Quality: Selling Lessons from Baldrige Award Winners

Last February at the 1993 Quest For Excellence Conference in Washington, D.C., the 1992 recipients of the Malcolm Baldrige National Quality Award shared their success secrets with leaders from business and industry. Top executives from the four winning companies-Texas Instruments, The Ritz-Carlton Hotel Company, AT&T and Granite Rock Company-repeated one theme over and over: quality sells.

Horst Schulze, president of The Ritz-Carlton Hotel Company, reflected on the tough lessons learned from the journey towards quality: “It was very frustrating. In the beginning, many of our own people were against the idea. We went through a period where we’d done everything to make this work, but didn’t see any tangible results. That’s the point where many companies quit.” Schulze’s 11,500-member team pressed on and set ever higher standards for quality service. “We

are ladies and gentlemen, serving ladies and gentlemen,” explained Schulze who has created a corporate culture based on the idea that Ritz-Carlton employees are not servants, but providers of service.

Schulze’s quality leadership is rooted in a strong vision and a set of practical principles that give all employees the confidence, freedom and authority to do whatever is necessary to satisfy their customers. If a customer requests a foam pillow, the request is honored without delay, and the customer’s preferences are permanently recorded in the Ritz-Carlton’s computerized repeat guest history program. When the customer travels to another Ritz-Carlton hotel, a foam pillow will be placed automatically in the customer’s room prior to check-in.

To resolve any problem swiftly, employees are authorized to reverse a transaction up to $2,000. Ritz-Carlton salespeople are empowered to decide the business terms of a sale without wasting the customer’s or their manager’s time. The bottom line results? Customer satisfaction at Ritz-Carlton rose to 94 percent while the best competitor’s ratings reached only 57 percent. Over the past three years, customer complaints have dropped 27 percent, national account retention improved by 20 percent and employee turnover is 40 percent lower than the industry average.

Schulze added with a sheepish grin, “It took us a long time before we realized that quality training is a lot cheaper than turnover.”

What lessons can sales organizations learn from the Ritz-Carlton success story and the practices of other Baldrige Award winners? Consider the following:

Center all employee activity around the quality theme.

All employees, including salespeople, must understand the economics of quality.

The CEO must drive the quality process and involve every level of the organization.

An organization that is challenged with an extraordinary goal can achieve extraordinary results.

Customer satisfaction begins with understanding the requirements that meet the customer’s needs.

Quality improvements are the result of improving methods, practices and processes, ongoing training, teamwork and empowerment.

Customer delight is the result of professionalism, efficiency and positive attitudes.

Customer satisfaction drives employee satisfaction. When customer satisfaction ratings go up, employee satisfaction goes up.

Poor quality is easier to deliver but harder to sell. Good quality is harder to deliver, but easier and more profitable to sell.