With Horst Schulze
Randy welcomes a very special guest, legendary hospitality leader Horst Schulze, on episode 127 of The Unique CPA. The co-founder and former COO of Ritz-Carlton hotels, as well as the founder of Capella Hotel Group, Horst shares invaluable insights on achieving excellence through defining a specific goal for your business, empowering employees, and making customers feel cared for. Underlying his philosophy, which is centered around having a concrete, attainable goal, is a sense of responsibility to people and society. He also discusses his book, Excellence Wins, which has been purchased en masse by CEOs around the world to help shape their organizations’ culture.
Today, our guest is Horst Schultze. I am extremely excited about this podcast today. I had the pleasure of hearing Horst speak only for about nes minutes because unfortunately I had a call, but we were at a conference together in San Diego recently. Just to give you a quick intro to Horst, Horst is the co-founder of Ritz Carlton Hotels. Yeah, that’s a pretty big deal. He retired years ago, but that only lasted a couple days because he—as I read in some of the things he said in the past is he likes playing hotel—and so Horst started another hotel group shortly after his retirement from Ritz Carlton that ended up being a highly acclaimed organization, Capella. Today, you can find Horst out educating, talking, speaking about excellence, he’s written a book called Excellence Wins: A No-Nonsense Guide to Becoming the Best in a World of Compromise. I can go on and on about Horst. But let’s get to Horst, to the guest of honor here today first. Welcome to The Unique CPA.
Thank you. Nice to be with you.
Yeah, unfortunately, when you were out there in San Diego speaking I had to walk out after about ten minutes with a phone call. And man was I upset I had to do that! Because especially afterwards, I heard everybody talking about what a great speaker and educator, and talking about excellence and all that you did. So I don’t know. Let me give you a few minutes to kind of, you know, give us why this is so passionate for you, after so many years in this profession, you’re still allowed educating on it.
Yeah, well, it’s interesting—what, who we are is the input that we had from many people before us and during our lifetime and so on. And I had especially heavy input by the first maître d’ I worked for. I actually left home when I was 14 years old, lived in a dorm room 100 miles away from my home. And when I arrived there, the reason was, my parents found this job as a busboy, is I wanted to work in a hotel business. And they wanted to get me to the best hotel in the region. And that was the best hotel in the region.
But the maître d’ welcomed me—he said two sentences that changed my life. Now, in the moment, 14 years old, I didn’t get it. But he lived those sentences, and consequently, over the next three and a half years working for him, I adopted much of it, obviously. So the first thing he said—he said just one sentence: “Tomorrow, show up at seven a.m. If I meant one minute after seven, I would tell you so.” He established discipline, controls, excellence, every single day, in one sentence. I didn’t get it. But I learned later.
And then he said, one more sentence, he said, “And don’t show up to work, show up to create excellence in what you’re doing.” And that’s the word, “excellence”—he used the English word “excellence,” and I was in Germany. He spoke five languages, fluent. And he always used the word “excellence” when he referred to excellence. In fact before I left there, two and a half years later I went to Switzerland to work a season in Switzerland, and on and on, America, Paris and London, and so on and came back to the U.S. eventually. The last thing he said, “Come here. Look me in the eyes. Never go to work. You’re a human being—you’ve got to create excellence.” Chairs on which you sit, work. Computers, as he would say today, work, or a telephone works. A spoon works. You—and those things fulfill functions—you are a human being. You create excellence in what you’re doing. He actually made me promise that: “Never go to work. You’re a human being.” So he had a huge influence on me.
That’s great. Is this, I’m just curious now before we get into anything else, is this somebody you were able to stay in contact with? Did he end up seeing the Ritz Carlton come to life?
No, no, no, he had died a long time since. I left there and worked in the finest hotels in Europe. And then I ended up for a year in—I was a room service waiter in San Francisco, and I’m still here! That was 1964. I was working in The Savoy in the grill at the time as a waiter, and somebody said, “Hey, do you want to work in America?” I said yes. Now, if he would have said Zimbabwe, I would have said yes, since I was young. And he said, well, give me an address, I’ll send you some papers, you go to the embassy, you get the papers and come to the U.S., and I did.
You didn’t tell him, though, you weren’t gonna go to work, you were gonna go to create excellence?
No, you know, interestingly enough, it’s kind of an interesting question. I finally ended up to work as a room service waiter in the Hilton in San Francisco, with the intent to go back within a year or two. But I wanted, before I got back, I wanted to learn the language well, I still work on that, okay?
You’re doing well.
And I wanted to learn a new culture, new systems, new ideas. And I wanted to have a promotion, from room service waiter to room service supervisor. I know I could get that, because I could see that’s how they promoted in the Hilton. And I knew I was the best waiter, and my manager in room service was German too. So I had an in, clearly. And sure enough, a few months later, another supervisor got promoted, and a manager said, “tomorrow morning, show up at eight o’clock, we’re going to say goodbye to Bill and wish him good luck, and I’m going to announce the next supervisor,” which of course, would be me.
So I went in at eight o’clock, and we applauded, Bill got promoted. And he said, “The next supervisor is Fred.” And I knew I wasn’t Fred. Now you know, there’s anger and his pain and this ego, and this “stupid management,” all that was in my mind. It took me several months to admit the other guy deserved it more.
Once I realized that he came to work five minutes early, I arrived five minutes late—I partied a lot in the evenings. I’d hardly say good morning. And he’d say, friendly, “Hello, everybody.” I mean, the manager asked, do some side work over here, like folding napkins or something like that. I said, why me? The other guy said, I’m happy to. I then went back to my little furnished room where I lived, three blocks away from the hotel, and I talked to the maître d’. Now he had passed away—he didn’t show up, don’t worry. But I talked with him. And I said, “Forgive me, I went to work to work.”
And I promised him It will never, ever happen again. And I promise you it didn’t.
Every morning, I remind myself in the beginning, I wrote on the mirror, “Go create excellence.” Every morning, I remind myself, I’m a human being, I’m better than just fulfilling a function. I’m not the chair. And my career took off.
I would say! That’s, right there, I mean, man, we can just go into a long story of leadership there, the leadership that that maître d’ showed you and that stuck with you all these years, and then you realize you weren’t following the things you had promised him you would.
It took seven months to admit that, by the way, my massive ego. I eventually admitted it and then approached the situation, and went back to him and said, “Excellence, yes.” And then from there on, it changed my life. Totally, totally.
Well, that’s amazing. So this is The Unique CPA—I love the story. And we’re gonna go into a lot of stories because, I just keep getting goosebumps just listening to the stories you’re already telling. Let’s try to talk about, and then we can probably do it in general, but I’m sure we can get more specific, with with our profession, the accounting profession. You just spoke at a conference. We have many things that that I think can be better, that can be changed, and that you and I said before the podcast, that some of the things that we’re dealing with are not unique to our profession. We feel like they are, but they’re not. So we have all kinds of things we can go into.
But one of them is, just, people aren’t coming into our profession right now. We’re not attracting and we’re not retaining people. I feel the culture needs a bump up, because people just like, you know, they decide, hey, I want to go into IT rather than accounting because IT is a lot more fun and exciting. And so there’s things that we’re just having struggling with as an accounting profession. From your standpoint, creating excellence from customer service from all that, what can we do to be better as a profession, I think? Big question!
Yeah! Well, it’s really, you’ll hear the same comments from every industry. Understand, you know, I’m on several boards, I consult with several companies. I make speeches, you know, I spoke to you, the next day I’ve spoken, and the next day I spoke in Los Angeles, the following day in Kansas City, on two totally different industries.
And I heard the same feedback. And it’s the same issue. It’s really—forgive me, now here comes this stupid words that everybody uses—a leadership issue.
Everybody talks about leadership, everybody talks about culture, everybody talks about alignment when it seems nobody knows what it really is. Look, I’ll sit in boards with several CEOs, and it is sometimes pathetic, I have to tell you, the thinking of people. We have to understand, no matter what we produce, if I’m building tractors, or I have a hardware store, or I’m a CPA, or I have a hotel, it’s not about us. It’s about our customers. And the way I can reach these customers is through my employees. Look, I had hotels in five continents. And each one was voted number one in their location, by the way, and the company number one in the world. The company I started afterwards, Capella, is now rated number one in the world, alright, and now I sold it. But it is no secret. And I’ve worked with companies that are exceptional.
But we have to understand, is that first of all, what is leadership? My goodness, we talk about them in pathetic ways. It says it—I’m leading you somewhere. And I talk to CEOs. And they say, yeah, I got that. And I say show me where you lead your people in your company. And you know what they show me? They show me a mission statement, right? Need to do this and this excellent. Well, that’s not leading. You’re there. That’s what you do. Where do you want to be in ten years from now, or twenty years from now?
I started this company, to give that as an example, and said, wve had no hotel, I started with the hotel that was in construction, it was being built as a Holiday Inn. Finished the building. And I said the only way to join and run your company, to the investors that were looking for an operator, I said, if you let me go top end. And they said you can do what you want, you’re the operator.
So I decided I will create the finest hotel company in the world. That’s a vision. Now I have something where I can lead people to, because I have determined a destination for the work that I do. But I have to make sure, now I have to say as a leader, is my vision good for all concerned? Is it good for the investor? Not just a simple yes. agonize about it. Number two, is it good for my customer? Number three, is it good for society as a whole? And number four, most importantly, is it good for every employee?
So once I know my vision is good for all of them, then as a leader, I cannot compromise it anymore. Now my role is because it’s good for everybody to make this the best hotel company in the world. Now from here on, I don’t hire people anymore to come to work for us. If there is an issue, we hire people, let’s be very honest. We go out and hire people to fulfill a function. In my case, cleaning toilets, checking people in, and so on. But that’s not why I hire them. I hire them to join me in a dream to become the finest in the world, and giving them purpose.
Now, Aristotle already said 3,000 years ago, if people want to be fulfilled, they need purpose and belonging. I’m inviting them to be part of something—to belong and have purpose. That’s how it has to start and show them. But then I have to connect them that the purpose of being the best in the world will, for you, create more opportunity, more income, recognition, honor, definement—you will be defined as the finest and abroad. I’m offering you that to join me in that wonderful journey. Now, there is no function I’m offering you. It starts there in the selection. And eventually, a person works for you and they leave and they don’t want to work for you. And we say well, they were not good. Wait a minute, then why did you hire them?
How did you orient them? How did you train them? What is your work environment? It’s you, Leader! It’s not them. So if you create that kind of an organization, and let me just explain the processes: Number one, select them right. Number two, orient them right. A key element, orientation. First day of work, what do we do the first day of work? I can tell you what you all do: Yeah, here’s our rules and regulations. Here’s the handbook, here’s the insurance papers. Here’s this and this. And when you’re finished with all that, to the manager, I will say, make this team speech. “We are a team here,” the famous team speech, without giving an objective. You’re not a team unless you have a common objective. But then talk about team without saying, “Here’s what we want to accomplish together. Here’s our objective.”
And then on the first day, you say to the new waiter, who is Bill, now Bill, I’ll let you work with Joe over here, he knows the ropes—suddenly, you’re in the rope business. And you turn Bill over to Joe. And they leave, and on the way to the kitchen, let’s say Joe tells Bill, “This company sucks.” And that’s the new guy’s orientation.
Great. And you have expectations? Let me tell you, I did every orientation at every new Ritz Carlton around the world, and told them, here’s who we are. Join us. Here’s where we’re going. It’s good for you. Be with me. And then I stayed there to train. I didn’t go as a CEO to have a glass of champagne with everybody and dance. No, I was trying to train the employees and teach them. And our turnover in the hotel, at Ritz Carlton, our turnover—now I’m gone a long time, I don’t know what it is today. First of all, were voted number one in the world for 14 years in a row.
Number one brand in the world. And I didn’t just sit down and hope that happens. We had a process. Number two, orientation. The first day we tell them the behavior that is needed in our job and how, and who we are, and so on. Because behavior cannot be taught after a person is 16 years old, unless there is a significant emotional event in a person’s life. And the first day of work is a significant emotional event. And we raised it.
And the number three thing we do, of course, teach the processes. And number four, we sustain it all. Everyday, you cannot go to work in my companies without having a five minute meeting where we remind you that we’re here for the customer, and so on. Oh, they know it already? It doesn’t matter, I will keep it right here in front. So that is the process, is to accomplish that people feel proud of you, and want to work and want to do what the company is all about. Let’s look at it for a moment.
There are all kinds of people over there, that’s your market or your potential market. I have to know what is the expectation of that market relative to my product? What is their real expectation? I can you tell you one expectation—they want to be respected. So not only your your tax work and so on, they have other expectations. And you should know that. And you should now align—yes, this word, another buzzword—align your employees to what those expectations and you the manager create processes, system measurements and controls, so it will happen. But it makes sure that the customer is respected.
And if you bring leadership into the equation, you create an environment where the employer wants to do it—wants to do it. Well, that one too, if you introduce them already, what it means to them to be highly respected, what is your future and so on? You connect to them. The millennials today say—here’s another one, the millennials, and here’s a big deal. The millennials, the two things that are a key differential about them is number one, they say, do it my way. My way. Okay, when they buy a McDonald’s, I order a number one, they say I’ll take a number one, but I take two slices of tomato and no mayonnaise, pickle and relish. That’s how they work.
My way. In their work, they want to give input relative to their work. But listen to them. They know their function better than you do. So the other thing they say, what is in it for me? Well tell them: If we are here accomplishing our objective, here’s what’s in it for you. All kinds of recognition, all kinds of honor. You’re defined as somebody exceptional, because you’ve worked with our company. That’s what’s in it for you. I mean, my goodness. And then the other buzzword, let’s get rid of that too now, and then we’re done. I’m ready for any kind of question.
It’s all the same, every company I’ve worked with—the other one is culture, culture. Everybody talks about culture. It’s not enough to use the word culture. What is the culture? The culture is the common belief of the organization. How do you communicate that belief? How do you visualize the belief? Every day we give a message before in our five minute meeting, about who we are, when we open a new hotel, what we are thinking. Every day, the same conversation takes place in every hotel around the world, every day, we send out comments.
Consistency is key, too.
Consistency, and create a common belief: we believe we’re the best. We believe that we will benefit. We believe that we’ll be respected. We believe we’re the greatest hotel in our industry. We believe that together.
That’s amazing. So that just there, I think we can take that as a profession, and change the perception and reality of our profession. But the perception is, I think, a key with it as well. And again, more than our profession, but the perception is that we don’t care about people. And you just told us how we can do that.
Yeah, but the first thing that you have to learn and all that is that you are in the service industry.
And that means to it’s very standard that you care for your customer. Service means it starts the instant I make contact with the customer. That instant. We have it as a greeting, good morning, a moment, in that moment, watch out, you will meet a new customer, it doesn’t matter whether on a telephone or somehow, or in person. In the moment when you meet them, you cannot help it, subconsciously you make a decision about them. And that society tells you different, but this is a fact and every behavioral analyzer will tell you that. That is, we can’t help it, right or wrong. It’s not our fault. We do it subconsciously, we make a decision.
But wait a minute. They’re making a decision about you the moment when they meet you. So it has started—your relationship with the customer has started. Your service to the customer has started. “Welcome. Good morning.” Instead of “hi,” like I would say to my equal. No, no, no, we’re not equal. I respect you, and I’m professional. I let you know that by how I say good morning, how I look, how I act. I’m going to say to you the first moment I meet, I make it clear to you that you can trust me. I look you in the eye and say “Good morning, sir. I’m delighted to meet you. Good morning. How are you today?” And I look in their eye, and I look right, when I meet you as a customer and I act right, and I smile at you. And so now that’s the first step of service.
Now here comes the second step of service: it’s not about you. It’s doing your best relative to your product or service. Doing your best to help them. And if that is your mindset, you will never lose them. They become loyal. There are three types of customers: They are the dissatisfied ones. Watch out. They become terrorists against your company.
They go on social networks. So you cannot afford that. If you’re any smart, you know you cannot afford that. So they’re dissatisfied ones. And then there’s the satisfied ones. They’re satisfied, and they go next door if there’s a better deal. And then there’s the loyal ones. Now that’s another trope, customer satisfied, customer loyalty. But what is it? Customer loyalty is nothing else but they have developed trust in you. And here is a a very important thing. I hope everybody listens to that one. Listen to what I tell you now. This is mind boggling.
In a very recent survey, 70% of the market—it means everybody out there—said “I am willing to pay more for your product if I know that you care for me.” Wow. Hey, but you know what? 80% of the millennials say so and then pretty soon they’re your only customers, the rest of us are dead.
So look, they’re saying 80% of them, if you care for me, I buy your product. And in fact I’m willing to pay more even if I know I can get it for less next door. Once I know that—this is a scientific survey, guys—once I know that, what am I doing about the caring part? Altogether, what is the expectation of the customer when they buy something from you?
See, this all has been studied and we work without blah blah blah, without knowledge, without destination, we just go and do things which have a function, but the expectation of your customer, in any purchase, your expectation. If you buy anything at all, a computer, a microphone car, a bottle of water. Let’s stay with that. What is your subconscious expectation? You want the product to be defect free.
Subconsciously. Number two, timeliness. Very important, extremely important, timeliness. Responding to emails, being in time responding in time, everything. Timeliness is very important. If you’re not timely, they don’t trust you. So no defect. Timeliness. And the third thing that you expect when you buy that bottle of water is again, you expect it to be clean, you expect it when you want it. And number three, you expect that people that give it you are nice to you. Caring. Caring always comes in. And you can go over and over, and make every analysis, caring plays a major role. And who gives that caring? Your employees.
Well, that goes back to the five minutes at the start of every day, this is what we go over. But to go even further on that, I’ve read, and I’ve heard you on other podcasts talk about the fact that you had, every employee had a card. And these are our values. What did you call them, and what were the cards for?
It was our canon card or our credo card. I mean, our creed was written on there, the creed of the organization. And then the twenty non-negotiables. That means twenty things, you can argue everything else how we should do it. But those twenty things, here is what we have to do. One of them, for example, silly things, but we got those things from customer studies—what impressed them, what did they think was important, and so on. Number twelve, for example, was if somebody asks for directions, you don’t point, you take him there. So that’s one of the points in here, number twelve. If somebody asks for directions, you take him there.
And then we taught them. Let’s say we are together today, and said number twelve. Today is number twelve. If anybody asks for directions, you don’t point, you take them there. And then we expand, and underway there you create a relationship.
On the way there, you say things like, are you hotel guests? And if he says yes or no, you then say, I hope you had the chance to try our restaurant. Every guest raves about it. So you converse, and you sell something at the same time. And then you show them, now here is your meeting room, sir. Thank you very much. Well, you’re very welcome, sir. Have a wonderful day. Bang. We develop trust in this moment.
Caring, respect. Yep.
By the way, we taught every employee: no matter what you’re doing, when the guest comes within ten feet, remember, within ten feet, they make a decision about you. That’s a fact. When they come within ten feet, you look them in their eyes and say good morning, sir, good morning, ma’am. Not “hi,” good morning. Good afternoon. Welcome. Not “guys,” not “folks.” Sir, ma’am. Because we want to tell them, we respect you, and we are professionals. Within ten feet, it’s been started. In our case we started 400,000 guest comment cards. JD Power started them for us. Whenever the first contact was excellent, for three days, three days, never did a complaint follow.
Never, because we put this subconscious positive in them. Whenever the first conduct was not excellent, always, soon after, a complaint followed. Room size was too small, slow, something. So have you thought to make sure that the first contact of excellence is so the customer will trust you? Have you thought about job timeliness and all those things we have to understand and correct processes behind it. Be sure we align our employees around it.
And so and by the way, number twelve, if you get asked for directions, don’t point—that is taught today in every hotel, same discussion. We include a letter from a guest that complimented it. We then tell them by the way, here’s what’s going on company, we just signed a new contract in Nanjing. And we’ll open the Nanjing hotel in about three years. It will have 600 rooms, whatever. We let them know that they’re part of something. And guess what? In twenty days, we repeat number twelve.
Yep. Right. Keep putting it out there.
Putting it out there.
I love that. But on top of that, what you just said, basically, you’re empowering your employees to be the positive face of the organization. But I read somewhere too, if there was anybody that had an issue, there was a complaint, there was a concern, that each employee was also, could make a decision on how to rectify that, by spending money on it too.
I cannot afford to lose a customer and the customer become a terrorist against my company. In my market segment, so we taught, certified, every employee around the world, how to handle problem resolution. In a nutshell, here’s how it goes. Number one, listen to the complaint. Number two, show empathy. Number three, apologize. Number four, make amends. And you have the right to make a decision, every employee, every single employee, up to $2,000.
You will not be questioned. But I do not want to lose a single customer. But of course, I knew that the lifetime customer is worth at least $200,000 to me. So why wouldn’t I invest? And he could take others away from me.
But when I did this, some owners threatened to sue me, that I want everyone, busboys to give $2,000, I’m gonna sue you for mismanagement and all this garbage. It’s so silly. Don’t you understand? I don’t want them to give $2,000, I want to keep the customer.
There’s much more than $2,000. He spends more than $2,000. Come on.
So when you said a customer lifetime was worth $200,000, is this based on studies? I mean, do you actually know this?
Yeah, we know, we know the average age, we knew how often they stayed, and how much they spent, on average. That is a normal business travel customer. There’s some customers who come only once in a lifetime. And we know that. But the repeat customer spends $200,000, about, lifetime.
Alright, so $2,000, and you said it, is a drop in the bucket compared to that plus, that terrorist against the organization, would be worth it. I mean, that, would even be more traumatic.
Much more traumatic, yeah.
Alright. So let’s go into just a kind of a wrap this into, you know, we have been as we’re talking, but the profession, we are, and you said it, we’re a service profession. Honestly, you know, from a technical skill standpoint, there’s not going to be much difference between me and another organization and another. It is the service, the relationship, that makes the customer feel valued. So how do we then…?
Let me put it in a nutshell, it’s very simple. We know, Aristotle stated, a human being wants to belong and wants to have purpose. So that should end “you offering a job.” You’re offering purpose and belonging. Now, here’s another fascinating story that’s a little older. That survey with the 70, 80% is pretty new. There’s a little older study, the largest study ever made for workers, 3 million workers, U.S. and Europe, many universities were involved. And the question was, what is most important in your job? Name it, one to ten. Money was number six, by the way.
Number one was a sense of belonging. You know, and we’re not offering it. I’m not belonging to a function. I’m belonging to an idea. I’m belonging to a plan, a destination, where we are going, the vision the purpose, this is so important. I’m giving you a purpose. It’s more important than anything in the sense of belonging.
And by the way, the second one was the typical millennial thing, it was elbow room, and they explained that when I am fulfilling this particular job, and I’m hearing from a boss how to do it, but I have done it for ten years, I know better, why wouldn’t anybody ask me? It’s so stupid. It’s amazing. It’s amazing. But it’s a power thing. I’m gonna I’m the boss, I’m going to tell you how to do it now. I’m like, or my mother in law told me or something like that. And he has a guy that’s doing the damn thing for 40 years, and can tell us how to do it better and says, I would like to tell you how to do it better.
That was the number two thing. Respect me!
Yeah! We started a new service about four years ago, that I got passionate about, just the tax code portion of it, but I wasn’t prepared to start making a service. I just was gonna go educate on it. And one of our new employees, brand new, came to me and said, hey, you need to make this a service offering. I mean, he’s brand new with us. I go, well, if you want to do it, you take charge, you run with it, this is your thing.
And that’s what we did. And this ended up being one of our largest service offerings that we’ve done in the last four years.
We have to accept, okay, from the standpoint of the employee, let’s bring the employee in and understand that the customer wants us to care for them. That’s it. That’s the issue. And I was recently, I spoke to the Classic Hotels of America convention. Before me was a lady who spoke and don’t get me wrong, she’s running a good hotel. And she’s a good manager. I mean, I’m not taking away that, her results. However, she spoke and said, in a 45 minute speech said at least 30 times, I’m not exaggerating: “Forget everything you know about the business, everything’s new, high tech, and here’s this, you check in on this thing, and on all the conversations that are taking place, everywhere, and AI and everything has taken place.” But she kept on saying, forget everything, you know.
And I was the next speaker and said, “Nothing is new. Please accept this, what I’m going to tell you all now. Thousands of years ago, people wanted to be cared for. And that was true a thousand years, that was true, and that was true a week ago, and then it is true today, and will be true a thousand years from now. Why don’t we understand that?
And this caring creates loyalty. And I can only give that to my people. So now I have to make work on that alignment. Care, looking at them, how do they know I care? That’s why we taught within ten feet, the behavior analysts said that’s when a decision is made, within ten feet, no matter what you do, you will look them in the eye and say welcome and show respect to them. Stand up, if you’re cleaning on the floor, stand up, let them go by. Wow! And people say “man, any Ritz Carlton you go to.” Now Capella is much higher rated today. People are amazed about our employees. And we just have those tricks, we have recognition and caring, and aligning the employees to care, and show them how we will benefit, long run, because we will get the respect, being defined. And if twenty years later, a Ritz Carlton employee looks for a job and there are twenty others, you would hire the Ritz Carlton employee because they define they understand we define ourself together.
I think that’s a lesson that we can install, and help make our profession, I think, what it can be because we have a long ways to go. But we can definitely learn from what you’ve told us. And this is amazing. Everything you say, I could listen to you for five hours nonstop, I could do it for two straight days nonstop. And I really appreciate that.
But I want to pivot. So let’s talk about the book that you wrote, this book I mentioned at the beginning. It’s, I assume, getting the ideas out that we just talked about. But why don’t you give us a little summary of the book?
Well, frankly, I’ll tell you, I didn’t want to write a book because I’m not good at that. But [a friend] kept on pushing me, he became a good friend, after he was a guest a couple of times. He called me, “Have you started yet?” “Yeah, no, not yet.” And I funnily enough, I drove home one evening, and I got a call. “Horst.” That’s how he talked. “I’m disappointed in you.” “Whoa, wow. Why?” “You have not written your book.” And I said, “Okay, I promise you right here, I’m gonna start taking notes right now.”
And soon later, he died. Then I had a bad conscience and did the book. And so I asked myself, what do I want to accomplish with the book on what he want to? I want to be sure, and I get a lot of business books, and generally I read one third and put them away. And I thought gee, I have to tell stories around those things. So I tried to tell stories around the issues that I discuss today. I’m very fortunate. It’s very, very successful.
It’s funny how books, I didn’t know a lot about books. I thought people would buy it in the store. But it’s not true. I have one guy called me for example, said, “I was in Florida. I took my flight back to Seattle. Somebody gave me a book, I started reading on the plane, I finished it on the plane. And I just ordered 5,000, for every employee.” Bang. Another CEO bought 3,000 and several, a thousand. That’s how it became very successful. And it’s really out there. And what is interesting, the publisher just called me and said the amazing thing is after four years it’s still hot. It’s still selling. Well, I’m fortunate, that’s all.
Well, because the things, the items you share the knowledge you share, I think is just amazing. I have not read it. I am immediately getting on wherever you tell me Amazon or wherever and ordering it
You will be a better man after you read it.
Oh, believe me, I’m a better man than I was 45 minutes ago, since we started talking. So I really appreciate that.
You know, and I’ve talked to a lot of people and in fact, after our podcast, I’m on my way to San Antonio to make a speech tomorrow. And they’re also a very fine company that are moving forward with the whole idea from the beginning. And they’re using the book as direction, as a guide.
And it’s funny, I was in the Delta Sky Lounge a few weeks ago, and I’m going to get a cup of coffee, and it was very crowded. A cup of coffee, and there was a big, scraggly guy in front of me, I mean, six foot four or something. And he said, “Are you Horst?” And I said, “Maybe I did something wrong. Yeah, I’m him.” I mean, he scared me. “I am working with my company through your book. Thank you very much.”
It’s amazing! And again, so people get the point when they read it. And I was hoping that particularly young people would read it because of the stories and finish it. I hoped that CEOs would read it and would be a little bit embarrassed.
Yeah, I can see that.
How we look at employees. Unfortunately, I see too often. We again, we look at employees just as somebody that fulfills a certain function for us. They’re human beings. Come on, they’re human beings. And they need the fundamental respect as a human being, a partner, to be something, to have purpose, and align them to the other human beings. If they feel apart, they don’t leave you because of five dollars. They’re leaving you because you don’t feel right.
I’ve worked with one bank, let me just tell you that.
And from the very beginning, I looked at employee turnover, lost accounts, and so on, so on, and analyzed it and, and that bank, the last 11 months before, it was December. So we looked for that year, 11 months, they lost 200 employees, which was a 36% turnover. I asked them, why did they leave? And the answer was money. “You don’t understand, banks don’t pay much,” and so on.
So we created a team. Now it took us one year to call every one of those employees back. And I was storywise. Look here, we just check in on you. Because you used to work for us, we care for you. I hope you just want to make sure that you are fine. And with all respect, by the way we cared for you, and if you ever want to come back, this is all voluntary leavers. If you ever want to come back, we’re here for you. Just so you know. We’re not looking for anybody now, just we say thank you that you were part of us. And by the way, would you tell us very sincerely why you actually left the company?
You know how many had left for money?
Six. And we said, all left for money, “you don’t understand, we don’t pay much,” and so on. They didn’t feel part, didn’t feel respected, didn’t see a future, and so on, with other banks they were a part of something. And okay, we’re human beings, we need that. Why don’t we accept that? All of us need that. Have you ever seen the movie Castaway?
You know, when you are all alone, you go crazy. You can be all alone working around people who don’t care for you. What I don’t say is compromise. I’m not saying that. You don’t compromise. If they don’t do the job, you don’t compromise. If they don’t, probably, you don’t compromise. You’re not there to compromise, you’re there to make the best in the world. For all. For all concerned. Not for one.
For… There was four things. For the employee, for the customer, for society, for the…
The investors. The customer, the employee, and society as a whole. I personally, and I hope nobody gets upset. But I personally would go back to myself and say, we’ve got that—that’s me. When I’m finished with this analysis, and we spent the whole day with two VPS that are hired. Now I knew them well, because they used to work for me before, and hired already. I wasn’t hired, I was in charge of food and beverage for the United States before I started this. So we set the whole day and answered, to answer, is this dream good for everybody? We put flip charts out and wrote down why. And then we wrote a bigger list of why it would not be good for them. I How do you eliminate this, the negative and so on. So we worked on it the whole day, commissioning, is this vision good, to become in the business? Because we knew we have to set high demand, and sometimes we may have let somebody go that cannot do it or will not do it and the pain of that. I let two [employees] go that previously were friends. And I cried. But I had no more right to compromise. I had made the decision to cannot help me be the best in the world because they just don’t fit it. And I have, I’m responsible for all concerned.
Yep. And I think that kind of summarizes that vision—is it good for investors? Is it good for customers? Is it good for society, and good for the employees? Is it good for all? I think that’s a great way to end that.
Alright. So of course, this has been amazing. You know, we talked about all these, I mean, you have a passion, obviously, for what you do, your passion for excellence, but I’m guessing you’re not working 24 hours a day and constantly thinking about this. What passions do you have that aren’t related to running an organization, educating employees? What are your outside of work passions that you have?
Well, it centers around my family and my wife. And today, our children are pretty well gone. We still live in very close contact, very much together. I have four daughters. I happen to be passionate about marriage. Because I’m passionate about our society and passionate about the country, which starts with a marriage, by the way—long story. And I want to recommend something in here, so to use that word again, but the only god-ordained union in this world is a marriage. And is the most important relationship you’re gonna have, ever. And we treat it as if it was nothing, if there’s nothing better.
And I’m proud to tell this story because it relates to everything else I said. But I have to start with a vision. Ah, here we go again: purpose of the marriage. I made a vision, I had a vision when I got married, 44 years ago, nearly 45 years ago, that I would be in love with my wife the rest of my life. Not only love, and I absolutely love her of course, this human being, but I would be in love. That’s a decision. That’s part of the vision and part of the model of leadership. The next thing I had to, I committed myself to that, just like at work.
Next thing I have to institute the things that creates it. I want to be the best in the world? What do I have to institute here? I have to institute the thing that creates it. I had to play with my mind. The way I do that still is when I drive in the driveway here, and I have a long driveway, and there’s a gate, it takes a few seconds—I thank god for this beautiful wife that I’m about to hold in my arms, and put it into my mind. As to put it in my mind every time. And it’s a story in speeches.
I sit down once in a while with my wife and say how can I be a better husband? Hey guys, try it. Try it. And the one that benefits from it is you! Not your wife. You will benefit from it. Come on. You see, excellence is not an accident. Excellence is the result of high intent and hard work to get to that intent. You know, it’s a decision to do that. And the decisions you make determine your destiny. Come on, you know?
So I’m passionate about the family thing. I’m passionate about—I know that it’s misunderstood and misinterpreted often because I’m not an idiot about that—but I’m very passionate about my my belief. I had cancer 30 years ago, where I was given ten months to live by the major hospitals. And when you have that, I promise you all, you will understand that there is something more than you in this. And I promise you, you would. As the relationship that I had that ends all doubt. And so my passion is partly not only to work for this life, but work for eternity. And that’s a decision.
A friend of mine is a heavy atheist, and he is a great friend and wonderful human being, one of the greatest guys I know. Your decisions determine your destiny. And that’s it, you know, and to know that I’m still trying to teach this to young people. I’m going to Thessaloniki in spring where they have a huge group of Europeans, Americans, to see how we can put those messages out better. My passion is to teach in universities about this issue, about having purpose.
The hospitality school in Auburn, Alabama, I’m very involved with, in fact, it carries my name, the Horst Schulze School of Hospitality and Management. And I can teach there, that’s a big passion.
Besides that, I wouldn’t mind some fishing.
Any type of fishing. We spend the summer every year in a village in Germany—we have a home there. My wife is from Pittsburgh, but she loves it as much as I do, otherwise we wouldn’t spend time there anymore. That’s another passion, to spend time there, you know, in a home area in a relaxed area together. And so, many things of life, and I kind of treat everything with a lot of passion that comes out.
I see that for sure. Well, Horst, I think we can all learn whatever profession we’re in, whatever industry we’re in, whatever life we’re living in, we can learn so much from your teachings. And I really appreciate you being on the show today. Before we wrap up, and we’ll put this in the show notes, but if people want to find out more about you, or go and get the book, where can they look?
Yeah. And then look on Amazon, you can look to get the book, and the twenty things are in the book too.
Okay, that’s great. And to steal something I’ve learned from you: This was my pleasure.
“My pleasure,” yeah. Instead of saying, “Okay,” it’s “my pleasure.” And you know, there’s the big story about Chick-fil-A around that. I was teaching them, and I told them they should change their language, and we discussed it all, and I discussed what we say in Ritz-Carlton, for example, I said, “Don’t say ‘okay,’ let’s find something else. We at Ritz-Carlton say ‘my pleasure’.” And the owner of Chick-fil-A said—I was consulting with them for quite a while— said, “I like ‘my pleasure’.” “I obviously do, too, but it’s wrong for your market segment.” He said I like it. That’s it, became it. Now people think I did it—I told him no!
Well, but you consulted still. Alright, well, horse this truly has been my pleasure. And you were very gracious to agree to do this, and I really appreciate it.
God bless you.
About the Guest
Horst Schulze is a legendary leader in the hospitality industry, known worldwide for his role in establishing The Ritz-Carlton Hotel Company. Born in a small village in Germany in 1939, he worked in hospitality from the age of 14. As co-founder of The Ritz-Carlton, he helped grow the brand to be recognized as delivering the finest customer service in the world. After retiring from Ritz-Carlton, Horst went on to found Capella Hotel Group and continue setting new standards of excellence.
Now, Horst dedicates his time to educating others on his principles of visionary leadership, employee empowerment and a relentless focus on caring for customers. He has authored the bestselling book Excellence Wins, which shares lessons learned over his illustrious career. Horst is a highly sought-after speaker who inspires audiences everywhere with his contagious passion for excellence.
Meet the Host
Randy Crabtree, CPA
Randy Crabtree, co-founder and partner of Tri-Merit Specialty Tax Professionals, is a widely followed author, lecturer and podcast host for the accounting profession.
Since 2019, he has hosted the bi-weekly “The Unique CPA,” podcast, which ranks among the world’s 5% most popular programs (Source: Listen Score). You can find articles from Randy in Accounting Today’s Voices column, the AICPA Tax Adviser (Tax-saving opportunities for the housing and construction industries) and he is a regular presenter at conferences and virtual training events hosted by CPAmerica, Prime Global, Leading Edge Alliance (LEA), Allinial Global and several state CPA societies. Crabtree also provides continuing professional education to top 100 CPA firms across the country.
Schaumberg, Illinois-based Tri-Merit is a niche professional services firm that specializes in helping CPAs and their clients benefit from R&D tax credits, cost segregation, the energy efficient commercial buildings deduction (179D), the energy efficient home credit (45L) and the employee retention credit (ERC).
Prior to joining Tri-Merit, Crabtree was managing partner of a CPA firm in the greater Chicago area. He has more than 30 years of public accounting and tax consulting experience in a wide variety of industries, and has worked closely with top executives to help them optimize their tax planning strategies.