Ritz-Carlton: Redefining Elegance (No. 1 of the Training Top 125)

Ritz-Carlton is practically a synonym for "high-end luxury hotel." The very name conjures images of old-world elegance and formality. The Ritz-Carlton Hotel Co. has one of the most distinctive corporate cultures on Earth, referring to its employees at all times as "our ladies and gentlemen." A two-time winner of the Malcolm Baldrige National Quality Award (in 1992 and 1999), it has long trained those ladies and gentlemen to very precise standards and specifications.

So when the head of the company's corporate university refers to a 2006 initiative as "a bit of a culture shift," one imagines thunderclaps and the sound of masonry crumbling. In teaching its people how to behave toward guests, the hotel chain has always been extremely detailed and specific. Under a new philosophy that went into effect last July, "We moved away from that heavily prescriptive, scripted approach and toward managing to outcomes," says Diana Oreck, vice president and director of the Ritz-Carlton Leadership Center in Chevy Chase, Md. "We're now saying, 'We won't tell you specifically how to get to the goal of a happy guest.'"

Has the Ritz gone loosey-goosey? That would be overstating the case. It also would ignore the deep thought and research that went into defining the concept of a happy guest, as well as the planning and intensive training that enabled a coordinated shift in approach at properties that do business in 17 languages around the world.

In practice, the shift should be invisible to guests who wish to be treated as visiting dignitaries, in the classic, formal Ritz-Carlton manner. But just as Time magazine made "You" the 2006 Person of the Year, hotel staff members now attempt to engage You, personally, on an emotional level—to make You say, "Wow!"

How do you wish to be treated, and what are your preferences generally? You needn't necessarily explain or fill out a questionnaire. If you have stayed at a Ritz-Carlton property before, the ladies and gentlemen working at any other property should just seem to know. And if this is your first visit to a Ritz-Carlton hotel, you should be amazed how quickly the entire staff learns to cater to your personality and your desires.

What's more, none of this should seem scripted, as if staff members are reciting lines from a manual. Your interactions with them should feel natural and authentic.

That's how the change works on paper. What makes it work in reality is a great deal of planning, communication and training. The whole thing rests, explains Oreck, on a central paradox: It is the very strength and distinctiveness of Ritz-Carlton's core culture, as embedded in the "Gold Standards" that every employee carries on a laminated card, that allows the company to tinker with it successfully.

"We don't think that culture is part of the game, we think it is the game," Oreck says. "Everything we do is aligned with our Gold Standards. In some companies you hear employees say, 'We've got so many initiatives happening that we don't know what takes priority.' [At Ritz-Carlton] nothing ever comes out of left field. All of our programs tie back to the Gold Standards."

There is much to recommend Ritz-Carlton as the No. 1 company on this year's Training Top 125 list: the fact that it invests a whopping 10 percent of payroll on employee training; longstanding excellence in areas such as leadership development and employee orientation; customer-oriented diversity training that extends even to interaction with service animals such as seeing-eye dogs; management and training philosophies that account for an annual voluntary turnover rate of 18 percent in an industry where 100 percent rates are the norm. But what really made Training say, "Wow," was the way the company went about shifting its perception of its very hallmark: elegant service.

Shifting demographics and societal changes, says Oreck, prompted the move away from a one-size-fits-all guest approach. Ten years ago, Ritz-Carlton's average guest was 59 years old. Now the average is 47. And the clientele are less homogenous, she says: "Today I can have a rock star in the lobby in torn jeans, and he's worth millions of dollars."

Research on guest spending patterns shows that a guest who is "actively engaged" with Ritz-Carlton's brand and its employees spends 23 percent more money than one who is only moderately engaged. A four-percentage-point increase in customer engagement company-wide would generate an extra $40 million in incremental revenue.

Actively engaging a rock star is a different proposition from engaging, say, a retired corporate executive. This suggests a more flexible approach. Suppose, Oreck says, that a dining steward enters a guest's room. "If the guest is an elderly gentleman who says, 'Good evening, young man, how are you?' that's formal. If it's a younger guest who says, 'Hey, dude, how are you doing?' then we can relax a bit."

Relax how much? That's where several months of training came in, leading up to the July change. Supplementing that training, and operating invisibly in the background, is a performance-support system called Mystique. Launched in 2005, Mystique is a computerized customer-relationship management system that collects information about guests. But this isn't just data from survey cards or special requests having to do with allergies to feather pillows; it also includes informal observations from staff members.

Mystique is designed such that if you stayed at a Ritz-Carlton in London last year, a bartender at a property in Hawaii might wow you this year by knowing your favorite drink. But selecting "actionable items" to enter into the system is tricky, and requires still more training. Since the goal is to produce authentic-seeming "wows," the guest mustn't catch a staff member acting on faulty assumptions. "If you order a martini with a pearl onion three times, we're pretty sure that's what you drink," Oreck says. "We won't [record the information] if you order a martini once."

As part of its reevaluation of what Oreck calls "the emotional aspect of service," Ritz-Carlton also took a fresh look at its individual properties. At a hotel on South Beach in Miami, a magnet area for the youthful and hip, "we had a harpist playing in the lobby," she says. Perfect for the Ritz-Carlton on Central Park in New York, but for South Beach, wouldn't someone like Madonna make more sense?

Such thinking led to a 2006 initiative called Scenography. Every Ritz-Carlton property, worldwide, was told to come up with a theme, unique to its locale, around which integrated "scenes" or guest experiences could be built.

Acting as master trainer for the Scenography program, which kicked off with one-day workshops for hotel general managers and creative directors, was Mandy Holloway, corporate director of training and organizational effectiveness. The message was that in order to "squeeze the last bit of enjoyment for guests, everything about your property is relevant—the lighting, the uniforms, the buildings' features," Holloway says.

As an example of the results, Holloway cites Ritz-Carlton's Half Moon Bay property in California's wine country. Its theme is "Fire and Wine on the Coast." Fire pits dot the hotel grounds and also are installed on guest-room balconies. A bagpiper plays at sunset. "Scenes" available to guests are built around the ideas of wines and fire. For instance, Holloway says, "you can be on your balcony with a bottle of fine wine and a special dinner"—that is, a meal designed specifically to make use of your fire pit.

Mystique, Scenography and the new emphasis on tailoring concepts such as elegance and graciousness to individual guests and locales place more decision-making responsibility in the hands of individual staff members. The whole approach also depends upon identifying and correcting things that go wrong. To ensure that errors are reported rather than covered up, Ritz-Carlton tries hard to de-stigmatize them, shifting the focus from blame to correction. Mistakes are referred to as "Mr. BIVs," after a cartoon character whose name stands for breakdowns, inefficiencies, and variations. The point is that "a Mr. BIV occurred, and we want to surface it and get rid of it forever," explains Oreck.

At the start of every shift, every day, at every Ritz-Carlton property, a 15-minute staff meeting takes place. Part of it is devoted to refresher training on one of the 12 "Service Values" incorporated into the company's Gold Standards (see sidebar below). Another part alerts the staff to Mr. BIVs that have arisen and the guests affected.

That suggests an ongoing self-correction process beyond the imagination of most companies. You might call it elegant.

Sidebar: Superior Service

Understanding the needs of guests is key to the success of Chevy Chase, Md-based hotel chain The Ritz-Carlton Hotel Company, L.L.C. The company says maintaining that standard is made easier by its adherence to a dozen key service values:

1. Building strong relationships, and creating Ritz-Carlton guests for life.

2. Responding to the "expressed and unexpressed wishes and needs" of guests.

3. Creating "unique, memorable, and personal experiences" for guests.

4. Employees "understand their role in achieving the Key Success Factors, and creating 'The Ritz-Carlton Mystique.'"

5. Seeking opportunities to innovate and improve The Ritz-Carlton Experience.

6. Owning and immediately resolving guest problems.

7. Creating a work environment of teamwork and lateral service so the needs of guests and fellow employees are met.

8. Finding opportunities to "continuously grow and learn."

9. Employee involvement in the planning of the work that affects them.

10. Employee pride in professional appearance, language, and behavior.

11. A commitment to protect the privacy and security of guests, other employees, and the company's confidential information and assets.

12. Taking responsibility for "uncompromising levels of cleanliness and creating a safe and accident-free environment."