Horst Schulze could have just rested on his laurels. After all, he had built a premier hotel company, known for its gold standards of customer service.
Instead, as soon as he left Ritz-Carlton, Schulze started a new hotel company, Capella Hotels and Resorts. “When people retire they do what they like. Some people play golf. I like to play hotel,” he said to Chief Executive.
In part one of our two-part interview with the co-founder of Ritz-Carlton talked with us about how the company became known as the gold standard for customer service and challenges the company faced as those standards were being established. In part two, Schulze talked about leaving Ritz-Carlton and starting Capella Hotels and Resorts and the differences in hotel expectations across the globe. Below are excerpts from this conversation.
After selling and leaving Ritz-Carlton you really didn’t have anything left to prove. Instead, you start Capella Hotels and Resorts. Why?
I saw there was a shift coming. The word was luxury. At the time, I saw it breaking out into affordable luxury and ultra-luxury. I wanted to do that ultra-luxury thing. And that’s what we did. When Trump and Kim Jong Un met in Singapore…that was Capella.
I wanted to do that ultra-luxury thing. It was very clear that was happening and it kind of related even more to my original upbringing of European hotels, smaller more intimate, no conventions, more personalized service and I wanted to do that.
You talk about the differences in the European style of hotel versus the American style. What makes for an ideal experience in Tokyo is different than what makes for an ideal experience in New York. How do you build a culture across a global company when each different region has their own unique set of standards?
The fundamental [values] are still the same. Every guest, no matter what culture, wants to be treated with respect and dignity. They want to have an awesome, clean hotel. They want to have fast follow through on any request that they have. Timeliness is important everywhere. They want the employees to say, “I’m happy to do that for you and I mean it,” and show that they mean it and so on. The fundamentals are the same.
Whether we are in Japan, China, Germany or wherever, we have to make sure we respect the local culture. So, before we opened a hotel and I had the dos and don’ts for that culture in my briefcase for each country where we had the hotel. Before we went in with the hotel we stated, “Wait a minute, let’s be sure we don’t offend anybody, don’t do anything wrong but maintain our own culture at the same time, our corporate culture.”
We adjusted ourselves to each country and it worked because in everywhere we went, every location, we were awarded best hotel. We were awarded best hotel in Japan, Germany, China and so on. It worked.
We taught our employees no matter what you do, when a guest comes within 10 feet, you look up and greet that guest. If the guest needs help, no matter what you’re doing you help. That’s a culture of ours. That’s what we do. That works in every country. If a guest asks for directions, don’t point. Take them there. That was appreciated everywhere. I had guests complimenting that in every country.
Any time we’d take over a new hotel, I sat down with all the employees and department by department. And I’d ask them the same question…in every question. “What do you want your department to be six months from now? What to do you want to be?” And in each department in every country they say the same thing, “We want to be the best.” Think about that. So much for cultural differences.
How do CEOs apply the Ritz-Carlton gold standards to their business, even if it’s not a customer facing enterprise like a hotel?
Everybody has to be customer focused. If I have a shoe store, I have to be customer focused. There is no such thing that’s business to business because there’s no business that talks to another business. My mattresses don’t talk to another mattress. It’s human beings. You will have in your business a human being who talks to a human being in a different business and that person makes a decision about your business because of that interaction. A great business really, in my opinion, does four things. Number one, cannot be encroached on by number two, three and four.
Number one, keep the customer. Keep the existing customer. The whole focus of an organization, in my opinion, has to be once a customer walks in my business or deals with me, they want to deal with me again. Number two, you have to find new customers. Number three, you get as much money from the present customers without losing them, but otherwise you give them value. And number four, you work on your efficiency. But number one, if the concentration of the company is number one to keep the customer and make sure that every employee knows that their real objective is and is working to convince the guest to come back or the customer to come back.
Every employee should know that’s their objective. If you would walk in a Capella Hotel and go the kitchen, walk up to the pot washer, that the worst job in the hotel…if you would go to him and say, “Excuse me. What is your objective here?” He would tell you, “I’m here to convince the guests to want to come back.” That’s the concentration of an organization.