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Part II: Ritz Carlton’s Schulze On Empowering Employees To Think Like Owners

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In this edition of our Corporate Competitor Podcast, Maxwell Leadership's Don Yaeger continues his conversation with co-founder of The Ritz Carlton Hotel Company, Horst Schulze, to reflect on empowering employees to see themselves as valued contributors.

This is part 2 of a two-part series; view part 1 here

Horst Schulze doesn’t really think outside the box; he creates new boxes. One of those boxes became The Ritz-Carlton Hotel Company, a global icon of excellence that has inspired business leaders worldwide with its credo of “ladies and gentlemen serving ladies and gentlemen,” a maxim that applies to any organization that empowers employees to think like owners.

How new-box is Schulze’s thinking when it comes to customer service?

Imagine yourself as a guest of the Ritz-Carlton, wandering in the hallways lost, and stopping to ask a bellhop or a busboy or a dishwasher or any staff member for directions. He or she will not point in the direction you should take, nor will they explain to you how to get there. Instead, they will stop whatever it was they were doing and take you there.

On the way to your destination, they will inquire about your stay. If you tell them that, generally, it’s been good, but your TV seems to be on the fritz, he or she has the power, and the responsibility, to see that it gets fixed and, if you seem agitated by the inconvenience, to buy you breakfast, lunch or dinner on the Ritz-Carlton’s dime.

Oh, and the dishwasher’s budget for seeing to it that you are not only happy but also amazed and delighted is $2,000. “When I introduced this practice years ago, the owners of Ritz-Carlton franchises threatened to sue me,” said Schulze, suppressing a chuckle. “So far, we have never had to max out the budget. A plate of cookies or a lunch has sufficed. But the point I made to the owners was that even if we had spent the full $2,000, these are guests who are likely to spend $200,000 over their lives, so the only—the only—thing we should be concerned with is keeping them as guests.”

The best way to keep your guests coming back, says Schulze, is to be excellent. In order to inculcate excellence as the core value at Ritz-Carlton, Schulze created his “20 Non-negotiable Points,” which include going that extra mile for guests who ask for directions, inquiring about their satisfaction with their stay, listening to their complaints, apologizing about it and fixing the problem.

All in a day’s work washing dishes, right? It is if you work at a Ritz-Carlton. This kind of ownership of the company’s success isn’t for everybody, but it is for people who want their employer to trust them implicitly and see beyond rank or functional duties. Getting those kinds of folks on your team requires knowing—as Schulze knew when he became an apprentice to a German hotelier at the age of 14—exactly what standards were expected of him and how he was to uphold those standards.

“That’s the job of the leader,” said Schulze, who served as Ritz-Carlton President and COO before founding The Capella Hotel Group. “We want to tell every employee, ‘We trust you. You are part of this company. You’re not just working here. You’re part of our dream . . . we trust you to help us reach our common objectives.’ That is why for the first two days of onboarding, we teach them who they are before we teach them what they do. Then, the 20 points reinforce that every day.”

In the podcast, Schulze offers guidance to any leader wishing learn:

•  The difference between mission and vision (5:30)

•   How to hire for purpose, not function. (7:00)

•  How to frame a common objective in a way that unifies people. (8:00)

•  Horst Schulze’s definition of a team. (9:00)

•  What you gain by “selecting” people to work with you rather than “hiring” them. (12:00)

•  The one thing that must be in every employee orientation. (13:30)

“A leader must set the vision,” said Schulze. “At the Ritz-Carlton, the vision was to be seen as the best provider of hotel services anywhere. Once you have the vision, you can select those you want to join you in pursuing it.”

Check out the full Corporate Competitor Podcast interview archive and subscribe to new episodes.


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