How Ritz-Carlton Co-Founder Horst Schulze Defines Excellence

On this episode of Our American Stories, Horst Schulze, co-founder of Ritz-Carlton and author of Excellence Wins, built his career around a simple idea: every employee has the power to define an entire organization in the eyes of a customer. Years ago, before speaking to hundreds of managers at a Chicago bank, Schulze decided to experience the bank's heavily advertised customer service for himself. One encounter with a teller gave him a lesson he would repeat for the next fifteen years.

Schulze shares his simple formula for service excellence, explains the difference between merely completing a transaction and earning a customer's loyalty, and shows why leaders can't afford to let even one employee define their organization through poor service.

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Episode Transcript

Speaker 1 (00:10):
This is Lee Habib, and this is Our American Stories,
the show where America is the star and the American people.
And to search for the Our American Stories podcast, go
to the iHeartRadio app, to Apple Podcasts, or wherever you
get your podcasts. Up next, a story by Horst Schulze,

(00:31):
who is the co-founder of the Ritz-Carlton Hotel and knows
more about customers, customer service, and how to really take
care of business when it comes to taking care of customers. Nobody,
nobody is better. Here's Horst to tell the story about
what he taught a bank about its own customer service.

(00:54):
Here's Horst.

Speaker 2 (00:55):
You define yourself. Forgive me, anybody who does it, but
let me tell you, if you, as a young man,
spike your hair and color them green and look like
a bum... You define yourself as a bum, period. Forgive me,
but that's a fact. You define yourself, and it's up

(01:17):
to you what you define. I'm not telling you what
you have to do, but understand, you define yourself every moment.
I tell the story about the bank there in the book.
I lived in Chicago, and I knew the bank very well.
They advertised. I've never been in a bank, but in
the meantime, I have started here. in Atlanta and I

(01:38):
was invited by them, by that bank, to talk to
the 300 manager, I'll never forget it, about customer service,
customer satisfaction service. Got there the day before, I still
had my apartment, I tried to rent and went to
look at apartment, got around. Again, I knew them well.

(02:00):
They advertised service all the time. On the radio station,
I sat in my car. But the day before I thought, gee,
I've never been in that bank. Tomorrow somebody is bound
to say, have you been in our bank? And I
better be able to say yes. So I went to
that bank. Now, walking into this, outside the building already, magnificent, stately.

(02:25):
And you walk in, I mean, marble floor, marble pillars.
You can feel the money all around you. It is
very impressive, very, wow. And all the way over there,
a long counter to tell us. And in front of
the maze. So I walk into the maze. Now, what
is service? We have to establish here what is service.

(02:45):
One more time. It starts with welcome, complying to the wishes,
and farewell. That's service. Welcome, comply, farewell. What's the expectation
of the customer when they come buy anything? We must
understand that. You or I or anybody has the same
subconscious expectation no matter what you buy. If it is

(03:10):
legal service or a bottle of water or a car
or radio, you have the same subconscious expectations. You want
no defect. You want your product to be right. You
want timeliness, you don't want to wait for your bottle
of water. You want it when you want it. And
you want the people who give it to you to

(03:31):
be nice to you. Those are the three things that I,
so if I know as a business, this is what
people expect from me, I build processes to deliver it.
So I'm in a maze. Not long, timeliness now. Number one,

(03:52):
I look left, And somebody on the ride screams, next!
That was the first step of service. I come to
her teller, was a woman. By the way, men are
usually worse in service. Was a lady. As I reached
her teller, she looks down, finishes some transaction for one

(04:14):
second or two. I see her face. I don't know her.
She doesn't know me. But when she looked up, it
was very clear that she hated me. And she said, yes. Yes.
I just want to change $ 50. She exercised. And she said, $ 10, $ 20, $ 45, $ 50. Next.
And I look at my product. My change is a product.

(04:37):
No defect. The timeliness was good. But the individual service
was non-existent. What could she have done? She could have said,
the next gentleman, please. Come to tell her, welcome, sir.
How may I help you? Just want to change $ 50.
That's my pleasure. 10, 20, 45, 50. Have a wonderful day.

Speaker 1 (05:02):
Bang.

Speaker 2 (05:03):
What happened to me? I was dissatisfied. Or there could
have been a third way of serving me. She could
have said, next gentleman, please. When I come to her teller, ideally,
she would have called me, welcome, Mr. Schulze. No, in
this case, she wouldn't know my name. I understand that.
But that is the ideal service, personalized.

Speaker 1 (05:25):
Welcome, Mrs.

Speaker 2 (05:25):
Schulze. How may I help you? Just want to change $ 50. Ideally,
she would have sent 10, 20, 45. And here are
four coins, five coins. Because I know you collect coins.
Individualized to me. Now that is great service. Then I
would have moved immediately to a level of trust and loyalty.

(05:49):
But what should she do? She did the first thing
that I explained. She said, next... And she treated me
as if she was angry that I was there. So
what did I do? For the next 15 years, I
used them for an example as lousy service. What happened here?

(06:13):
She defined the bank. She defined her fellow workers. That
can't happen. You can't let that happen in an organization.
That one employee defines you, And I didn't say Susie
mistreated me. I said that bank is a poor bank.

Speaker 1 (06:35):
And a thanks to Greg Hengler for the production and
editing on the storytelling. And a special thanks to Horst
Schulze for sharing his wisdom with us. Excellence Wins, A
No-Nonsense Guide to Becoming the Best in a World of
Compromise is his book. By the way, we have a
bunch of stories. By Horst, on our website, go to

(06:55):
ouramericanstories.com and just type in his name. Just put in
H-O-R-S-T and you'll get story after story, including his life story,
which is a stemliner and a real beauty about the
American dream and about excellence. And it's so hard to
find these days when you can just be really good

(07:17):
at something. It stands out. The story of how to
treat people. Horst Schulze here. on Our American Stories. Lee
Habib here, the host of Our American Stories. Every day
on this show, we're bringing inspiring stories from across this

(07:39):
great country. Stories from our big cities and small towns.
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