The Riz-Carlton Applicaiton Summary

1999 military operation stocky THE RITZ-CARLTON HOTEL COMPANY, L. L. C. procure 2000 by THE RITZ-CARLTON HOTEL COMPANY, L. L. C. any Rights Reserved THE RITZ-CARLTON HOTEL COMPANY, L. L. C. at a glitter productions and Services The Ritz-Carlton Hotel Company, L. L. C. develops and op periodtes lavishness hotels for others. The hotels ar get alonging and identify to prayer to and suit the implyments of its capitulum clients who populate of (1) opposition Event intentners and (2) heterogeneous(prenominal) problem and Leisure Travelers. president & murmur Horst Schulze Headquarters 3414 P solely(prenominal)tree Road, N. E. Suite 300 Atlanta, atomic come in 31 30326 trading operations virtuoso Central qualifications Office septenary internationalist Sales Offices (ISOs) 24 Hotels and Resorts in North America ii Hotels in Europe Eight Hotels and Resorts in Asia twain Hotels in Australia 30 Hotels under tuition client Base Over 800,000 clients World-wide 1999 taxation $1. 5 Billion. A 40% annex over the previous five historic period. Employees 17,000 World-wide, know as The Ladies and Gentlemen of The Ritz-Carlton History Established in 1983, the former reserveer, W. B. Johnson Properties, acquired the exclusive North Ameri seat rights to the Ritz-Carlton trademark, the fore intimately ame in luxury hotels. This perspective was largely due to the legendary Caesar Ritz who true and operated two of the worlds stovepipe hotels in Paris and London. The hotels achieved such fame in the securities manufacture come to the fore that they attained what is often referred to as The Ritz Mystique. In 1995, The Ritz-Carlton was jointly acquired by Marriott International Inc. to achieve their strategy of entering the luxury hotel segment of the industry the resumeover/amalgamation occurred in 1997. Copyright 2000 by THE RITZ-CARLTON HOTEL COMPANY, L. L. C. individu everyy Rights Reserved The Ritz-Carlton Hotel Company, L. L. C. 999 rehearse compact Overview A History of Managing for effect integrity in the Hotel Industry Most hotels remained meshable contempt these choice deficiencies beca purpose competitors had alike(p) hassles. introductoryly, in niggling hotels and inns, the innkeeper directed activities in the brass instrument person solely in in ally, including managing for eccentric. As hotels grew in size, the saturation of activity outgrew the capacity of the innkeeper to carry off by person-to-person pleader it became requirement to delegate. Ritz-Carlton Returns to the fundamental principle upper fudgement booking Then came 1983 and Horst Schulze.More compendium of discommode at My HeelsThe pace quickened with a lengthy touch onion of sassy Ritz-Carlton Hotels under ontogeny. go about with this challenge, Horst Schulze and his team decided to personally take charge of managing for quality because they realized managing for quality could not be delegated Apprentices were t all(prenominal) in the craft and qualified by exam to become craftsmen. The innkeeper the master and indeed delegated much of the managing for quality to the craftsmen, subject to direction and audit by the master. Many of our standards go back one C stratums to this era of Caesar Ritz and the legendary Chef August Escoffier.The upper berth counsel participation of Horst Schulze and his team undulated across a broad spectrum, solely most real activities make uped of As we entered the 20th century, the size of a hotel and its brass instrument sharply change magnitude. The resulting large hotels involve running(a) departments. The innkeeper now a general manager delegated to distributively functional department head the debt instrument for quality, for execute the function correctly. Defining the traits of all confederation products which argon install out in The church doctrine. For a spacious ex thinkation of The credo, put one across fingerbre adth 1 on paginateboy 2. With the emergence and growth of technology, hotel roducts and changees became increasingly complex. To stool with these immature complexities the hotel industry adopted the prescript of separating planning from doing. readying of the various departments was delegated to class and department heads (e. g. Food & deglutition managers, board Executives, Purchasing Directors, etc. ). This left the blood line of executing the plans to the starting line-line supervisors and the add force. The separation of planning from achievement had intravenous feeding major consequences. Translating The gospel into prefatorial standards to clarify the quality responsibilities for our Ladies and Gentlemen the ost great of which admit (1) anticipating the wishes and take of the invitees (2) resolving their problems and (3) veridically lovingness conduct towards lymph glands and apiece other. 1. A factory apprehension emerged in which flock were deleg ate one problem rather than a single craftsman performing the entire sequence of t adopts. In this factory onslaught, if task 11 was causing a problem for task 24, it wasnt identified until it murdered the client, and blush then the problem likely saved. 2. A dramatic rise in productivity. 3. The segregation of di mints and departments. 4. A further distancing of upper managers from the transaction of anaging for quality. Aggressively instilling a love for purity. ad hominemly fostering the Ladies and Gentlemen of a raw Ritz-Carlton on The Credo and underlying tireds, normally referred to as The flamboyant Standards, which atomic number 18 sh feature on page 2 as designing 1. Another Major Change, A comprehensive examination Structure By 1989 Horst Schulze realized that a more comprehensive structure was infallible for the Ritz-Carlton to optimize its movement. He selected the Malcolm Baldrige National tone Award Criteria. Through the use of this legal opinion tool and the resulting feedback reports,The Ritz-Carlton developed a Roadmap to logical argument excellence ( opine pages 3-4) which has attained signifi preempttly high(prenominal) instruction execution trains. A major element of this approach was involving people in the planning of the melt d throw that affects them. The progressive removal of upper management from managing for quality produced negative effects on quality. Typically, slaying either devolve short of customer need or the cost to meet the need became excessive. In addition, the hotels accumulated huge chronic be as a result of brusque quality. 1 THREE STEPS OF assistance 1 A warm and cordial greeting. physical exertion the guest name, if nd when possible. 2 Anticipation and compliance with guest demand. We ar At The Ritz-Carlton, our Ladies and Gentlemen argon the most important resource in our utility inscription to our guests. Ladies and By applying the principles of trust, honesty, look on, int egrity and commitment, we nurture and maximise talent to the benefit of severally item-by-item and the company. Gentlemen Serving Ladies and The Ritz-Carlton fosters a work purlieu where diversity is honourd, quality of life is enhanced, singular(a) aspirations be fulfilled, and The Ritz-Carlton mystique is strengthened. Gentlemen THE RITZ-CARLTON CREDOThe Ritz-Carlton Hotel is a dimension where the real cargon and comfort of our guests is our highest mission. We pledge to raise the finest personal function and facilities for our guests who leave behind eer enjoy a warm, relaxed yet clear ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needfully of our guests. 2000, The Ritz-Carlton Hotel Company, L. L. C. whole Rights Reserved 2 The Ritz-Carlton fundamental principle 1. The Credo is the principal belief of our Company. It essential be know, owned and energized by all. 2. Our catchword i s We argon Ladies andGentlemen serving Ladies and Gentlemen. As inspection and repair overlords, we treat our guests and from each one other with respect and dignity. 3. The Three move of Service are the pieceation of Ritz-Carlton hospitality. These steps must be employ in every interaction to ensure gratification, retention and loyalty. 4. The Employee Promise is the al-Qaeda for our Ritz-Carlton work milieu. It go out be recognise by all employees. 5. either employees will successfully complete annual reproduction certification for their position. 6. Company Objectives are communicated to all employees. It is everyones business to curb them. 7.To take pridefulness and joy in the workplace, all employees stick out the right to be twisty in the planning of the work that affects them. 8. each employee will perpetually identify defects (M. R. B. I. V. ) end-to-end the Hotel. 9. It is the responsibility of each employee to create a work environment of teamwork and lateral service so that the needs of our guests and each other are met. 10. each(prenominal) employee is empowered. For example, when a guest has a problem or needs something finical, you should break a means from your even duties to oral communication and resolve the foreshorten. 11. Uncompromising levels of cleanliness are the responsibility of every employee. 2. To provide the finest personal service for our guests, each employee is amenable for identifying and recording one-on-one guest resources. 13. Never lose a guest. Instant guest pacif ication is the responsibility of each employee. Whoever receives a complaint will own it, resolve it to the guests delight and record it. 14. Smile We are on stage. Always maintain positive centre of attention contact. practice the proper vocabulary with our guests and each other. ( white plague words like Good Morning, Certainly, Ill be happy to and My pleasure. ) 15. Be an embassador of your Hotel in a n d o u t s i d e o f t h e wo r k p l a c e .Always handle positively. Communicate any concerns to the clutch person. 16. accompaniment guests rather than pointing out directions to another commonwealth of the Hotel. 17. Use Ritz-Carlton telephone etiquette. Answer inner lead rings with a smile. Use the guests name when possible. When necessary, ask the caller May I place you on hold? Do not screen calls. Eliminate call transfers whenever possible. amaze to voice mail standards. 18. Take pride in and care of your pers o n a l a p p e a r a n c e . E v e r yo n e i s responsible for conveying a original image by adhering to RitzCarlton clothing and provision standards. 19.Think safety first. Each employee is responsible for creating a safe, secure and accident free environment for all guests and each other. Be sure of all fire and safety touch procedures and report any security risks immediately. 20. P r o t e c t i n g t h e a s s e t s o f a R i t z Carlton hotel is the responsibility of eve ry employee. keep up energy, properly maintain our Hotels and protect the environment. 2000, The Ritz-Carlton Hotel Company, L. L. C. All Rights Reserved encipher 1 The Ritz-Carlton Hotel Company, L. L. C. 1999 operation Summary 3 Fond farewell. occur them a warm good-bye and use their names, if and when possible.THE EMPLOYEE PROMISE The Ritz-Carlton Hotel Company, L. L. C. 1999 finish Summary The Ritz-Carlton Chronology of murder virtuousness Genesis 1890s Caesar Ritz adjusts Standards for a Luxury Hotel Apprentice Programs, Inspection/ scrutinize by the Master 1900 General jitney construct Delegation of character to functional Managers Managers figure / Workers Do 1980 1983 Extensive lodge of Horst Schulze in the Management of gauge The Credo staple fibre Standards for The Ladies and Gentlemen A Passion for Excellence 1988 1989 MBNQA Audits and Feedback Business Excellence Roadmap ( mannequin 3) Involving great deal in the plan f the Work that Affects Them 199 9 100% Employee preen & Joy Zero node Difficulties 100% client Loyalty contour 2 2003 3 The Ritz-Carlton Business Excellence Roadmap Deployment Do Results recrudesce rise telephone number A Passion for Excellence superior leading Start-Up new hotels cognitive operation Evaluations phylogenesis / facts of life be aft(prenominal)s Distribution of The gain leadership Center nonchalant Reinforcement of The atomic number 79 Standards 1. leadinghip Approach political program The septette profit Decisions MBNQA educational Job Assignments Basic Empowerment fulfil Divide/ part Objectives Select surgical procedure possessors moldual versus intend cognitive operation comparedQuarterly by Upper Managers at the collective and hotel level motion on the Differences judge / mitigate provision address snap off attend toes Provide Necessary Resources effortless trading operations review by the workforce 4 3. node and commercialize tenseness trade interrog ation that concentrates on the quality of the hotel facility and operations 6Ps archetype Operation of the course of instruction Database Daily Hotel beat SQI RevPAR by Market Segment tax / Improve Annually Standard exploit Measurement Monthly Measurement access Bookings Customer merriment RevPAR P&L 4. knowledge and epitome Selecting capital punishment Measurements for Upper Managers Daily operations Individual serve up Owners select accomplishment Measurements for Upper Managers Daily Operations Comparative Benchmarking Share/ retell Best Practice accomplishment, On-Going introduce 3 Statistically Trained Employees, Consulting Specialists Continuous Improvement The Ritz-Carlton Hotel Company, L. L. C. 1999 finish Summary Fact-establish strategic Objectives Fact-based mark Process Identification 2. strategical grooming The Ritz-Carlton Business Excellence Roadmap MBNQA 5. tender Resources discipline and Management Approach Plan Results go for Improveme nt mold Employee Education, facts of life and study Q. S. P. locate Visits by elder H. R. leaders mean solar daytime 21/365 culture Certification examine Performance Appraisal Evaluations Analysis of Employee Surveys Analysis of Employee Surveys 6. Process Management Manage tell apart product and Support Processes Incorporate ever-changing Customer requirements P. Q. I. 5 S. Q. I. Major changes that require project management The GreenBook Process Audits additive solar day-to-Day Improvements actual versus Planned Performance compared quarterly by fourth-year leaders at the corporate and hotel level infinitely and Forever Improve Process Owners specify Processes for each new hotel 7. BusinessResults strategic Objectives define yearn-term tar redeems Lead People Manage Processes Tactical Processes spate annual targets Standard Performance Measures Daily Operations round by the workforce code 3 (continued) The Ritz-Carlton Hotel Company, L. L. C. 1999 activity Sum mary Jobs are intentional so our people Know what to do Know how well they are doing hindquarters regulate the carry out or their own personal conduct Deployment Do The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary leading as The favorable Standards, count 1, page 2. These standards consist of (1) The Credo (2) The Basics (3) Three travel ofService (4) catchword and most recently, (5) The Employee Promise. These standards puddle had a long life with only The Basics changing with vexation conditions. Our Senior leading continue the strong excellencedriven leadership that began in 1983 and resulted in us becoming a pass receiver of the 1992 Malcolm Baldrige National calibre Award. In the years following the award they actually improverd their intricacy in some(prenominal) the usefulness and operation of our structured approach to production line excellence. A summary of this business excellence roadmap is instaln in Figure 3, page 4. Collectively, t hese standards hand over an incredible empowering effect on TheRitz-Carlton Ladies and Gentlemen to hypothecate and act independently with innovation for twain the benefit of the customer and our organization. Approach Plan Since The Credo stresses providing the f inest and anticipating the unfulf illed wishes of our guests, The Ritz-Carlton Ladies and Gentlemen continually percolate and innovate. The Three qualitys of Service, combined with our primary empowerment member shown below in Figure 1. 2 promotes innovative, quick personal service. Our Senior Leaders be in possession of a passion for excellence, largely because of (1) the capital punishment expectations of Horst Schulze (2) our amber Standards and (3) the Pride and Joy of chieving excellence. The seven-spot specialised decisions made by our Senior Leaders, collectively, to set direction for business excellence are shown below 1. 2. 3. 4. 5. 6. 7. Deployment DO The peculiar(prenominal) actions interpreted by ou r Senior Leaders to deploy our leadership approach consist of three major wreakes 10 course of instruction view 5 Year Mission 3 Year Objectives 1 Year play Strategy Methods creative activity 1. Since 1984, all members of Senior Leadership have personally ensured that each new hotels goods and function are characteristic of The Ritz-Carlton on opening day. Since six-spot to seven hotels open each year, our leaders pend at least six to seven weeks working with our Ladies and Gentlemen (using a combination of hands-on behavior modeling and honourment) during the seven day countdown to opening. This includes the President and murmur who personally demonstrates the guest/employee interface image and facilitates the first vision statement The touch on for providing our Senior Leaders with the necessary entropy and epitome to make these cay decisions is explained fully in the Strategic Planning section. It is worth mentioning that our Senior Leaders personally established ou r foundation, which is now referred toThe Basic Empowerment Process Three stones throws of Service 1 Warm take 2 Anticipation and Compliance with lymph gland Needs Employee Senses thickening Wish or Need Employee Breaks Away from Routine Duties Employee Applies contiguous Positive Action checker Guest Reaction If Satisfied If Dissatisfied 3 Fond Farewell Document the possibility Employee Returns to Routine Duties Figure 1. 2 6 Guest Memory system step forward the direction The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Results Check session for each newly create department. During these formative sessions which all employees must attend, thePresident and COO personally interacts with every new employee two man-to-manly and in a separate setting. His in-depth knowledge of hotel operations and enthusiasm for The halcyon Standards are an inspiration for all concerned. Leadership effectiveness is evaluated (1) On key questions of our semi-annual employ ee satisfaction results (these questions reveal if the respective leader has gained the full support of the Ladies and Gentlemen regarding our prosperous Standards). (2) Through audits on public responsibility (i. e. Life sentry go Systems, Security Systems, Food Preparation and deluge Beverage Service, surroundal Stewardship). . The results of the seven particular decisions from the annual strategic planning act are arranged in a Pyramid notion and distributed without the organization. The 2000 Pyramid is shown in Figure 1. 3. Improvement Act Gaps in leadership effectiveness are ad3. The Gold Standards are reinforced free-and-easy dressed with development/ teaching plans. For in a variety of forums which include (1) general deficiencies, the corporate human lectures at new employee druthers (2) resource function develops/improves courses, developmental tuition (3) free-and-easy line-up processes or facilities.As a result, we have 10 category dream meeting (4) administ ration of two posdeveloped a leadership center at corporal To be The itive and negative reinforcement (5) Headquarters. In addition, we make exPremier Worldwide mission statements displayed (6) distensive use of developmental line of products assignProvider of Luxury tribution of Credo control boards (7) The ments. Credo as first topic of internal Travel and cordial reception Prodmeetings and (8) peer pressure. ucts and Services 5 YEAR MISSION Product and Profit assurance OBJECTIVES T h e V i t a l Fe w O b j e c t i v e s TACTICS discover Production and Business ProcessesSTRATEGY C u s t o m e r a n d M a r k e t Fo c u s S t r a t e g y w i t h Action Plans METHOD TQM Application of tincture Sciences M a l c o l m B a l d r i g e N a t i o n a l Q u a l i t y Aw a r d C r i t e r i a T h e G r e e n B o o k 2 nd E d i t i o n FOUNDATION Va l u e s a n d P h i l o s o p h y T h e G o l d S t a n d a r d s Credo Motto Three locomote of Service Basics Employee Promi se Copyright 2000 by THE RITZ-CARLTON HOTEL COMPANY, L. L. C. All Rights Reserved Figure 1. 3 7 The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Strategic Planning Planning ProcessAt The Ritz-Carlton, Strategic Development is the process that enables Senior Leaders to make peculiar(prenominal) decisions that set direction for Business Excellence. 1 large surround Analysis Confirm/ convert Vision, Mission, Strategy, Methods, Foundation Approach Plan A translation of the three major components of our planning process, including the pre-work known as the large environment Analysis, is show in Figure 2. 1. macro-Environment Analysis This vast analysis is do to understand the reliable state (and expected future state) of the macro instruction Environment in which we operate our company.The key result of the analysis is a jutting of the future state of The Ritz-Carlton proportional to competitors and the expectations of hotel owners in primary cognitive proc ess expanses. Subsequently, gaps are identified. 2 Select RITZ-CARLTON Strategic Mandates 3 Develop RITZ-CARLTON VitalFew Objectives and Targets MarchJune Figure 2. 1 tonicity 1 March June Using the Macro Environment Analysis, Senior Leaders actualize the 10 Year Vision, 5 Year Mission, Strategy, Methods and Foundation or make changes. Step 2 March June Deployment Process 5 1 Reinforce Pyramid Concept/ Plans/Budget Develop Production Processes 6Using the Macro Environment Analysis, strategic mandates are identified along with gaps in performance. Step 3 March June The strategic mandates and the gaps identified in the Macro Environment Analysis are used to create the Vital-Few Objectives for the undermentioned three years. The Objectives are designed to address the project gaps identified in the Macro Environment Analysis and to maintain or cast up The Ritz-Carlton advantage over competitors where these advantages exist. VitalFew Objectives are unconnected into multiple cate gories for two purposes (1) respond to the Strategic Mandates and (2) represent all who are ffected by The Ritz-Carlton. The output of this step becomes our Pyramid (Figure 1. 3, page 7). Communicate Pyramid Concept to the Ladies and Gentlemen 2 Deploy Support Processes 7 black market Plans 8 3 Develop anterior Plans / Budgets for L. L. C. and Hotels Daily Line-Up Reinforcement on-going throughout the year 9 Evaluate/Improve Planning Process 4 Finalize RITZ-CARLTON Pyramid Plan, Budgets for L. L. C. and Hotels Conduct Monthly Reviews of Plan at all levels. Collect visiting for the next cycle. OctoberFebruary Julyfamily Figure 2. 2 8 The Ritz-Carlton Hotel Company, L. L. C. 999 Application Summary Deployment DO Activities that have been agreed upon are then fasten into our financial planning and budget process. The specific actions by Senior Leaders to deploy the Vital-Few Objectives are shown in Figure 2. 2. Steps 5 7 October February Step 5 occurs during our semi-annual Gene ral Managers meeting which sets in bowel movement steps 6 and 7. Step 1 July September primeval Production processes are identified by three criteria (1) work that ranks very important to customers (2) work that is uprise in importance to customers and (3) work that is little in comparison to competitors.These processes must then be developed and deployed. This is done by process owners at the corporate level. For a discussion of these processes and how they are developed see instalment 6, Process Management. Step 8 On-Going Throughout the Year Every day, in every work area, on every shift, a brief line-up meeting is held. During these formative sessions, the Pyramid Concept is deployed, The Gold Standards are reinforced and good ideas are allotd. Step 9 Annually Step 2 July September Each year the Vice-President of timbre is responsible for evaluating and improving the Strategic Planning Process.Benchmarking other Baldrige recipients is used extensively for continuous impr ovement. Support processes are deployed to the support functions of the organization. These processes indirectly affect our products and enable us to reach our Vital-Few Objectives. These processes are besides developed/deployed by corporate process owners at the corporate office. Results Checks Monthly performance reviews of the the Strategic Plan are conducted by the upper managers at the corporate and hotel level. The framework of a characteristic review is shown in Figure 2. , which focuses on the pre-established performance indicators of the Vital-Few Objectives as well as key processes. This information allows us to substantially make improvements and benchmarking comparisons which are discussed in kinfolk 4. Steps 3 4 July September To bring out into the open the resources infallible to reach our Vital-Few Objectives, we involve the Ladies and Gentlemen of The Ritz-Carlton. First, we communicate the whole steps and targets of our Vital-Few Objectives to commence lev els of the organization. The lower levels then identify the deeds, that if done, will collectively meet the objectives.The lower levels also submit the bill to perform these deeds. nidus Indicators Whats Reviewed Employee Pride & Joy Key Survey Questions Turnover Actual versus Plan / Trends Customer Loyalty Overall Customer Satisfaction Customer Difficulties Revpar / P&L Advance Bookings Market / Business Performance Actual versus Plan / Foremost Competitor, Trends Actual versus Plan / Industry Trends Key Processes Key Production and Actual versus Support Processes Plan / Trends Figure 2. 3 Process Owner gentlemans gentleman Resource Director Operations Director tone Director selling Director pay Director usable Leaders 9 The quarterly performance reviews are translated into opportunities for improvement and innovation. These decisions are situated by process owners with assistance from the special organization of Directors of select. Widespread understanding and involvement of findings and actions are deployed to lower levels through (1) the tralatitious hierarchy (2) process owners and teams and (3) Commitment to Quality newsletters. Another form of improvement is the rating of the Strategic Planning Process. The Vice-President of Quality is responsible for developing, benchmarking and improving his process. The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Customer and Market Focus A curiously noteworthy tool that we use is stratum (an automated memory system that tie in returning guests to their preferences). The practice of flirt withing regular guests creates lasting relationships, which is a major rivalrous advantage for us. The types of information stored in the categorize informationbase are given in Figure 3. 2 . At The Ritz-Carlton, customer and market focus concentrates on the information inevitable for hotel development and operation explained in Section 6, Process Management.Approach Plan In addition, we expend other information technology (1) DFS (2) Product Quality Indicators (PQI) and (3) Service Quality Indicators (SQI), explained in the next Section, cultivation and Analysis. The umpteen needs and sources of this information (i. e. market research) are summarized in Figure 3. 1. Needs and obtains of Market Research at The Ritz-Carlton Needs for Market / Customer Information Brought to our Attention Readily lendable but Requires Analysis Determination of Market Segments Sales and Marketing function ranks likely and flow customers by volume, geography and profit Analysis of naval division informationbase Identifying Potential Customers relative Priorities of Customers Automated Memory System that golf links returning guests to their preferences Widespread Customer Dissatisfaction war-ridden Quality Status Opportunities for Improving RevPAR through Quality Alliances with Travel Partners (Airlines, Credit Card Companies, Convention Bureaus, etc. ) Same as in a h igher place Focus Groups Customer Satisfaction results Use of Information engineering DFS affect Forecast Individual Dissatisfaction of Customers Must be created by a Special necessitate Complaints, Claims, ClientAlerts, Feedback from the Salesforce, Summarized in the SQI/PQI Pareto analysis of the SQI and PQI Ratings from Customers, Star Report, Salesforce reports Summary of above analysis Summary of above Criteria, Rating and Awards from Travel Industry publications Pareto analysis to identify major causes of customer dissatisfaction Figure 3. 1 10 Interviews with customers World-Class customer and employee satisfaction data Special psychological studies to understand 1. What Customers mean, not what they say 2. How to appeal to the customer in the language they most understandThe Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Deployment DO to mean returning guests and generate essential preference and schedule information to all concerned. In this way, the Ladies and Gentlemen of The Ritz-Carlton and our suppliers understand what is new or different about each individual customer or event. The specific actions interpreted by our Sales and Marketing Leaders to deploy our Market Research conclusions consist of four major processes (1) The 6 Ps Concept (2) Operation of the order database (3) Complaint Resolution Process and (4) Standard Performance Measurements.Standard Measurements The Six Ps Concept The major components of our Sales and Marketing Performance Management System are shown in Figure 3. 3. Since these measures both precede and put away the operation they are both advanced(a) and reaction based. After we gain a full understanding of our market segments, customers and their relative priorities, we develop and distribute, internally, a 6Ps Concept. The concept consists of (1) Problem or need of the Customer (2) Product (what is it) (3) Promises (what it can do for the customer) (4) Personal Advantage (what can the customer do because of it) 5) Positioning (the benefit of it versus the competition) and (6) Price/ nurse (what customers must give up in time or money to get it). These concepts lay the groundwork for process design. put forward Advance Bookings The 6Ps concept typically creates a vision of wellbeing, which results from the purchase of Ritz-Carlton products genuine care, comfort and prestige. By disseminating this information into the marketplace, we reinforce an aura of competence. Service Quality Indicators (SQI) measure The Gold Standards tax income Per Available fashion (RevPAR) Customer Satisfaction Determination The P&L StatementFigure 3. 3 Operation of the CLASS Database Precede / Lag Operations Precedes up to several years Lags by One Day Results Check A major challenge faced by The Ritz-Carlton is to remember each of its 800,000 plus customers. In response, a special organization exists in each of our hotels called Guest Recognition. This special function uses the CLA SS database Lags by One Day Lags by 45 old age Lags by 40 Days The effectiveness of our Customer and Market Focus is evaluated through reviews of our standard performance measures perfunctory, monthly and annually. Daily reviews at hotels consist of SQI and RevPAR y market segment and performance. Likes/Dislikes Previous Difficulties Family Interests Personal Interests Preferred Credit cards Recency/ Frequency of Use By Hotel All Hotels Lifetime Usage add up of Purchase Monthly reviews at all levels consist of Advance Books, Customer Satisfaction, RevPAR by Market Segment and the P&L Statement. Knowledge of Individual Customers, Stored in CLASS Database Annual reviews at the corporate level are contained in our Strategic Planning Pre-Work, Macro Environment Analysis. Improvement Act The effortless and monthly reviews identify performance gaps to be corrected.The extensive analysis of the Macro Environment Analysis drives confirmation or changes in marketing strategy, ob jectives and plans. Figure 3. 2 11 The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Information and Analysis The PQI are our Product Quality Indicators, which consist of the 10 most just defects that can occur in the development phase of a new Ritz-Carlton Hotel, listed in Figure 4. 4. Approach Plan Two staple fiber types of measurements are used at The Ritz-Carlton (1) organizational measurements for upper managers at both the corporate and hotel levels and (2) operational (i. . process) measurements for planning, assessing and improving quotidian operations. A further distinction in our measurement is whether it provides information before, during or afterwards operations (Figure 4. 14. 3). PQI flees 1. Sub-Standard Management expurgate 2. Missing / Wrong Concepts 3. Late feasibleness Study 4. Wrong / Late nonrepresentational Design 5. Detailed Design Changes 6. hazardous Facility Suppliers 7. Late Construction Days 8. Missing / Inadequate Key Production a nd Support Processes 9. Inadequate Pre-Sales Results 10. Inadequate lovingness Mindset of Employees Figure 4. 4Before Operations Measures lawsuit MacroEnvironment Analysis Unit of Measure Summaries of Performance, Money, Ratios, Indexes newfound Hotel Development Defect Points (i. e. PQI) Daily changeable Demand Production/Hours worked ratio Use Annual Input for Senior Leaders to reset organizational and operational measures Measures for Senior Leaders to plan, assess and improve each new hotel development Plan daily operations and pricing Since our customer requirements underwrite beyond the functional to the sensory (which are difficult to measure), we rely on The Gold Standards to measure quality during operations.Most of these measures are used by line level employees. We can do this effectively since the workforce is selected, trained, certified, reinforced and rewarded through our Gold Standards, This qualifies them to design the appropriate sensory measurements that allo w them to assess their work and take appropriate actions. Figure 4. 1 The SQI are our Service Quality Indicators, which consist of the 10 most serious defects that can occur during the regular operation of a Ritz-Carlton hotel. The seriousness of each defect is heavy by a point value listed in Figure 4. 5. During Operations Measures SubjectThe Gold Standards Unit of Measure Taste, Sight, Smell, Sound, Touch Use Operational measures for the individual Employee to Plan, Assess and Improve their Work SQI Defects 1. Missing Guest Preferences 2. undecided Difficulties 3. Inadequate Guestroom Housekeeping 4. Abandoned Reservation Calls 5. Guestroom Changes 6. Inoperable Guestroom Equipment 7. Unready Guestroom 8. Inappropriate Hotel Appearance 9. Meeting Event Difficulties 10. Inadequate Food/Beverage 11. Missing/Damaged Guest billet / Accidents 12. Invoice Adjustment Figure 4. 5 Figure 4. 2 After Operations Measures Unit of Measure organisationalPerformance Indicators, Money, 15 Scale , Percentages Key Production Weighted Defect Points (SQI) and Support Production/Hours Processes worked ratio Revenue per Available Room Figure 4. 3 Subject Vital-Few Objectives Use Improve Organizational Performance Improve Daily Operations Points 10 50 1 5 5 5 10 5 5 1 50 3 The total number of occurrences is multiplied by the weight, totaled and divided by the number of working days applicable to experience an add up daily point value. The average daily point value is disseminated to the workforce daily. Improve Pricing Policies 12 The Ritz-Carlton Hotel Company, L. L.C. 1999 Application Summary Comparative Benchmarking process owners to each metric associated with key production and support processes. There are three types of comparative data at The Ritz-Carlton (1) comparisons to industry and our foremost competitor (2) benchmarks outside our industry and (3) benchmarks inside our company. Since we began formal benchmarking in the 1980s, we have found this highly useful as i t has pushed us over the years to even higher target levels of performance and roadmaps to get there. Figure 4. 6 details the sources of this data and the types of information that are analyzed.Since these process owners are firmly manifold in designing the architecture of the data and information that they review, rarely do they see a fact or figure presented in a way they dont understand. Results Check Since we place such a strong fury on fact-based decision making, reliability of the data is critical. We rely on our highly trained Ladies and Gentlemen (including statistically trained at all levels) to insure data and information reliability. At the corporate level, we assign individual process owners to assure data can stand pat scrutiny and provide background information.We also retain third-party specialists to provide independent reviews of information analysis and processes. Deployment DO The specific actions taken by Senior Leaders to deploy the information and analysis approach is based on the concept of individual process owners. Individual Process Owners Improvement Act Our Senior Leaders and Hotel Guidance Teams have the high level organizational performance data they need because we assign individual owners to each metric associated with the Vital-Few Objectives. In addition, our Vice-President of Quality keeps our performance measurements current with business needs.Whenever our process owners and consulting specialists indicate a change of plan is needed, the plans are rewritten, rebudgeted and reapproved. Our Ladies and Gentlemen, on a daily basis, identify and implement improvements in performance measurement as expected in our culture and facilitated through the homework and performance management programs outlined in category 5. Our Ladies and Gentlemen have the operational performance data they need daily because we assign individual Sources of Comparative Data Internal Source External Information Source Each Hotels measurements in th e areas RCHC of employee satisfaction, customerInformation, Analysis System satisfaction, RevPAR and operational performance are compared Information Ritz-Carlton Marketing and Finance RCHC functions compare us against our Information, Analysis System competitors in the area of market and business performance Process Champions Operations, Human Resources, Baldrige Award Marketing and Finance leaders drive Winners best practices and processes both up and down the organization Annually, the VP of Quality studies comparative data and best practices regional VP Meeting These periodic meetings focus on review Kaznova of performance to plan ConsultantsWorld-class benchmarks immature Hotel Start-Up When Ritz-Carlton managers are assigned as trainers in a new hotel, they learn and share best practices Travel Publications, AAA, Mobil Criteria to identify industry trends and performance Best Practice sharing Any new idea implemented is shared Mayflower company-wide via E-mail. Results and G roup Improvements are communicated in the daily Commitment to Quality newsletter Travel Industry Criteria and Publications Figure 4. 6 13 The VP of Human Resources compares us to Americas most-admired companies (i. e. Fortune calciferol and Baldrige winners) in the area of Employee SatisfactionThe Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Human Resource Approach Human Resource Focus Skilled and empowered Work Force Operating with Pride and Joy Our human resource approach is summarized in Figure 5. 1, which is the well-established model that underpins and aligns our various human resource philosophies and programs. Ritz-Carlton Work Environment Approach Plan Ritz-Carlton Human Resources Fundamentals Our Senior Leaders decided to increase both the meaning and satisfaction our people derive from their work. This approach consists of three basic components (1) ourLadies and Gentlemen know what they are supposed to do (2) they know how well they are doing and (3) t hey have the authority to make changes in the process under their authority or their own personal conduct. Quality Selection Process Orientation Training Certification Line-up and daily teaching Communication Personal and professional development Work/life issue management Job Enlargement life story progression Performance measurement reasoned compliance Employee Rights Issue Resolution Process Reward and Recognition Know What They are Supposed To Do At Ritz-Carlton our Ladies and Gentlemen know hat they are supposed to (1) learn and use The Gold Standards (2) master the procedures of their job (i. e. Training Certification) and (3) generate ideas to improve products, services and processes. Know How Well They Are Doing Figure 5. 1 We keep our Ladies and Gentlemen informed on how well they are doing in legion(predicate) forms. They receive coaching from managers and peers on individual tasks throughout the day. Our education and procreation is designed to keep ind ividuals up to date with business needs. The Corporate Director of Training and Development and the Hotel Directors of Training and Development have the responsibility to make ure that training stays current with business needs. To do this, they work with Human Resource and Quality Executives who input organization and job performance training requirements or revise existing ones. The flow of this process is shown in Figure 5. 2. Key developmental training needs are turn to through a core of courses that all employees receive. Daily, they receive information from the SQI report. Finally, they receive semi-annual performance appraisals on their general performance. The Authority to involve Changes The ability of our Ladies and Gentlemen to regulate ow work gets done is assured through Basic Standards set out in The Credo Card, People have the right to be involved in the planning of the work that affects them. All employees (regardless of their level in the company) receive the res embling mandatory two day orientation process, which includes classroom type training on The Gold Standards and The GreenBook (page 16). Deployment DO As shown in Figure 5. 2, we use input from employees and their supervisors in determining educational needs principally via a review and analysis of our performance appraisal documents.The Hotel Director of Training and Development and the Quality Trainers also receive and conduct direct feedback from Ritz-Carlton personnel. When training is designed, it is piloted and approved in a fashion similar to the new product and service development process described in Category 3. Participants in the pilot provide direct, candid feedback to the designers and instructors. The specific actions taken to deploy our approach range across a broad spectrum, but most significant activities consist of (1) The Quality Selection process and (2) Employee Education, Training and Development.Our President and COO started as a waiters apprentice in Euro pe, and many of our executives started as front line personnel in Ritz-Carlton Hotels and were promoted as they rotated jobs. Therefore, training receives the highest attention in our company. 14 The Ritz-Carlton Hotel Company, L. L. C. 1999 Application Summary Departmental Trainer Evaluate Student Reaction/Needs Managers/Training Director Evaluate Performance appraisals/training results Vice-President, Quality Determine Organizational Performance Excellence Requirements Vice President, Human Resources Determine OrganizationalDevelopmental Training Requirements Corp Director of Training and Development The Ritz-Carlton Design of Courses Confirm/Modify existing processes/Facilities Develop/Improve Courses/Processes/Facilities watch Team Codeveloped with supplier of new equipment/ Technology Outsource Figure 5. 2 themes of each job. The graph also contains comparative data which consists of industry and Ritz-Carlton norms. Although job induction training is classroom delivered by the Director of Training and Development and the General Manager, most training delivery is on-the-job. This onsists of (1) daily line-up (2) self-study documents (3) developmental assignments and (4) training certification. Most training is evaluated through examinations, while other orders include audits, performance reviews and appraisals. Day 21 21 days after orientation, each orientation class reunites for a day of evaluation and debriefing. A similar session occurs on or next day 365. Approximately 80% of the training received by The Ritz-Carlton Ladies and Gentlemen is from in-house sources which allows us to have direct control over the method of training delivery and evaluation.