|
|
|
Shrink Not - Adjust the Sail
and Seek The New Gold
Standard of Leadership
(by
Joseph A. Michelli, author of The New Gold standard) |
Soaring gas
prices and the US credit crunch have many business
owners scurrying to reduce costs and "do more with
less." But this natural and reflexive approach to
economic uncertainty is often the worst path a business
leader can take. In fact, while researching my recently
released book The New Gold Standard: 5 Principles for
Creating a Legendary Customer Experience Courtesy of The
Ritz-Carlton Hotel Company, Ed Staros, a founder of the
modern-day Ritz-Carlton Hotel Company noted that during
difficult economic times in the 1980's many hotel chains
were cutting back on flower arrangements in the lobby
and not placing mouthwash in guest rooms. Ed shared. "We
always believed that economic challenges didn't mean
that people didn't need or want mouthwash. It meant we
had to raise the standard in a quality efficient way."
So, how do business leaders decide when to pull-back
products or service versus expanding them, particularly
when business begins to slow? For example, many
marketers suggest that the best time to advertise is in
a tight market, namely because fewer people are doing so
(allowing you to position your product with less
clutter) and because it is the time when customers need
most to be reminded that you are still there.
While cost cutting may be inevitable in tighter economic
cycles, I gained key insights during my conversations
with the leadership at The Ritz-Carlton Hotel Company
about how to avoid a scarcity mentality in challenging
times:
1) When consumers face economic challenges they often
place a greater emphasis on value. While many customers
will "pinch pennies" and "clip coupons" to address
financial hardships, they will still look for
opportunities to "treat" themselves. When consumers do
spend money freely they will want to experience true
quality and not a watered-down or corporately
scaled-back version of quality.
2) Focused excellence prevails. If cutbacks are
necessary, companies can and should reallocate resources
toward their core areas of excellence. To be "excellent"
means resisting the urge to overreach into areas where
your products or service will be mediocre. Doing a few
things expertly beats doing many things adequately.
3) Inspire staff to focus on purpose and outcomes, not
fulfillment and procedures. I have long believed that
all business is personal. This is particularly clear in
the world of luxury hotels and resorts. While most hotel
companies that compete for this market segment have
exquisitely clean and well-appointed facilities, the
primary driver for guest loyalty emerges from the
personal attention and caring of staff. From the onset
of their employee selection process, leadership at
Ritz-Carlton looks for underlying talent in service
characteristics. They then train and certify the skills
necessary for the new hires to do their jobs while
constantly linking job function to the overarching
purpose of the business - namely to provide for "the
genuine care and comfort" of their guest.
4) Empowering the front-line saves money. While many
business leaders talk about their empowered workforce,
few put money behind the hype. At Ritz-Carlton, staff
members (referred to as the Ladies and Gentlemen of The
Ritz-Carlton) are given the authority to spend up to
$2,000 per day per guest, without seeking the approval
of their supervisors. This authority allows front-line
workers to immediately resolve service breakdowns for
guests or simply engage guests by doing something
unexpected that will make the hotel stay memorable. The
cost-saving nature of this seemingly risky level of
financial empowerment is derived from the morale and
loyalty of employees, the clear cost savings of
resolving problems immediately, and the impact that this
type of empowered workforce has on customers.
Essentially, empowered employees consistently transform
otherwise satisfied customers into fully-engaged brand
loyalists that spend more and refer family and friends
to the business.
In my book The New Gold Standard, I identify 5 key
business principles that have allowed The Ritz-Carlton
to continue to be a recognized leader in product quality
and service excellence (two time winner of the Malcolm
Baldridge award for service excellence). Rather than
contracting or adopting a defensive posture during
economic uncertainty, The Ritz-Carlton leadership stays
the course with these five principles:
Define and Refine
Empower through Trust
It's Not About You
Deliver Wow!
Leave a Lasting Footprint
While concepts like empower through trust have been
alluded to earlier, concepts such as "define and refine"
and "it's not about you" warrant further exploration. By
clearly "defining" the core components of the company's
values, quality standards, and service tradition,
Ritz-Carlton constantly communicates the path by which a
guest's experience can be elevated, how the staff member
can purposefully add value and the means by which the
company will thrive. By having every staff member take
time every day at every hotel worldwide to participate
in a process called line-up, Ritz-Carlton leadership
re-engages staff in a discussion of the overarching
mission they all share. Further, by being attentive to
the need to "refine" the brand so that it remains
relevant in changing economic times, for evolving
customer segments and in diverse international markets,
leadership builds on their well-defined culture.
The "It's not about you" principle reflects the
disciplined practice of listening to staff, customers,
vendors and all stakeholders to constantly assure that
business does not principally serve the needs and
preferences of leadership. By adopting a penchant for
listening to stated and unstated needs while maintaining
a passion for service, great leaders produce businesses
that endure. From the customer's perspective, these
businesses are extensions of themselves and not
commodities.
While none of us can control the winds of economic
change, taking a few lessons from The Ritz-Carlton Hotel
Company can help us adjust our sails to arrive at our
desired destination. I welcome your thoughts about the
journey...
ABOUT THE AUTHOR
Joseph A. Michelli, Ph.D., is an internationally
sought-after speaker and business consultant whose
clients include Bridgestone Firestone, Nokia, The
Hartford Insurance Group, UCLA Health System, and USMC.
Michelli has vast media experience, including television
programs such as "The Glenn Beck Show" and CNBC's "On
the Money," and has conducted hundreds of radio and
print interviews. |
| |
|
|
| |
| |
| |
|
|
Editor's Note |
|
If you are a
career coach or a human resources professional
and would like to contribute an article to
WorkBloom, please
contact us. |
|
| |
|
|
| |
|
|
| |
| |
| |
|
