Show Notes

• What is “excellence”?
• Horst’s background in hospitality
• “We are Ladies and Gentlemen Serving Ladies and Gentlemen”
• How to create and sustain a culture of excellence
• Attention to detail
• How most people react to complaints, and what we should do instead
• Why performance measurements are essential to success
• Creating a culture where everyone is connected to a shared vision
• The role faith plays in Horst’s life

Connect With Horst Schulze

✩ Website: http://www.horstschulze.com
✩ Instagram: https://www.instagram.com/thehorstschulze

Additional Resources

Book: Excellence Wins

Summary

As a founding member of both the Ritz Carlton Hotel Company and The Capella Hotel Group, Horst Schulze’s teachings and vision have reshaped the concepts of service throughout the hospitality industry and beyond. Horst discusses why excellence matters, and how you can become the leader in your field and create a culture of excellence in any organization.

Full Transcript

Brian  

Welcome to another episode of LifeExcellence with Brian Bartes. Join me as I talk with amazing athletes, entrepreneurs, authors, entertainers, and others who have achieved excellence in their chosen field so you can learn their tools, techniques and strategies for improving performance and achieving greater success. 

A legend and leader in the hotel world, Horst Schulze, his teachings and vision have reshaped the concepts of service and hospitality across industries. After an apprenticeship which began when he was a 14 year old in a German resort town, Horst would go on to work for Hilton Hotels and Hyatt Hotels Corporations before becoming one of the founding members of the Ritz Carlton Hotel Company in 1983. As president and chief operating officer of the Ritz Carlton, Horst created operating and service standards that have become world famous throughout the hospitality industry and beyond. It was also under his leadership that the Ritz Carlton became the first service based company to be awarded the prestigious Malcolm Baldrige National Quality Award, and it won the award twice. Horst has also received numerous personal accolades, honorary degrees and awards, including being recognized as Corporate Hotel Leader of the world in 1991 by Hotels Magazine. After leaving the Ritz Carlton, Horst went on to found The Capella Hotel Group. Today he serves as expert in residence at Archon Tower, a boutique organizational strategy consulting firm. He also added author to his list of impressive accomplishments with his book “Excellence Wins:  A No Nonsense Guide to Becoming the Best in a World of Compromise.” In 2022, Auburn University named its School of Hospitality the Horst Schulze School of Hospitality Management. It’s truly an honor to have such an esteemed guest on the show today. Welcome, Horst, and thanks for joining us on LifeExcellence.

Horst  

Well, thank you, Brian, you should come with me and introduce me all the time, even I’m impressed.

Brian  

Well, you are impressive. I appreciate having you on the show today. Let’s dive right in. Let’s talk about the concept of excellence. Your book is titled “Excellence Wins,” of course, and it’s a fantastic book. It’s available on Amazon and wherever books are sold. You’ve made excellence the standard not only in every business that you’ve been involved with, but also in your life. And by the way, you and I share that, which is one of the reasons I’m honored and delighted to have you on our show. How do you define excellence?

Horst  

Well, interesting enough, I’m – by the way, I want to make clear here because I’m always known as the hotel guy – I haven’t worked with hotels for quite a few years, but I’ve worked with all kinds of other companies. The meaning is the same in any business or in your personal life. Excellence very simply…most of all, we must understand it’s not an accident. It’s always the result of high intent and hard work. So what’s your high intent in your life? What’s your high intent in what you’re doing today? Or are you just doing? And that’s the problem. We just fulfill functions and go on without a high intent where that function should lead us. I’ve worked with a number of companies, many, and my consulting and on my boards and so on and there is hardly anybody who will actually have a vision, a high intent for the company. They have missions, which are quite well and quite good, but vision, a high intent, even…I worked with, in fact, a Christian university – very fine institution, very fine campus, absolutely exceptional, beautiful – and I worked with the leadership to establish a vision. After hours we could not come up with something. Finally I said, how about being known as the finest Christian university in America? And the result was, that would be too arrogant. In other words, they want to keep on working with the intent of mediocrity. What is this? This cannot produce excellence. I absolutely and fully believe that any company – I mean fully, I mean people think I’m crazy when I say that – any company, I don’t care who it is and what it is, you can become the leader in your field if that’s what you set your sight on, if that is your high intent, and you don’t give it up, you keep on going toward it. You will fall down. You don’t know what to do but you will see it every step forward, you will see what to do next, and you will be. But now you can translate that into your personal life, your family life, to your church, your institution, it doesn’t matter – high intent. But it’s not only the overall high intent, it’s the high intent consequence of every thing that you do. Excellence is not an accident. And let’s face it, it takes the decision of excellence as your destiny; consequently, it’s not accident, it’s the decisions that you make in life.

Brian  

I love that idea of intent, and I call it intentionality, and you’re right, you do have to be intentional first about making the decision that that’s going to be the standard and then second, taking all the action needed to achieve that desired result. Horst, you’ve devoted most of your life to unlocking the power of excellence, not only in yourself but in countless others, individuals as well as organizations that you’ve worked with throughout your career. Why do you believe it’s so important for us to orient our businesses and our lives around such a lofty standard?

Horst  

Most of all, in life, particularly when you become a manager and so on, what is the greatest honor of being a manager, or a leader; leader more important than manager, but both are important. The greatest honor is that you have the opportunity to positively impact the life of others. Again, if you’re conscious of that and you do it with a high intent, you actually will accomplish that and you help people to be successful, and consequently, personally be fulfilled. I talk to my managers that I used to work with, it’s not being a nice guy. Because the nice guy only is nice to the people around them in order so that they think highly of them. No, the intent is to make people around you successful and consequently, your organization successful. If you’re driven by those things and you remind yourself; you have to remind yourself – I’m not doing that naturally, every day – I’m doing it by reminding myself of those things every day. You have to remind yourself, and remind yourself, like the high intent, you’re doing what in the next five minutes? You’re going into a meeting. What’s your high intent of that meeting? You’re meeting somebody, what’s your high intent? Is that high intent of value to everybody or only to you? That’s not to you, high intent means high. Look around, that’s a breakdown of companies. The only intent is to make a profit, which is driven by our society, by Wall Street, and so on, so on, and by the evaluation – how is a manager evaluated? By the profit they make. I mean, come on, there is no high intent, high thinking. So without [that] you have to manage yourself to step into a higher human frame and think what’s my highest thinking here? Am I really doing things for all concerned or am I doing things for myself only.

Brian  

I love that and I definitely want to unpack this concept of excellence more, especially as it relates to organizations, but also, personally. But let’s back up a little. I know that you’re no longer the hotel guy, that you’re consulting and vocationally, you’ve expanded into lots of other organizations and you’ve actually done that for years. Whether you’ve been intentional about that or people have just looked at organizations that you’ve led and learned and applied those things to other industries, you’ve had a tremendous impact on on the world with your leadership and some of the concepts that you’ve been teaching. But I know your desire to work in the hotel industry originated at a very early age and I find that story fascinating. Where did that desire come from? Especially at the age of 14 and maybe even a little before then. Tell us about the start of your career in the hospitality industry.

Horst  

Oh, you know, Brian, I actually wish I knew, but for some reason, I was 11 years old, I went to my parents and said, I would like to work in a hotel business, which was unthinkable at the time. There was no hotel, never been a hotel, never been a restaurant. Mind you, this was after the war years. Haven’t been in hotel before, I must have read something my parents [had], my mother thinks that I read something [that] came to them. Of course at that time, they said, yeah, yeah, but I was possessed, I kept on talking about it. Maybe because of that negative response to it, maybe that’s why I kept on insisting. My grandfather said, don’t tell anybody, it’s embarrassing. That’s not what you did in a small town in Germany at the time. But my parents inquired and found, if I wanted a career, I must start in a very fine, the finest, hotel possible. Sure enough, they found that shop 100 kilometers away. At the time that was far as a busboy. I actually left home at 14, my mother took me to this new job. I lived in a dorm room in the hotel. I met a general manager who told us you’re learning to serve and be a servant to fine ladies and gentlemen who are our guests. Literally said, you have to remember that you are nothing, don’t become envious, and learn how to take good care of fine ladies and gentlemen. Which was quite an experience. In fact, my parents told me, now behave yourself, because its guests, they are very fine ladies and gentlemen, behave yourself accordingly. We could never go to a hotel like that, this is only for fine people, and blah, blah, blah. Next I meet the maître d’ of the hotel who changed my life from the first second that I met him. He is the man that I reported to in the restaurant. He looked at me and said, now tomorrow, I want you to show up to work – no, I want you to show up at seven am. If I meant one minute after seven, I would tell you so. He established in one sentence, we have rules, we have discipline, we have understanding, we are not floundering around. When we say something, we mean it. And the next sentence he said and don’t come to work, come here to be excellent in what you’re doing. Now, mind you, this all went over my head at the time, I was 14 years old. I didn’t know what he was saying. But over the next three years working with this incredible human being I learned what excellence is and his standard of excellence. He didn’t do anything without a higher intent. He didn’t. He didn’t serve food. He was there to make people feel well, he did everything with just the highest you can be in thinking in what in his profession – which he loved – that profession of caring for people. So you learn and you start to understand it. And by the way, in the typical German [way] once a week you go to hotel school or school of your business. After about two years, the teacher asked us to write an essay what we now think about our business. Going to work that evening, I saw that maître d’ approach a table – now mind you, the message [that] they are important ladies and gentlemen and we are servants was constantly hanging over us by the management of the hotel – but I saw the maître d’, approach a table and a guest being actually proud that he came to him. I could clearly identify that; I had before but it never hit me as clear. And I said, wow. When I went to my room that evening, after dinner service, to start working on my essay – three pages the teacher said [about] what we now think about the business – I thought about the maitre’d and I wrote my essay around him. I named the essay “Be Ladies and Gentlemen;” I learned that we are ladies and gentlemen serving ladies and gentlemen. Because why was he respected? I realized for the first time he was respected because he had defined himself as somebody very special. Everybody in the room respected him because he had defined himself as respectable. For the first time I realized, I define myself. It’s not my neighbors. It’s not society; which everybody seems to think now defines you, that’s why we copy everything. It’s you who defines [yourself] and he taught that very clearly. So it was an incredible impact on my life. If you don’t mind, I’ll hook something onto it; I left and after three years he asked me to look him in the eye and promise that I would never go to work, always go only for excellence. I promised him. I took off as an 18,19, 20, 21 [year old] and came to United States. I have worked in the finest hotels in Europe, in Paris and London, and so on, worked in San Francisco as a room service waiter in the Hilton with the intent of getting a promotion because I was there only a month when one of the supervisors got promoted. Then, one of the waiters was promoted. A supervisor said, this is for me [Horst]. I’m the best waiter here by far, I know, I’ve worked in the finest hotels in the world. I know everything around food and beverage, and the manager was German too. So I knew that next promotion would be mine. In my mind, I built my whole life around that next promotion; get promoted, stay eight, nine months or so, go back to Europe, follow career. Sure enough, a few months later, a supervisor got promoted again. The manager said tomorrow morning, we have a meeting we’re talking about Bill’s promotion. Everybody came early. I was early for once because I knew that would be the announcement of my promotion to supervisor. I knew that, it was very clear. There was no question about it, my life was connected to it. The manager said, alright, as you all know, Bill got promoted, and he deserves it, let’s applaud him and blah, blah, blah, and by the way, the next supervisor is Fred. And I knew I wasn’t Fred. I knew it and it was a major disastrous breakdown. What did I think? It shows how stupid management is, et cetera, et cetera, the typical thoughts of a young guy. It took me a few months to admit the other guy deserved it more. I came to work five minutes late in the morning, tired from being out in the night before, saying not even good morning. The other guy came in five minutes earlier and said a friendly good morning. When the manager asked, come on, let’s do some side work here, like folding napkins or whatever, I [had] said, why me? The other guy [had] said, I’m happy to, et cetera, et cetera. I mean, I realized that. I went back to my furnished room in the Tenderloin District in San Francisco; lousy furnished room. I talked to the maître d’ there – he wasn’t there, he didn’t show up, he had passed away, he didn’t show up – but I talked to him and apologized. I went to work to work. I didn’t go for excellence. In my youth, I had been following the temptations of the world rather than making a decision for excellence. I made up my mind that it will never happen again and I managed myself so it wouldn’t happen again. And it didn’t, really didn’t and my career took off like a rocket ship.

Brian  

Well, that’s a great story and there’s so much packed into it. I just want to make a couple of comments. First, what a blessing it was to have somebody pour into your life at such an early age when you first started in that restaurant and to teach you about excellence and to teach you about service. And then of course, it’s even more remarkable that you took that lesson, and all the things that you’ve done with it since and we’ll talk more about that. The other thing I wanted to touch on because I didn’t know the origin of “ladies and gentlemen, serving ladies and gentleman” until I read your book. But of course that was a phrase that I was very familiar with. I’ve studied the Ritz Carlton because the Ritz Carlton, like other iconic brands – Rolls Royce is one that comes to mind, Louis Vuitton, those are all iconic brands and companies – exemplify excellence. So I was very familiar with the phrase, I had no idea that it was something that you wrote down at the age of 17. And of course at 17 it was [speaking German 19:50] so I get to practice my German a little bit today.

Horst  

Damen und Herren dienen Damen und Herren.

Brian  

And it’s for anyone in the hospitality industry. That’s a phrase that probably stands out more than any other in that industry. Again, there are lots of companies who have benefited from training at the Ritz Carlton Company or have read books about Ritz Carlton or have read your book and have benefited from that, too. Horst, most of our listeners and viewers have experienced a high level of service so they know what that looks like, but I’m sure you’ll agree, it’s rare for a culture of excellence to be sustained over time. It just seems like it’s more difficult today than ever before to do that, with higher employee turnover than ever before. We have five generations in the workforce for the first time in history, which creates multiple sets of dynamics around trying to strive for excellence. And maybe foremost, a society that for whom the standard is mediocrity, rather than a standard of excellence. What has to be done to create such a culture, a culture of excellence, and then to reinforce and sustain it over time? Because I think there are a lot of people who have created excellence in their lives, individually or in organizations. There are lots of organizations that make an effort to do that, and maybe get started in that. But that sustainability piece, the ability to reinforce it over time, especially with high turnover or with employees or team members who maybe aren’t as committed to that as management or ownership are committed to that. Say more about that.

Horst  

Well, it’s in all companies, the same. It’s funny listening to that, you said the difficulties of the day shortage of labor, etc, etc. As a leader, I have to be aware of that but I cannot make it an excuse. I can only be aware of it. So I take care of the situation and correct that situation and make that situation workable. That is my role as a leader, not just explain what is wrong, but when I hear everybody, I mean, I hear it all the time. That’s all turnover, it’s because the millennials, shortage is because…wait a minute, you are the leader here. I looked outside in the street, a lot of people, the problem is they don’t want to work for you. You are in charge. If I dismiss it as a problem, a societal problem that I cannot do anything about, it’s over. It’s over, I can’t take care of it anymore. You’re not here as a leader to make excuses, you’re here to find solutions, first of all and besides, that too is not very difficult. I would like to remind you that in Ritz Carlton, Cappella, which occurred afterwards, incidentally, is a superior company relative to market segment, okay. Ultra-luxury is not luxury, it’s ultra-luxury. And the results there are better then Ritz Carlton was. So it is rated number one in the world now. I sold the company three years ago after I left Ritz Carlton. And then I look at many other companies; the issues are all the same. There is no other issue. It’s leadership, its management, but unfortunately, there’s little leadership and a lot of management. What is it with Ritz Carlton at a time the employee turnover and hotel restaurant business was 122% a year – 122%. How can you…when the knowledge that you teach walks right out of the door again, how can you possibly become excellent? It was, by about the time…and the years before I left, [it] was about 18% – 20%. We didn’t pay more, we just offered people to join us and not work for us. That’s the point. What do we do as companies? Brian, every company, we hire people to fulfill a certain function while the chair on which they are sitting is fulfilling a function, but we are dealing with human beings that have a right of belonging and purpose. So the first thing you have to develop, what are you offering them in your selection process? Offer them a function or a place to belong and a purpose? It is the processes of selecting and the communication. Next is your orientation. So how do you online, if you will, the new employee? I know what happens in every company. I haven’t found one different, I’m sorry, I’m sure there are but I have worked with a lot. What is it? The first day they come to work and the manager makes his pathetic team speech; we are a team, blah, blah, blah. He doesn’t even give an objective, because without an objective, you’re not a team. A team has a common objective, and helps each other too, with that objective. But that’s not the discussion, just we’re a team. And then he gives them the rules and regulations – the first day – here’s the rules and regulations of the hotel, of the company. You don’t belong, you’re just a part, you better fulfill the rules and the company regulations, here is your insurance payment, fill out these papers here and you sign your life away there and that’s the first day. How about when they come in the first day, tell them who you really are and invite them, again, to be part of who you are. How about saying here’s our case, here’s what they expect from our behavior from us. How about, here’s our vision. We want to be known as the finest in the world; join me in this vision and here is the motive of that vision, objective and motive:  objective, best in the world; motive, so we can grow together, so you can have opportunities, so we will be respected to each other, so we will be honored, you will be honored. So we have more guests who have more income, you have more income. Connect them, connect them to your motives of your objective, offer them purpose. You see, I cannot help, I always get back to that. Aristotle, 3000 years ago, he said you cannot be fulfilled in life unless you have objective and motive. Wait a minute, if we are leaders, we would help them [find] fulfillment in their life. But we’re not leaders. We manage processes and rules, etc., and not lead. When I have worked with so many organizations, they don’t have a vision statement, they have mission statements. Nearly all of them, no vision – “we are…” yeah, of course, that’s what you are but what do you want to be? So in other words, there is a function statement and not a purpose statement. Yet we know people are fulfilled by purpose. So this has to all come together. This excuse not…I know I’m going to be very bold and people think am I very arrogant here, but I would make any bet – I’m in Atlanta, so it happens. Everybody in Atlanta can get upset with me. Everybody here is crying, everyone’s crying for shortage of help – would I make a bet that if I would open a hotel tomorrow, there would be a line of employees standing around the corner wanting to work for us. It’s leadership. Now, that’s a solution. Shortage of help, we are short, that’s why we have a service problem, a parking problem. Is that a solution? That’s just an issue. What are you here for? To find the solutions.

Brian  

You’ve said so much in there. I think one of the important things that I wanted to point out was what you said right in the beginning, that we oftentimes use all of those external dynamics, the turnover, or how people use excuses and really what they are is just dynamics. We have a choice to either have that hold us back and to not move forward using those things as excuses for not doing so. Probably if you’re sharing that with people, they’d say, oh, yeah, you’re right, it is tough, it’s hard to find people, and this and that and the other thing, but there are other companies that face the same set of circumstances, the same set of dynamics, and yet they’re moving forward and succeeding in spite of those.

Horst  

Brian, I want to make clear I didn’t say it’s not tough. But I’m saying you as leaders are there to find those solutions for that, for the situation. And there are solutions. I mean, somebody found a solution and got to the moon and you don’t find a solution to find employees, come on.

Brian  

That’s great. Horst, I want to dig into your book, “Excellence Wins.” It’s a textbook for high level service for excellence both personally and professionally and for creating great results. As I was reading the book – and by the way, I read it twice; I was first exposed to you when you spoke at the Global Leadership Summit in Chicago, read your book then and of course, read it again in preparation for our time together today – as I was going through it both times, I jotted down some notes about qualities that stood out. May I ask you about a couple of them? Specific things? (Horst:  Sure.) And these are great, by the way. The first is attention to detail. Most people and most organizations are not especially detail oriented, as you know. Why is attention to detail so important and what are some ways that we can incorporate that into our organizations and even into the way that we operate personally?

Horst  

Well, the details that are important, the most important is how do I serve my market. And the details that are important come from the market, the customer, not you. If you don’t serve the little details – now, let me use the hotel, but you can translate that into any business you’re in – the hotel gets check-ins, I know, of course, they want a nice clean room. It’s not that simple. I want to check them in, I know they don’t want to wait. So we have processes so they don’t have to wait long, have to have a process to make sure the room is clean, et cetera, et cetera, et cetera. Then we listen very carefully after that, what our guest said, that guest said, hypothetically, it is a small detail here. If I really listen to the guests – not to my grandmother, or to my mother-in-law and myself, but no – the guest, the customer, if the guest says in a survey, you have beautiful robes in the room and they were all high quality, everything but when I went and took a shower and took the robe off, there was no hook to hang it on – detail. Now I have to make sure – once I see that, now I don’t have to study that anymore, that makes a lot of sense – I have to add that detail now into the planning in the building and re-adjusting every room that there is a hook added in each shower. Now, this is just one small detail which is driven by the customer. And of course, there are many details. So the labor driven, meaning employee driven, that you say in your services, we don’t have that – why not correct it? So it’s detail not only to the market, but it detail internally and then their functional detail. So, you build your company, how do you make sure you take care of the detail? Well, you have to mobilize the whole organization to identify the mistakes that happen because that’s where the details are, and eliminate one mistake at a time. One mistake at a time. In my book, I tell the mistake about the guest complaint [about] slow room service, for example. But here’s the problem. Management wants to correct it by themselves. They sit in office and all of a sudden they become expert of everything there is and say here’s what we’re going to do rather than going to the employees that are connected to the process. In my case, I was talking slow room service and said here’s a detailed concern. The guest thinks that we are often late, you tell me the answer – you connected to the process – tell me the answer how we can eliminate this concern, this one detail. So I involved the room service order taker, the waiter, the busboy, the cook, to find out how we can do it faster, rather than me in the office. So the small details have to go to where that detail is taking place and connect the people to that detail to find the answer. That’s the thing, again, that’s not management, that’s leadership to do that. To lead people too, you always want that because you want to be, in our case, the best in the world. So, I ask the leader – and there’s an important point that I want to make here – after we decided that’s what we want to do with this new company, be the best in the world, then I have to question myself as a leader – not as a manager – is it good for everybody? Is it good for the investor? Is this vision, this high intent, good for the investor? Is the high intent good for the customer? Is it good for the employee? Is it good for society as a whole? I, as an individual, look, I’m not selling that, but as an individual who helps all of us with who I am, and to go back, we’ve got our proof. If everything says yes, now I can…this is a leadership objective and everything. But I clearly said the employees are involved here, they’re involved in every detail. That’s how you get to your small details, it comes from the customer or the employee and the employee has to be involved. Those that are connected to the detail have to be involved to correct that [which] is not going one hundred percent.

Brian  

That comes back to intentionality doesn’t it. (Horst:  Oh, yeah, sure. Oh, sure.) You need to be very intentional about creating an awareness, first of all, and then doing something about that attention to these details.

Horst  

But see, the employees who were selected and understand they’re part of something, they have to identify the issue, the employee who was just hired for that function will not step out of that function and not find it and not connect it.

Brian  

Horst, you mentioned complaints and that was another note that I made. I think people, companies, and organizations really struggle with how to handle complaints. We all know that challenges are going to arise that complaints are going to occur. But oftentimes, it seems like how we respond to those complaints does more damage than the actual issue. How do most people respond to complaints or handle complaints, react to complaints and how should we approach it instead?

Horst  

Well, in fact, by the way, you mentioned the value of the book, I hope to accomplish thinking of leadership there in the book, that was my main intent. But anyway, and connected with that, well, you have to lead your people. You have to know leadership implies that you’re noticing, not from yourself, that you’re very conscious of what the customer wants, and lead the organization to a place which is of great value. That, of course, can only be accomplished, I can only become the best in the world, if our customer says so. Period. So I have to understand that, I have to now pull in my employees, and connect them to that desire. That’s an ongoing communication and so on. But I have to know, no matter what I do, some customers will be unhappy. Now, I cannot afford that because a customer that’s unhappy becomes a terrorist against your company. I know that. So consequently, we started that too. What does it mean? It turns out that 96% of all complaints, in hotel business, generally, the complaining customer, all they want is to get rid of their frustration and they complain to the first person that listens. Well, that means they may complain to the busboy about their stay or about their room. So we went and taught and certified every employee around the world, man, you have to understand we were on five continents, right? Every employee around the world was certified, how to handle a concern or complaint by the customer. In a nutshell, now mind you, it takes a little longer to teach it, but in a nutshell:  number one, if somebody expresses concern or complaint, listen carefully; number two, empathize; number three, apologize; number four, make amends; and we had number five, delight. In the book I gave an example there when a guest comes for breakfast and a busboy said, good morning sir, I hope you have a nice stay with us. And the guest says I didn’t because my TV didn’t work. Well, what we taught our employees is no matter what is the complaint; you own it. In that moment the busboy owns the TV. He is now to say, please forgive me, sir. I’m so sorry. And in that case, the employee now is empowered – there’s another word that we use, [empowered] not really managed – our busboy now was empowered to buy the guest breakfast and say, I’m so sorry. I’ll buy your breakfast, because of my TV. But then he could go another step and finding out what room the guest is in and send the guest some cookies and apologize one more time about the TV. In that moment, a potential terrorist against your company becomes an ambassador for your company. That was, of course, the reason. That was their high intent. Even if a complaint comes, we make them an ambassador. And knowing that 96% just want to be heard; I’m here and want to be heard and [hear] I’m sorry, rather than say my call the manager – it’s just they get more angry. [Laughter.]

Brian  

Well, that’s the first thing that I was going to say, is your your number one point – listen – so many companies and so many people don’t even do that. And most of the time, somebody just wants to express their frustration and if they’ll have somebody who just listens oftentimes, that’s enough, and then the challenge is resolved (Horst:  96%.) I find it interesting, and I was going to ask you about your terminology – a terrorist against the organization, or an ambassador for the organization – those are very strong terms on both sides of the spectrum. But I think that really illustrates the the importance of this issue, and being able to resolve complaints. And by the way, I think that’s true, not just for an ultra-luxury hotel company, but for any organization where part of our goal is to serve people.

Horst  

It’s true anywhere, it’s true in a hardware store, it’s true anywhere. It’s very simple. And since I know – and why do I say terrorists, by the way, and in our case, that relative exists in any business. My guest – let’s say, we had, Cappella, we had some hotels in New Zealand, the average rate per night was $3,000. That guest comes from a travel agent. If that guest is not having [a good stay,] guaranteed that travel agent will ask the guest how was it? If that guest doesn’t say it was great, the travel agents will take us from the shelf, they won’t sell us anymore. That’s a terror. But if you say, it was really great, it just sold me like an ambassador.

Brian  

The stakes are that high, aren’t they?

Horst  

Yes. I gave an example. So somebody said what other example business, let’s take a hardware store. You go and buy a hammer, need a hammer and you go and buy it. You get the hammer the way you want it, the handle the way you want it, the way it feels, it’s grip, that everything’s fine, you have a good hammer. Do you think you will tell anybody in the world there’s a hardware store that sells good hammers? It’s ridiculous. Why would you want to go back there – because I got a hammer? But if the hospitality was excellent, they welcomed you nice, they helped you out, they were extremely friendly, they walk with you to the door, say I hope you have a good day and then open the door, thank you for coming by, you will be convinced about that hardware store. We have to understand those things. And that means I have to make sure – I couldn’t hope that my doorman in Shanghai is nice, or in Africa, or in Osaka, or in Berlin, or in Philadelphia – I had to make sure I had the processes to select them right, to connect them right, to communicate right, and so on. It’s all process after that, then it’s managing. Leadership is making sure they join you, making sure they work in an environment where they want to do things, not have to do things.

Brian  

It’s a difficult culture to create but once you do, you’ll stand far above your competitors for sure. You you mentioned the hardware store and we all have hardware stories. We walk into a hardware store…for somebody who isn’t handy like me – you probably are and you walk in a hardware store and know what you’re looking for – but I think most people walk into a hardware store and they need a little screw and they have no idea where to find it. In some stores there will be no one approaching them to help them. Yet you know, because you’ve experienced this, I’m sure, I know I have, that you walk into other hardware stores and you have a person come up, a gentleman or a woman come up, and ask you what you’re looking for and then walks you over, all you need is one little screw, you don’t need a box of 100 screws, you just need one, but you need one particular screw, and you have somebody who helps you to do that. Then they walk you up to the register to cash out and then they they wave as you’re walking out the door and tell you to have a nice day. When that happens, you’re going to go to that hardware store every single time after that. And if it doesn’t happen, you’re going to look for a place that does that.

Horst  

Exactly. I’m convinced that as a leadership [sic], I have to create an environment where every interaction with one of my employees convinces the guest, the customer, to come back. That’s it. Every interaction; we should seek those interactions.

Brian  

That’s well said. Of course, one last concept that I jotted down was around measurement. By the way, these are…so you’ll read a lot of business books that have great advice, great input, great stories, but these concepts that I’ve pulled out, I think really set your book apart from a lot of other books that I’ve read. This last concept is measurement. It’s an important concept for me, I talk about it, I write about measurement; this idea of what gets measured gets done and if you’re not measuring something, then don’t be surprised when you’re not achieving the result that you’re looking to achieve. But you maintain it’s not enough to work hard, that performance measurements are essential to success. You also point out in the book that that just measuring things financially, profitability, for example, isn’t enough, either. Share with us more about the importance of measurement and how we can integrate that into our organizations.

Horst  

Economics is not a real good measure. I can tell you that. I mean, I can…if I run a hotel – mind you I’m running a hotel in Jamaica, our headquarters is in Washington, I’m the general manager – how am I going to be evaluated? Bottom line. That’s it. But I can manipulate the bottom line. I can, instead of buying fresh flowers in the lobby, I can put plastic flowers in there or none. Instead of having piano in the lobby playing in the afternoon, I don’t have that. In fact, I’m going to change the soap to [something a] little smaller and I’m making more profit and I’m getting promoted from [the] corporate office in Washington. I’m getting applauded from the corporate office in Washington for good management. That’s what it is. So I have to measure and really know what’s going on. I have to measure, of course. What I looked at everyday, I looked at five things. Now they have many sub-points, which I didn’t look at unless there was a problem in one of those five things. Of course I looked at the economics of the day, of course, I have to know that as a leader. But I looked at how many percent of the guests want to return and want to recommend us. We had a ceiling, a red line. It could not be under 92%, top box. If it was, I interceded and then, of course, I looked at all the sub-measures, check-in, food, cleanness, everything, all the sub-measures where it would possibly happen. The next measure I look at is employee satisfaction. There too, everyday I look at that even though we made [inaudible] service a year, but it changed slightly by call-in, it was tweaked. So I look constantly, is there something happening anywhere? Every hotel, I looked at every hotel, I mean, it was set up when there was a red arrow down, then I looked at it because it went down. If it stayed up, it was fine. I looked at the other future business indicators of course, individual and second one, group indicators. So I knew what piece is going to be forward, if we’re ahead of the game or not. If we’re not ahead of the game, I interceded. If customer, employee satisfaction went down, I interceded. In fact, I threatened everybody. If one of the measurements is down and stays down for three months, I will move into the hotel and the general manager will have to sit beside me. I will use his office, his desk and he has to sit in the corner and see what I’m doing and correct it. That was the biggest threat I could give somebody, and I did it, period. I cannot compromise because I know to accomplish our vision, it’s good for all concerned. I cannot compromise because of one guy or one woman, period. I have no right, I have no moral right; they say, well, he’s a nice guy. No, he’s a nice guy hurting thousands of employees and thousands of customers and a huge amount of investors. Come on. I can’t do that.

Brian  

This next question comes from my background in accounting and finance. And I’m really curious, because you talked about managing to the bottom line and how managers and leaders are held accountable to the bottom line, especially with an ultra-luxury brand like Capella, how do you balance investing in guest experience versus cost cutting? You mentioned making the shampoo bottle smaller and I think you probably dance a fine line between the two, you can’t spend an inordinate amount of money or an endless supply of money, creating luxury or ultra-luxury guest experience so you do need to be sensitive to cost and investment and those sorts of things. How did you balance that at Ritz Carlton and later at Capella?

Horst  

Let me give you a thought here. Take a city like Singapore, great business city, they have a great Ritz Carlton, absolute great Ritz Carlton. Last time I looked a couple of years ago, the average rate a night for a room was $480. We have a Cappella not far away, our average rate a night was $1,200. However, the guest perceives high value, have to give that. That high value perception only comes from giving back to the customer, calling them before, and what can I do for you, et cetera. I cannot compromise on it. I concentrate on what makes money – on excellence – not on the money. I considered what makes the money and that is excellence of service and product delivery. Now, you touched on that. How about temptation of taking the flowers away and so on, they’re always there. That’s called cost cutting. That means I take something away, that lowers my cost, but at the same time, it takes something away from the market, from the customer. There is such thing then, efficiency. That means I look at my processes, and try and take time and cost out of the process without affecting the outcome of the process, without affecting the service or the product to the customer. That is again, finding. Now the employees again have to be involved in finding the mistakes that we made and eliminate a mistake. Nearly every time when you eliminate a mistake permanently by finding the root cause, you save money and you improve your product. That’s efficiency. Now, how does that work? What the experts say is that a well run organization makes about 58,000 mistakes per million from transactions. Now, anybody who hears that says, not us, not us. Well, you too. You too. So how about eliminating it and become six sigma – that’s where Six Sigma comes from – eliminate those 58,000 mistakes, you will save maybe – now I’m going to say it even though I know that nobody accepts what I’m saying – now, you save maybe as much as you now make as profit, you will double your profit without having taken away anything from your customer, in fact, improve the service to your customer. There is tremendous upsides to excellence. But it takes time, diligence, commitment to accomplish it. It is accomplished by having made the decisions and not change your mind. High intent, no compromise.

Brian  

That’s much harder to do. It’s easier to stop the fresh flowers every day from coming or to reduce the size of the shampoo bottle or the pour of the wine in the bar. The things that you’re talking about are more challenging.

Horst  

I have a friend here who is running a hotel that’s a year old, and a great hotel, he has certain concepts that unquestionably will make the hotel totally successful. But it costs money right now, because you’re not…first year, you have to mature the hotel – two, three years. But the ownership of the hotel that he’s a part of – a management company like Ritz Carlton, we were management, we didn’t own the hotel – is pressuring now to change those concepts, which in the short term will give me, immediately, my money, because there’s some costs involved in it. In the long run, that forfeits millions and millions and millions – hundredfold – the money that they save now. But that’s what it is, you get the pressure for money. That’s what I said, the pressure for money comes from Wall Street, it comes from owners, come from investors; everybody wants the results today and not for tomorrow. Even though in the beginning…I mean, listen, I opened one hotel in Europe, which I argued that many things should not be done because they’re too costly, and they said, don’t you understand? We don’t care about the money, we care about the image here, the image here. After four weeks, they called me for a [inaudible] session because we didn’t make enough money. [Laughter.] That’s it, that’s not how it works, you have to clearly look at your intent, and stand behind it. For me, again, [it is] impossible not to make it if you just stick to it.

Brian  

Horst, we’ve been talking about organizational excellence and I believe that I read part of measurement for you personally, is constantly evaluating your own performance. So I’d like to just talk for a brief moment about personal excellence. Is that something that you continue even today? And what does that look like?

Horst  

Well, I have to do it, otherwise, I would be a slag at measuring because I have to manage myself. I know that moment in San Francisco, in that room, never left me. I knew in that moment, in about five years after leaving, six years after leaving, that maître d’, from promising I would go for excellence, I became just a functioning person, because I didn’t manage myself. So I knew from there on, I have to manage myself. And I still do. Otherwise, I immediately slip into something else. So the question, your personal excellence comes into play there. What is personal excellence and how do you improve yourself constantly or at least make sure you stay on a certain level? You have to question yourself, at least once a month, how relative to your functioning as a person – a person functions, relationship, values, and morality? Those are the personal. So I have to question myself, my functioning, how could I improve what I do? If you ask yourself once a month, what am I doing, how could I improve my work? When I work with people on it, they’re looking for a big hit, but there’s no big hit; tweak yourself with small things. With small, little things, tweak yourself, because you will see something where you can do better. Next do something in the relationship. In fact, there, I had a big struggle, I have to, at least four times a day, stop and say I have to work on my relationship. I still have to. In that case, say if I meet with a guest, afterwards, how could I have done that better? If I meet with an employee, how could have done it better? If I meet with the manager, how could I have done that better? If I walk by somebody, how could I have said better “hello?” Tweak your relationship. You define yourself more by relationship than function, by the way. Next, of course I have to question myself, morally and ethically. People, don’t think that I’m trying to sell you something, I’m just rounding it up, how I think. I pose the question to myself, more spiritually, how could I do better? So if I work on those things now I’m improving as a human being personally. In other words, I can’t just lead my people, I have to lead myself. Make a decision and question myself very carefully, what’s my high intent? Is it good for everybody? And I have to ask that constantly, is it good for everybody? Because otherwise we’re doing something ridiculous for ourselves and that won’t work in the end.

Brian  

By the way, all the concepts that we’ve been talking about that create organizational excellence also apply personally; so intentionality, attention to detail, measurement, it’s all applicable.

Horst  

Again, you said the measurement, I mean, as I said before, for measurements when we have a had counts below that, but I couldn’t look at all of them, so I’ll just look at that. But if one of my measurements [was off], I had to go back and say, where in my measurements do I see there is a hiccup.

Brian  

Horst, you mentioned spirituality and I know you’re a man of faith. You talk about this at the end of your book, “Excellence Wins” and so I want to ask you about it. For most people, it’s not as clear, the role that God plays in someone’s life. It’s remarkable to me looking at that declaration that you made to your parents about wanting to go into the hotel business and then what you did with that over the next 70 years in terms of reshaping the concepts of excellence and service and raising the standard, not only in the hotel industry, but across the global business landscape. It really, as I think about that – and we share faith – it just seems like God planted a seed in your life very early on and – like you said you had never been in a hotel and never had been in a restaurant – yet, you declared at a very young age, that that’s what you wanted to do. In fact, that’s how you’ve invested your entire career, your entire adult life. Share with us, if you would, a little more. I don’t know if you think about it in those terms but how do you feel about that, as you reflect on your career and on your life?

Horst  

Well, that’s part of my faith issue, is what you addressed here. If I would look at my career, leaving home when I was 14, and look at my career, being – forgive me – a true leader in our industry and other industries, if I would look at that myself, that would be the ultimate arrogance. I happen to believe and that’s also a decision that I mean, your comment that that was somehow faith, and I’m [inaudible] why, what I’m supposed to be, what I’m supposed to do. I look at my failures and so on but in the end, believing or not believing is again, nothing but a decision. [Laughter.] Here’s the decision again – your destiny is your decisions. It’s not…here we talk about faith, we talk so much about faith, we talk so much in this country about all kinds of things, which is mind boggling to me when I sometimes hear what is being said. I have a home in Germany still, my wife was from Pittsburgh,loves it there too, otherwise, I wouldn’t have two homes anymore, let’s face it. And so we go there, and I have a good friend; Stefan is a great guy, intelligent, fine business, elegant. I mean, he and I used to be running together, now we walk together [laughter] my age. So he is a proud atheist. I happen to be the believer. A year ago, we went for a walk and all of a sudden – he likes to discuss this issue, and I don’t – he said, oh, come on, Horst, with your God and belief and so on, you cannot prove that there is God. Now think about that statement in his head – wait a second, you can’t prove that there isn’t. So in other words, it can be nothing but a decision that evolved or you stop one day and say, I believe this or the other. Now to me personally, again, people think – I don’t necessarily like this because people think I try to sell something and the last thing I want to do because it’s your decision. For me, it’s an easy decision because I’d rather make a decision for hope than against hope – simple; your destiny is your decisions. Think about that for a while, if we still can think.

Brian  

I appreciate you sharing that part of your life, Horst. Your book, “Excellence Wins” is, as I mentioned earlier, are available on Amazon and wherever books are sold. How can people find out more about you?

Horst  

Just look at the website HorstSchulze.com and go from there. I’m on LinkedIn and so on, but the book again, it’s on Amazon. And guys, it’s not a religious book even though at that point on the end, it would have been. I would not have been honest if I wouldn’t have told my story, my spiritual story, which was really actually connected to a cancer that I had 29 years ago yesterday. It was yesterday 29 years ago that I was operated on, which I was told was fatal, I would have a year left to live, at the time, by every expert there is, and that was 29 years ago. So the year was a long year, [inaudible] they told me ten months, one year. So I told that story and told how in that moment, I was sustained by my faith, and [it] would have been difficult without it. But that’s the story so don’t worry about it. It’s not a book about making you change your thought, and in the end, I had to tell my story too. In that book, I felt compelled to do that.

Brian  

Well, and I’m glad you did and certainly glad that you made it through the cancer and that we’re able to be here today. We’ll definitely share the link to the book, the link to your website and other social media, in our show notes. Horst, it’s been a great pleasure having you on the show today. Thank you for joining us and thank you for equipping us with tools to unlock the power of excellence, not only in ourselves, but also in our organizations and those around us. I really appreciate your time today. It’s great to get to know you.

Horst  

It was a pleasure to be with you, Brian. I have quite a few podcasts and sometimes the interviews are good and sometimes they’re not. This one was an excellent one with great flow. It’s amazing how the interviewer brings it out of you or not. Great job as far as you’re concerned. Thank you.

Brian  

Well, thank you. My standard is excellence and I’ve learned from you and so I certainly appreciate that. To our listeners and viewers thanks for tuning into LifeExcellence. Please support the show by subscribing, sharing it with others, posting about today’s show with Horst Schulze on social media, and leaving a rating and review. You can also learn more about me at BrianBartes.com. Until next time, dream big dreams and make each day your masterpiece.