elusi/e target8 In the past7 managers ha/e +een pro/ided with such techni-ues
and programs as management +y o+,ecti/es :M9>;7 -uality circles :QC;7 and
organizational de/elopment :>A;8 Most recently7 total -uality management :TQM;
has +ecome a .ocus in many manu.acturing and ser/ice industries7 including the
hotel industry8
The dri/e .or -uality impro/ement has +ecome a nationally recognized goal8 To
that end7 the Malcolm 9aldrige (ational Quality Award7 esta+lished +y Congress
in 1*B7 recognizes 08%8 companies that ha/e achie/ed e=cellence through
adherence to -uality-impro/ement programs8 (amed .or the late %ecretary o.
Commerce7 the award is administered +y the Commerce Aepartment's (ational
Institute o. %tandards and Technology8 The goals o. the award are to promote
-uality awareness7 recognize -uality achie/ement o. 08%8 companies7 and
pu+licize success.ul -uality strategies8
Companies participating in the award application process must su+mit
comprehensi/e in.ormation on the -uality-impro/ement programs they ha/e
implemented8 The se/en categories on which applicants are e/aluated are
leadership7 in.ormation analysis7 strategic -uality planning7 human-resource
de/elopment and management7 -uality assurance7 -uality operating results7 and
customer satis.action8 Applications are graded on a 17)))-point scale7 and
companies with the highest scores are /isited +y a team o. -uality e=aminers8
The e=aminers su+mit their .indings to a +oard o. nine ,udges7 who then
pro/ide .eed+ac< reports to applicants and select award recipients8 Two awards
may +e granted yearly to companies in each o. three categories# manu.acturing7
ser/ice7 and small +usiness8 Chile award recipients are allowed to pu+licize
and ad/ertise their awards7 they are also e=pected to share in.ormation a+out
their success.ul -uality strategies with other 08%8 companies8:1;
In the .irst .our years o. its e=istence7 14 .irms won the Malcolm 9aldrige
(ational Quality Award# eight came .rom manu.acturingD three were in the
small-+usiness categoryD and only one7 6ederal E=press7 hailed .rom the
ser/ice sector8 Certain aspects o. the ser/ice encounter that are endemic to
the hotel industry may ma<e it di..icult +ut not impossi+le to apply many o.
the management principles .rom other industries8 Those aspects include the
intangi+ility and perisha+ility o. the product7 /aria+ility o. deli/ery7
simultaneous production and consumption o. the ser/ice7 and the changing needs
and e=pectations o. pro/iders and users8:4; In a seminar held at the 11
Annual CHRIE Con.erence in Houston7 hospitality educators and industry
pro.essionals stated their +elie. that the hotel industry could success.ully
apply 9aldrige award criteria and achie/e per.ormance le/els needed to win the
award8:!; That +elie. was su+stantiated on >cto+er 1$7 147 when the Ritz-
Carlton Hotel Company was named a winner o. the 14 9aldrige award7 ma<ing it
the .irst hotel company to win this co/eted honor8
In this article7 I will relate the lessons o. the Ritz-Carlton e=perience7
+ased on an e=tensi/e inter/iew with &atric< Mene7 Ritz-Carlton's corporate
director o. -uality8 At the conclusion7 I will discuss some o. the issues
relati/e to implementation o. TQM in the hotel industry8
The contemporary Ritz-Carlton8 The Ritz-Carlton Hotel Company is a management
.irm that de/elops and operates lu=ury hotels worldwide8 It was .ormed in 1*!
when Atlanta-+ased C898 Fohnson &roperties purchased e=clusi/e 08%8 rights to
the Ritz-Carlton trademar< along with the 9oston Ritz-Carlton Hotel8 Today7
under the leadership o. Cilliam 98 Fohnson :CE>; and Horst %chulze :C>>;7 the
pri/ately-owned company operates 4B hotels and resorts in the 0nited %tates
and Australia8:$; Its .uture international e=pansion plans include adding
hotels in Hong ?ong7 9arcelona7 and Cancun8 Ritz-Carlton also has nine
international sales o..ices and employs 1173)) people8
Q0AGITH-MA(A5EME(T &R>5RAM
Quality management +egins with president and chie. operating o..icer %chulze
and the other 1! senior e=ecuti/es who ma<e up the corporate steering
committee and the senior -uality-management team8 They meet wee<ly to re/iew
product-and ser/ice--uality measures7 guest satis.action7 mar<et growth and
de/elopment7 organizational indicators7 pro.its7 and competiti/e status8
Appro=imately one-.ourth o. each e=ecuti/e's time is de/oted to -uality-
related matters8
5old standards8 ?ey product and ser/ice re-uirements o. the tra/el consumer
ha/e +een translated into Ritz-Carlton 5old %tandards7 which include a credo7
motto7 three steps o. ser/ice7 and 4) @Ritz-Carlton 9asics@ :see E=hi+it 1;8
Each employee is e=pected to understand and adhere to these standards7 which
descri+e processes .or sol/ing pro+lems guests may ha/e as well as detailed
grooming7 house<eeping7 and sa.ety and e..iciency standards8
To pro/ide superior ser/ice7 Ritz-Carlton created its targeted selection
process to ensure a success.ul match o. potential employees to employment8
0pon +eing selected7 new employees are /ersed on the corporate culture through
a two-day orientation7 .ollowed +y e=tensi/e on-the-,o+ training7 then ,o+
certi.ication8 Ritz-Carlton /alues are rein.orced continuously +y daily @line
ups7@ .re-uent recognition .or e=traordinary achie/ement7 and a per.ormance
appraisal +ased on e=pectations e=plained during the orientation7 training7
and certi.ication processes8
To ensure guests' pro+lems are resol/ed -uic<ly7 wor<ers are re-uired to act
at .irst notice--regardless o. the type o. pro+lem or customer complaint8 All
employees are empowered to do whate/er it ta<es to pro/ide @instant
paci.ication8@ (o matter what their normal duties are7 other employees must
assist i. aid is re-uested +y a .ellow wor<er who is responding to a guest's
complaint or wish8
The responsi+ility .or ensuring high--uality guest ser/ices and accommodations
rests primarily with employees8 %ur/eyed annually to ascertain their le/els o.
satis.action and understanding o. -uality standards7 wor<ers are <eenly aware
that e=cellence in guest ser/ices is a top hotel and personal priority8 A .ull
' percent o. all employees sur/eyed in 11 singled out this priority-e/en
though the company had added !7))) new employees in the pre/ious three years8
Aetailed planning8 At each le/el o. the company-.rom corporate leaders to
managers and employees in the indi/idual wor< areas--teams are charged with
setting o+,ecti/es and de/ising action plans7 which are re/iewed +y the
corporate steering committee8 In addition7 each hotel has a designated -uality
leader7 who ser/es as a resource and ad/ocate as teams and wor<ers de/elop and
implement their -uality plans8 To culti/ate employee commitment .urther7 each
wor< area is co/ered +y three teams responsi+le .or pro+lem sol/ing7 strategic
planning7 and setting -uality-certi.ication standards .or each position8
The +ene.its o. detailed planning and the hands-on in/ol/ement o. e=ecuti/es
are e/ident during the se/en days leading up to the opening o. a new hotel8
Rather than opening a hotel in phases7 as is the practice in the industry7
Ritz-Carlton aims to ha/e e/erything right when the door opens to the .irst
customer8 A @se/en-day-countdown control plan@ synchronizes all steps leading
to the opening8:3; The company president and other senior leaders personally
instruct new employees on the gold standards and -uality management during a
two-day orientation7 and a specially selected start-up team composed o. sta..
.rom the company's other hotels ensures that all wor< areas7 processes7 and
e-uipment are ready8
Quality data8 Aaily -uality production reports7 deri/ed .rom data su+mitted
.rom each o. the B4) wor< areas in the hotel7 ser/e as an early warning system
.or identi.ying pro+lems that can impede progress toward meeting -uality and
customer-satis.action goals8 Coupled with -uarterly summaries o. guest and
meeting-planner reactions7 the com+ined data are compared with predetermined
customer e=pectations to impro/e ser/ices8 Among the data gathered and trac<ed
o/er time are annual guest-room pre/enti/e-maintenance cycles7 percentage o.
chec<-ins with no -ueuing7 time spent to achie/e industry-+est clean-room
appearance7 and time to ser/ice an occupied guest room8
6rom automated +uilding and sa.ety systems to computerized reser/ation
systems7 Ritz-Carlton uses ad/anced technology to .ull ad/antage8 6or e=ample7
each employee is trained to note a guest's li<es and disli<es8 Those data are
entered in a computerized guest-history pro.ile that pro/ides in.ormation on
the pre.erences o. 4$)7))) repeat guests7 resulting in more personalized
ser/ice8
Quality results8 The aim o. these and other customer-.ocused measures is not
simply to meet the e=pectations o. guests +ut to pro/ide them with a memora+le
/isit8 According to sur/eys conducted .or Ritz-Carlton +y an independent
research .irm7 4 to B percent o. the company's guests lea/e with that
impression8 As a result o. its -uality program7 Ritz-Carlton recei/ed 141
-uality awards .rom the tra/el industry in 11 alone7 including# @9est Hotel
Chain in the 0nited %tates7@ +y Iagat Tra/el %ur/eyD @Inde= Award o.
E=cellence7@ +y Hotel and Tra/el Inde=7 @Alred Award@ .or 9est Hotel Chain7 +y
Corporate Tra/elD and @Top Hotel Chain in A+ility to %er/ice Meetings7@ +y
%uccess.ul Meetings8
&ATRIC? ME(E A(A TQM
&atric< Mene ,oined the Ritz-Carlton Hotel Company three years ago as
corporate director o. -uality to coordinate and spearhead the company's TQM
program8 &rior to ,oining Ritz-Carlton7 he was with G'Hermitage Hotels in Gos
Angeles and ser/ed as general manager o. the Ge 9el-Age8 He has also +een
associated with Hyatt Hotels7 Cestin International7 and >mni Hotels8 He +rings
to his position a comprehensi/e <nowledge o. all aspects o. the hotel
industry7 .rom operations to .ood and +e/erage and management training8
In Mene's /iew7 Ritz-Carlton's approach to the 9aldrige award +egan long
+e.ore the award was esta+lished and +e.ore anyone had heard o. TQM8 @A+out
eight years ago Ritz-Carlton set out to +e a single supplier o. lu=ury
properties that met Mo+il's and AAA's highest standards8 %i= years later7 we
had achie/ed recognition .rom those independent rating organizations as the
only hotel company that consistently met their highest standards7@ he said8
(ow7 Ritz-Carlton is the +enchmar< used +y AAA and Mo+il in rating lodging
properties8
@At that point7 company president Horst %chulze shoo< us to our .oundations
one day when he told us7 'Hou <now whatJ Ce're a luc<y7 +loody si=7 on a scale
o. one to ten8' Chat he was saying was that all o. our customers were still
not +eing satis.ied all the time7@ Mene said8
He said that despite a desire to .ind areas o. impro/ement and a strong
-uality-+ased culture7 the company had run out o. ideas .or how to impro/e8
@Ce went to se/eral o. our main customers and independent -uality-rating
organizations7@ Mene recalled8 @They suggested turning to the 9aldrige
criteria .or guidance8 Those criteria were hard to understand7 and at .irst we
didn't thin< they were rele/ant to our +usiness8 Ce gradually realized the
award criteria could ser/e as a road map .or -uality impro/ement8@
@I thin< it is important that e/eryone understands we were not a classic TQM
company to +egin with7@ Mene added8 @Aespite our culture and o+session with
-uality impro/ement7 we were not a classic TQM company and I don't e/en <now
to this day i. we are7 although we certainly apply many o. the principles8 Ce
aren't as statistically controlled as some o. the more traditional TQM
companies7 +ut we are +eginning to mo/e more and more in that direction8@
EM&>CERME(T
>ne o. the plan<s o. TQM7 empowerment7 was an easy step .or Ritz-Carlton7 Mene
said8 @To us7 empowerment means gi/ing employees the responsi+ility .or
sol/ing guests' pro+lems8 Ce .ound that happens in two stages i. you're
staying at a hotel and you encounter a pro+lem or something is wrong8 In stage
one7 the employee will ha/e to +rea< away .rom his or her normal routine to
ta<e an immediate positi/e action7 to in/estigate what went wrong7 and
straighten it out8@
9rea<ing away is not e=actly the proper term7 since sol/ing guests' pro+lems
is a ma,or consideration in guest ser/ice8 Mene e=plained7 @Ce would rather
ha/e a guestroom attendant7 .or e=ample7 deal with .i=ing a guest's pro+lem on
the spot rather than ha/ing the director o. mar<eting .i= it later8 It's the
1-1)-1)) rule that we +elie/e in# Chat costs you a dollar to .i= today will
cost K1) to .i= tomorrow and K1)) to .i= downstream8@
Teamwor<8 9uilding a team approach did occasion some resistance .rom managers7
+ecause o. its no/elty8 Employees met as teams to spot pro+lem patterns7
prioritize pro+lems7 and de/elop measures to pre/ent their recurrence8 @This
was the phase that was completely new to us7@ Mene said8 @The way we addressed
managerial concerns was +y in/ol/ing all the managers in a re/iew process8
Gater7 we went on to create strategic planning teams where e/ery le/el o. the
organization was charged with the responsi+ility to set goals and action
plans8 Ce allowed the managers to sit in on re/iew +oards and study each
team's o+,ecti/es and plans8 >. course7 they had some training on what to loo<
.or8 The managers came to see their role as still responsi+le .or o+,ecti/es
and solutions and to ensure they were ade-uately researched and .unded7 +ut
with input and in/ol/ement .rom employees8@
Mene said the company has learned that not e/eryone wants the responsi+ility
o. +eing on a strategic-planning team and that some managers are +etter suited
to a team approach--particularly as .acilitator or coach--than others8 @Ce use
screening methods in hiring to determine who shares in our /alues7 and we use
predicti/e instruments to tell i. people are well suited to teamwor<8 That's a
+rea<through7@ he said8 @Ce also spent more time +uilding the relationship o.
the team8 Ce too< .or granted that i. you were already a good Ritz-Carlton
employee7 you already understood our concept o. lateral ser/ice8 %o when we
put a group o. cross-.unctional people together in a team7 we .igured they
would ,ust naturally wor< together as a team and go .orward8 9ut what we .ound
was that we had to spend more time to allow the team mem+ers to get to <now
each other and learn how to +uild and maintain support +e.ore they could
really get the <ind o. impro/ement we wanted8 Get's ,ust say that we learned
how to +etter +uild and maintain our teams8@
6EEA9AC?
Cinning the 9aldrige award turns out to +e a @good-news7 +ad-news@ situation8
A month or two a.ter winning the award7 Ritz-Carlton recei/ed a .eed+ac<
report suggesting B3 areas o. impro/ement8 The ne=t step7 Mene said7 was to go
right +ac< a.ter de.ects8 @Ce announced to the employees that +y 1'7 and
this one really shoo< them7 we wanted to reduce the cycle time :the time
+etween identi.ying a guest's need and satis.ying that need; +y 3) percent7
and we also wanted to set an o+,ecti/e o. 1))-percent customer retention8 %o7
we actually set goals o. enormous magnitude right on the heels o. winning the
9aldrige7 long-range -uality goals8 Chat I thin< got people's attention was
that not only did we ha/e new high--uality goals7 +ut we weren't stopping at
9aldrige8 Ce wanted the highest le/el o. -uality8@ Ritz-Carlton did not target
such traditional goals as occupancy rate +ecause the company e=pects the .ocus
on -uality goals will de/elop -uality production that will dri/e the .inancial
outcome8 @That was a real shoc< to our employees7@ Mene said8 @Chether we end
up with the highest a/erage rate and occupancy I don't <now7 +ut we will ha/e
the most e..icient system to satis.y customers8@
%0&&GIER%7 T>>
Ritz-Carlton is now wor<ing with its suppliers .or -uality management8 The
.irm has de/eloped supplier certi.ication7 +y which the company not only
measures how o.ten suppliers meet speci.ications on time7 +ut how well they
impro/e their cycle time .rom order to deli/ery8 @I. they don't ha/e the
willingness to do that we can no longer do +usiness with them7@ Mene warned8
@Ce want to see which suppliers are +est a+le to meet our -uantity needs7 and
which will meet our -uality needs +y doing an internal assessment or +y
applying .or the 9aldrige award themsel/es8@
The internal assessment in/ol/es a rigorous 1))--uestion internal audit o.
suppliers' capa+ilities7 plus a sur/ey o. the people who use their products
and ser/ices7 including purchasing agents7 accounting personnel7 sales
persons7 and hotel guests7 who also rate the -uality o. those suppliers'
products and ser/ices8 Ritz-Carlton ran<s the suppliers +ased on a score
de/eloped .rom the supplier audits and user sur/eys8 The goal is to get
suppliers to ad/ance through a certi.ication program to +ecome a .ully
integrated partner8
@Most o. our suppliers are already in/ol/ed in this approach and they're happy
to share with us their capa+ilities7 +ut we ha/e all sorts o. other suppliers
showing up and saying7 'Goo< at me7 loo< at what I can do8' %o I thin< the
response to our program has +een good7@ Mene said8
H0MA( RE%>0RCE%
Ritz-Carlton completely integrates human resources and operations7 so that an
outside o+ser/er might +e hard pressed to .igure out who were the human-
resources people and who were the operations people7 Mene o+ser/ed8 Human-
resources and operations personnel wor< together to select7 orient7 train7 and
certi.y employees8 They also ensure that the employees remain deeply in/ol/ed
in running the +usiness7 since e/ery le/el o. the organization is charged with
the responsi+ility o. setting goals and o+,ecti/es8
Appraisal8 @>ur -uality per.ormance standards are also esta+lished +y
employees through their wor< teams in each area o. the hotel7@ Mene said8
@This leads me to our per.ormance-appraisal system7 in which we hold our
people responsi+le only .or the things they can control8 Appraisal is +ased on
the things that we told employees were important during their orientation--the
gold standards8 >nce our employees +ecome certi.ied7 per.ormance appraisals
are nothing more than a recerti.ication7 so that training can +ecome a
continuous process8 Ce also as< our people to contri+ute to the process +y
identi.ying pro+lems and wor<ing to sol/e them8@
AA"ICE 6>R EA0CAT>R%
Mene had the .ollowing thoughts .or educators# @The education esta+lishment
needs to recognize that -uality is a whole new +ranch o. <nowledge7 and it has
to +e taught to the students as an entirely separate concept8 I don't e/en
<now i. it should +e a separate course or something that is inculcated
throughout the curriculum8 I really +elie/e the manager o. the .uture must +e
a generalist8 I don't thin< we teach students enough a+out interpersonal
relationships or how to +uild and maintain a team approach8:';
@I thin< we should teach them less a+out .inances and more a+out -uality8
Ce'/e got to get them o.. the .inancial agenda8 Hou cannot impro/e a company's
.inancial per.ormance merely +y .ocusing on .inances8 %o7 we can no longer say
to human-resources people that they +e responsi+le .or personnel7 and to
controllers that they +e responsi+le .or .inances8 6uture managers7 and
employees to a di..erent e=tent7 ha/e to <now and +e responsi+le .or -uality7
relationships7 and .inances8@
AA"ICE 6>R I(A0%TRH
To ma<e -uality wor< success.ully7 the president and senior leaders must
initiate and dri/e the process7 Mene +elie/es8 @The -uality culture has got to
+e there7 and top leaders help to set that8 It's also important to understand
the criteria +e.ore starting7 +ecause it may seem irrele/ant to the typical
hotel8 5uide+oo<s and TQM seminars can +e help.ul8 An application committee
should +e .ormed to assess the current situation and implement the TQM
process8 >ur committee was di/ided into se/en su+committees +ased on the se/en
e=amination areas in the 9aldrige application7 with a senior manager as leader
.or each area8 Ae/eloping a detailed plan or wor< .low similar to opening a
new hotel is e=tremely important .or the purpose o. completing the 9aldrige
application itsel.8 The application process o. dra.ting the report and then
re/iewing7 editing7 pu+lishing7 printing7 and de.ending it is a ma,or
underta<ing8 I recommend using a pro.essional editing team7 +ecause you are
pu+lishing a +oo<7 ma<e no mista<e a+out it8 I also suggest editing the .inal
document in a +usiness-center en/ironment7 li<e a retreat7 where you get your
editing team together .or a wee< to loc< yoursel. down and ,ust go through the
iterations8 The editing process is +igger than one might imagine8 6inally7 I
+elie/e you ought to challenge your organization with an e=traordinary goal8
The goal to impro/e +y using the application as a guide .or sel.-assessment
and de/eloping a -uality program should outweigh the goal o. wanting to win
the 9aldrige award8
IM&GICATI>(% >6 THE RITI-CARGT>( EL&ERIE(CE
The Ritz-Carlton case demonstrates that the hotel industry can apply 9aldrige-
award criteria to de/elop a success.ul -uality program ,ust li<e other .irms
in the manu.acturing and ser/ice industries8 The chie. mechanism .or ensuring
the steady -uality impro/ement re-uired +y the 9aldrige award is empowering
employees7 which means gi/ing them the authority to identi.y and sol/e
customer pro+lems on the spot and to impro/e wor< processes8 A corollary o.
empowerment is that employees should +e a+le to ma<e modest changes in normal
procedures7 especially in resol/ing a guest's complaint8 Ritz-Carlton7 .or
instance7 allows each indi/idual employee to spend up to K47))) to satis.y a
guest8 As &atric< Mene so aptly put it7 @Ritz-Carlton employees <now that .rom
day one they are empowered to +rea< away .rom their normal routines whene/er
they see a pro+lem to +ring that pro+lem under control8@ 6or empowerment to
ha/e a positi/e e..ect7 howe/er7 employees must also ha/e the <nowledge and
s<ills to use their authority well8 That re-uires training not only in -uality
concepts and -uality control tools and techni-ues7 +ut also in how to do the
,o+ and how to wor< together as a team8:B;
Another lesson learned .rom Ritz-Carlton's -uality e..ort is that hotel
companies can achie/e e=cellence in -uality impro/ement without using the
sophisticated statistical techni-ues normally associated with manu.acturing
companies8 Although many persons .eel that the precisely measured 9aldrige
criteria .a/or manu.acturing7 the award does not re-uire companies to use
computer-generated statistical techni-ues8 Companies are re-uired7 howe/er7 to
collect and analyze in.ormation related to customer satis.action7 -uality o.
products and ser/ices7 cycle-time reduction7 and .inancial and employee-
related per.ormance7 and to ma<e comparisons with competitors and industry
+enchmar<s8
In .act7 measuring -uality is one spot where Ritz-Carlton encountered
pro+lems8 In our con/ersation7 &atric< Mene e=pressed how di..icult it was to
.ind -uality-related in.ormation on the industry8 E=cept .or .inancial data7
neither single competitors nor the industry as a whole was trac<ing -uality-
assessment in.ormation8 The need to change current systems o. in.ormation
gathering and analysis to .ocus more on -uality and data related to customer
satis.action will +e a challenge to other hotel companies in planning their
-uality programs8 Ritz-Carlton's lesson was that it needed immediate responses
throughout the system and accessi+le to all employees7 ,ust to <eep pace with
e/er-changing customer demands8
The Ritz-Carlton e=perience also o..ers lessons .or other hotel companies
interested in pursuing the Malcolm 9aldrige (ational Quality Award8 6or the
Ritz-Carlton7 winning the 9aldrige has +een a dou+le-edged sword8 >n the one
hand7 the award is a crowning achie/ement .or employees on their success.ul
de/elopment and implementation o. TQM8 It has also +een e..ecti/e in
solidi.ying the company's position as a leader in the lu=ury hotel mar<et and
in generating +usiness .rom companies interested in doing +usiness with a
9aldrige award winner8 >n the other hand7 the num+er o. re-uests .or
presentations7 appearances7 tours7 and general in.ormation +eing placed on
Ritz-Carlton's e=ecuti/es and sta.. has +een staggering--o/er ')) in the .irst
three months o. 1! alone8 &atric< Mene admitted to spending more than 3)
percent o. his time tra/eling and ma<ing presentations on Ritz-Carlton's
-uality program and the 9aldrige e=perience8 Although the award winners are
not re-uired to respond to such demands7 they are e=pected to support the
-uality mo/ement +y sharing what they ha/e learned with others8
Mene would change nothing7 though8 The chain's representati/es no longer ha/e
to con/ince prospecti/e clients that its properties o..er a high--uality guest
e=perience8 @&eople need to understand the economics o. -uality7@ Mene warned8
@Chen you don't satis.y all the customers all the time it can cost you a
.ortune8 %o we .ound the +ene.its more than outweighed any pro+lems8 A -uality
approach to running a +usiness is the most cost-e..ecti/e7 least capital-
intensi/e path to pro.ita+ility8 I ha/e nothing +ut positi/e things to say7
and I'/e spent se/eral years o. my li.e on this8@
In light o. the su+stantial e..ort and actual costs in/ol/ed in competing .or
the 9aldrige award7 not to mention a he.ty up-.ront application .ee :K$7)));7
hotel companies may want to consider whether they really want to try .or the
award itsel.8 Companies that see< the award merely to gain pu+licity or
prestige will .ind that such pursuits usually do not withstand the scrutiny
that e=aminers gi/e each applicant8:*; The real danger lies in +ecoming more
concerned with winning the award than with -uality impro/ement8:; Today7
9aldrige-award winners typically spend se/eral years wor<ing on TQM +e.ore
e/en applying .or the award7 and on that score7 Ritz-Carlton's @+orn at +irth@
philosophy to -uality appears to +e prescient8
Ritz-Carlton's e=perience with TQM and the Malcolm 9aldrige (ational Quality
Award pro/ides /alua+le lessons .or any hotel company8 The hotel industry
today is +eing challenged +y a sluggish economy7 increased multinational
competition7 and a more-sophisticated and demanding customer8 How these issues
are addressed may /ery well determine the di..erence +etween success and
.ailure8 Chile approaches to TQM can /ary depending on an organization's
uni-ue circumstances and characteristics7 the 9aldrige-award criteria ser/e as
a use.ul guide .or setting up and monitoring a -uality-impro/ement program8
I. the Ritz-Carlton e=perience teaches us anything7 it's that a .ocus on
customer satis.action must +e +uilt into the management processes o. the
organization and supported through an integrated system o. in.ormation
analysis7 total employee participation7 training7 and the continuous e..ort to
impro/e ser/ice and product -uality8
1 Most o. the in.ormation presented here is adapted .rom the 14 Award
Criteria# Malcolm 9aldrige (ational Quality Award8 To o+tain a copy at no
cost7 contact# Malcolm 9aldrige (ational Quality Award7 (ational Institute o.
%tandards and Technology 5aithers+urg7 MA 4)* :telephone# !)1-B3-4)!';8
4 Ro+ert C8 Gewis and Richard E8 Cham+ers7 Mar<eting Geadership in
Hospitality# 6oundations and &ractices :(ew Hor<# "an (ostrand Reinhold7
1*;7 pp8 !-$8
! R8 Aan 9eid and Mel/in %andler7 @An E/aluation o. the 9aldrige Award and Its
Implications .or the Hotel Industry7@ a+stracted in 11 Annual CHRIE
Con.erence &roceedings :Cashington7 AC;7 pp8 43'-43B8
$ 6or comments .rom Horst %chulze7 see# ?enneth R8 5reger and 5lenn R8
Cithiam7 @The "iew .rom the Helm# Hotel E=ecs E=amine the Industry7@ The
Cornell Hotel and Restaurant Administration Quarterly7 !47 (o8 ! :>cto+er
11;7 pp8 1*-!'8
3 %ee# Cilliam E8 ?ent7 @&utting 0p the Ritz# 0sing Culture to >pen a Hotel7@
The Cornell Hotel and Restaurant Administration Quarterly7 !17 (o8 ! :(o/em+er
1);7 pp8 1'-4$8
' These statements are congruent with the .indings o. the sta<eholder sur/ey
discussed +y Cathy Enz7 Geo Renaghan7 and A8 (eal 5eller in @5raduate-Ge/el
Education# A %ur/ey o. %ta<eholders7@ in this issue's Educators' 6orum8
B 6or empowerment to he e..ecti/e7 employees must also +e ena+led8 That is why
Aeming emphasized the need .or training and education in his principles o.
TQM8 Aeming's ideas are presented in# Mary Calton7 The Aeming Management Model
:(ew Hor<# &utnam1&erigee7 1*';8
* Marshall %as<in and ?enneth F8 ?iser7 Total Quality Managment :%ea+roo<7
Maryland# Aucochon &ress7 11;7 pp8 13-1'B8
Feremy Main7 @Is the 9aldrige >/er+lownJ7@ 6ortune7 Fuly 17 117 pp '4-'38
ELHI9IT 1
THE RITI-CARGT>( @5>GA %TA(AARA%@
THE RITI-CARGT>( CREA>
The Ritz-Carlton is a place where the genuine care and com.ort o. our guests
is our highest mission8 Ce pledge to pro/ide the +est ser/ice and .acilities
.or our guests who will always en,oy a warm7 rela=ed yet re.ined am+ience8 The
Ritz-Carlton e=perience enli/ens the senses7 instills well-+eing7 and .ul.ills
e/en the une=pressed wishes and needs o. our guests8
THE RITI-CARGT>( M>TT>
@Ce are Gadies and 5entlemen ser/ing Gadies and 5entlemen8@ &ractice teamwor<
and @lateral ser/ice@ :i8e87 employe-to-employee contact; to create a positi/e
wor< en/ironment8
THREE %TE&% >6 %ER"ICE
18 A warm and sincere greeting8 0se the guest's name7 i. and when possi+le8
48 Anticipation and compliance with guest needs8
!8 6ond .arewell8 5i/e guests a warm good-+ye and use their names7 i. and when
possi+le8
THE RITI-CARGT>( @9A%IC%@
18 The Credo will +e <nown7 owned7 and energized +y all employees8
48 The three steps o. ser/ice shall +e practices +y all employees8
!8 All employees will success.ully complete Training Certi.ication to ensure
they understand how to per.orm to The Ritz-Carlton standards in their
position8
$8 Each employee will understand their wor< area and hotel goals as
esta+lished in each strategic plan8
38 All employees will <now the needs o. their internal and e=ternal customers
:guests and .ellow employees; so that we may deli/er the products and ser/ices
they e=pect8 0se guest pre.erence pads to record speci.ic needs8
'8 Each employee will continuously identi.y de.ects :Mr8 9I"@# Mista<es7
Rewor<7 9rea<downs7 Ine..iciencies7 and "ariations; throughout the hotel8
B8 Any employee who recei/es a customer complaint @owns@ the complaint8
*8 Instant guest paci.ication will +e ensured +y all8 React -uic<ly to correct
the pro+lem immediately8 6ollow-up with a telephone call within 4) minutes to
/eri.y that the pro+lem has +een resol/ed to the customer's satis.action8 Ao
e/erything you possi+ly can ne/er to lose a guest8
8 5uest-incident action .orms are used to record and communicate e/ery
incident o. guest dissatis.action8 E/ery employee is empowered to resol/e the
pro+lem and to pre/ent a repeat occurrence8
1)8 0ncompromising le/els o. cleanliness are the responsi+ility o. e/ery
employee8
118 @%mile8 Ce are on stage8@ Always maintain positi/e eye contact8 0se the
proper /oca+ulary with our guests8 :0se words li<e# @good morning7@
@certainly7@ @I'll +e happy to7@ and @my pleasure8@;
148 9e an am+assador o. your hotel in and outside o. the wor< place8 Always
tal< positi/ely8 (o negati/e comments8
1!8 Escort guests rather than pointing out directions to another area o. the
hotel8
1$8 9e <nowledgea+le o. hotel in.ormation :hours o. operation7 etc8; to answer
guests' in-uiries8 Always recommend the hotel's retail and .ood and +e/erage
outlets prior to .acilities outside the hotel8
138 0se proper telephone eti-uette8 Answer within three rings and with a
@smile8@ Chen necessary7 as< the caller7 @May I place you on hold8@ Ao not
screen calls8 Eliminate call trans.ers when possi+le8
1'8 0ni.orms are to +e immaculateD wear proper and sa.e .ootwear :clean and
polished;7 and your correct name tag8 Ta<e pride and care in your personal
appearance :adhering to all grooming standards;8
1B8 9e certain o. your role during emergency situations and +e aware o. .ire
and li.e-sa.ety response processes8
1*8 (oti.y your super/isor immediately o. hazards or in,uries and o. e-uipment
or assistance that you need8 &ractice energy conser/ation and proper
maintenance and repair o. hotel property and e-uipment8
18 &rotecting the assets o. a Ritz-Carlton Hotel is the responsi+ility o.
e/ery employee8
ELHI9IT 4
6I"E TE(ET% >6 TQM
Chile the .ollowing .i/e principles are not the only tenets o. Total Quality
Management7 +y concentrating on these principles7 employees will realize that
TQM is not ,ust another @program@ that will almost certainly /anish8 The <ey
is that TQM is an integrated system o. techni-ues and training8
:1; Commit to Quality8 Ma<ing -uality a num+er-one priority re-uires an
organizational culture to support it7 and only top leadership can .oster a TQM
culture8 Thus7 the .irst step toward TQM must in/ol/e acti/e support and
direction .rom top-le/el managers7 especially the CE>8
:4; 6ocus on Customer %atis.action8 Customers are concerned a+out -uality and7
in .act7 de.ine it .or the organization8 %uccess.ul TQM companies are acutely
aware o. the mar<et8 They <now what their customers really want and in/aria+ly
meet and e=ceed their e=pectations8
:!; Assess >rganizational Culture8 A select group o. top managers and
employees .rom di..erent parts o. the company should e=amine the organization7
with a .ocus on its culture7 and assess the .it +etween that culture and TQM's
principles8 This assessment7 which may ta<e se/eral months to complete7 will
help management +uild on strengths7 identi.y wea<nesses7 and set priorities8
:$; Empower Employees and Teams8 Although TQM is led .rom the top7 the real
wor< occurs @+ottoms-up8@ Empowering employees and teams re-uires training
them to use their authority e..ecti/ely8 It may also re-uire redesigning some
,o+s to .acilitate a team approach and modi.ying policies and practices that
support rewards .or results and other cultural elements that empower
employees8
:3; Measure Quality E..orts8 The a+ility to gauge your e..orts toward superior
employee per.ormance7 streamlined decision-ma<ing7 supplier responsi/eness7
and impro/ed customer satis.action is endemic to the TQM process8 In.ormation
gathering and analysis techni-ues should help identi.y causes o. wor<-process
pro+lems and +e well-designed7 timely7 and straight.orward8 In the end7 TQM is
+ased mostly on rational thin<ing and pro+lem sol/ing7 not on sophisticated
statistics and other measurement techni-ues8
Reproduced with permission o. the copyright owner8
6urther reproduction or distri+ution is prohi+ited without permission8