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 strategic planning process are arranged in a “pyramid” and distributed throughout the organization
· The Gold Standards are reinforced daily in a myriad of ways.
“Check” – Leadership effectiveness is evaluated on key questions of the Ritz-Carlton’s semiannual employee satisfaction results and also through audits on public responsibility.
“Act” – Gaps in leadership effectiveness are addressed with development/training plans. For widespread deficiencies, the corporate human resource department develops and improves courses, processes, or facilities.