The New Gold Standard | Joseph A. Michelli

Summary of: The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company
By: Joseph A. Michelli

Introduction

Embark on a journey through the world of luxurious hospitality as we explore the principles that transformed The Ritz-Carlton Hotel Company into a global phenomenon. Acclaimed author Joseph A. Michelli details not just the origins of the renowned hotel chain and its fascinating history but delves deep into the five guiding precepts known as the ‘Gold Standards.’ Discover how dedication to service, adherence to timeless principles, and the importance of creating memorable guest experiences contributed to the success of this legendary enterprise. Packed with real-life anecdotes, practical insights, and valuable lessons, ‘The New Gold Standard’ equips readers with the wisdom of upholding quality service and innovation in the fast-paced world of the hospitality industry.

The Rise of Ritz-Carlton

César Ritz’s entrepreneurial journey led to the creation of the Ritz-Carlton hotel chain, which has become synonymous with luxury and exceptional service. After managing London’s prestigious Savoy Hotel, Ritz opened The Ritz Paris in 1898, eventually owning a controlling interest in The Carlton in London and various upscale restaurants. Ritz died in 1918, and his wife Marie allowed Albert Keller to use the Ritz-Carlton name, leading to the opening of hotels in Boston, New York City, Boca Raton, and other cities. Despite setbacks during the Great Depression, Ritz-Carlton regained its footing after World War II and grew to become a Marriott International subsidiary with 69 properties worldwide. The chain’s corporate culture revolves around five principles that have contributed to its extraordinary staff loyalty, outstanding customer experience, and extensive brand recognition. Today, Ritz-Carlton aims to expand to countries such as China, Egypt, and Russia, with plans to have 100 hotels by 2011.

Ritz-Carlton’s Gold Standards

The Ritz-Carlton hotel chain’s success is largely attributed to its adherence to a set of principles called the Gold Standards. The company’s motto, “Ladies and Gentlemen serving Ladies and Gentlemen,” reflects its commitment to excellent, timeless service. The Gold Standards are embodied in the company’s “Credo,” which pledges genuine care and comfort for guests and its “Three Steps of Service,” which prioritize personalized attention to each guest. The Ritz-Carlton also instills its 12 service values in all employees, which focus on fulfilling guests’ needs and continuously improving their experiences. Managers reinforce these values at daily interactive meetings called “lineups.” Additionally, the company conducts ongoing research to stay relevant and appeal to luxury consumers. Overall, the Ritz-Carlton’s Gold Standards are deeply embedded in its culture and have contributed greatly to its long-standing success.

The Ritz-Carlton’s Employee Selection and Training Process

The Ritz-Carlton strives for exceptional service by implementing an extensive staff recruitment process. They select talented individuals who take pride in being part of the service industry, train them to meet certain competency standards and provide leadership expectations training within three days. By Day 21, these new hires must achieve the basic competency level, which they can openly evaluate on the “Day 21” session. The company also believes in treating customers like family and giving employees the freedom to solve any customer-related issues by spending up to $2000 per day. The result of such elaborate procedures is a lower employee turnover rate of 20% against the average 60%.

The Ritz-Carlton’s Business Model

The Ritz-Carlton’s President emphasizes their need to be financially sound without deterring their staff from their objective. The company values internal transparency by providing access to financial information and progress graphs. These graphs identify the company’s success on five factors that they revise annually. The five factors are “The Ritz-Carlton mystique,” “employee engagement,” “guest engagement,” “product and service excellence” and “financial performance.” The company strives to provide personalized services that exceed benchmarks while also focusing on increasing their earnings and profit.

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