Introduction
Ritz-Carlton. The name alone evokes images of luxury and quality. As the first hotel to win the Malcolm Baldrige National Quality Award, The Ritz treats quality as if it is the heartbeat of the company. This means a daily commitment to meeting customer expectations and making sure that each hotel is free of any deficiency. In the hotel industry, quality can be hard to quantify since guests do not purchase a product when they stay at the Ritz, they buy an experience. Ritz-Carlton has become a leading brand in luxury lodging by rigorously adhering to its own standards. It is the only service company in America that has won the Malcolm Baldridge National Quality Award twice, and Training Magazine has called it the best company in the nation for employee training. One of its remarkable policies is to permit every employee to spend up to $2,000 making any single guest satisfied.
Before applying for the Baldrige Award, company management undertook a rigorous self-examination of its operations in an attempt to measure and quantify quality. Nineteen processes were studied, including room service delivery, guest reservation and registration, message delivery, and breakfast service. This period of self-study included statistical measurement of process workflows and cycle times for areas ranging from room service delivery times and reservations to valet parking and housekeeping efficiency. With specific, quantifiable targets in place, Ritz-Carlton managers and employees now focus on continuous improvement. The goal is 100% customer satisfaction: if a guest’s experience does not meet expectations, Rit-Carlton risks losing that guest to the competition.
Achieving Quality
According to Simon Cooper, the president and Chief Operating Officer of Ritz-Carlton, he focuses on three fundamentals. Location, product, and people. Ritz-Carlton's top leaders communicate what they are going to be serving and also talk about great things that their employees have done. Ritz-Carlton entrusts each staff member without approval from their general manager to spend up to a meaningful amount of $2,000 on a guest per incident. Although it may not get used frequently, it means a deep trust in its staff's judgment. It could be that someone finds out it's a guest's birthday and there's champagne and cake in the room. Cooper values every employee's opinion. One of the most important internal metrics Ritz-Carlton measures is voluntary turnover, which is an indicator of talent acquisition and training. For Ritz-Carlton, training is crucial, because it nurtures the careers of its employees(its ladies and gentlemen).
More Than A Slogan
One way the company has put more meaning behind its quality efforts is to organize its employees into “self-directed” work teams. Employee teams determine work schedules, what work needs to be done, and what to do about quality problems in their areas. Ritz-Carlton believes that a more educated and informed employee is in a better position to make decisions in the best interest of the organization. It takes an extraordinarily long time to build a culture. No culture sticks if it's not lived at the highest levels of the organization. Cooper believes a good culture is built on trust. And if leadership doesn't live the values that it requires of the organization, that is the swiftest way to undermine the culture(Reiss, 2013).
Identifying Quality Problems at A Hotel, Control Charts, Pareto Diagrams, and Cause-and-Effect Diagrams
The Control charts can help a hotel determine whether its process will produce great services consistently. Also known as the Shewhart chart or statistical process control chart, it is a graph used to study how a process changes over time. It provides a visualized look that helps a hotel improve its management. By comparing current data to these lines, a hotel can conclude whether the process variation is consistent or out of control such as affected by special causes of variation. And, also, how many or much these data are and the quality of these data directly determine its decisions. Cause-and-Effect Diagrams can also be adopted by a hotel to evaluate possible causes and effects of its quality issues. Hotels are able to resolve these issues even before they start to affect their quality of services. A Pareto chart is a bar and weighted graph to analyze variations. Its core concepts are frequency and effect. A hotel can use this tool to analyze its variations. In addition the frequency and effect of these variations. This tool makes me think of one of my favorite books, "Factfulness: Ten Reasons We're Wrong About the World — and Why Things Are Better Than You Think". The world can seem scarier and more dangerous because what you see and hear is selected, either by your internal filters or information outlets like the news and media for the very fact that it is scary. Plane crash events are far fewer than car crashes, but they have very different effects. Some events happen even daily but some barely happen in decades.
Nonfinancial Measures of Customer Satisfaction
Non-financial metrics are quantitative measures that cannot be expressed in monetary units. Common financial metrics include earnings, profit margin, average order value, and return on assets. Outcome-based measures such as customer satisfaction, market share, category ownership, and new product adoption rate fall into the non-financial metrics(Patterson, 2022).
Brand preference is one of the good measures that help Ritz-Carlton understand the position of its products and services in relation to competitors. The Take Rate is how many customers act on the seller's call to action such as signing up for a free trial or subscribing to a new channel. For a hotel like Ritz-Carlton, it can be a membership program. Customer retention is also a sign of future revenue or constant cash flow which is crucial for Ritz-Carlton. Retention is how many customers continue to stay in Ritz-Carlton hotels.
Customer experience has a direct impact on customer retention. To measure customer experience, you need to take into account all of the major touch points where a customer interacts with your company. For example, Ritz-Carlton entrusts each staff member without approval from their general manager to spend up to a meaningful amount of $2,000 on a guest per incident. And, finally, Market share. Each of the prior metrics, customer retention, take rate, and customer experience all impact Ritz-Carlton's market share. Market share is one of the primary measures of a company's success. An increase in market share can mean a better profit margin.
The Fish-Bone Diagram
Quality Tools Ritz Carlton Might Needs
The Five S’s (5S) is the first tool that came to my mind since 5S is defined as a methodology that results in a workplace that is clean, uncluttered, safe, and well organized to help reduce waste and optimize productivity. It's designed to help build a quality work environment, both physically and mentally.
i. Sort
The first step in the 5S process is to go to the workplace and determine which of the items there are necessary and which are not. And then, get rid of or remove the unnecessary items. For Ritz-Carlton's customers, staying in a clean room is less likely to be stressed by the jumbles of junk as they try to fall asleep at night. A cluttered room can have an effect that clutters their thoughts.
ii. Straighten
Now that the property or workplace is uncluttered, what should be done with it? Straighten it up and get it organized. The necessary items need to be arranged logically in the hotel. Supplies that are used daily need to be convenient to the users, but not placed so that they hinder workflow or compromise safety.
iii. Scrub
For Ritz-Carlton's leaders who want their employees to love to work for them and would like to raise productivity and quality to all-time highs, the scrub is a total and thorough cleaning of the workplace. After removing the clutter, clean the overhead areas, walls, floors, and machines. It means cleaning them to the point where the smallest crack in a cast frame or a small oil leak can be easily seen.
iv. Standardize
Most importantly, this 5S program is not a one-shot effort. There should be a regular schedule for completing the previous steps, to systematically check to see if the procedures are being followed.
vi. Sustain
oftentimes, everything fell through the cracks, making the effort all but worthless because it was not sustained. Therefore, the final step is to sustain these steps and check them regularly.
Pareto Chart
Pareto Chart is a bar graph that shows which factors are more significant. For example, if complaints about uncluttered or room services cause the most distress to the customer, working on eliminating such complaints would have the most impact. When Ritz-Carlton hotel has to solve a room services problem, it has to determine why it happened and the causes of it.
References
Pareto chart (service example). We stand with Ukraine. (n.d.). Retrieved September 27, 2022, from https://www.moresteam.com/toolbox/pareto-chart-service.cfm
Patterson, L. (2022, February 24). Six non-financial metrics every marketer should measure. VisionEdge Marketing. Retrieved September 27, 2022, from https://visionedgemarketing.com/non-financial-metrics/
Reiss, R. (2013, June 19). How Ritz-Carlton stays at the top. Forbes. Retrieved September 26, 2022, from https://www.forbes.com/2009/10/30/simon-cooper-ritz-leadership-ceonetwork-hotels.html?sh=6247862110b1
Posts
