Ritz Carlton

In 1983, President and COO, Horst Schulze, decided upon a strategy to manage the Ritz Carlton in order to compete on quality. The strategy affected the entire organization, with significant differences in:

· Defining traits of all company products defined in the company Credo

· Translating the Credo into basic standards to clarify the responsibilities for employees

· Personally train employees the new Ritz-Carlton Credo and basic standards (the Gold Standards)

· Aggressively instilling a passion for excellence

Five years later, Schulze began using the Malcolm Baldridge National Quality Award criteria to develop a system of business excellence. This system used the Deming Wheel in order to achieve optimum performance levels throughout the organization. With these new policies in place, Schulze lead Ritz Carlton to the first recipient of the Malcolm Baldridge National Quality Award for Service.

The 1999 Ritz-Carlton application summary is as follows:

Criteria 1: Leadership

“Plan” – There are seven specific decisions collectively made by Senior Leaders to set direction for business excellence:

· 10 year vision · Strategy

· 5 year mission · Methods

· 3 year objective · Foundation

· 1 year tactic

The senior leaders formed the Gold Standards, which are comprised of the Credo, The Basics, Three Steps of Service, the Motto, and the Employee Promise. Together, the Gold Standards have the ability to empower employees to take initiative in thinking and acting with innovation and independence, for the overall benefit of not only the company, but the customers as well.

“Do” – Specific actions by senior leaders in order to properly manage the new leadership approach are made up of three salient processes:

· Ensuring each new hotel’s goods and services are characteristic of all other Ritz Carlton’s on opening day.

· The results of seven specific decisions defined at the annual ...

... middle of paper ...

... well as drivers of employee satisfaction.

7.4 Supplier and Partner Results

The Ritz-Carlton ensures that performance requirements of their suppliers are met through a thorough Supplier Compliance and Quality survey that measures key aspects of supplier quality. Purchasing personnel at each hotel fill out the survey every six months and rate specific issues, for example, fit for use, accuracy and service, etc. Suppliers who achieve an 80% or better overall rating on all attributes meet Ritz-Carlton’s quality requirements.

7.5 Organizational Effectiveness Results

Ritz-Carlton’s C.A.R.E. program of systematic preventive maintenance has kept their property and equipment at world-class levels at reduced costs. This is in line with their goal of pursuing a defect-free environment.

With unemployment at a low and significant competition for skilled workers, the Ritz-Carlton embarked on a major project to improve the cycle time from when a potential new-hire walks in the door and a job offer is tendered. Using scientific quality approaches, the Ritz-Carlton has improved cycle time from 21 days in 1996 to just 1 day in 1999.