Horst Schulze (CEO of Ritz-Carlton) - What I Learned

Horst Schulze is a great speaker.  He's very witty and has good comedic timing.  Overall, listening to him was very enjoyable.  I am going to give you a rundown of the best things I learned by watching a speech given by Horst.

Horst had a basic premise to his speech and he labeled it: What is the difference between Leadership and Management?

He broke it down into 3 categories.  I will break down each individual category below.

1. What do customers want?

  • Customers want you to care about them and their opinion.
  • Customers want a product that works every time.
  • Customers want a good service.
    • He joked that you should treat them as if they are Jesus Christ himself.

2. Employee's need to be involved to care.

  • If you give them no individual responsibility they will be there for the money and not because they feel like they are a part of something special.

3. Give employee's more than a job.

  • Give employee's pride in the company they work for.
  • Give employee's self-respect.
  • Give them pride and self-respect on day 1.
  • Align a common goal with each employee.
  • Help them feel like they are a part of something bigger.
    • Not because they simply complement the position well.
  • Toss around ideas with them, don't give them objectives or demands.
  • Help them dream of making the company the very best in the business, the most respected.
We are superior to the competition because we hire employees who work in an environment of belonging and purpose. We foster a climate where the employee can deliver what the customer wants. You cannot deliver what the customer wants by controlling the employee.
— Horst Schulze

Well, there you have it.  I don't know about all of you, but I learned a lot!  I am going to add an incredible story he told to explain how he learned some of these lessons.

Horst said he since he was 11 he knew he wanted to work in the Hotel industry.  He formed a dream that he would some day run the Ritz-Carlton it very seriously.  At 14 he started working at a hotel and had been working and living in them ever since.

When he started out managing the Ritz-Carlton, he said he was a pretty harsh boss.  He was always demanding better performance and a faster service.  He wanted to have the best hotel in the world after all!  

Well, they had outstanding customer service and every part of the hotel was A+, except one.  They could not get food to the rooms on time.  They just could not seem to get food from the kitchens to the rooms in a decent amount of time.  The food was pretty much cold by the time it got there every time. 

Customers complained about this all the time.  He said it was like this for years.  About 3 years since the complaints started he decided it needed to stop.  He called the Kitchen and told them "You need to get this food out faster!" 

Over the next year nothing changed.  

Horst threatened jobs over this issue.  After the year he called the kitchen and they said they were making the food faster than before, so the issue must be the room service.  Horst threatened those jobs too.  After another year nothing changed.

Horst gathers the room service staff and asks why they aren't getting the food delivered on time.  They said that they left the kitchen as soon as food is made in the kitchen, but then end up waiting for the elevator for 20 minutes!  Horst looks at the time where the issue was occurring and sure enough the biggest problem was at a certain time.  

The time the problem was happening was while the maids were taking sheets and towels to the laundry in the elevator.  He threatens the maids turning the rooms.  After a year nothing changed and he decided "This is it! Someone is getting fired!".  Horst gathers the maids for a meeting and tells them that whoever is to blame needs to fess up.

The maids tell him, they have to take the laundry at that time because they have to get the laundry done before the next reservation shows up for that room.  They only had a couple hours to do so and the room service happened to also need to use the elevator at the same time.  He yells "Then why don't you put two sets of sheets and pillowcases in each room!?"

One of the maids who had been there six years tells him "Well, in order to cut cost when you first took over the hotel you said we could save $20,000 by buying only one set of sheets and pillowcases for each room and re-order another set if the one in the room was no longer worth keeping."

Horst was in shock, then started laughing.  This whole time he'd been blaming other people when he was the one to blame!  So the lesson goes, always respect and listen to your employees. 

Have you ever stayed at the Ritz-Carlton?  What was your experience?

Martin J Glennon