Summary: The New Gold Standard by Joseph Michelli
Summary: The New Gold Standard by Joseph Michelli

Summary: The New Gold Standard by Joseph Michelli

Among the luxury space, Ritz-Carlton hotels regularly rank the highest in guest satisfaction, and it has won the reader polls as the best luxury hotel in the world. What’s more, Ritz-Carlton leadership center is named as the best global training company in 2007 issue of training magazine.

In the new gold standard,  best-selling author Joseph Michelli shares Ritz-Carlton way of providing extraordinary service to its employees, customers and the community at large. As Cesar Ritz, the founder of Ritz-Carlton, puts it:

“People like to be served, but invisibly.”


Whether it’s serving customers, employees or business partners, Ritz’s basics of caring never change.

Ritz weaves three steps into the core of its culture.

  1. A warm and sincere greeting using guest’s name.
  2. Anticipation and fulfillment of each guest’s needs.
  3. Fond farewell. Give a warm goodbye and use the guest’s name.

Ritz also uses these 3 steps of service to ensure its employees (or Ladies and Gentlemen as they call it) are warmly welcomed into the company and that they are given a fond farewell when they depart.


In the food and beverage business, an informational type of lineup is very common.

If your doors open at 6, it’s routine at 5 you have a huddle and get the entire waitstaff together. The sous chef might come out and say ‘tonight we have fresh mahi-mahi that was just flow in. In fact, I’ve prepared one’, and there’d be 12 forks for the 12 waitstaff to taste it. However it was uncommon to do that in non-food environment. So Ritz decided to use the same culinary lineup, which is very similar to stand-up meetings, in business setting.


Ritz-Carlton changes with time and place.

For a while, young people thought of Cadillac as being the car of an older generation. Both brands have had to change in order to appeal to an increasingly younger customer while holding onto the traditional guest. Times change, and we must change with the times. Ritz recognizes that.

Similarly, Pizza Hut can’t just make the same pizza and export to the entire world. The crust is different from place to place. In the US, the crust edge is stuffed with cheese. In Asia, they put meat in the crust. In Mexico, they stuff it with cream cheese and jalapeno peppers. Ritz positions itself in international luxury hotels, but differently depending on where it is. That’s why if you go to NYC, you’d expect a bit more traditional style hotel, but when you go to Battery Park, there’s a more contemporary look.


Ritz Service Values: I Am Proud to Be Ritz-Carlton

  1. I build strong relationships and create Ritz-Carlton guests for life.
  2. I’m always responsive to the expressed and unexpressed wishes and needs of our guests.
  3. I’m empowered to create unique, memorable, and personal experiences for our guests.
  4. I understand my role in achieving the key Success Factors, embracing Community Footprints, and creating the Ritz-Carlton Mystique.
  5. I continuously seek opportunities to innovate and improve the Ritz-Carlton experience.
  6. I won and immediately resolve guest problems.
  7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
  8. I have the opportunity to continuously learn and grow.
  9. I’m involved in the planning of the work that affects me.
  10. I’m proud of my professional appearance, language, and behavior.
  11. I protect the privacy and security of our guests, my fellow employees, and the company’s confidential information and assets.
  12. I’m responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.


Ritz finds its top talents by diligence and patience, instead of compensation and benefits.

Most people think Ritz attracts the best talents by having an overly generous compensation plan. But nothing could be further from the truth. Ritz pays the same as the rest in their space. It’s how they select their people and what they do when they join their family that makes a difference.

No one at Ritz is hired without a series of personal meetings. Ritz resists to ‘hire’ people, instead they ‘select’ the best fits. Hiring can be nothing more than finding anyone to fill a job, but selection is choosing the best person to provide exemplary service.

Take for example, Tony Mira, a general manager of one of the Ritz hotels, had to go through 14 interviews. When she heard the final results, she couldn’t help but feel special. Whether you’re a leader or a doorman, Rtiz takes so much time to get to know you and afterward deem you acceptable. By creating layers of evaluation, the hotel’s new hires feel that the leadership has invested in getting to know them. That in turn gives them a sense of responsibility to live up to the trust of the hotel.


Ritz leadership never hesitates to roll up their sleeves and get their hands dirty.

One of the doormen put it this way, “I appreciate my company because a supervisor is never too important to drive a car down for me, the doorman. And the hotel manager assists men in carrying luggage without my saying a word, in short, its’ a place where leaders show you that we’re all one, where leadership isn’t saying it, but doing it. And I mean in all areas of the hotel.”

Because Ritz encourages lateral service in all areas of work to get rid of silos and improve collaboration. Morever when people work side by side, it creates a shared purpose of ‘we’re all in this together’.


Ritz refuses to give average training, even if there’s a slight chance of their talents being lured away by competition.

While it’s less than desirable to train service members who are then sought by your competitors, management at Ritz would rather face that challenge than hold onto less-developed talents. By developing and empowering their employees, Ritz allows them to do their best work at all levels.

Leadership exercises the patience and respect to step back and let the front line find their own ways to offer guests a memorable experience. Every staff including a member of housekeeping is empowered to use judgement, without seeking approval from supervisor, to spend up to $2,000 on each guest each day! It’s all possible because the leadership at Ritz-Carlton has done a fantastic job in educating their workforce the importance of fiscal responsibility.


Ritz goes an extra mile to break every customer expectation.

When the guest lost his or her ring, it’s good enough for most hotels to go through the laundry. But Ritz refuses to stop there. In one instance, they went to great lengths by taking the washing machine apart and searched for the ring down into the drain. And they succeeded as they found the ring in the catchment area of the drain.


Ritz learns from the elites and act upon the best practices.

Over the years, leadership at Ritz has ‘closed gaps’ in business processes by imitating from the best practices of other trends-setting organizations. For example, realizing Ritz lacked a well-defined process for designing new products and services, leadership directly implemented the Xerox’s 6-step approach to quality improvement. FedEx’s systematic ways of service delivery was deployed at Ritz. The $2,000 -per-day empowerment originally comes from studying Zyrtec corporation and Solectron corporation.


Ritz administers the Gallup Q12 tool to assess employee engagement.

Ritz requires employees to answer 12 questions and determine whether they fall into owners (engaged), renters (not engaged) and squatters (disengaged). The overall database of Gallup indicates 40% people as engaged, 45% not engaged and 15% actively disengaged. To put it into perspective, Ritz’s numbers are approximately 63% engaged, 28% not engaged and 9% actively disengaged.

Gallup’s Employee Engagement Metrics

  1. I know what’s expected of me at work.
  2. I have the materials and equipment to do my job right.
  3. At work, I have the opportunity to do what I do best every day.
  4. In the last 7 days, I’ve received recognition or praise for doing good work.
  5. My supervisor, or someone at work, seems to care about me as person.
  6. There’s someone at work who encourages my development.
  7. At work, my opinions seem to count.
  8. The mission/purpose of my company makes me feel my job is important.
  9. My coworkers are committed to doing quality work.
  10. I have a best friend at work.
  11. In the last 6 months, someone has talked to me about my progress.
  12. This last year, I’ve had opportunities at work to learn and grow.


Ritz also uses Gallup model to assess customer engagement levels.

There isn’t a GM who sleeps the night before the day results come out. Although, rewards and incentives for everyone at Ritz are linked to a variety of factors, they’re heavily weighted in the direction of showing improvement in customer engagement scores.

When a hotel meets their brand performance marker, it’s performing around 97th percentile in Gallup’s global competitive database. And that hotel would be considered truly world class and that puts the hotel in Ritz’s yellow-zone category. The green-zone hotels are performing around 98-99th percentile and red-zone comprises Ritz hotels that are not performing at their promise. A red-zone hotel is around 94-95th percentile. Some might say 94th percentile is pretty darn good, but it simply misses the mark for Ritz-Carlton

Gallup’s CE Metric

  1. How satisfied are you with the company?
  2. How likely are you to continue to choose the company?
  3. How likely are you to recommend the company to a friend?
  4. The company is a name I can always trust.
  5. The company always delivers on what they promise.
  6. The company always treats me fairly.
  7. If a problem arises, I can always count on the company to reach a fair and satisfactory resolution.
  8. I feel proud to be a company’s customer.
  9. The company always treats me with respect.
  10. The company is the perfect thing for people like me.
  11. I can’t imagine a world without the company.


Ritz understands the value of customer insights and uses it to their advantage.

While not everyone at Ritz has open access to the Mystique, the aptly named customer relationship management (CRM) software, they’re encouraged to jot down guest preferences from every encounter. These observations are soon entered into Mystique and from there, information is readily accessible across all Ritz properties.

A lot of preference identification involves paying attention to subtlety. If your name is John Smith but the bellman finds out that you like to be called ‘Smithy’, that’s what you’ll be addressed as during your stay at the hotel. Subtleties of preferences matter. If you order Perrier, it doesn’t mean you prefer Perrier. It might be the first time you try it. But if you order it with two lemons without ice, there’s a chance it might be your preference. If you order it twice, it’s a preference. Ritz got to watch their customers and read them to understand when they truly prefer something vs when they’re only experimenting with something. It’s not easy but apparently worth the effort.

Having said all that, CRM software are a double-edged sword. On the one hand, CRM databases capture customer intelligence and helps the company make informed decisions. On the other hand, tracking every bit of customer detail comes across as a sensitive endeavor on some levels. Ritz understands this and constantly discern the level of disclosure and interaction that individual guests desire while respectfully honoring their privacy. It’s important for them to be intuitively observant while not being intrusive.


Ritz is always on the lookout for its unwelcomed guest MR.BIV.

In a playful spirit, Ritz has identified one guest it doesn’t want at its properties: MR. BIV. The ladies and gentlemen are constantly on their toes to track down the presence of MR. BIV, an acronym for

  1. Mistakes
  2. Rework
  3. Breakdowns
  4. Inefficiencies
  5. Variations

While everyone wishes there hadn’t been a problem in the first place, there’s a need for all of us to learn from each imperfection. Just like Ritz, we want our people to report the breakdowns so we can build solutions to remove them, not just weep them under a rug.


It’s not the role of Ritz leadership to lead the quality.

Instead, Ritz leadership should help influence a ‘quality culture’. Everyone at Ritz is responsible for leading the quality.


Ritz well understands satisfied customers won’t stay loyal and spread the words. Delighted customers do.

It’s scary to know that most businesses even if they have a perfect track record of accuracy, delivery, quality and service with a smile, most customers won’t stay loyal. We’ve moved beyond the era of adequate service. Customers nowadays want to be thrilled, to feel a rush of extraordinary satisfaction by getting much more value, attention and enjoyment than they expected.


Ritz emulates the home of a loving mother.

Guests want things to be done without having to worry whatsoever. Think about it. When something went wrong at your home as a young child, you told your mother about it. She wouldn’t say “I’d check with someone else”. She just takes care of it without any excuses and better yet, without requiring you to follow up constantly. When you open the fridge in you home, you find whatever you like without having to play a role in how it got there. The light bulbs got changed and you never have to think about who did it. Ritz understand their service is not only about fulfilling requests, also about noticing and anticipating underlying needs of every single guest.


Ritz knows not everything goes well, and they understand how to turn around a bad service.

Whether the problem is caused by your or not, you can use 5 simple steps to turn the tides.

  1. Share a genuine and compassionate reaction to the person’s distress
  2. Offer appropriate apologies.
  3. Assure the person you’ll take care of the issue.
  4. Individually and through the resources of your team, see that the problem is taken care of.
  5. Go one step further to compensate for the person’s frustration.


Ritz practices immediate service recovery.

With the rise of social media and customer reviews, companies can’t just practice service recovery. They must practice immediate recovery, because the sooner the customers are satisfied, the less likely they will go rant on the Internet.


Ritz focuses on how brand extensions can strengthen one another.

In essence, they view each extension as an opportunity to strengthen connections between their properties. For example, hotel experiences can lead customers into vacation experiences at the Ritz-Carlton Club, which in turn can fuel purchases of Ritz-Carlton Residences. Of course, brand extension can also backfire if one extension becomes a negative outlook and causes a ripple effect on the other offerings.


Ritz would rather over-communicate than under-communicate.

Ritz would rather over-communicate their customer WOW stories and underlying service values that drive them, than under-communicate. You can talk abstractly about great service, but when you hear 10 stories about people who deliver it, everyone including new employees can get the texture of what’s expected of them. Put it another way, the leadership team can talk all day about Ritz culture, but the difference came when the frontline shared how they lived it.


Ritz takes responsibility to share their remarkable customer service ethos with the world.

While some leaders might be reluctant to share best practices with others, Ritz leadership realizes that by teaching others, they’re taking an abundance mentality as opposed to a scarcity mentality to knowledge and information. Ritz amply shares and receives knowledge, and, in the process, it broadens the scope of the footprint they leave.

For example, to help Citibank Singapore develop internal program, a team of Ritz employees visited the bank and observed service delivery and physical environment. Upon completion of their diagnostic review, the analysts offered a range of findings. According to Jonathan, CEO of Citibank Singapore, “They showed us things we had overlooked; a stain on the carpet outside an elevator that had obviously been there for several years; our salespeople leaving their drink bottles in the foyers of the branches; six different uniforms of our staff – things we just weren’t paying attention to but that make a very fundamental difference in the impression the customer has. They just brought a totally different perspective to us.”


Ritz recognizes the long-term benefits of CSR activities far outweigh its short-term payments.

Their Community Footprints program focus on 3 areas – hunger and poverty relief, well-being of disadvantaged children, and environmental conservation. Since these themes emerged from existing frontline efforts rather than from senior management, the Community Footprints program was met with enthusiasm.

While socially responsible action may initially reduce profits, many corporations are finding that it may also create new opportunities to add profits, reduce operating losses due to regulatory actions or loss of favor in the marketplace.

As Simon Cooper, president of Ritz-Carlton once stated, “We want to make sure we don’t impute guilt on guests who’re paying for a luxury experience but at the same time we want to create openings for our gests to help us steward precious resources.”