Organizational Dynamics, Vol. 30, No. 1, pp. 30 47, 2001 2001 Elsevier Science, Inc. www.organizational-dynamics.

com

ISSN 0090-2616/01/$see frontmatter PII S0090-2616(01)00039-0

Lessons From Hospitality That Can Serve Anyone

ROBERT C. FORD CHERRILL P. HEATON
he hospitality industry has long known that the difference between success and failure is the successful management of the service experience for all guests. If you want people to come back to your restaurant, hotel, airline, or theme park, you had better keep them not only satised with the experience you offer but wowed with what you do. Given the variety of people in the world and the intangibility of the hospitality product, this is a major challenge. Organizations like Marriott International Inc., Southwest Airlines Co. and the Walt Disney Company theme parks nd ways to create memorable experiences consistently. People remember these experiences as being so much better than those offered by competitors that they come back time and time again. These benchmark hospitality organizations must know something that all organizations, service and otherwise, can use; they must be doing something right from which all organizations can learn. While many factors contribute to their success, these exemplars of hospitality have three keys in common. What they do is no secret. The service product they offer, the setting in which they offer it, and the systems that deliver it are out in plain sight for anyone to observe. Unfortunately, too few organizations bother to pay attention or even look. Although any organization can do many specic things to improve its service, the benchmark hospitality organizations have found three keys to service success: Make every decision with the customer in mind,
30 ORGANIZATIONAL DYNAMICS

Build a strong culture of service, and Manage each moment of truth in the service experience. This article will talk about each key and how it leads to service success.

FOCUS ON THE CUSTOMER

Successful hospitality organizations know that they must make every decision with the customer in mind. Modern managers in other elds will tell you that they also follow this principle, but they really dont. Most organizations have a tendency to look at the world from their side of the cash register. Decisions on capital investments, facilities design, system design, and managerial policies and procedures are too often made from the organizations point of view and convenience rather than the customers. Consider a bank that sets up its lobby so that long queues of people in front of unmanned teller terminals are created, an insurance company that invests in a major structural upgrade while ignoring employee training, a retail store that creates awkwardly difcult product-return procedures, or a health maintenance organization (HMO) that is rude and unresponsive to its members. In each of these situations, customers are left wondering why any organization would behave in such a fashion if its future success and protability depend upon satisfying, if not wowing, the people it gets inside the door. The benchmark hospitality organizations have learned that they cant succeed if

Robert C. Ford (Ph.D.-Arizona State University) is currently associate dean for graduate and external programs and a professor of management at the University of Central Floridas College of Business Administration. He joined UCF in 1993 as chair of the Department of Hospitality Management after serving on the faculty of the University of North Florida and the University of Alabama at Birmingham. He has authored or co-authored over 100 articles, books, and presentations on organizational issues, human resources management, and guest services management, health care and related service management topics. His texts include Principles of Management: A Decision Making Approach and Organization Theory. His recently published text, Managing the Guest Experience in Hospitality, is a compendium of hospitality-based concepts important in managing any service organization. Ford has also been an active professional serving the Academy of Management as director of placement and the division chair for both the Management History and the Management Education and Management Development Divisions. In addition, he has been the chair of the Accreditation Commission for Programs in Hospitality Administration and president of the Southern Management Association. He currently is a Fellow of the Southern Management Association and the associate editor and editor-designee of the Academy of Management Executive.

Cherrill P. Heaton is professor of organizational communications at the University of North Florida. In addition to teaching organizational and business communications in the M.B.A. and M.Acc. programs at UNF, he has taught over 100 short courses for business and industry in these subjects. Formerly a stockbroker in Miami and Wall Street, he is the co-author of Essentials of Modern Investments. With Robert C. Ford, he has co-authored three books: Principles of Management, Organization Theory, and Managing the Guest Experience in Hospitality. He has a B.A. from Princeton University and M.A. and Ph.D. degrees from Florida State University.

SUMMER 2001 31

they treat customers this way. Instead, they think of customers as their guests and treat them accordingly. They go out their way to make their guests comfortable, to help guests derive the maximum value from the experience they have paid for, and to ensure that the experience is as rich, enjoyable, and satisfying as they know their guests expect. This sounds easy, but it isnt; more is required than just being nice to people. These benchmark organizations also work hard to determine the key drivers of guest satisfaction: what their guests want and what will satisfy them enough to keep them coming back.

Finding and Using the Key Drivers

The best way to keep up with the current drivers of customer satisfaction is to study and survey customers continually. Most organizations think they know what their customers want and expect, and to a limited extent they do; they have to in order to stay in business. The best hospitality organizations understand that they cant really know what factors are the key drivers of customer satisfaction and intent to return without carefully studying the wants, needs, and behaviors of their guests. Many times what management learns in such studies is a surprise, because what management thought would be keys when it designed the experience dont turn out to be so from the customers point of view. This difference between what the organization delivers and what the customer expects or really wants is the service gap that Len Berry has identied, and it happens. Organizations must keep working and studying until they know what customers actually expect, how they actually behave, and what their key drivers are. Only then can organizations give their customers the experience that they want and will come back again and again to enjoy. Disney has even coined the term guestology to reect the importance placed on understanding thoroughly how Disney guests actually behave, as well as what they want, need, value and expect from the Disney experience. Disney studies how
32 ORGANIZATIONAL DYNAMICS

long a wait can be before guests become unhappy, what price points are acceptable to guests, and what number of drops the runaway elevator in the Tower of Terror must have to satisfy the guests quality standards for the attraction. They seek to measure everything that is important to their guests and manage these key elements thoroughly. Other benchmark guest service organizations study their guests as well. They survey guests continuously and train their guest contact employees to check with guests about their experience every chance they can. The benchmark organizations dont miss any opportunity to talk to their guests and ask them How was everything? In addition, they employ trained mystery shoppers pretending to be guests, to acquire feedback on the quality of the experience in a structured, systematic way. Even if the guests tell you what is important to them, you cant always nd out how well you did simply by asking them. Mystery shopper programs are another way of nding out if you met their expectations and kept your promises. The point is that the benchmark organizations spend a lot of time and money to nd out what their guests value, expect, and want. Then they deliver it. The RitzCarlton Hotels used customer surveys to identify 18 key drivers. RitzCarlton then hired a process manager for each hotel. That managers responsibility is to eliminate aws and reduce work-cycle times by 50% in the systems that deliver the 18 keys leading to customer satisfaction. The basic drivers are so important that RitzCarlton wants someone in every hotel to be worrying about them all the time. The basic drivers may not always be the ones discovered rst. The company may often have to dig below the surface to nd out what customers really want. Southwest Airlines surveyed its customers and learned that they wanted cheap fares, on-time performance, great meals, comfortable seats, free movies, and more. Southwest quickly recognized that, human nature being what it is, if you ask people what they wantthey want everything.

Southwest realized it couldnt give its customers everything because nobody could. Gourmet meals with wine in big comfortable seats and low faresit cant be done. So Southwest did additional research to dig deeper into customer preferences and learned that their customers really wanted low fares and reliable schedules with friendly service. The Southwest product is now exactly what its target market wanted and, more important, wanted enough to pay for and to return again and again. Even better for Southwest, giving customers what they really, basically wanted provided extra cost savings to Southwest; turning an airplane around between arrival and departure is considerably easier, faster, and cheaper without having to clean up all the mess and clutter caused by unwanted frills like food service. Organizations in other industries certainly dont allocate resources on a hit-ormiss basis. But they often use allocation criteria like internal needs or top managements preferences rather than the key drivers of customer satisfaction. The benchmark hospitality organizations, on the other hand, rely on their knowledge of the guests key drivers to allocate resources. They dont want to put money into parts of the experience that dont matter that much to customers, nor do they neglect parts that are truly important to customer satisfaction. If one component of the service experience receives relatively low ratings, the organization may accept them if surveys also show that these ratings have little effect on guest satisfaction and intention to return. If a component shows a strong statistical relationship to guest satisfaction and return intention, it is obviously a key driver; these organizations allocate resources to that component to wow customers and keep them coming back.

knowledged as an individual is or can be a key driver for just about every customer. Everyone wants to feel special and be treated as an individual. Personalizing the experience is one way to wow customers. The excellent guest-service organizations that attract repeat customers allocate signicant resources to study their customers extensively and also accumulate the information they have learned. Computerized databases and sophisticated techniques of database analysis allow the organization to know a great deal about its customers as individuals. The best hospitality organizations mine these databases to dig up as much as they can about what is important to each guest so they can customize the experience. Intelligent use of a customer database allows the best to get better at doing these things. Customizing or personalizing each customers experience to match the customers unique needs and expectations is becoming increasingly easy for all organizations. The increased emphasis in services on relationship marketing or the market-segment-of-one concept has been made possible through the increasing power of computers to store, digest and interpret large quantities of information. The idea is to nd out so much about customers that the organization can treat each person as a separate market. When customers return warranty cards on products, ll out the information on cents-off coupons, or send in for free premiums such as t-shirts and company-logo coffee mugs, they provide information that companies can use to gain a better understanding of their customers and their unique needs.

Personalizing Through Computer Analysis: RitzCarlton and AMEX

Many hotels seek to provide more than just a simple clean room, and their information systems are designed to provide this extra level of customer service. The Ritz-Carlton Hotels, for example, offer an excellent customer experience partly because they provide their customers with more than a clean
SUMMER 2001 33

A Key Driver for Most Customers: Personalize

In the TV show Cheers, patrons went to the bar because it was a place where everyone knew their name. Being recognized and ac-

room and bed. Their denition of a properly prepared room includes having service providers check the information system to review items that todays incoming guests have indicated in previous stays are important to them. They know from retained information that certain customers expect to nd extra pillows, hot chocolate, or specic magazines in the room when they arrive. The RitzCarlton database tells the hotel what the exact preferences of its guests are so staff can be sure that the desired items are in the room when guests arrive. RitzCarlton also asks its employees to provide information related to service delivery. Employees are asked to listen for and record in the database any relevant guestrelated information that might assist the hotel in adding value and quality to the guests experience. For example, if a oor sweeper overhears guests talking about celebrating their anniversary, the sweeper is supposed to pass the information along so that the hotel can take some notice of this special event. The employees help deliver the wow Ritz Carlton experience by adding useful information to the organizational information system, which helps to ensure that all the people involved in providing the guest experience have the information they need to do their jobs in the best possible way. The powerful applications of modern information technology provide the employees with the information necessary to satisfy and even wow the customers by personalizing the service experience. RitzCarlton is one of the best, but other guest-service organizations have also developed innovative ways to build a relationship with each customer based on powerful computer analysis of customer information. While personalizing is not easy with a highvolume, mass-produced experience like a theme park designed to appeal to thousands of customers every day, these data-based systems are making it easier for service settings like hotels, and even restaurants, to provide individualized customer interaction. Like managers everywhere, the managers of the best hospitality organizations know that
34 ORGANIZATIONAL DYNAMICS

making every customer feel special is an important way for an organization to differentiate its customer-service experience. The difference is that these managers aggressively use this knowledge to make their guests feel personally treated. American Express Co. may have taken this approach as far as anyone. In addition to putting basic demographic information about its customers into a database, the company also stores information about every customer transaction. The company has dedicated seventy workstations at its decision sciences center in Phoenix to scan mountains of data on millions of Amex cardholders. They know which stores the cardholders shopped in, the restaurants where they dined, the places they visited, and the airlines they ew, how often they went, and how much they spent when they got there. Amex can infer from the data what is likely to appeal to each customer in the future, andto encourage customers to use their credit cards more can target specic promotions like weekend getaways on their favorite airline to their favorite city to stay at their favorite hotel. Amex gured in 1994 that the personalized marketing strategy made possible by this relationship-based information system increased member spending by 15 to 20% in the markets where it was used. Any organization able to offer this degree of personalized service can make it tough for competitors who cant provide their customers with similar value. Information systems and the powerful advances in information technology make it happen, and many organizations now have access to the power of building personalized relationships with their present customers and offering such relationships to their future customers. The best hospitality organizations know that success is never nal, and that the drivers of customer satisfaction today may not work or may be too commonplace tomorrow. Because what impresses customers now may not be sufcient to encourage their return in the future, organizations must continually survey their guests, know the key

drivers of today, and project the drivers of tomorrow.

The Mantra: Everything Starts with the Customer

These benchmark organizations know that their long-term success depends upon their guests thinking so highly of what the organization does for them that they will come back again and again. Its not enough for an Olive Garden Restaurant to get people inside their place once. If only a few rst-time visitors turn into loyal repeat patrons, the organizations future is limited. Thus, they worry about the guests who dont make a top box mark on the guest satisfaction surveys. They know that unless guests think highly enough of the experience to give it top marks, they may not be backand they certainly wont recommend the place to their friends. Thus, when Darden Corporation designs its Olive Garden restaurants, it spends countless hours and dollars making sure the distance between the tables is just right, the volume level and type of music are pleasing, and the people waiting in the inevitable lines have something to occupy them (e.g., a menu to look over, or a display of tempting appetizers and desserts). They also test menus, portion sizes, and food quality continuously and extensively. It doesnt matter if the managers, the designers, the corporate planners or the engineers like something; if the guest doesnt like it, Darden doesnt do it. Before making every decision, they ask the question, How will the customer feel about this? In contrast, consider the many times you have entered an auto dealership, bank, retail store, medical ofce, or other organization that obviously doesnt spend much time thinking about what it does from the customers perspective. The location, design, and hours of operation are clearly focused on employee convenience, the product was designed by someone who never asked what the customers wanted, and the operational policies and procedures are distinctly userunfriendly. The point is simple: Benchmark

hospitality organizations excel at making every decision with guest satisfaction in mind, no matter how uncomfortable or complicated that decision may make their own lives as operators. Their mantra is simple: Everything starts with the customer.

A STRONG SERVICE CULTURE

A second key to service success in excellent hospitality organizations is to build a strong service culture. Taking good care of customers stuck in the snow is no small matter. During a 1999 snowstorm, Northwest Airlines left passengers sitting in planes at the Detroit airport for eight hours. The negative effects on Northwests reputation lasted a long time. Contrast Northwests customer service with that of the service-oriented Scandinavian Airline Services (SAS) purser in the following example. An SAS plane with 40 passengers aboard was stuck at an airport because of snow. Because the purser knew that an SAS cultural value was to do whatever necessary to satisfy customers, or at least try to, she decided to offer them free coffee and biscuits. She went to the catering supervisor, a middle manager who outranked her, and asked for 40 extra servings. The catering supervisor wanted to help but refused the request, because according to company policy each ight was allocated only so many cups of coffee and biscuits. The purser could have let it go at that, but to do nothing was contrary to the guestservice culture of SAS. She noticed that the plane at the next gate belonged to Finnair, an airline that purchased food and drink from the SAS catering department. The SAS purser asked the Finnair purser to order the coffee and biscuits, the SAS catering supervisor was required by SAS regulations to ll the order, the SAS purser bought the coffee and biscuits from the Finnair purser with petty cash, and the stranded customers received a welcome snack. The SAS purser put service rst to achieve the airlines primary goal: customer satisfaction.
SUMMER 2001 35

Culture and the Front-Line Employee

Every organization has a culture of some kind, whether or not anyone is managing it, dening it or teaching it to employees. The benchmark hospitality organizations create a strong culture with guest-centered values and manage it very carefully because they know its importance. In all service industries, the product is largely intangible. One result of this intangibility is that the value and quality of the product are determined exclusively in the mind of the customer. Only that person can tell you if the service experience was a wow or an ow, and whether the experience was worth the time and money spent on getting it. Because each customer determines the quality and value of the service experience, how should the organization concentrate its efforts to make sure each guest has a good one? Almost invariably, the customers judgments of quality and value depend on the excellence of the customer-contact employees. They can acquire the basis of that excellence in employee manuals and training programs. But front-line employees frequently face problems and decisions not covered by their formal training. In those situations, employees must be able to translate the cultural principles of guest service into the appropriate behavior in each situation where they are responsible for making the customer experience work well. The organizational culture lls in the gaps between (1) what the organization can anticipate and train its people to deal with and (2) the opportunities and problems that arise in daily encounters with a wide variety of customers. There is no way to anticipate the many different things customers will do, ask for, and expect from the service provider. The power of the culture to guide and direct employees to do the right thing for the customer becomes vital. Good managers know that the values, beliefs, and norms of behavior that the culture teaches its employees become critical in ensuring that the front-line employee does what the organization wants done in unplanned and un36 ORGANIZATIONAL DYNAMICS

anticipated situations, even if the organization hasnt said so. The culture must be planned and carefully thought through to ensure that the message sent to all employees is the one the organization really wants to send. An important part of any strategy is to ensure that everything the organization and its leadership says and does is consistent with the culture it wishes to dene and support. The more intangible the product, the stronger the cultural values, beliefs and norms must be to ensure that the customer-service employee provides the quality and value of customer experience that the customer expects and that the organization wants to deliver.

Service Employees: Always On Stage

Hospitality organizations, and most other service organizations, are different from traditional manufacturing organizations in some fundamental ways. First, the people manufacturing a service experience are not hidden away in an authorized access only factory oor. They are on stage all the time while they are producing lunches, hotel check-ins, Disney magic, or trips to New York. If they dont make the experience work, it wont work, and there is no rework pile for a bad experience. Thus, employees in the hospitality industrylike those in most service industriesnot only have to be capable of producing the service experience; they have to do so while guests or customers are talking to them, distracting them, and watching everything theyre doing. Additionally, these employees have to x any errors made in this production process on the spot and appropriately. The skill set required of hospitality employees is considerably more complex than the set required to participate in the production process of a tire, refrigerator, or auto in a manufacturing plant. Whats even more amazing is that the hospitality guest contact employees producing these consistently outstanding experiences are frequently the same young people whose

parents cant get them to clean up their rooms at home. But the problem is even more complicated than merely training employees to do their jobs, on top of having good interpersonal and problem-solving skills. The hospitality organization has to serve a multitude of very individual people or VIPs, each of whom expects something a little bit different from the experience. The hospitality product cannot be packaged and put on a shelf for purchase. It is ever changing and dened anew in the mind of each guest every time it is experienced. Traditional organizations rely on policies and procedures to ensure proper command and control of the employees producing the products. Hospitality organizations have to substitute culture and empowerment (to be discussed later) for command and control, because no one is smart enough to anticipate and plan for every conceivable desire and requirement that each unique guest will bring to the hospitality experience. Thus, benchmark hospitality organizations spend considerable time and money teaching a culture value system so that when a guest wants something that isnt discussed in the training manuals or cant be done by the book, the employee who has learned the culture will still know how to do the right thing for that particular guest at that particular moment, will want to do the right thing, and will be empowered by the organization to do it. Here are some examples of how a strong culture has motivated and guided employees to make the right decisions.

Culture, the Front Line, and Service Faults

People on the front line are often the rst to notice or be informed of service faults or failures. If the culture has a strong service orientation, they will x the problem if they can; if not, they will report the need for improvement. A British Airways baggage handler at Londons Heathrow Airport noticed that passengers waiting for their luggage at the carousel were asking him a strange ques-

tion: How can I get a yellow and black tag for my bags? The passengers had noticed that bags with those tags arrived rst, so they wanted the special tags. The baggage handler realized that because the passengers asking him the question were the rst ones to arrive at the carousel, they had to be rstclass passengers, who deplaned rst. And yet they had to wait 20 min on average for their bags, while some other passengers were getting rst-class luggage service. First-class passengers are highly protable to airlines, and the baggage handler saw that something was wrong with the service being provided to them. The baggage handlers inquiries revealed that the passengers perhaps least deserving of rst-class luggage service, those ying on stand-by, were getting it. Because they were the last to board, their luggage was loaded last and unloaded rst. The baggage handler reported his ndings and made a simple suggestion: load rst-class luggage last. Although the idea was simple and had obvious merit, implementing it meant that BA had to change its luggage-handling procedures in airports all over the world, and that took time. But it was done, and the average time of getting rst-class luggage from plane to carousel dropped from 20 min to less than 10 worldwide, and under 7 min on some routes. An employee who understood the BA culture saw a way to improve the system and got it done. He had no idea he was going to receive a service award of $18,000 and two round-trip tickets to the United States on the Concorde. The baggage handler didnt take a creative path to solving a customer problem because he had to, but because he wanted to. He saw a problem, saw the creative possibilities in a new idea, and passed it along for development. How can any organization create and sustain a culture like thisin which employees not only do their jobs efciently and competently but also want to go the extra mile? How can such a strong customerfocused culture be created? Two ways suggested by the success of these benchmark
SUMMER 2001 37

guest-service organizations are (1) by celebrating the organizations service heroes and telling their stories, and (2) by encouraging the organizational members to teach each other the appropriate cultural values. But the hospitality benchmarks also know that the most important contribution to the organizational culture is the behavior and teaching of its leaders. American Express creates and maintains a strong customer-focused culture. One way is by recognizing those employees who have provided exceptional service to customers as Great Performers. Two customer service people in Florida got money to a woman in a foreign war zone and helped her get on a ship out of the country; travel agents in Columbus, GA paid a French tourists bail so he could get out of jail; an employee drove through a blizzard to take food and blankets to stranded travelers at Kennedy Airport; an employee got up in the middle of the night to take an Amex card to a customer stranded at Bostons Logan Airport. Any organization has its cultural heroes employees who have gone above and beyond the call of dutyand their stories should be preserved and shared. American Express distributes its Great Performers booklets to all employees worldwide.

Teaching the Culture Through Stories, Heroes, Myths, and Legends

The Olive Garden restaurant uses stories to teach employees the cultural value of service it hopes to communicate. At new store openings, when the corporate culture is being taught to new employees, the opening manager will usually tell a story about a customer named Larry. It seems that Larry came to an Olive Garden and found the armchairs uncomfortable for his signicantly above-average weight. He wrote the company president a letter praising the food and complaining about the chairs. In response, the Olive Garden ordered and placed in each restaurant two Larry Chairs that have no arms. These chairs are discreetly substituted for the
38 ORGANIZATIONAL DYNAMICS

normal chairs whenever a person of extra girth comes into the restaurant. Needless to say, telling the Larry Chair story at an opening reveals a great deal about the companys cultural values and sends a strong message to the new employees about how far the restaurant (and they) should go to respond to and meet a customers needs. All organizations can use stories, heroes, myths, and legends to help teach the culture, to communicate the values and behaviors the organization seeks from its employees in their job performance, and to serve as role models for new situations. Most people love stories. Its so much easier to hear a story of what a hero did than to listen to someone lecturing about customer responsiveness in a formal training class. Not only are the stories more memorable than some arbitrary ve points seen on a classroom overhead, but the tales can be embellished in the retelling and the culture thereby made more alive. Tales of old Joe and what wondrous things he did while serving customers teach desired responses to customer concerns and reafrm the organizations cultural values at the same time. Every organization should capture and preserve the stories and tales of its people who do amazing things, create magical moments, to wow the customer. The effort will yield a wonderful array of inspiring stories for all employees, as well as send a strong message about what the organization values and desires in its employees.

Employees Teach Each Other

Another way to teach the culture is by encouraging employees to teach each other. Outstanding guest-service organizations engage all their members in teaching each other the organizations culture. Southwest Airlines created a Culture Committee whose responsibility is perpetuating the Southwest Spirit. Members promote the companys unique, caring culture to fellow employees. They show up in an employee break room with equipment and paint to remodel it. They appear at a maintenance facility to serve pizza and ice cream to employees.

They may appear anywhere at any time to lend a helping hand. Another Southwest effort to promote the culture and the Southwest Spirit was the Walk a Mile in My Shoes program, which encouraged people to use a day off without pay to shadow another employee doing another job. The program helped employees understand how their jobs t together in making the organization work. They also created a Helping Hands program, to get people to spend some time helping employees at other locations where the growth in trafc was overwhelming. All of these programs have had multiple positive effects for the organization and its employees. They reinforce the togetherness of the extended family that Southwest believes is an important part of its cultural value system, allow members to teach each other the cultural norms of helping, caring, and having fun at work, and provide a strong visible expression of the cultural values that all employees are encouraged to share.

ployees exactly as they want employees to treat their customers. They use rituals to recognize and reward the behaviors that the culture values, and they praise the heroes whose actions have reected worthy cultural values. Other employees can use these hero stories as models for their own actions.

Bill Marriott, Jr., Herb Kelleher, and Walt Disney

Bill Marriott, Jr., provides a good example of how a leader can help to sustain the culture. He is a constant teacher, preacher, and reinforcer of the Marriott cultural values of customer service. He believes in staying visible. He ies more than 200,000 miles every year to visit his many operations and to carry the Marriott message visibly and personally to as many people as he can. He is famous for dropping in at a hotel and chatting with everyone he sees. He has been known to get up early in the morning and wander into the Marriott kitchens to make sure the pancakes are being cooked properly. This intense commitment to personal contact with each and every Marriott employee and visible interest in the details of his operations have become so well known that his mere presence on any Marriott property serves as a reminder of the Marriott commitment to service quality. Southwest Airlines is also famous for this hands-on commitment to service. Herb Kelleher was the premier example of quite literally walking the walk through airports, planes, and service areas to show employees his concern for the quality of each customers experience. Even today this tradition lives on as all Southwest managers are expected to spend time in customer-contact areas, both observing and working in customer-service jobs. These actions send a strong message to all employees that everyone is responsible for maintaining the high quality of the Southwest experience. This same modeling behavior can be seen in the many hospitality managers who visibly and consistently stop to pick up small scraps of paper and debris on the oors as they walk through their faSUMMER 2001 39

Culture and the Leaders

All organizational leaders are crucial in transmitting and preserving the organizational culture. Managers of effective organizations constantly teach the culture to their employees, reinforcing the values, mores, and laws. Strong cultures are reinforced by top managements strong commitment to the cultural values. Ed Schein suggests that the only thing of real importance that leaders do is to create and maintain the organizations culture. Leaders who appreciate the importance of culture spend more time communicating values than they do on anything else. The benchmark leaders worship at the altar of the customer every day, and they do it visibly. They are personally involved in service activities. They back up slogans with dramatic, often costly actions. To instill values, they stress two-way communications, opening their doors to all employees and using weekly work-group meetings to inform, inspire, and solve service problems. They put values into action by treating em-

cilities. Employees see and emulate this care and attention to detail. Walt Disney was a benchmark of how to teach the organizational culture. Here is how he described his function within the organization: My role? Well you know I was stumped one day when a little boy asked, Do you draw Mickey Mouse? I had to admit I do not draw anymore. Then you think up all the jokes and ideas? No, I said, I dont do that. Finally, he looked up at me and said, Mr. Disney, just what do you do? Well, I said, sometimes I think of myself as a little bee. I go from one area of the studio to another and gather pollen and sort of stimulate everyone. I guess thats the job I do. Walt was supporting and maintaining the culture. He knew that to do so, he had to stay close to both his employees and Disneys customers. Only in walking around can managers see for themselves that the quality of customer experiences is high, that concerns of customers and employees are being met, and that everyone remains focused on the customer. Unlike the manufacturing industry, which can rely on statistical reports to tell managers how things are going on the production line, managers of these benchmark service organizations inform themselves about how things are going by staying as close to the point where the guest experience is produced as possible. Many restaurant managers are told to meet every customer and to make as many table visits as possible to talk to them; hotel managers wander the lobbies to observe the reactions of customers; and theme park managers monitor the looks on guests faces to make sure they are having a good time. All these strategies are based on the simple idea that the reason for the organizations existence and basis for its success is the customer. For these benchmark organizations, being out with the customers and interacting with the
40 ORGANIZATIONAL DYNAMICS

employees who take care of the customers is an important organizational value and not just a company slogan, and managers from the top down must set the example.

Culture, the Leader, and the Reward System

Leaders also teach the culture by what behaviors they support and dont support. A popular buffet restaurant decided to add a greeter position to welcome customers as they entered the restaurant. The manager told the newly hired employee explicitly that his primary responsibility was to greet and welcome the customers. However, as time went on, to keep the employee busy when customers were not entering the restaurant, the manager added responsibilities to the positionsuch as checking periodically to make sure there were enough trays or making sure that the butter dish was always full. The greeter quickly realized that the manager never complimented him for properly greeting the customers, nor did he ever say anything to him when he missed a customer because he was too busy with his other duties. But if he ever let the buffet line run out of trays or butter, he was strongly reprimanded. Therefore, by her actions or lack of action, the manager had redened the job description. The manager made her real priorities clear, and the employee adjusted his actions accordingly. Many a company tells its employees that they should make every effort to satisfy the customer. Then the company evaluates and rewards employee performance only according to the budget numbers. This practice has been called rewarding A while hoping for B. Most employees will naturally focus on the budget numbers and not on the customer-satisfaction ratings. Similarly, if the company tells its employees how important team performance is, but rewards its employees only as individuals, employees will see that team effort doesnt really matter that much. In the best guest-service organizations, the reward system gets constant and careful review to ensure that it is supporting and re-

warding behaviors that the organization wants repeated. Leaders can teach the culture by how they publicize and reward success. They can also teach the culture by how they react to service failures. Whether the organization handles service failure well or poorly affects the customers, of course, but it also tells the employees how committed the organization is to customer satisfaction. Employees need to know that this commitment is more than a slogan. How the organization nds and xes its service errors sends a loud message to employees about what the organization truly does believe in. Let us say that the management of Hotel A is defensive about customer complaints and keeps them secret (though employees will hear about them), resolves complaints as cheaply and quietly as possible, and seeks people to blame for the complaints. The management of Hotel B, on the other hand, aggressively seeks out and xes service failures. It disseminates ndings about complaints and failures to employees, makes quick and fair adjustments for failure, and seeks solutions rather than scapegoats. We can predict that the employees of Hotel B will give better service.

tion, they use these cultural values to guide their behavior and act accordingly. In addition, as part of their teaching responsibility, managers tell stories about employees who did outstanding things for guests. Disney employees know that the commitment of the organization to guest happiness and satisfaction is nearly absolute and that they should do whatever they can do ensure the delivery of this service product, this happy experience, to each and every guest. Culture makes a tremendous difference, and the benchmark organizations protect, nurture, and teach it whenever they can. Organizational leaders in all elds know intellectually that culture is important, but they do not always teach and live the culture with the force and consistency necessary to drive employee behavior.

Employee Empowerment Makes It Possible

A strong, customer-focused culture creates employees who are eager to give outstanding service, but that is not enough. They must be enabled or empowered to do whatever it takes to meet and exceed customer expectations. The empowered service provider can personalize the service experience to meet or exceed each customers expectations and can take whatever steps are necessary to prevent or recover from service failure. And on those complementary ends can hinge organizational success or failure. A young family was visiting the Magic Kingdom in Orlando. They had saved for some time to come from their home in the Midwest and had planned carefully to make this trip truly memorable. They were spending the week in the Grand Floridian, the most expensive resort on the property, and were enjoying their trip fully. One day, toward the end of their visit, they were on the Haunted Mansion ride, and the little boy in the family lost his Mickey ears during the ride. At the exit, the father displayed his obviously distraught son and asked the ride operator to look through the cars to see if the ears might be there. These werent just a hat
SUMMER 2001 41

The Most Important Job

The most important job of the leader may be to frame the cultures beliefs, dene its values, reinforce the appropriate norms of behavior, recognize and tell stories about those who personify what the culture should mean for the customer, and nd every possible occasion to celebrate when the members make good things happen for their customers. If peerless service is important to the leadership and they tell the members so, clearly and without equivocation, the members who believe in that culture will do the right things to make excellent customer service happen. Disney, for example, teaches each employee the hierarchically arrayed goals of safety, courtesy, show, and efciency. Each employee knows that the rst priority is safety, the second is courtesy and so on. Whenever employees confront a new situa-

to this little boy; these were his prized possession, purchased on the rst day of the visit and worn faithfully ever since. The ride operator looked. The ears were nowhere to be found, and the operator watched as hope died in the little boys face and the fathers concern grew. The ride operator seized the moment, went across the walkway to a souvenir stand, took two Mickey hats, put one on dads head and one, triumphantly, on the boys. Management got a letter of thanks a few weeks later. The family spent a lot of time and money at the theme parks, but this one simple act by a truly committed employee made the trip memorable for this family. If the Magic Kingdom employee had not been empowered to go grab a set of Mickey Ears for the little boy, the family would have returned to the Midwest unhappy. The ride operator had absorbed Disneys guest-focused culture and had also been empowered to take any reasonable action necessary to achieve guest satisfaction. The action cost Disney a little bit of money, but the payoff Disney earned in good will, customer satisfaction, and positive word-ofmouth advertising more than made up for any lost revenue. Employee empowerment is essential in hospitality because situations occur so frequently in which the employee must make a decision on the spot about what to do for the guest to produce a wow or x a problem. If the guest asks for special service, complains about a service error, or wants to substitute one thing for something else, the guest contact employee must know what to do and be able to do it. Training and culture teach the employee what to do. Organizational willingness to empower the employee to do it will ensure that the employee can match the experience to the guests expectations. Clearly, employees have to be not only well trained, but also well trusted to make the right decision for the guest without requiring time-consuming checks with a senior manager for approval. Guests want their problems solved and their needs met now. Employees must be empowered to respond
42 ORGANIZATIONAL DYNAMICS

now, or guest expectations will not be met, and guests will go elsewhere in the future. The benchmark organizations give their employees the training and latitude to make those responses.

MANAGE EACH MOMENT OF TRUTH

The third key to hospitality success is that the successful hospitality organizations make an enormous effort to study, understand, and then manage each moment of truth occurring during the guests experience. Some of these moments can be known or predicted and can be managed; some that occur only occasionally can be prepared for; and some may take the organization by surprise. The benchmark hospitality organizations have condence that culture will ll the gaps at such moments. The moment-oftruth concept was popularized by Scandinavian Airline Services Jan Carlzon, who used it to make his employees aware, rst, of the number of separate interactions that customers had with the airline and all the different components of the airline experience and, second, the crucial importance of each interaction, each moment of truth, to guest satisfaction and organizational success. If one considers any customer experience in this way, identifying the potential and actual moments of truth during the time that the typical customer interacts with the organization providing that experience is relatively easy. From the visual appeal of the parking lot, to the way in which the employees greet customers, to the cleanliness of the restrooms, to the customers departure from the service setting each of these and many other points during the experience provide an opportunity to succeed or fail, to evoke a wow or produce an ow. The goal should be to fail no customer, and everyone in the organization should be engaged in watching out for failures at the moments of truth. The benchmark hospitality organizations know the crucial nature of these contact points and study them continuously to ensure that they

are all well managed and that each moment of truth will be a positive one for the customer.

Planning the Service Experience

One way in which the outstanding hospitality organizations ensure the success of these moments is to plan every detail of the entire service experience thoroughly. Once they have identied the key drivers of their guests, they plan the entire experience so they can be sure that the key drivers are present, and that all the details of the experience are understood, tested, and measured. Careful analysis of each contact point in the plan will reveal where problems might occur so they can be anticipated and avoided. One method of planning and analyzing the experience is to put a service diagram down on paper in as much or little detail as is helpful. A simple owchart of the activities associated with the service experience might do. Or perhaps the organization needs a detailed blueprint dening every component part and activity of the experience. Moments of truth at which service failure is most likely to occur can be identied on the blueprint and early-warning mechanisms included. Times can be attached to the activities to serve as measurement standards. Another approach to planning the experience is to use analytical models, typically but not always computer models, to simulate the guest experience. The organization can then analyze a wide variety of different situations that might occur to see what impact each might have on the customer. On a simpler level, role plays and structured scenario simulations can help employees practice handling different moments of truth. If studies show that service failures are more likely at one moment of truth than the others, the organization can use cause-andeffect analysis, possibly in the form of a shbone diagram, to analyze the causes of faulty service outcomes. Let us say that hotel guests are complaining about having to wait too long for room-service meals. That problem would become the spine of the sh in the

diagram. Then the general areas within which problems might arise that could delay the delivery of meals are attached as bones to the spine. Four typical areas might be equipment, personnel, material, and procedure. All of the possible contributors to an equipment failure then become bones attached to the equipment bone, and so on with each of the four areas. Using a technique called Pareto analysis, the percentages of late meal deliveries associated with each cause are listed next to the cause in their order of importance. The analysis might reveal that, say, 90% of all late meal deliveries were caused by only three or four of three dozen possible causes. In this example, taken from life, the organization determined that most late deliveries happened because room service personnel could not nd an available elevator promptly. Further analysis of the unavailable elevator shbone revealed that because not enough sheets were being stored on each oor, housekeepers were making inordinate use of the elevators to go oor to oor to nd extra sheets. Fixing the sheets problem xed the room service problem. What at rst appeared to be a personnel problem turned out to be a material problem.

The People Part

The plan of the service experience can be studied and fail-safed in hopes of making it work the way its supposed to work, every time, awlessly. But only the organizations people can make it work; they are the ones with whom customers usually interact at key points. All of the comments we have made about the importance of the organizational culture are relevant to the people part of the moments of truth. In addition, organizations obviously try to hire people who t the culture and have a desire to serve; they search out employees who love people and enjoy helping them. Having such employees helps because so many moments of truth are customer/server interactions. These employees typically start the day with a smile on their faces, and they pretty much stay that way regardless of the vagaries of human nature
SUMMER 2001 43

they encounter that might annoy, anger or provoke less guest-oriented people. Employees must of course be trained well and continuously in their job skills, interpersonal relationship building, and problem-solving techniques. The organization must also create a job environment that promotes fun, so that both the employees and the guests have an enjoyable experience. The benchmark hospitality organizations understand the statistical relationship between positive guest experiences and positive guest-contact employee attitudes. If employees are not feeling and acting positive, guests probably wont either. Finally, these organizations work hard to reward people for service excellence. The benchmark hospitality organizations nd excuses to celebrate success; they know that such celebration rewards, reinforces, and promotes guest service excellence.

The Importance of Measurement

In addition to planning or blueprinting the experience and effectively hiring, training, and rewarding the employees who provide the experience, the benchmark hospitality organizations also seek to dene specic, fair, and appropriate measures of what guests expect at the different moments of truth. They understand that what gets measured gets managed. Organizational studies may reveal that guests want the phone answered in no more than three rings, wont wait patiently in line for more than fteen minutes, and expect eye contact and a smile from employees coming within ten feet of them. These guest expectations then become specic measurable goals or targets that employees can use to manage themselves. If the phone isnt answered in three rings or the line wait exceeds 15 minutes, then a service failure is signaled that prompts remedial action by the employee without waiting for the guest to complain or a manager to intervene. Because the organization has taught employees what and how to measure, they know they should offer an apology, a coupon for a free dessert, or a room upgrade in the hotel if a standard is not met. Attention to measurement tells
44 ORGANIZATIONAL DYNAMICS

everyone that meeting or exceeding standards is an important determinant in the success of the guest experience, so everyone needs to pay attention to it. Measuring what is happening to the customer in every step of service delivery is critical in understanding where the problems are and whether the solutions being tried are actually xing the problem. Saying to a service provider, I want you to do a better job of satisfying customers because your customers seem unhappy doesnt give much guidance. To tell employees in measurable terms what guest expectations are and how well they are being met can be extremely helpful. Indeed, in the best circumstances when the measures of guest expectations and employee performance are clear, fair, and completely understood by employees, they will be able to measure for themselves how well they are doing. Self-management through self-measurement is a fundamental premise for the W. Edwards Deming quality-circle movement that anchored the quality-improvement literature and efforts in totalquality management. All organizations use measurements and standards to some extent. Understanding that you cant manage what you cant or dont measure, the benchmark hospitality organizations measure all aspects of service delivery conscientiously and consistently.

Preparing for Failure

A nal point when managing moments of truth is to be prepared for failures, because they are going to happen no matter how good the plan and the people, and because every failure is a moment of truth. The motto should be, Fix failures fast and fairly. The guest contact employee who knows that a failure has occurred, that a service standard has not been met (whether the guest noticed or not), should be able to x the problem fast and fairly without senior manager involvement. No organization wants to fail, and all organizations want to recover when they do fail. But the benchmark hospitality organizations know that they can end up much better or

worse off than they were before the moment of truth, depending upon how successfully they can recover from failure Here is an example of an organizational procedure designed to help customers avoid failure at a potential moment of truth: nding the car in a crowded parking lot. Speedparking is often used at theme parks, where a lot of cars are arriving across a broad time window. Under the direction of a parking attendant, the cars line up and park in successive spaces. Each row is lled before cars go to the next row. This parking method is fast; it keeps all cars facing the same way and in line to park in the next available space. If a departing family shows up lost and uncertain as to where their car might be, Disney has a way to handle the problem. When customers rst stream into the parking area, the Disney parking attendant writes down the time each row is lled. To help a family that cant nd the car, the attendant pulls out the list of what sections were parked at what times. The attendant asks the family about what time they arrived at the parking area, then uses the list to locate the car. In this way, Disney prevents a customer-caused failure that could have ruined the days experience. A moment of truth in the food service business is the moment when the guest looks at the food as it is served; is it what the guest ordered? If not, a service failure occurs. Hard Rock Cafe prevents failure at this moment of truth by hiring an extra person to stand at the end of the food preparation line to match the order with whats on the plate, to catch discrepancies before the customer ever sees the order. Even though the traditional job description for wait staff includes this checking responsibility, the extra person reduces the possibility of error even further. The wait for service and the customers reaction to it comprise a moment of truth in many service organizations. If the wait is so long as to annoy the customer, a service failure results. The Opryland Hotel in Nashville cross-trains some of its employees so that they can be called upon in peak demand times when the front desk is extra busy. If the

lines get too long for the regular front desk team, this swat team staffs extra computers to reduce the wait for the incoming or departing customers. When the customers themselves make a mistake that could lead to an unsatisfactory service experience, a moment of truth occurs. Leading organizations prepare for these moments so they can help to correct them with sensitivity. That way customers leave feeling good about their overall experience and appreciating how the organizations personnel helped them redeem themselves. We have already shown how speed-parking can help customers nd lost cars. Imagine how depressed you would feel if the parking attendant guides you and your large family to your lost car on a hot day, then you nd that you have lost your car keys and are locked out of your car. Disney has a way to handle this problem. Its parking attendant, prepared for this moment and perhaps even looking forward to it because it provides an opportunity to wow you, calls the parks Auto Patrol to your rescue. In seconds, they make you a new set of keys for free! Even though key problems are not its fault, the customeroriented organization believes that the customer needs to be wrong with dignity. Benchmark hospitality organizations know that customers who are angry at themselves may transfer some of that anger to the organization. To overcome this very human tendency, these organizations even nd ways to x problems they didnt create so that angry, frustrated people leave feeling good because a bad experience has not been allowed to overshadow or cancel out all the good. By providing this high level of customer service, the organization earns the gratitude and future patronage of customers and enhances its reputation. Any organization that seriously reects on what really happens to its customers when they storm out of the store because of a poorly handled purchase transaction, leave an auto dealership unhappy because they cant get their defective tires replaced, or write an angry letter to the computer manufacturer because their power supply keeps cutting off, should spend some time considSUMMER 2001 45

ering the lessons that hospitality organizations have already learned well. Unhappy customers dont come back, and worse yet, they may set up a web site and tell the entire world about their unsatisfactory experience.

CONCLUSION
These three pointsmake every decision with the customer in mind, build a strong service culture, and manage the moments of truthare a large part of what makes the best guest service organizations the best, and they can be keys to improving any organization that serves the customer. Give customers what they want instead of what you think they should want, build a culture where everyone believes in providing service excellence, and then manage every moment of truth so as to provide the best possible experience for customers. They will then be at least satised and possibly wowed. They will return again and again to spend their money with you instead of with your competitors. These are the competitive advantages of outstanding hospitality organizations, and they work very hard to sustain them. These three keys can become competitive advantages to organizations in just

about any eld. Whether a customer is seeking to buy a car, refrigerator, shirt, or house, or get a loan or u shot, set up a bank account, or open a stock market account, these lessons can be applied. Too many organizations set themselves up for their own convenience, listen to their engineers instead of their customers, and hope quality control catches all their mistakes. They should instead be seeking to implement these key lessons from hospitality and trying to listen more systematically to their customers to understand what they really expect from the product or service. Then, they can organize themselves to deliver this product or service as seamlessly and effectively as possible. An old saying in hospitality is true in any industry: If you dont give customers what they want, your competitors will. This is a hard lesson for many in the more traditional business sectors to really believe, but the successes of the benchmark hospitality organizations provide a convincing argument that emulating what they do is worth a try.

To order reprints of this article, please call 1(212)633-3813 or e-mail reprints@elsevier.com

46 ORGANIZATIONAL DYNAMICS

SELECTED BIBLIOGRAPHY For more on making decisions with the customer in mind and treating customers like guests, see Robert C. Ford and Cherrill P. Heaton, Managing the Guest Experience in Hospitality (Albany, NY: Delmar Publishers, 2000); and Leonard L. Berry, Discovering the Soul of Service: The Nine Drivers of Sustainable Business Success (New York: The Free Press, 1999). The information about the Amex database and relationship marketing is from Business Week, 5 September 1994, 61. For more on organizational cultures, see Edgar H. Schein, Organizational Culture and Leadership: A Dynamic View (San Francisco: Jossey Bass, 1992). The story of the SAS purser and the snowstorm is from Karl Albrecht, At Americas Service: How Your Company Can Join the Customer Service Revolution (New York: Warner Books, 1988), 124 125. The story of the British Airways baggage handler and the yellow and black tags is from Alan G. Robinson and Sam Stern, Corporate Creativity: How Innovation and Improvement Actually Happen (San Francisco: BerrettKoehler Publishers, 1997), 9 11. The Southwest Airlines Culture Committee and the Walk a Mile in My Shoes program are described in Kevin Freiberg and Jackie Freiberg, Nuts! Southwest Airlines Crazy Recipe for Business and Personal Success (Austin, TX: Bard Press, 1996), 166 172. The Bill Marriott, Jr., story illustrating the importance of the leader in dening and sustaining the organizational culture is from Albrecht, At Americas Service, 130. The Walt Disney pollen quote appeared in Walt Disney: Famous Quotes, printed for Walt Disney Theme Parks and Resorts, 1994. For more on empowering employees, see Robert C. Ford and Myron D. Fottler, Empowerment: A Matter of Degree, Academy of Management Executive 9 (1995), 2128. A compelling discussion of the link between employee satisfaction and customer ratings of service quality can be found in Benjamin Schneider and David E. Bowen, The Service Organization: Human Resources Management Is Crucial, Organizational Dynamics 21 (1993), 39 52. The relationship between employee satisfaction, guest satisfaction, and prots is discussed in James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Prot Chain: How Leading Companies Link Prot and Growth to Loyalty, Satisfaction, and Value (New York: Free Press, 1997). To read more about service failure, see Stephen S. Tax and Stephen W. Brown, Recovering and Learning from Service Failure, Sloan Management Review 39 (1998), 75 88. Jan Carlzons Moments of Truth (New York: Ballinger, 1987) provides a detailed explanation of that concept and how Carlzon used it to rejuvenate SAS. For information about planning and blueprinting to help ensure the success of the service experience, see G. Lynn Shostack and Jane KingmanBrundage, How to Design a Service, in Carole A. Congram and Margaret L. Friedman (Eds.), The AMA Handbook of Marketing for the Service Industry (American Marketing Association, 1991), 243261. Flowcharting the service experience and the shbone technique for problem solving are described in D. Daryl Wyckoff, New Tools for Achieving Service Quality, Cornell Hotel and Restaurant Administration Quarterly 25 (1984), 78 91.

SUMMER 2001 47