The Ritz Carlton: A Study of Innovation in Action

Everybody a player

The Ritz Carlton hotel chain believes that customer service is essential. Since the company runs hotels, that’s not really a surprise. But they’ve gone beyond just making innovation a slogan or a trademark – it’s a consistent culture among their staff. Consider the following:

  • All Ritz Carlton employees receive a careful orientation to familiarize them with the customer-focused culture for which the company is known.
  • Each employee, along with the rest of the staff in their department, participates in a weekly meeting to review one of their ground rules and brainstorm ways to better apply it in their area.
  • Each staff member and each department writes a Mission Statement that relates specifically to them and sets out their goal to achieve world-class customer service.
  • Every employee, from housekeeper to executive, can spend up to $2,000, without permission, to fix whatever problem a customer is having trouble with. Now, they are required to write a report explaining what they did to fix the problem, but there are no recriminations for the fact that they spent the money.

What are the results? The Ritz Carlton has a business return rate of over 95% of its customers, and that’s with an average nightly charge of over $200. Turnover at RC is below 25% per year, in an industry with an average turnover of over 125% (at nearly equal hourly wages). Customer “Wow!” stories abound and the staff is proud to be part of a company that has won multiple Malcolm Baldrige Awards and other awards for quality and performance.

Ritz Carlton Staff Stories

  • A couple of businessmen were walking down a corridor on their way to the hotel lobby and on their way they passed a staff member who was mopping the floor. The staff member overheard a man tell his friend that he was not happy with his room due to a problem with the bathtub. The staff member introduced himself, apologized for the problem, moved the man to a fancier room on the concierge floor, and then fixed the tub problem.
  • A couple were staying at a Ritz Carlton in Florida to celebrate their 15th wedding anniversary, and as they visited the hotel’s gift shop, they talked to each other about the occasion. The clerk overheard them and, looking up their names in the register, had a bottle of champagne and glasses delivered to his room immediately afterward, courtesy of the hotel.

The hotel chain has pioneered a series of employee-suggestion tactics that set it apart from even the best of its competitors.

Housekeeping staff, when preparing a room for a new visitor, sets the radio to a specific station. If the station was changed during cleaning, the new setting is noted and subsequent visits by that client will find the preset radio station upon arrival.

The hotel’s computer system also provides the guest’s name and room number to any support staff who handle phone calls (front desk, kitchen, etc.). Customers are always referred to by their own name when making calls within the hotel.

Can you apply any of these world-class approaches to drive innovation in YOUR business? Of course he can! And what results will you see? You’ll see increases in morale, great employee engagement, lower costs, and higher customer satisfaction. All of this will translate into more sales with high-level clients. Do you want to try it? Forward!

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