WELCOMETO THE
RITZ-CARLTONThe Secret System of Legendary Service
J A M E S S K I N N E RR O I C E K R U E G E R
M A R K V I C T O R H A N S E N
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 1
Ideas That Can Change Your Life™ in Business
Welcome to The Ritz-Carlton The Secret System of Legendary Service
James Skinner, Roice Krueger, and Mark Victor Hansen
“Welcome to The Ritz-Carlton” is an inside look at
some principles and processes that will help you
achieve a legendary level of service in your own
business.
“The Ritz-Carlton®” is a registered trademark of The Ritz-
Carlton Company, L.L.C.
___________________________________________
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 2
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
The Authors
JAMES SKINNER is the founder of two global financial
groups that manage billions of dollars of assets. He is
also recognized as one of the world’s foremost business
thinkers and appears regularly on Japanese television.
ROICE KRUEGER co-founded Franklin Covey, the
world’s largest training company, and has supervised
consulting projects for 80 percent of the Fortune 500.
MARK VICTOR HANSEN is the co-creator of the Chicken
Soup for the Soul empire and is the best-selling nonfiction
author of all time. His goal is to make the planet work
for all humanity!
NOTE: Ideas That Can Change Your Life™ is a
collaboration of three of the world’s most amazing
authors, speakers, and thinkers. The first person “I” may
refer to any of the authors.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 3
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Golden Handcuffs
The Ritz-Carlton is an amazing hotel company founded
by the hotelier Horst Schulze.
Schulze used to work in a different hotel company,
and he ran dozens of properties. He had on his hands
what he called “golden handcuffs”—they were paying
him so much money he couldn’t quit.
One day, he finally said that the hotel was not the
kind of hotel he wanted to be running. He wanted to
run a completely different kind of hotel, a service hotel.
If you want to have legendary service, you have to
break loose the golden handcuffs that tie you to the
past, and have a dream of how things really ought to be.
Chocolate Chip Cookies and Milk
The Ritz-Carlton is legendary throughout the world in
terms of doing things that consistently surprise, inspire,
and, quite frankly, blow their guests away with service.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 4
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You want to blow your customers away with
service!
I have heard a story of a guest staying at The Ritz-
Carlton Hong Kong who lost her contact lenses in the
shower. The guest mentioned to the staff that she was
having trouble because she did not have her contact
lenses with her, so the hotel staff knocked out the wall
and took out the pipe to get the contact lenses back.
The first time I stayed at The Ritz-Carlton,
Buckhead, in Atlanta, Georgia, I checked in late at night,
went into the room, and looked at the menu. On the
room service late-night menu they had chocolate chip
cookies and milk.
What a great idea, even if no one ever orders it! In
the United States, mothers are always handing out
chocolate chip cookies and milk to their kids as a
bedtime snack. Having these cookies on the menu was
like you were at home with mom.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 5
Ideas That Can Change Your Life™ in Business
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I thought it was really terrific that this place was so
warm that they put chocolate chip cookies and milk on
the late-night menu!
After they built The Ritz-Carlton in Osaka, I
mentioned this experience to someone who worked
there because it was such a terrific idea. The next week I
checked in to The Ritz-Carlton Osaka again, and in my
room there were two chocolate chip cookies sitting on
my nightstand for me. I was blown away.
I told the individual who escorted me to my room
how impressed I was and asked them to tell whoever did
this that I said thank you. I came the next week, checked
into my room, and found four chocolate chip cookies!
The cycle just goes on and on and on.
Beyond Expectation
There was an individual who left his glasses at a Ritz-
Carlton in Osaka. He was on his way to give a
presentation at a symposium in Tokyo, and he couldn’t
read his manuscript.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 6
Ideas That Can Change Your Life™ in Business
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The hotel operator who received the phone
immediately ran to the room, found the glasses, left the
hotel, and boarded a bullet train for Tokyo, taking the
glasses to the customer.
I often tell people that service is not doing what the
customer asks; service is doing what the customer didn’t
even have the courage or the imagination to ask.
What guest would tell the hotel, “You need to get
on a bullet train and bring my glasses up here right now
because I forgot them”?
Service is doing the things that the customer
didn’t even have the courage to ask!
I want to share with you what The Ritz-Carlton does
exactly and specifically so you can apply the same
principles and processes in your own organization to
achieve a legendary level of service.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 7
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
The world needs more legendary service, we need
service heroes, we need service cultures, we to get the
job done for our customers, we need a philosophy and
system of service.
It Starts with Philosophy
The number-one thing The Ritz-Carlton has that is
absolutely essential to running a legendary business is a
philosophy.
The philosophy of all the most successful companies
that I have studied, whether it is The Ritz-Carlton or
Disney, or any other successful service enterprise
answers three questions.
When you are framing your philosophy for your
company, you need it to answer these questions too:
Who are we? How do we see ourselves? How do
you see yourself? What is your role? What is your
persona? What is your character? What is your identity
when you show up to work in the morning?
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 8
Ideas That Can Change Your Life™ in Business
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Who are they? How do you see the customer? How
do you define your customer? What is the identity you
hold for your customer?
Why do we have a relationship? What is the one
thing that we must get right for the relationship to
succeed? In the absence of this one thing, we could get
everything right, and the relationship would be
meaningless.
The Credo
In any Ritz-Carlton Hotel property located any where in
the world, you can approach any employee—door man,
housekeeper, waiter, waitress, front-desk person,
maintenance man, anyone—and ask them for a copy of
their Credo.
I have done this all over the world with all types of
employees, and I have never had a Ritz-Carlton
employee fail to reach into their pocket and pull out a
copy of the Credo.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 9
Ideas That Can Change Your Life™ in Business
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This is the level at which the philosophy needs to be
installed, owned, and used.
Every employee has a copy of the Credo with them
at all times, which says, “We are ladies and gentlemen
serving ladies and gentlemen.”
“We are ladies and gentlemen serving ladies
and gentlemen.”
Does it answer the three questions?
Who are we? We are ladies and gentlemen.
Who are they? They are ladies and gentlemen.
Why do we have a relationship? Service—it’s as plain, as
clear, and as simple as that.
If we get everything else right and we do not
embody and deliver service, has the relationship
succeeded? No.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 10
Ideas That Can Change Your Life™ in Business
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Every employee, in making every decision, only
needs to answer one question: If I were serving ladies
and gentlemen, what would I do in this situation?
In making every decision, every employee needs
to answer only one question: “What does our
philosophy dictate that I should do?”
Say you are the hotel waiter or waitress and
somebody has just ordered something that is not on the
menu.
What do you say?
“Certainly, Sir, my pleasure”—it’s as plain, as clear,
and as simple as that.
That is service.
You go back and get the chef to make it, invent a
price for it, put it on the bill, and deliver it. It’s as plain,
as clear, and as simple as that.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 11
Ideas That Can Change Your Life™ in Business
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You are attempting to provide service, which is the
only reason we have a relationship in the first place.
Can you see how important and empowering the
philosophy can be? It answers all the questions, every
day.
Disneyland is not in the service business. This is
surprising to some people. Each company has one word
why it exists, not two words, not three words—one
word.
At Disneyland they say, “We are actors and actresses
on a stage entertaining guests in an audience.”
What is the reason for the relationship?
Entertainment.
They could have all the service in the world; but if it
weren’t entertaining service, it would be meaningless.
I have a company in Japan that does seminars. We
are not in the service business, we are not in the
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 12
Ideas That Can Change Your Life™ in Business
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entertainment business—we are in the edutainment
business.
If it is not entertainingly educational, it is
meaningless; and this philosophy guides all our
decisions.
That is the first thing that you must have: a
philosophy that answers three questions—Who are we?
Who are they? and Why do we have a relationship?
The simple answers to the three questions will guide
all your decisions and the decisions of all the employees
every day.
Does this simplify your life?
The philosophy is vital. It simplifies everything. But
philosophy alone is not enough.
You have to have systems and processes that will
actually make it happen.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 13
Ideas That Can Change Your Life™ in Business
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In addition to having a well-defined philosophy,
you have to have systems and processes that make
it happen every day!
The System of Legendary Service
I want to share with you five systems and processes that
The Ritz-Carlton Company uses to generate and make
these miracles happen every day.
The Ritz-Carlton has many systems and processes,
but after many years of studying the company and their
various properties, I am convinced that these five are
what set them apart.
Modeling these five systems with consistency will
allow you to achieve a level of service in your business
that can only be described as legendary.
System 1: The Morning Line-Up
The first process that is essential to The Ritz-Carlton is
called the “Morning Line-Up.”
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 14
Ideas That Can Change Your Life™ in Business
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The Morning Line-Up happens at the beginning of
every shift: every morning, every afternoon, and every
night.
It is basically a meeting held by all of the employees
of very department at which they discuss the philosophy
and the Gold Standard behaviors that all Ritz-Carlton
employees must exhibit at all times towards their guests.
For example on of the Company basics for many
years has been, “Instant guest pacification will be
ensured by all.”
Employees are to instantly make sure that the guest
is satisfied.
Every day they take one element of the Credo, the
Basics, or some other element of what they call their
Gold Standard and they discuss it.
It’s as simple as that.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 15
Ideas That Can Change Your Life™ in Business
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They say, “In housekeeping, to ensure instant guest
pacification today what can we focus on and do?”
There has never been a single shift on any day in any
Ritz-Carlton Hotel property that did not begin with a
Morning Line-Up.
Religious Consistency
A system is one of two things: either a meeting or a
report. Think about it. A system is a meeting, a report,
or a process that you carry out religiously, meaning that
there can be no variation—they hold the Morning Line-
Up every single day.
A system is a meeting, a report, or a process that
is carried out with absolute consistency.
They review the repeater VIP guests who are going
to be coming in, and what their preferences and desires
are, so that everyone in the hotel knows that Mr. Mark
Victor Hansen will be arriving and like’s strawberries
dipped in chocolate, or Mr. James Skinner is arriving
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 16
Ideas That Can Change Your Life™ in Business
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and he likes the clock on the night stand to be pointing
in a certain direction.
It really is to that level of detail.
They also share a story from someone within the
company who embodied the Gold Standards at the
highest level for that day, so they have a story about
instant guest pacification.
Then they deal with any other issues that need to be
dealt with that day, and off they go.
It is pretty simple.
They do this every single day.
I have actually attended the Morning Line-Up of
different departments on several occasions; it’s a
wonderful process.
It usually takes five to 10 minutes.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 17
Ideas That Can Change Your Life™ in Business
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You need to have a process that consistently reviews
your philosophy and the standards that your
organization aspires to, because people need to have
repetition.
We need to hear the same message over and over
again before we begin to believe that management
believes it.
That is the first system.
You must have a system for reviewing,
repeating, and instilling the philosophy everyday.
System 2: The Guest Incident Action Report
The second system is profound in its simplicity, but
there are very few organizations that do it with any
consistency.
This idea will change your life.
It is called the “Guest Incident Action Report,” or
GIA.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 18
Ideas That Can Change Your Life™ in Business
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The GIA is very simple: If any employee notices
that a guest has not been completely satisfied, then that
employee must fill out a Guest Incident Action Report.
Notice that the guest isn’t filling it out.
Most companies want their guests to fill out their
complaints.
But by the time the guest is writing it down, it is way
too late.
Will most customers write it down?
No, only one in 100 will write it down, so you only
know one percent of the problems with your company,
and you know them too late.
At The Ritz-Carlton, using the GIA system, the
guest doesn’t even have to complain.
If the customer has to complain, it’s too late!
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 19
Ideas That Can Change Your Life™ in Business
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I still write a GIA if I notice a guest is not satisfied.
The GIA says who the guest is, what the problem
was, what the current status or satisfaction of the guest
is, whether or not they ran out of the restaurant
screaming… Did we leave them in a state where they are
now calmed down but maybe not feeling terrific about
the hotel? We need to know that.
Is that useful information?
Yes, especially if you want them to become a
repeater and a fan of your hotel.
What Stephen Covey and many other people have
taught me is that the guest does not remember the
problem; they only remembers how you dealt with the
problem.
The customer does not remember the problem,
they remember how you dealt with the problem.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 20
Ideas That Can Change Your Life™ in Business
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If your guest has a problem and you attend to it
superbly, you turn your customer into a raving fan.
The GIA Report is immediately sent to the Quality
Leader of the hotel, who is responsible for making sure
that your customers systemically become your raving
fans.
The Quality Leader looks at this report and checks
to see if the guest is still in the hotel.
If they haven’t checked out yet, the Quality Leader
immediately sends a copy of the GIA Report to every
department of the hotel, where it is disseminated to
every hotel employee.
Every employee knows every current problem of
every guest in the hotel—every single one!
Every employee is familiar with every problem!
Most organizations try to hide this information.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 21
Ideas That Can Change Your Life™ in Business
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The Ritz-Carlton wants everyone to know.
The guest had a problem in the restaurant in the
morning; the hash brown potatoes were not quite the
color that the guest liked them to be.
We are getting down to a level of detail, because
guests and customers today are getting pickier than they
were 10 or 20 years ago because the competition is
evolving.
Customers are more demanding than ever
before!
The GIA has been sent to every department in the
hotel.
Now the customer goes to the fitness center to work
out, and the attendant in the fitness center says, “Mr.
Skinner, I’m so sorry about the hash brown potatoes
this morning. We’ll make sure that it doesn’t happen
again. Is there anything I can do to make your stay at the
fitness center more enjoyable for you?”
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 22
Ideas That Can Change Your Life™ in Business
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And the guest is thinking, “I like this hotel, even
though the hash brown potatoes were disappointing.”
But it doesn’t end there. The attendant’s comment
was just a follow-up, making sure that the guest knows
he has been heard, that he has been noticed, and that
the hotel staff cares.
Most companies never become aware of the
problems in the first place and therefore cannot fix
them.
You cannot fix a problem that you are not aware
of!
Most companies that become aware of the problems
only try to process the claim so they can get the
customer to quiet down and go away.
No wonder they experience the same problems and
the same complaints over and over again, and have to
develop claims processing departments.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 23
Ideas That Can Change Your Life™ in Business
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The Ritz-Carlton does not have a claims processing
department. Why? Because every department is a “claims
processing/follow-up/delight the customer”
department.
Stop processing claims, and start fixing the
problem so you don’t have the complaint in the first
place!
Systemic Improvement
The quality leader must now ask a question, and it is a
very specific question—because if you ask the wrong
question, you can kill your company.
The question that you need to ask is “Why?” Yet,
the question that most organizations ask is “Who?” Do
you see the difference between them? Who did those
hash brown potatoes this morning? Who is it that made
Mr. Skinner angry?
It is not useful to know. We can fire the person and
hire somebody else, but we will still get the potatoes
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 24
Ideas That Can Change Your Life™ in Business
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wrong, because our system has made it possible to get
the potatoes wrong.
We need to know exactly why it was possible in our
system and in our process to get them wrong in the first
place.
Stop asking “Who?” and start asking “Why?”
and “How?”
Right Inputs
We need to ask whether we purchased the right
potatoes. If we are purchasing the wrong potatoes, we
can cook them all day long and it is not going to help.
We want to look at our inputs.
Right Equipment
Are we using the right equipment for our potatoes? Do
we have the best equipment for cooking these potatoes?
Do you see how you have to make this systemic?
Right Process
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 25
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Are we cooking them with the right process? Do we
even have a process? Do we have the right recipe? If we
give the cook the wrong recipe, the guest is going to get
the wrong potatoes. We can yell at the cook all day, but
it is not going to help. Are we using the right process?
Are we using the right recipe?
Right Environment
What about the environment? Have we given them the
right environment to cook the potatoes in? Was the
kitchen dirty? and if so, was it because the wrong
cleaning products were used? Can we still get the
potatoes wrong? Yes, we can still get it wrong. Can you
see where systemic improvement comes from?
Right People
We also have to ask “Do we have the right people?” We
need to know if we have the right hiring process to
attract great chefs.
Is getting the right chef more important than
instituting the right hiring process to get the right chef?
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 26
Ideas That Can Change Your Life™ in Business
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Which would you rather have? The right hiring process!
Then you would get the right chef every time.
Then, look at the training process. Did we train our
chef properly in the cooking of hash brown potatoes?
Improved Forever
We look at all these things, because if we get the right
inputs, the right equipment, the right process, the right
environment, and the right recruitment and training
process, we will consistently make the world’s best hash
brown potatoes, forever.
Systemic improvements last forever!
The quality leader’s job is to find out why this
morning’s deficient hash brown potatoes happened in
the first place.
I am going to give you an example that really
happened that will blow you away.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 27
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
I went into The Ritz-Carlton Osaka three days after
it opened. Now I want you to imagine a newly opened
hotel.
Is everything going to work smoothly?
No.
Running a hotel is one of the most complicated
endeavors on earth, because everything that happens in
human life happens inside a hotel.
Do people get sick inside hotels? Yes.
Do people die in hotels? Yes. An old person can
come in, have a heart attack, and die. It happens.
Meals happen in hotels, weddings happen in hotels,
parties happen in hotels.
You have to be able to run a dry cleaning business, a
laundry business, a restaurant business, a room-
supplying business, an event planning business—you -
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 28
Ideas That Can Change Your Life™ in Business
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have to be able to run about ten businesses to be able to
run a hotel.
If you are trying to open all of these on the same
day, it simply doesn’t work smoothly the first time out.
I checked in, and the first night the hotel generated
28 GIA Reports just on me!
The Quality Leader goes through each GIA one at a
time.
One of the GIA Reports that was written on me
that I had commented to an employee that the check-in
took too long; it took five minutes, which is a very long
time after a long air flight.
The Quality Leader got together with the people
from the Front Desk and they had a meeting to review
the GIA and systemically solve the problem.
They asked themselves “Why?” questions:
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Why did the check-in take too long?
Why is it possible for our check-in to take five
minutes?
The answer they came up with is very interesting: It
takes five minutes because they have a check-in.
The simplest answers are the most powerful!
The quality methodology that W. Edwards Deming
taught is that you ask “Why?” at least five times, so that
you can drill down.
Ask why five times!
Why do we have a check-in? We need to collect
credit card and guest information.
Why do we need the credit card and guest
information? To ensure we will get paid.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 30
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Why do we need this information to ensure that we
will get paid? We don’t trust our guests!
That was a shocking moment for them. What is
their philosophy? “We are ladies and gentlemen serving
ladies and gentlemen.”
Well, why don’t we trust our guests? Well, it is after
all the first time we are seeing them…
Well why are we doing it for repeat guests as well?
By the time you ask why four or five times you are
getting down to some deep root causes of the problem.
Maybe we can understand it for our first-time
guests, but what about our guests who come repeatedly
and whom we know? What would happen if we just
trusted them? We wouldn’t need their credit card.
Would that shorten the check-in time? Yes, big time.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 31
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I came back one week later. I got out of the taxi.
The doorman said, “Mr. Skinner, welcome back to The
Ritz-Carlton.”
We walked in through the door. What I didn’t know
was that the doorman had a little microphone on his
lapel that the staff at the front desk were able to hear.
The man came out from the front desk with my
room key. As I came through the door, he said,
“Welcome back, Mr. Skinner. Here is your room key.
Let me escort you to your room.”
No check-in! Five minutes became zero.
The GIA is the basis of that improvement.
The employee fills out the GIA Report, not the
guest or customer. Isn’t that profound?
If you and your employees knew about every
dissatisfaction of every one of your customers, your
business would be transformed.
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Ideas That Can Change Your Life™ in Business
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It would be transformed even more if you had a
Quality Leader whose job was to ask “Why?” in
response to every case of dissatisfaction that ever
happened.
The system is absolutely earthshakingly simple and
profound. Even so, most organizations don’t have it.
I remember I was starting a training company in
Tokyo, and I wanted to list our company in the
telephone directory, but there was no category in the
business section for training companies.
I went to the telephone company, and I asked why
there wasn’t a category for training companies, a billion-
dollar industry.
They told me that nobody had ever asked for it
before, and my response was “How do you know?”
Think about that for a moment. How would you
know?
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 33
Ideas That Can Change Your Life™ in Business
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Without a system to tell you, you do not know
what your customers want or what they are
dissatisfied with!
How do you know what your customers want or are
asking for if you don’t have a system that consistently,
every single time, captures that information?
You have no idea what they want or what they are
dissatisfied with or what they ask unless you have a
system that tells you.
You need to develop a culture that rejoices in the
guest incidents, because today’s GIA Report is
tomorrow’s miracle.
Today’s GIA is tomorrow’s miracle!
System 3: The Guest Preference Pad
The third system that The Ritz-Carlton uses to achieve
legendary service is a report called “The Guest
Preference Pad.”
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 34
Ideas That Can Change Your Life™ in Business
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Remember, systems are all meetings, reports, or
processes that are executed with consistency.
The Morning Line-Up is a meeting. The GIA is a
report. The Guest Preference Pad is also a report.
Whenever an employee notices an individual
preference of a guest, that employee fills out a Guest
Preference Pad: Lincoln Taft likes pencils more than pens. It
could be as simple as that.
It is then logged into the computer, so that the next
time Mr. Taft checks into the hotel, the housekeeping
staff is alerted that he prefers pencils to pens.
He checks into his room, goes to his writing desk,
and sits down. Pencils.
It happens every time he comes to the hotel from
now on, because we have the data. We know.
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I feel sorry sometimes now for The Ritz-Carlton
when I check in, because I have stayed there so many
times that they have noticed so many things that I like.
They know that I like my alarm clock not to face out
towards the room, but to face in towards the bed. They
know that I like to do yoga in the morning, so they put a
yoga mat at the foot of my bed with a towel and a bottle
of water. They know that I like to have a fresh fruit plate
in my room, and they also know that I like sun-dried
tomatoes, so there is always a little glass filled with sun-
dried tomatoes sitting on my desk. They know, because
I’ve stayed there so many times, that I don’t like the
room-service menus or hotel papers sitting on my desk,
so those all have to be put away. They know what room
number I like. If for some reason they have a long-term
guest staying and the room number that I prefer is not
available, they know and will apologize about it.
Do you see how after several interactions with your
guest or customer, it could rapidly become impossible
for your customer to shop anywhere else?
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 36
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
After several interactions with your customer, it
should become impossible for them to shop
anywhere else!
It is as simple as noticing that there is something
they like, then writing it down to capture the
information.
This is something that goes into the Morning Line-
Up. The Ritz-Carlton people know the names of the
guests who are going to be arriving, and they go over
their preferences.
Simple?
Is this applicable to your organization?
Could you do this if you are selling to corporate
organizations?
Certainly.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 37
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Could you do this with the individuals in the
corporate organizations that you are selling to?
You could know their individual and company
preferences. Those could be data-based, available online
so that all your employees could immediately find out
how to best serve this person in the way that they want
to be served.
The Ritz-Carlton, in several countries, keeps a
record of the type of salad I like to order.
You can go to The Ritz-Carlton in Singapore and
ask for the salad that James Skinner always eats, and
they will serve it to you.
In Osaka they had a salad that they used to serve,
but they took it off the menu; however, they know that I
like it, so it is available to me. I just call up room service
and say, “I would like my usual salad,” and they will
know that they have to pull out the old recipe and make
the salad, because that is my preference.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 38
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Would you like to be able to surprise your customers
and clients with that level of service?
If so, you need a system that is either a meeting or a
report that is going to give you the information you
need so you are able to do it.
Do you think that employees love to make the
customers happy?
When you go to work in the morning, would you
rather have your customers be ecstatically happy or
angry with you?
If you give this information to your employees, do
you think they will use it to help make your guests and
your customers happy?
Yes, because it makes their life easier.
Employees know that making the customer
happy makes their life easier. You just have to help
them do it!
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 39
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
System 4: The Hiring System
The fourth system used by The Ritz-Carlton to
consistently achieve extraordinary service is their hiring
system.
The type of employee that you need in any
organization changes, depending on the type of work
that needs to be done.
For example, there are some organizations that need
people with extremely high spatial skills, the ability to
see in three dimensions, to look at a two-dimensional
map and convert it into a three-dimensional space in
their mind.
There are some jobs that require that.
There are some jobs that require physical prowess.
For example, if you are going to be on a sports
team, you have to have very specific skills and very
specific physical abilities.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 40
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
There are some jobs that require very specific
training.
The hiring process is going to have to be highly
customized to an organization, so I am not going to give
you as much detail on it as the others.
The one thing that you should know is, The Ritz-
Carlton hires for the personality more than for skills.
Job fit is more important than job skill!
They want to know that the person is predisposed to
do the job they are being given.
If a person doesn’t enjoy serving and helping other
people, you can train them all you want. Could they do
the job? Yes. Will they do the job satisfactorily? No,
because the job is repeatedly serving other people and
having a consistently great attitude about it.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 41
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
They could do the job, because most human beings
are capable of doing most jobs, even if they don’t
choose to do them.
Can do is not the same as will do!
For example, I am a big-picture person. I like doing
strategy and vision. I could do the detail if I had to, but
would I do it well and consistently over time? No.
I know the principles of accounting. I can do it, but
you wouldn’t want me in your accounting department
because I’ll get bored, and I’ll complain, and I’ll whine,
and I won’t be happy for one single day.
I would be a cancer in your accounting department.
You don’t want me there, and you want to identify that
in advance.
The best way to hire the person best suited for the
job is by asking questions that identify traits in the
person without the person knowing the traits that are
being identified.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 42
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Test for pre-disposition using indirect
questioning.
For example, there is an airline that does something
very interesting in their recruiting process.
They bring all the people who want to be flight
attendants into a room, and they have them give a short
speech about why they want to become a flight
attendant. This is part of the evaluation criteria, and you
believe you are being evaluated on your smile, your
motivation, and your confidence.
However, the recruiters aren’t even listening to your
speech and they are not even watching you at all.
They are watching all of the people who are
watching you!
It is absolutely brilliant.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 43
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Some of the applicants will be nodding up and
down, on the edge of their seat, sort of rooting for the
other person and encouraging them; and some of the
people will be thinking what they are going to do to get
this job.
You have one set of people who are others-
centered, and you have another set of people who are
self-centered.
They tell all the self-centered ones to go home,
because they could serve other people on the airplane,
but it is not likely that they will.
The airline wants people who naturally pay attention
to others, who naturally notice what others are doing,
and who are naturally encouraging of others.
The fourth system that you must establish in your
organization is a system that captures people who are
naturally disposed to the jobs they are being given, so
that they not only can do the jobs but will do them
consistently, cheerfully, and joyously over time.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 44
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
You want your employees to be cheerful and happy
about what they are doing. You want them to feel
fulfilled. It is just that simple.
System 5: The Empowerment System
The fifth system that allows The Ritz-Carlton to
consistently produce extraordinary results and miracles
is what I call “The Empowerment System.”
It is also quite simple.
Every employee in The Ritz-Carlton knows that they
are allowed to, at any time, without consulting a
manager or anybody superior to them in the
organization, if necessary, spend an amount of money
up to $2,000 to keep a guest happy.
Your employees need to be able to take instant
action in response to changing conditions on the
ground!
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 45
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
The reason the employee was able to get on the
bullet train and take the glasses to Tokyo is that he knew
that he didn’t have to go through a budget approval
process to make it happen.
The guest was in trouble; he was an important guest,
and the hotel was going to make a lifelong fan who
would tell the whole world that a Ritz-Carlton employee
got on the bullet train to give him his glasses.
Employees are empowered to make these decisions,
and it is very simple.
Empowerment is the process of training,
developing, encouraging, and building systems around
employees that enable them to be able to take any action
or make any decision that you could and would make if
you were there.
This “Let me talk to my manager” stuff is a
complete waste of time and resources.
It is a very simple process, but it is very powerful.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 46
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
If the hotel has damaged someone’s shirt in the
laundry, the employee who hears from the guest can
immediately say, “Let me replace that for you. What can
I do to make this right?” and can immediately take
action.
They don’t have to go through some long, drawn-
out process.
You need guidelines, of course, because you don’t
want the employees to do things that you are not
anticipating. You want to have some anticipation, some
framework, and some rules that say that within these
parameters employees can make decisions.
At Nordstrom’s, it is called “The Rule,” and it is
“Do what’s right; serve the customer.”
You need to have a framework. Yes, you need to
have some rules, but within the rules the employees
need to have the power.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 47
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Success in today’s world is all about speed, and
speed is all about empowerment!
Empowerment=Speed
One Philosophy, Five Systems
It is really one philosophy and five systems—that is all
you need.
The Ritz-Carlton developed this methodology
through and as a result of the quality movement, and
then proved the power of their methodology winning
the Malcolm Baldridge Award in the United States.
Then they decided to prove it again by winning it
twice!
You need to have processes and systems that make
sure that you will provide quality service consistently
over time.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 48
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
Deming taught that it is all about having a system
that brings you to within statistically measurable
variances.
With any one system you are always going to be
within this zone; you have to change the system to go
up to another zone.
You need to practice this methodology.
You need to build these systems that are very
simple.
You need to have a philosophy that answers Who are
we? Who are they? and Why do we have a relationship?
You need a meeting that is held on a regular basis
that instills the values and basic behaviors in the
employees.
You need a system for catching all of the
dissatisfactions of your customers and a system for
capturing what wows them on an individual basis.
© 2007, James Skinner, Roice Krueger, and Mark Victor Hansen. All rights reserved. 49
Ideas That Can Change Your Life™ in Business
Welcome to the Ritz Carlton
You need a system for hiring people who not only
can do the job but also will do the job and be happy
doing it.
And finally, you need an empowerment system that
tells employees when and how it is okay to make
decisions to serve the customers.
These five simple systems will change your
company.
With best wishes and gratitude to The Ritz-Carlton for
all the years of outstanding service,
James Skinner, Roice Krueger, Mark Victor Hansen
___________________________________________
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