Ritz Carlton Essay Example For Students

Ritz Carlton Essay 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 CredoTranslating the Credo into basic standards to clarify the responsibilities for employeesPersonally train employees the new Ritz-Carlton Credo and basic standards (the Gold Standards)Aggressively instilling a passion for excellenceFive 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 speci fic decisions collectively made by Senior Leaders to set direction for business excellence:10 year visionStrategy5 year missionMethods3 year objectiveFoundation1 year tacticThe 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 hotels goods and services are characteristic of all other Ritz Carltons 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 organizationThe Gold Standards are reinforced daily in a myriad of ways. Check Leadership effectiveness is evaluated on key questions of the Ritz-Carltons 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. Criteria 2: Strategic PlanningPlan An extensive analysis is performed to understand the current state of the macro environment in which the Ritz-Carlton operates. Using the Macro-Environment Analysis, Senior Leaders confirm or make changes to the 10-year vision, 5-year mission, strategy, methods, and foundation. Discrepancies identified in the analysis are used to create the 3-year objectives. Do Specific actions by Senior Leaders to deploy the 3-year objectives are as follows:Develop production processesDeploy support processesDevelop preliminary plans/budgetsFinalize the Ritz-Carlton pyramid plan and budgetsReinforce the pyramid concept/plan/budgetsCommunicate the pyramid concept to the employeesExecute plansOn-going daily lineup reinforcement Evaluate/improve planning processesConduct monthly reviews of plans at all levels and collect necessary information for the next cycleCheck Upper management conducts monthly performance reviews of the strategic plan, focusing on pre-established performance measurements of the 3-year objectives as well as key processes. The information allows the Ritz-Carlton to make improvements and benchmarking comparisons. Criteria 3: Customer and Market FocusPlan Customer and market focus concentrates on the information needed for hotel development and operation. Needs include determination of market segments, identifying potential customers, relative priorities of customers, demand forecast, individual dissatisfaction of customers, widespread dissatisfaction of customers, competitive quality status, and opportunities for improving quality. Much of this information requires analysis and special studies. Do Specific actions taken by the Ritz-Carlton Sales and Marketing Leaders to organize research conclusions include:The Six Ps concept, which creates a vision of well-being from the purchase of Ritz-Carlton products: Problem, Product, Promises, Personal Advantage, Positioning, and Price/Value. Albert Einstein and His Theories EssayCriteria 7: Business Results7.1Customer Focused ResultsStatistically, customer and employee satisfaction data comparisons are considerably different from the competition at the 95% confidence level. Surveys are administered and produced by objective and independent outside third-party research consultants, and analyzed against world class and Baldridge winning companies. Externally, the Ritz-Carlton uses J.D. Power and Associates to measure overall customer satisfaction versus their foremost competitor. Individual guest satisfaction is also measured both internally and externally using a variety of surveys. 7.2Financial and Market ResultsThe Ritz-Carltons measures of financial performance fall into a number of different categories including earnings before income taxes, depreciation and amortization, and return on investment. They measure administrative costs as a percentage of total fees, profit and revenue, and generate an analysis of the percentage of gross profit versus their main competitors. 7.3Human Resource ResultsRitz-Carltons employee well-being and satisfaction are measured through their Employee Satisfaction Survey. Responses are analyzed and compared to service company norms. Turnover has decreased from 77% in 1989 to 30% in 2000. The industry average is currently just over 50% (RCHC/Kaznova Consultants). Positive trends are a result of increasingly improved selection and training processes as well as drivers of employee satisfaction. 7.4Supplier and Partner ResultsThe 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-Carltons quality requirements. 7.5Organizational Effectiveness ResultsRitz-Carltons 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.