Ritz-Carlton TQM Case Study: Gold Standards & Service

In today's society, consumers are often seen more as numbers than actual people. Customer service is discussed frequently but rarely delivered upon. Customer requests or needs that go beyond what employees typically experience often fall on the deaf ears of apathetic staff. Complaints are handled with equal carelessness. One company, however, has a reputation for being different: Ritz-Carlton Hotels.

The corporation's commitment to customer satisfaction and guest services is apparent in every facet of its business. It is each employee's duty to go above and beyond the call of duty with every customer they serve. This two-time winner of the prestigious Malcolm Baldrige National Quality Award has truly taken customer service to a level head and shoulders above its competition.

This superior level of service did not happen by chance, however. The Ritz-Carlton organization has molded its employees into superior service providers through a variety of intensive training programs, merit-based appraisal systems, and continuous reinforcement of the company's "Gold Standards." This commitment — shared by both the organization and every team member — has allowed Ritz-Carlton to take the principle that "the customer is always right" and evolve it into the ultimate customer service experience, which is the cornerstone of their success.

In addition, by using Total Quality Management (TQM), the Ritz-Carlton Hotel Company has not only been able to maintain superior customer service, but also drive significant and sustainable change. This adaptability, combined with the highest levels of quality, has propelled Ritz-Carlton to the forefront of its industry.

The Ritz-Carlton is among the grandest hotels in the world. Each guest who passes through its doors experiences renowned indulgent luxury, sumptuous surroundings, and legendary service ("About Us"). The legacy of the Ritz-Carlton Hotel Company began in Boston "with the celebrated hotelier Cesar Ritz — the 'king of hoteliers and hotelier to kings.' His philosophy of service and innovations redefined the luxury hotel experience in Europe through his management of The Ritz in Paris and The Carlton in London" ("History").

In 1983, William Johnson, real estate mogul and former CEO, acquired the rights to the Ritz-Carlton name as well as the Ritz-Carlton Boston property (Najjar). It was the Ritz-Carlton Boston that revolutionized the hospitality industry in America, setting the bar for what luxury hotels should be. Their innovative standards of service included formalizing staff appearance with white tie and apron uniforms for the waitstaff, black ties for the Maître d', and morning suits for all other staff members. Fresh flowers were prevalent throughout all public areas of the Ritz-Carlton Boston.

Gourmet cuisine was offered at the dining facilities, and an intimate lobby provided a more personalized experience for guests. Hotel policy also demanded that each guest's privacy be meticulously maintained, drawing the wealthy and famous to the property ("History"). All of these standards, and many more, have been propagated throughout the now-worldwide Ritz-Carlton chain.

The cobalt blue signature goblets found in all Ritz-Carlton hotels and resorts, restaurants, and cafés worldwide also originated at the Ritz-Carlton Boston. These goblets were designed to match the blue Czechoslovakian crystal chandeliers in The Dining Room, where they still hang today. Coincidentally, blue glass was considered a status symbol in 1920s Boston: window glass imported from Europe underwent a chemical reaction when exposed to the Boston air and turned blue. Blue glass windows signified that homeowners could afford imported glass. The Ritz-Carlton, being quite fashionable, ordered glassware in this color ("History"). This is just one of many examples of the tradition of luxury that sets Ritz-Carlton apart.

Ritz-Carlton Hotels grew quickly from its single Boston property in 1983. In 1995, Marriott International purchased a 49% interest in Ritz-Carlton Hotels; today, Marriott's interest stands at approximately 99% ("History"). The chain now employs approximately 25,000 people and operates 57 hotels worldwide, several located in historic landmark buildings, preserving these architecturally significant properties. Locations include Bahrain, Canada, the Cayman Islands, Chile, China, Egypt, Germany, Hong Kong, Indonesia, Jamaica, Japan, Korea, Malaysia, Mexico, Portugal, Puerto Rico, Singapore, Spain, the U.S. Virgin Islands, the United Arab Emirates, and the United States ("Fact Sheet").

The quality that Cesar Ritz built his business on is still alive and well in the Ritz-Carlton Hotel Company, thanks to TQM. As confirmation of this outstanding quality, the organization has "received all the major awards the hospitality industry and leading consumer organizations can bestow" ("Awards"). The most prestigious of these is the Malcolm Baldrige National Quality Award, presented by the United States Department of Commerce. Ritz-Carlton is the first and only hotel company to win this award twice, for revolutionizing the service industry ("Awards").

In addition, the Ritz-Carlton earned the highest ratings in the luxury segment of its industry in J.D. Power and Associates' 2003 North America Hotel Guest Satisfaction Index Study. Many of its lodging and dining facilities received the American Automobile Association's Five Diamond Award for 2004. Business Travel News rated the Ritz-Carlton Hotel Company as #1 in its 2003 Top U.S. Hotel Chain Survey and also awarded it the World Award for Best Business Hotel Brand ("Awards"). And the accolades continue.

These awards did not appear by chance. The Ritz-Carlton has built its entire organization, from top to bottom, around customer service, implementing TQM at every level. Their "Gold Standards" are the foundation of all they do. This four-pronged set of standards "encompasses the values and philosophy by which [Ritz-Carlton] operates and includes The Credo, The Motto, The Three Steps of Service, The Basics, and The Employee Promise" ("Gold Standards").

The Credo reads:

The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests ("Gold Standards").

This philosophy flows into every action that a member of the organization takes, especially when dealing with the customer.

The second element, the Ritz-Carlton motto, sums up how every employee should act while serving hotel patrons. It states simply: "We are ladies and gentlemen serving ladies and gentlemen" ("Gold Standards").

The third part of the Gold Standards is the Three Steps of Service, which gives specific instructions for delivering superior customer service every time:

1. A warm and sincere greeting — use the guest's name, if and when possible.
2. Anticipation and compliance with guest needs.
3. A fond farewell — give a warm goodbye and use the guest's name, if and when possible.

The Employee Promise is the fourth and final component of the Gold Standards and is honored by all Ritz-Carlton employees. The Promise includes the following commitments:

All employees will successfully complete annual Training Certification for their position. Company objectives are communicated to all employees, and it is everyone's responsibility to support them. To create pride and joy in the workplace, all employees have the right to be involved in planning the work that affects them. Each employee will continuously identify defects (MR BIV) throughout the hotel. It is the responsibility of each employee to foster a work environment of teamwork and lateral service so that the needs of guests and colleagues alike are met.

Each employee is empowered — for example, when a guest has a problem or needs something special, employees are expected to break away from their regular duties, address the issue, and resolve it. Uncompromising levels of cleanliness are the responsibility of every employee. To provide the finest personal service for guests, each employee is responsible for identifying and recording individual guest preferences. Complaints are never to be ignored: whoever receives a complaint will own it, resolve it to the guest's satisfaction, and record it.

Employees are to smile and remain "on stage" at all times, maintaining positive eye contact and using proper vocabulary with guests — phrases such as "Good Morning," "Certainly," "I'll be happy to," and "My pleasure." Employees should be ambassadors for their hotel both inside and outside the workplace, always speaking positively and communicating any concerns to the appropriate person. Guests should be escorted rather than simply given directions to another area of the hotel.

Ritz-Carlton telephone etiquette requires that calls be answered within three rings and with a "smile," that the guest's name be used when possible, and that call transfers be eliminated whenever possible, adhering to voice mail standards. Employees are expected to take pride in their personal appearance and convey a professional image by adhering to Ritz-Carlton clothing and grooming standards. Each employee is also responsible for creating a safe, secure, and accident-free environment for guests and colleagues, remaining aware of all fire and safety emergency procedures, and reporting security risks immediately. Finally, protecting the assets of a Ritz-Carlton hotel — by conserving energy, properly maintaining the property, and protecting the environment — is the responsibility of every employee ("Gold Standards").

It is these Gold Standards that have allowed Ritz-Carlton to become a two-time winner of the Malcolm Baldrige Award and to drive significant and sustainable organizational change.

For many patrons, "the most important element of their hotel stay is being pampered" (Barsky & Nash), and that is exactly what the Ritz-Carlton provides. In order to ensure that the highest levels of service are delivered, Ritz-Carlton empowers its employees to satisfy the customer no matter what. Each employee's comprehensive training in the core corporate values is completed with certifications in guest service. Daily reinforcement of this commitment reiterates the company's dedication to quality service.

To further foster employees' commitment to excellence in guest service, Ritz-Carlton frequently recognizes those who go above and beyond the call of duty. Employee appraisal systems hinge on each individual's delivery of superior service. The expectation is straightforward: do whatever it takes to make the customer happy. This high standard gives employees something to continually strive toward.

One innovative way Ritz-Carlton maintains this culture of service excellence is through its Leadership Center. Embracing change, Ritz-Carlton opened the Leadership Center in 1999. It was originally created to support the phenomenal growth and expansion the company was experiencing. Today, "it has also flourished as a resource center for leading organizations interested in benchmarking many of the business practices that led to our becoming a two-time recipient of the coveted Malcolm Baldrige National Quality Award" ("Leadership Center").

At the Leadership Center, management from both Ritz-Carlton and outside companies learn how to increase employee and customer retention and loyalty, achieve service excellence in any industry, and effectively drive an organization through culture, philosophy, vision, and mission. These tools allow Ritz-Carlton and its partner organizations to outperform their competition and develop a "culture that promotes knowledge and sustainable change" ("Leadership Center").

The Ritz-Carlton is constantly looking to go one step beyond its competition, understanding that innovation and change are the true keys to success. Inventive partnerships — such as the arrangement with Mercedes-Benz to provide loaner vehicles to guests — go one step further than guests expect (Najjar). Services such as the "compcierge," a computer-savvy concierge who helps patrons with any technical challenges they may encounter, place Ritz-Carlton on a higher plateau (Abernathy).

Check into any Ritz-Carlton hotel anywhere in the world and you will be greeted not only by the doorman, but by a number of small, pleasant surprises. The hotel does not need to ask the name of your employer, your home address, whether you prefer a non-smoking room, or whether you require a non-allergenic pillow — all of this information was obtained during your previous visit.

The desk clerk greets you by name when you call for a morning wake-up call and asks whether you would, as usual, prefer breakfast in your room. When you awaken the next morning, your favorite newspaper, The Wall Street Journal, is outside your door — without you having to ask. You sense that the hotel staff is somehow able to anticipate and respond to your every need, providing a feeling of satisfaction that comes from being among people who care about you as an individual. "Why would I ever stay anywhere else?" you wonder (Hart).

The Ritz-Carlton has created a database of its guests' preferences. This database allows hotel personnel to know in advance each customer's likes and dislikes, schedule information, family and personal interests, preferred credit card, and any difficulties encountered during a prior visit — so those difficulties are not repeated (Durrett).

Total Quality Management (TQM) can be defined as "a satisfaction of social shareholders via implementing effective planning, programs, policies, and strategies, as well as using human and other assets efficiently and continually within an organization" (Arasli). One of the most fundamental features of TQM is management's commitment to the process. Management must not only support the various tasks of TQM but must actively participate in them as well. At Ritz-Carlton, all levels of management are committed to TQM, recognizing how it drives change that continually improves quality — the lifeblood of the organization.