CEOs around the world struggle in letting go of the day-to-day. They ask me how CEOs become visionary leaders. This interview kicks off a new series just for CEOs who know they have to move beyond where they are today. Today’s guest is Horst Schultze, co-founder of The Ritz Carlton and founder of the Capella Hotel Group. These brand names are in the top tier of hospitality and rated excellent by their guests. Horst was the visionary leader behind their success. He is also the author of Excellence Wins. He and I talked about how CEOs become visionaries. We look at what gets in the way. Horst shares his insights on the real reason why you must become a visionary leader. Join us for how CEOs become visionary leaders.
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Target Audience: Horst is the president of The Ritz-Carlton Hotels. After years of running the company. He started another company called Capella Hotels, which was sold to nearly 2 years ago. No, he is busy making speeches and consulting and et cetera…
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Aligning the employees to the purpose of the organization, aligning employees to what the company is, and aligning employees what the customer expects. Now, they’re inspired, they’re part of the company. They’re not working for the company anymore. They now become part. Yes. Here’s the fascinating thing. I may have mentioned that last time, and it because it fascinates me. Aristotle established that human beings need belonging and purpose. So why wouldn’t I give that to my human beings that work with me, if at the same time, and by giving them that they will be more connected into a better job, and I’m giving them in return, belonging and purpose?
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs, the fastest-growing privately held companies, I am the host, my name is Gene Hammett, I hope leaders and their teams navigate the defining moments of their growth, are you ready to grow?
Gene Hammett [1:05]
Stepping into your role as the visionary leader of your business is going to take a lot of effort. But it’s got to be done with intention, it’s really necessary because when you’re not doing the visionary work, and when you’re not looking at the future, looking at the trends, looking beyond where you are today, you’ll probably figure out that no one else is doing it for you. Because everyone else is got their own teams got their own little processes that they’re managing, and they are doing the work and your jobs as CEO is to be able to take the time to lift your head up and look around, see what’s coming around the corner, look at the competition, look at the trends. Look at the the macro elements of your business. You can, of course, include your team and some of these things, you can get your insight, you can get data, but your job is to create the space and the time. And that energy to be the visionary leader that your company deserves. And one of the things I’ve seen interviewing so many founders and CEOs, that this is a struggle, this is something that they want to do a better job with, they want to get out of so many day to day meetings, and they want to become true visionaries so that you can understand what the way they see the world, why it’s so important. And some of the key elements that will help you be the visionary that you really want to be. Today we have the co-founder of Ritz-Carlton, the brand that you probably love so much. He’s also the founder of Capella Hotel Group and their award-winning hotel. Fantastic brand. And then also he is the author of this book, “Excellence Wins”. And I just happen to have it here because I was reading it over vacation, of course has been on the show before. But why this interview is different is because we really look at visionary leadership, we look at why it’s so important. And why you are the one to lead the charge on this to look at those trends, and to be able to see the future that no one else can see. And this is the beautiful thing about you as an entrepreneur.
Gene Hammett [3:00]
The reason why your company is today is you saw a future where your product or service fit in the market. And you’ve built a team around that, now is the time for you to step up to that next level and be the visionary leader. And that’s what these interviews are all about. One of the things I love about this, he says in here is excellent is never an accident. Think about that for a second. Excellence is never an accident. It’s a great intention around how you as a leader, or to inspire your people to take ownership of their work and client experience, but also of the entire culture as they move forward. Your job as a leader is to bring all this together in the vision that you create is so critically important to the success of your business. It’s also about the lifestyle you’re going to live. Are you going to work yourself to death? Well, we’ve done a lot of series around time. But this one is around visionary leadership. So tune in today with horse to short say he’s going to rock you and knock your socks off all at the same time. Inside this one episode. Without further ado, here is Horst.
Gene Hammett [4:05]
Horst, How are you?
Horst Schultze [4:07]
I’m very fine. Nice to see you. Nice to be with you.
Gene Hammett [4:10]
Well, we’re here again on growth Think Tank. You’ve been here before. So appreciate you coming back.
Horst Schultze [4:15]
Great to be back with you. Yeah, I enjoyed being with you last time.
Gene Hammett [4:18]
We are going to talk about a very big topic. And I know you’ve been through this yourself as you’ve grown, you’ve probably even led others and coached other CEOs through the aspects of becoming a visionary leader. And I want to go ahead and let you kind of give some context to your background. You started out as a dishwasher and that is that right as a kid?
Horst Schultze [4:42]
As busboy was 14 in fact, I left home and lived in a hotel up about 100 kilometers away from my home and work there as a busboy. Yes.
Gene Hammett [4:53]
And you probably held every almost every role possibly inside of a hotel from you know front desk and And you certainly had your eyes on what it takes to run a hotel because being the co-founder of Ritz-Carlton is such a huge big deal, but also the founder of the Capella group, the Capella Hotel Group. You guys were recently awarded something, right?
Horst Schultze [5:15]
Yeah, we have a capella I’m, of course, I sold the company a little bit over a year ago. But Capella was just voted best hotel in the world in Bali, and second-best hotel company here in a local publication and in Asia based hotel company in the world. So best hotel company in the world and best hotel in the world. That’s Capella, which I created, which have founded and created and by myself, right after I left Ritz-Carlton, yeah.
Gene Hammett [5:46]
And I was on vacation, and I got a chance to finish the book, I interviewed you before but excellence wins. Such a fantastic book, I want to encourage everyone to go go read this, there’s a lot of leadership inside here from the very heart of what it takes to run an excellent brand. And we’re gonna talk about some of the things are in the book, but but we’re gonna let you just kind of share your, your, your journey, of course, one of the things that I get asked a lot is, you know, how do I let go of the day to day the work the managing the even the metrics to a point and start to become the visionary leader of the business? I know that’s necessary, and no one’s doing it, if I don’t do it, how do I do that as a CEO of a company so.
Horst Schultze [6:33]
But let me address that a little bit differently. We’re talking about the book excellence wins, let’s see what is excellence? excellence is never an accident. Let’s understand that it’s never an accident. It’s always the result of high intent, and of course, hard work, high intent. What was that? What’s high intent? Well, the vision of the company, what is your in high intent? Does that have to be clarified? And being a leader implies that you’re leading somebody to a particular destination? What is that? Is that a destination of high intent? What’s the vision?
Horst Schultze [7:14]
Now, and in fact, that vision that high intent should become the purpose of the organization. So now, certainly, you have a purpose and not just function is it? Unfortunately, what we are making a serious mistake as leaders of organizations, managers of organization, we hire people to fulfill a certain function, the chair on which you’re sitting is fulfilling a function. We hire human beings, as leaders, we hire people, we select people to become part of our purpose, which is the high intent we have as an organization. That’s leadership. Let me put it a totally different way. And this discussion, leadership, and management and says are so confusing. It’s very simple. If you pretend that on your left side over there, there are a lot of people, those are your potential customers and your customers guessed, patrons, whatever you call them. And on your right side, a lot of people too, those are your employees. So how are you? How are you good company, if you know what the people on your left your customers, your potential customers, expect from your product if you understand that, and you make sure now that the people on your right your employees know what the people what your customers expect what your market expects from you.
Horst Schultze [8:48]
Now, this is alignment, not a password in business, that’s alignment. Now, management creates processes, systems, measurements, controls, to make sure this happens. That makes sure the delivery to the customer from the employee happens. Leadership creates an environment where the employees want to do decide to do what the customer wants, why do they decide that because then ignores it will bring you in fulfills the purpose of the organization with which they have adopted as their own? Wow, that’s a long speech. But that’s leadership.
Gene Hammett [9:34]
A very simple version you put in here. I think it was chapter nine. I have it here. Managers push and leaders inspire.
Horst Schultze [9:42]
Yeah. Right. That’s and that’s how you inspire by aligning the employees to the purpose of the organization, aligning employees to what the company is, and aligning employees what the customer expects. Now they’re inspired. They’re part of the company. They’re not working for the company anymore. They now become part. Yes. Here’s the fascinating thing. I may have mentioned that last time, and because it fascinates me, Aristotle established that human beings need belonging and purpose. So why wouldn’t I give that to the human beings that work with me, if at the same time, and by giving them that they will be more connected and do a better job, and I’m giving them in return, belonging and purpose?
Gene Hammett [10:33]
So I’m totally in alignment with what you’re saying. And I see this a lot with leaders, but they can’t let go of managing the work to become the leaders that the company needs.
Horst Schultze [10:46]
Yeah, well, interesting. Stephen Covey, of course, made that very clear that that is very dangerous as a leader in it, because I mean, we do that we, we love to put out the fires of the daily, the micro stuff that goes on daily around us, we love to put it out, and then we feel good. But as leaders, that doesn’t mean we have accomplished anything for the future. We only have accomplished something for right now. That’s the micromanaging that we all do. I do what everybody does, it makes you feel good. And but but but as a leader, remember, again, you’re taking them to a destination. So what have you done to get you closer to that destination? What have you done to eliminate the when you take care of problems to date, what have you done for the future so that the same problem never happens again? So as a leader, what you have to learn is, what are the few essential things that you should know and manage? And lead on? What are the few things you have to question yourself, get you to get your key executive together? And said, What what?
Horst Schultze [12:02]
Give me one thing that is essential in this organization, and each one, give them pick five, I picked five, when I run Ritz-Carlton or Capella minute bill Capella, I want to know number one for me, how many percent of the customers want to return and one to recommend me so I have measurements established. So I know, every day, I know, in every hotel, how many percent of the customers want to come back a wonder return, I have established baseline and I made it very clear. If you go under that baseline, I will intercede in with you, I will get involved, I will talk to you. And if you don’t improve it, and improve it for you. Number one, customer customer satisfaction. Number two, employee satisfaction, I want to know that I want to know what ongoing what is going on what’s going on with employees. Number three, I want to know the economics of the day, what happened economically today.
Horst Schultze [12:59]
Next, I want to know, what are my future indicator indicators for business in the future, we have measurements on all those things. And then I had an extra one, which for us that was General and I wanted to have a future indicator of group business in the organization. Those are the five things I want to see I want to I want to have totally my arms around it, because they indicated everything. But if I saw a hiccup in one of them, then I went and dug deeper and involved other people if I see employed, the customer top box satisfaction goes below 92%. 92% was the line, I wanted to be over 92%. But 92% if it goes under, I get involved, then I want to know when regional vice president why to dig into it because our analysis should tell you why. So but I didn’t get involved in that. But I frankly, am very clear. If it stays in the 80s for two months, I will move into the hotel and run it myself until it’s corrected. Now. Nobody liked that threat. That was a threat. I did it sometimes, by the way, you know, so so I yes, in that moment, there was an emergency, in my opinion for me to get work at the micro But otherwise, it’s the macro as a leader and what constantly appointed the future, constantly be involved, constantly present to everybody. And I consider myself for the rest of it. I consider myself to support system for everybody else.
Gene Hammett [14:33]
I want to ask your question horse, you know, looking at the future, everyone’s probably got their own style for it. But what was your way of truly taking time to think about what the future would be for the way your companies are run? Like what’s the future of hotels? Would you take time every day to do that? Would you take time during you know, big, big sections every week, or would you. What would you do?
Horst Schultze [15:00]
We had, that’s another thing I looked at we had ongoing. I mentioned, the number one thing for me is customer satisfaction. So consequently, we had ongoing customer service going on. And so I looked out in the service for any kind of trends that I could establish what are the trends that are come? I was very careful not to respond to the opinion of one, but, but be sure that I saw Aha, there is a trend, I better be aware of that trend, and see how we have to apply those trends. And so so I constantly could see. And I could also see trends, and generally how they’re developed. I tried to see trends if you will, and I for example, right now I it’s very clear to me what will happen with automobiles, I give that only as an example, you will see that the hotel business, all non-Prince, brands of hotels will slowly become sleeping factories, no, no, don’t be insulted anybody that is, pretty soon, you make a reservation on this thing over here, you make a reservation, this thing, and then you check in on that with this thing here.
Horst Schultze [16:10]
And then you go to your elevator and it works. And then you go to your room it works. And then you check out it works and you don’t see a single person. Without us, you become a sleeping commodity. But that will bring you in you see the trend, it’s very clear, that trend was happening before COVID. But COVID accelerates it. I would have said in 10 years, that’s where we are now I’m gonna say in three years that will be where we are. Now, that dog will bring now you have a trend now what? What will that impact that will allow smaller hotels to come along and still offer hospitality? So I have to know this is happening. I have to know the trends what’s happening in your get that you read, you get customer service comments, you see the industry saying we can’t find any, any help. It’s very difficult this stuff, it’s very difficult to put it together that will create that trend. And that’s what your leader will look at where is the industry going? Where is my business going? Where do I fit in? Where do I want to fit in?
Gene Hammett [17:13]
I want to ask you, I get the fact that we should be looking for trends. But how did you do that? Did you schedule time? Or did you just try to fit it around all your busy schedule?
Horst Schultze [17:22]
Well, as I mentioned very early, I looked at the customer a customer studies but there is a constant look at customers Thunderbird is and what the presentation says. So looking at the studies, it hits you what oh 234 customers said that then you know you have a trend. Once you know you have a trend, you follow that and look at and analyze that a little bit deeper, and say what is the meaning of that once you see a trend once you get the same comment several times better pay attention if it gets an immediate comment on your ones. Don’t pay attention. Don’t pay attention. danger. dangerous to be always very dangerous to a friend tells you it touches study or one don’t respond to it. Unless you see it repeated and repeated and repeated, done. You go for it, then you analyze it then you said how does it impact me? How do I have to respond to you?
Let me take a moment here to remind you that we have a channel on YouTube. If you want to be a better leader, if you want to be the visionary of your team, we put different aspects of training over there that you won’t find on the podcast you won’t find anywhere else where you have to go to YouTube and subscribe to make sure you don’t miss anything. So go to genehammett.com/YouTube. Here’s to you being an amazing leader.
Gene Hammett [18:39]
What are the dangers of you seeing organizations that are running where the CEOs are just focused on the urgent focus on just the now and not really focused on that future.
Horst Schultze [18:51]
While somebody else will focus on the future and they will lead your life okay, because it will happen and it’s just it’s just gonna happen that’s it you must you must be with the market you must go go must understand the market you must understand what they’re thinking get some is for example, I mean, and watch out what do you hear what is the did talk sometimes Watch out what it really says For example, right now, everybody is talking about the millennial millennials, Millennials millennials as if they’re very huge threat, so I have to say wow, I better understand what they’re really what are the Merlyn Ian’s really now I call for a survey. Now I want to know facts because they talk millennials bananas bananas. I mean as if they were attacking you with with with guns. As it turns out the number one change in that there’s some major change the millennials say do it my way. do it my way. That’s what they’re saying.
Horst Schultze [19:52]
Oh wow. I better be prepared for individualization. Now I better not standardized I better get ready to individually True Lies, because the millennials will come in and say I want my hamburger number one, or whatever the hamburger is. But I wanted me two slices of tomatoes and the harvest light of pickle and they want the individual. That’s what’s happening. But I have to understand that as a leader, that is what they’re saying, really. They’re saying, dude, my way, that means in pretty soon, please don’t guess what the only customers you have are millennials. And if you’re not ready to serve them the way they want to be served, you are going to be out of business. That’s what I mean. No, no.
Horst Schultze [20:33]
The interesting thing about this is totally fascinating. By the way, since we talk about millennials, the market as a whole says, I am willing to pay more for your product, even if I can get the same product for less. If you give me good service and good attention, then I’m willing to pay more for your product. Even if I can get the same product for less, I willing to pay more for you. If you give me Chris Urmson’s attention, 70% of the market says, Ah, but the millennials 80% said, if you take care of me the way I wandered in and you individualize, I’m willing to pay more? No, if I don’t know those things, how can you prepare for it, that’s why the leader has to look into the future.
Gene Hammett [21:21]
Talking about being a visionary leader here, there’s a lot of stuff that gets in the way which you talked about the fires, it feels good to put them out. But I’d also like to ask you this. When you get that right balance of managing the day-to-day and leading the people inspiring them and filling that vision. What are the things that you aspire to next, what comes after visionary in your world?
Horst Schultze [21:45]
Well, first you can see, then you have to commit yourself to it. That is the model’s first high intent, establish my intent, what you want to do, again, excellence is never an accident, never. It’s always the result of high intent. So you have to know where you’re going and then set your intent, your vision there, and then commit to it and then apply the steps that it takes to get to that intent done and takes processing and isn’t done, it takes to understand what is it that I have to do for that market in order to reach that intent, and then create processes around it and manage them that now that’s management. Now, that’s managing Now, first, the leader established the division the high intendant, and sees it sees where it’s going to be. And now you have to become a manager and be sure that your organization creates the understanding of the processes, the measurements, the systems, to be sure you’re doing what has to be done. To get there.
Gene Hammett [22:44]
First, I want to thank you so much for being a part of the Growth Think Tank. Once again, thank you for sharing your wisdom.
Horst Schultze [22:51]
With us, thank you very much. God bless.
Gene Hammett [22:54]
Another fantastic interview here on Growth Think Tank. Hopefully, you took some notes, I took notes, I was scribbling away, I’ve got probably three pages of notes in just a short period of time with horses. Some of the things that Horst shed today were some things that I already knew. But some of the things were new to me. And one reason why I do these interviews is so I can tune in to visionary leaders like Horst and others out there, and really understand how they think how they see the world, some of the things that I don’t have aware to, because we’ve got to fill in these blind spots. We all have blind spots. And the thing about filling them in is it takes an outside perspective and some trigger to help you will see what you don’t see right now.
Gene Hammett [23:34]
One of the things I’m best at as an executive coach is having the kind of conversations with leaders that want to go to that next level, be visionary leaders, and really create the space for them to think and create the vision that they can see so perfectly, but how to inspire others along that journey. My job as an executive coach is to help you see your blind spots help you see what’s next, help you get more confidence and clarity around exactly what to do next. So if you want to have that conversation with me, make sure you go to my website genehammett.com You can find plenty of free resources but you can also register for a call just go to start your journey. And I’d love to chat with you about what’s next for you. Just go to genehammett.com and go to find start your journey. This wraps up an incredible episode of other visionary leaders. Stay tuned for more coming on the show. When you think of growth you think of leadership think of Growth Think Tank, as always lead with courage. Well, see you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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