Is the Customer Really Always Right? A Hotel Company Invests in its Employees First

What if you turned the service philosophy “the customer is always right” on its head and considered your employees first? What would happen to your customer service?

Employees first (or ladies and gentlemen first) is a consideration of two-time Baldrige Award recipient The Ritz-Carlton Hotel Company, LLC, where inspired, engaged employees are considered one of the most critical investments, said Valori Borland, Corporate Director, Culture Transformation, at The Ritz-Carlton Leadership Center, speaking at a recent Baldrige Quest for Excellence conference.

“We know without a shadow of a doubt [that] you cannot have excellent customer engagement without having passionate advocates who work with you,” said Borland. “We support. We invest. We grow. We develop. We want to inspire [employees] each and every day.”

She added that two important things you can say to an employee are “Thank you" and "That means a lot.”

And in the hospitality industry, where the average rate of employee turnover is 80%, retaining employees, especially in ultra-competitive markets such as Miami and New York City, is a challenge. But Borland said The Ritz-Carlton averages an employee turnover rate of just 20%; “a lot of that comes back to culture.”

Growth of the Culture

In the early 1980s, Borland said, The Ritz-Carlton started as three U.S. hotels and now has 140 properties in more than 30 countries. The growth is both in number and type: The Ritz-Carlton now offers properties that include destination clubs and year-round residences. The hotel company has had to evolve its culture and processes through different elements of the hospitality industry, different regions of the United States, and even different countries, she said.

What the hotel company attributes to its success to be able to grow and consistently deliver service excellence are four pillars: (1) the Gold Standards (made up of components: the Credo, Motto, Three Steps of Service, Employee Promise, and 12 Service Values), (2) alignment across properties, (3) its human resources key processes, and (4) the delivery of unique experiences (e.g., global flavor and celebrity chefs), said Borland.

“As we have grown and as customers adapt and evolve, and their needs have changed, we had to stay relevant,” she said. “We have a commitment to quality. This actually came out of us going through the first Malcolm Baldrige assessment. We had to quickly be able to figure out how do we align and create consistent messaging."

Borland said The Ritz-Carlton brand’s original vision, written by former president Horst Schultz, was to create a world-class, luxury hotel company on the premise that we are "ladies and gentlemen serving ladies and gentlemen." That motto has not changed over the years.

She said, in the late 1990s, the employee survey revealed that the ladies and gentlemen wanted an internal statement of their beliefs, so employees and leaders, across global properties, held roundtables to seek feedback, and the Employee Promise was developed. As an employee, Borland said, “I was so blown away that they wanted me, along with my colleagues, to be a part of the writing and co-creating and collaborating [on the Employee Promise]. . . . When you involve your employees in the planning of the work that affects them directly, wow.”

Borland said the 12 Service Values all start with the word “I” followed by an action word; for example, “I am proud to be Ritz-Carlton” and “I am creating.” She said putting the “I” before the values indicates ownership and pride. She added that the Service Values support the mystique of the brand, as well as the emotional engagement of The Ritz-Carlton brand’s ladies and gentlemen.

Recruiting, Hiring, Training

As a luxury brand, The Ritz-Carlton looks to serve the top 1% of the travelling market, a pretty specific niche, said Borland. So, the hotel company needs to recruit the same caliber of employees to be able to deliver to this market. She said the Gold Standards that encompass The Ritz-Carlton brand’s values and philosophy are the foundation of the culture, but the employees make the magic happen.

“You can’t just add on when renovating a building; you have to go back to the foundation, make sure it’s solid, reinforce it before building out,” she said. “To consistently deliver service excellence around the world is all about human resources—our systems behind the smiles. . . . How do we inspire and engage on a regular basis daily, at all times?”

Prospective employees go through four to five interviews, with team members often involved in decisions, before they are selected to join The Ritz-Carlton, said Borland. The hotel company is not solely looking at skills and knowledge. “We are looking for individuals who possess the behavior and have the DNA of who we are already as a company,” she said. “Can [the employee] consistently bring [the Credo] to life and energize it for every guest, every day? I cannot teach you to smile and to care and to be genuine and authentic.”

Before they can start their jobs, employees must complete two-and-a-half days of orientation training, which includes content from senior leaders, human resources, sales, marketing, finance, etc., about The Ritz-Carlton culture, said Borland. On their first day, the ladies and gentlemen receive their very own Credo cards. The Gold standards, of which the Credo are part, “are known, owned, and energized with every guest during every interaction at all times,” she said.

After orientation, each employee receives a learning coach to guide them, and on his/her 30th day, each receives an operational certification. On their 21st working day, another day of orientation, called Day 21, allows coaches to check in with employees. Day 365 is celebrated, but it is also used as an “emotional rehire”; the employee is asked, “Are you still committed to being a part of this organization?”

Ladies and gentlemen at The Ritz-Carlton are empowered to handle service recovery for immediate employee resolution. Borland said employees have the tools and the training to make decisions. She suggests, “Allow them to run your business as if it’s their own. You would be surprised as what that does accomplish. Some say if you give too much power to employees, they might give away or comp too much, but If you teach them, set the examples, and provide the guidelines, you may be surprised that they probably make better decisions” than others who are not on the front-line.

To ensure consistent messaging, across the globe in every Ritz-Carlton property, at the beginning of each shift, every day, 40,000 employees go through the daily lineup, which reinforces messaging about what’s new, a featured topic, a value, a component of the brand, etc. On Mondays and Fridays, ladies and gentlemen share “wow stories”: examples where they have gone above and beyond to deliver exceptional service to guests.

“We are always asking how can we be better. What are we doing that really creates the brand loyalty?”

And for The Ritz-Carlton, that brand loyalty starts with the ladies and gentlemen of its workforce.

Who sees the investment in your organization, the employees or the customers?