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 / Spring 2007 / Issue 46(originally published by Booz & Company)


The Luxury Touch

Companies that achieve high levels of customer satisfaction display a zeal for superior service from the very top of the organization chart. This dedication constitutes the foundation of customer-centricity. Without the values and culture that leaders inspire, none of the other principles can be effective for long. Customer-centric values and culture inform the hiring process and animate the systems of training and rewards. Instilling values of this sort may be the ultimate test of leadership. Leaders of customer-centric companies clearly articulate what kind of organizational culture they want and consistently sell employees on its key principles, leaving no doubt about the significance that members of senior management attach to customer-centricity. More important than communications, however, is the leaders’ willingness to take action when the primacy of high-quality service is challenged.

No hotelier takes this principle more seriously than Ritz-Carlton, whose standards were set more than a century ago by founders Caesar Ritz and August Escoffier. Ritz employees are constantly schooled in company lore and company values, spelled out in a credo that the company calls its “Gold Standards,” printed on a card that employees carry at all times. The credo begins with the statement, “We are ladies and gentlemen serving ladies and gentlemen,” and continues with principles such as these:

  • I am always responsive to the expressed and unexpressed wishes and needs of our guests.
  • I continuously seek opportunities to innovate and improve the Ritz-Carlton experience.
  • I immediately resolve guest problems.
  • I have the opportunity to continuously learn and grow.
  • I am involved in the planning of the work that affects me.
  • I am proud of my professional appearance, language, and behavior.

Ritz’s values are not reserved for printed cards. They are the basis for all employee training and rewards programs, and they are discussed in daily “lineups” — 15-minute sessions at the start of each employee shift during which managers reinforce company values and review service techniques.

Nordstrom has been a global pioneer in giving sales staff both the training and the autonomy to deliver high-quality service. Stories of extraordinary Nordstrom service have become a staple of management literature. Here is one of many: In Portland, Ore., a man walked into Nordstrom asking for an Armani tuxedo to wear to his daughter’s wedding. The sales representative took his measurements but said she’d need time to work on his request. She called later to say that the tuxedo would be ready the next day. As it turned out, Nordstrom did not carry Armani tuxedos at the time. The sales representative had found the tux through a distributor in New York, then had it rushed to Portland and altered to fit the customer in time for the wedding.

To achieve that level of service, it is not enough to merely invest sales personnel with an unusual degree of authority. It must be backed up with extraordinary levels of support, recognition, and opportunity. Nordstrom’s hiring materials, given to anyone applying for a position, say, “The opportunities are endless. This is a place to love what you do.” That slogan, in turn, is reinforced by the organization chart, which puts customers on the top and the firm’s sales and support staff directly beneath them. At the very bottom of the company’s inverted organizational pyramid sits the board of directors. Having stated that the most important decisions at Nordstrom are those made by the sales and support staff in serving customers, and that everyone else at the company, including the board of directors, is there to support them, the retail chain must then follow through. It does so through a variety of means, which range from recognition for employee services to a commission system that allows successful Nordstrom sales associates to earn significantly more than their peers at competing stores.

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