PBD Podcast - Ritz Carlton Founder Horst Schulze | PBD #735

Episode Date: February 10, 2026

Patrick Bet-David sits down with Horst Schulze, the visionary who helped envision The Ritz-Carlton, to break down leadership, purpose, and world-class culture. From wartime Germany to influencing Stev...e Jobs, he shares powerful lessons on service, discipline, and building excellence.------👔 GENTLEMAN'S COLLECTION: https://bit.ly/45XbiwPⓂ️ CONNECT ON MINNECT: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4kSVkso ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ⓜ️ PBD PODCAST CIRCLES: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4mAWQAP⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠👔 BET-DAVID CONSULTING: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4lzQph2 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠🥃 BOARDROOM CIGAR LOUNGE: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://bit.ly/4pzLEXj⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠💬 TEXT US: Text “PODCAST” to 310-340-1132 to get the latest updates in real-time!ABOUT US:Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.

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Discussion (0)
Starting point is 00:00:00 I came to a conclusion, I'm working for barbarians. No fish knives, no fish for. And they live in a situation where human beings shouldn't live. My father joined the Nazi party because he had to work. My grandfather was a unique character, said if our son died, he will die too. So living in that environment impacts your life in a big way as a kid. No doubt. I will never go to that Ritz-Carlton and Fort Lauderdale ever again.
Starting point is 00:00:28 You understand. I cannot compromise that. You understand? I'm getting upset. I said, there is no way this is horse's standard. And Daniel said, and don't come to work tomorrow. Come here to
Starting point is 00:00:41 create excellence. Now, I didn't get that. You were number one when you guys left. Oh, sure. They dropped from 1 to 26, and Capella's number 1. Yeah. I insisted wherever we are, we're number 1. Period.
Starting point is 00:00:55 And with the general manager, will you accept that? What's your superpower? Relentless. Here's a promise I'll make you. By the time you're done watching this interview with the founder of Ritz Carlton, your life will change. I'm telling you right now, it's a big promise,
Starting point is 00:01:24 and I don't normally open up an interview saying this, this was one of my favorite interviews I've ever done in my life with an 87-year-old man that was born in Nazi Germany and 39. His father was in the military. His father was a Nazi. His mother hated the Nazis. And all he talked about was love and respect. And how this boy from this city in Germany grows up, goes into the hospitality business,
Starting point is 00:01:50 eventually starts Ritz Carlton later on, the only business ever to get two awards from the government for the best service in the world. What came with that honor was the fact that you had to let any company come to your company to learn customer service. And guess one of the guys that showed up. Steve Jobs showed up and said, how can we make Apple's customer service better in the early 90s? The meetings he had, the people he served over the years, the philosophies. I asked him a question.
Starting point is 00:02:20 I said, tell me about the managers you manage. You said, I had 65 managers. I said, of the 65 managers, how many were leaders, how many were managers? Five leaders, 60 were managers. I said, give me the best one that you had. What did they do? He gave three principles of what this guy did. Breaking it down.
Starting point is 00:02:35 Here's what made this guy better executive. Here's what made him a better leader. How do you deal with confrontation? How do you do with issues? The answer is going to shock you. And for us, we've had Ritz come here and train us in this exact room with all of our executives. And then I shared an experience we had with a local Ritz-Karlton and Fort Lauderdale. And I asked him, I said, so how has Ritz customer service been since you left?
Starting point is 00:02:58 I think in early 2000, 2002. And his answer, he did not want to give the answer, but he eventually gave the answer. And it was a shocking answer of what happens after the first. founder of Ritz left and what happened to their customer service at the time they were number one and then what he did later on with the company called Capella and then while we're sitting he was talking about an email he got from a previous friend employee that went to Ritz Carlton he was in pain he got emotional talking about the fact that those standards are no longer there at Ritz again I can go on and on married to his wife for I think almost 50 years 47 years
Starting point is 00:03:34 raised four kids, broke down principles, values on personal life, all of that. I can't go on with a ton of stories, but I'll wrap it up with this one quote that he said from early one of his mentors, which you have to see when he tells the story to you. Please promise me you won't be a chair. Please promise me you won't be a chair. The amount of money he's made. He's met people from Onassis back in the days. Remember, this man's been around for 87 years.
Starting point is 00:04:02 to many of the recent presidents, all the presidents that we've had. And at 17 and a half years old, his first manager told him, promise me you won't be a chair. Meaning one day when it becomes successful, you won't be somebody that just sits out there telling people what to do. And he kept that promise. Your life is about to change by the time you're done watching this interview with the one and only founder of Ritz, Horst Schultz.
Starting point is 00:04:25 Enjoy this interview. I know this life myth for me. Adam, what's your point? The future looks bright. A handshake is better than anything I ever size. Right here. You are a one of one? My son drive, I think I've ever said this before.
Starting point is 00:04:53 That's a simple decision to make in my opinion. I agree with you. And by the way, horse, you need to know this. Like, I've been following your work for many years. We read the book. We see the work that you've done over the years. We brought in October of 20. for a Ritz trainer to teach on standards of excellence in this room.
Starting point is 00:05:11 We took all our executive, all our managers for a full day. She did a great job on the training, on where you guys stand for, questions to ask, and, you know, I've been a customer of yours for decades going to Ritz Carlton all over the world. And to sit with the guy that came up with the ideas to talk to. It's a pleasure. It's great having you on the podcast. Great way with you.
Starting point is 00:05:29 Yes. And in turn, I admire what you're doing. Well, thank you. Truly do. Thank you. Thank you. So let's get right. into it. I'm looking at it. As I'm going through the story, I'm like, wait a minute. He was born in
Starting point is 00:05:41 1939 in Stuttgart, but was Germany. Outside of Stuttgart and the wine area, you know, and apparently it's right next to the Luxembourg and France on that area where it's like perfect market to create wine. So to go from there to where you are today, I want to first go into the story how everything got started. When you were born, what was Germany going through? start of the war beginning of the war 39 in fact my father
Starting point is 00:06:08 was drafted late 39 and was came back in between but left permanently if you will in 41
Starting point is 00:06:18 I got to know him I got to meet him the next time and I was seven so you you don't you meet your father first I'm at seven years old
Starting point is 00:06:25 well consciously met him I mean I get that yeah yeah yeah in fact in fact I was playing with another kid
Starting point is 00:06:33 in the mud heap somewhere. In a village. I live in a village. Somebody came around and go home your dad came home. Go home, your dad came home. So I ran down the street, go home, was a couple hundred yards, run there, and there was a bunches of people assembled already. Every neighbor, everybody in town. That was the news when a guy came back from prison camp. And it was, and he just came back, and I went through the miles. I knew it was him.
Starting point is 00:07:00 He was a guy with a tattered uniform and everybody else was. So I got in and I looked at him and I said that and then he knew who I was. What was that reaction? Oh well, shock and a moment and people crying and so on. That is what you remember, the extremes you remember in the moment. Do you remember that day till today? Oh yeah, sure. Yeah, yeah.
Starting point is 00:07:22 It's pretty wild. No kidding, yeah. I mean, I was born in Iran and 78. So when the revolution happened and we left in 89, so living in that environment, in impacts your life in a big way as a kid. No doubt. What did it do to you? Well, I don't exactly understand because I was there and with 11 years old and somehow that must have all have an impact.
Starting point is 00:07:49 With 11 years, I went to my parents and said, I want to go to work. I want to work in a hotel. At 11 years old. Yeah. And there was no hotel in the village. Never been in a hotel. I'd never been in a restaurant. So how do you know this?
Starting point is 00:08:01 Are you watching a movie? Are you reading books? everybody is wondering, I must have read something exactly. My mother never forgave me because never forgave herself because she didn't inquire how are we going to do that when I kept on begging and begging and crying. And so somebody said, well, he should start in a very good hotel.
Starting point is 00:08:25 So they look, what's the best hotel? Unfortunately, it was over 100 kilometers away. So at 14, I actually left. lived in a dorm room in that hotel. And all that was an impact of the environment where that came from. We sat down often with my parents and tried to analyze it. There was no real answer. No movie, no book, no person, no teacher.
Starting point is 00:08:53 There was a movie that went none of the times. Are you kidding? I know what I'm trying to find out of, but how do you, because I read somewhere as well that you said, as early as four years old, you know you wanted to be in the hotel business. No, no. No, no. was 11. 11 years old?
Starting point is 00:09:04 Okay. Yeah. So when I read this, Rob, where was it? We read that said as early as four years old? I said four years old, for him to know at four years old, how does that happen? No, no. What was it like? Maybe, you know, because today when we read about it, 39, Germany goes to war in September.
Starting point is 00:09:20 I think you're born April 25th. So five months. January 10th. Okay, so you're born January 10th? Yeah. Okay. So January, online says April 25th, by the way. And now you're pretty private with your, with your.
Starting point is 00:09:31 Yeah. So January 10. you're born, a few months later the country goes to war, what is the conditions like where you're living? I know, of course, you don't remember that age, but... Yes, yes, you do, because there was some such extremes. Pretty soon
Starting point is 00:09:44 we went to sleep in the cellar. We broke the cellar, wall in, so in case the house would collapse, we could go into the next neighbor and so on, so on, they were all connected. My mother, my father joined the Nazi
Starting point is 00:10:02 party because he had her was working. My mother was a major negative. And let me give you a story that is hard to believe. My father, we didn't hear from him. My parents didn't hear from him. But my grandfather, who was hated Nazis, every morning came to my house. He lived in a different house at 7 a.m., took the axe that was there from wood shopping plant, and stayed behind the door and looked through the slow. lot and the door, the old wooden door. Because the chief Nazi went to work that morning. When he went to work, he told, stopped in the families
Starting point is 00:10:41 where the son had fallen and informed them. And my grandfather was a unique character, said, if our son died, he will die too. When he comes in here to report, he's going to die. So you think you don't know that as a kid? Opa is coming to take the axe. That was a normal daily routine. So you can't help but remember those things, you know.
Starting point is 00:11:09 Or when there was the message that Hitler had been killed for a moment in the radio, my mother was in the grocery store. Buying grocery when it came, the Fuhrer has been killed. For a moment that was out, and of course that changed a few minutes later. And my mother said, God said, thank God. It's time. She was arrested the next day. Stop it.
Starting point is 00:11:36 Just for a day because her uncle was a Nazi. Oh, my God. That's what life was. There was nothing. But what was there at the same time, everything was still continue. You still had something to eat. There still was kindergarten,
Starting point is 00:11:53 even though when you had to ride, walked into kindergarten, you had to greet the Hitler at the painting of Hitler. but it was all functioning somewhat. It's right after the war when nothing was functioning anymore. There was a total breakdown because there was no control.
Starting point is 00:12:12 There was nothing there. The interesting thing at the time, the Allies decided nobody who was a Nazi could work in a leadership role. Well, everybody who was a leadership role, if you were running a border, you had to be Nazi. You had to be a Nazi.
Starting point is 00:12:33 So who do you put into this rolls now? It was Patton, in fact, who said, no, we're not going to do that. We have to put the people back down to understand the job. I mean, there was a total breakdown. There was no school. There was no transportation. There was nothing after the war, right after the war.
Starting point is 00:12:56 So that was, and of course, that those created such extreme. moments that you do remember, no doubt. Yeah, you see the inflation. There was some reports I saw that the price of bread could double every two hours, every four hours, some weird stories that you would read about. So do you remember that they, it was announced that Hitler died? No, I don't remember, no. I only knew my mother was in trouble. She got arrested. Yeah, yeah. And this was even the right one. This is a day that she thought he died, that he didn't die. For the moment, for the moment, was announced. Stavberg, who tried to kill him, thought he was dead, he announced, and it was
Starting point is 00:13:35 open. That's how everybody was exposed because they got a message he died. Consequently, everybody that was part of the plot, 20,000 exposed himself, took over in various towns, and they were killed afterwards. That's how they knew. They were all involved, that huge plot, yeah. 20,000. Yeah. How do you, because when I'm seeing you speak or I watch your interviews or I sit down with you right now or you're coming up to me, read this book, I'm going to help you change your life. You're a very positive figure, right? Your intensity, your energy, you've been married for many years, you're a man of faith, you know, you speak in a very eloquent way. Even at that moment, were you staying positive? Was it your mom that helped you be positive?
Starting point is 00:14:18 My mom. How would your mom make you positive? Very positive about life, about everything. In Germany at that time? In Germany at the time. Good for her. For example, also, My dad, who we didn't hear from for over a year because his group was behind the lines in Russia. So you didn't hear anything for over a year. And we didn't know if he was alive or dead. He was alive in our house. My mother said, oh, that's a good job.
Starting point is 00:14:47 I would tell dad or don't do that. Your dad won't like that. So he was constantly alive there. And she kept him in the house. and it was nearly like he was there, you know. So that was, and it's interesting, that's how mothers are. That's a mother. I mean, I told you, when I finally should talk me to this job,
Starting point is 00:15:11 which was far away from home, she knew it was very homesick, but I wanted to be there. But she wrote me a letter every day. If I didn't have one today, I had two tomorrow. Help me through. What an amazing mother. What a great story. It speaks about mothers, you know.
Starting point is 00:15:30 Unbelievable. Yeah. So she was the reason why you became positive. So you leave at 14. By the way, how many kids were you guys? How big was the family? I had a brother that was eight years old. He had left already.
Starting point is 00:15:42 So he was in the military? No. No, he was studying and working. He started studying and working. Yeah. So you were by yourself living with mom before you left that 14 years old? Yes, that's correct. Yeah.
Starting point is 00:15:54 Okay. But my father was there in the meantime. When I was 14, he came back when I was seven. So from 7 to 14, your father was there. What influence did your father have on you? Well, a very, very high demand person, work hard, do everything right, everything with values. I read the Bonhofer book where Metaxa says, tells her about Bonhovers, which was a very rich family sitting around a table,
Starting point is 00:16:26 and the attitude was, don't talk unless you have something important to say. This was true in a very rich family. That was also true in a very poor family in our house. Sit down and do everything right. Wow. Lots of order. Don't do it unless it's unright. Is that a German thing?
Starting point is 00:16:43 I guess so. Believe me, it was in our house. How German it is, I don't know. Got it. Yeah, Bonhofer is an amazing story. My pastor Dudley-Rutherford bought me a book 20 years ago, 18 years ago, to read on Bonhoeffer, an incredible story
Starting point is 00:16:57 on what he went through. So, but going back to it. So, dad was order, structure, system, mom was attitude, positivity, everything's going to work itself. Love. Love. Love. From mom. Oh, totally. How did she show it? By telling, by harking, by holding, by
Starting point is 00:17:13 saying, by saying, I love you, there was, I don't think I was, there was a day where I wasn't told 10 times that she loves me. I mean, and and that, of course, plays a role too. I can see that that's how I am today with my wife or with my children. Same way?
Starting point is 00:17:34 Oh, yeah, very much so. Are you more like your dad or your mom? My mom. More like your mom? Yeah, my mom, yeah. But in my intensity of doing things, I'm my dad. You're your dad. Yeah.
Starting point is 00:17:47 At 14, when you left to go to the apprenticeship, and how long are you away, are you coming back home, or you're seeing the family. What does that process look like? Every three or four months. Every three or four months you're seeing them. Yeah. And this place you went to, where was it?
Starting point is 00:18:03 What did they teach you? Oh, well, it was. My mother took me there. And the first thing I meet is the general manager of the hotel. In Germany, the general manager was a guard, understand. And he told me, he spoke to us for two minutes. And the only message was now,
Starting point is 00:18:20 you are here to study and learn how to become a service. to very important, ladies and gentlemen, our guest. That's what I wanted. That's why I wondered. That was my dream, to live in a beautiful surrounding and serve wonderful people, non-people. But the next person was the headwader of the hotel, the Metro D, the headvader, whom I actually would work for.
Starting point is 00:18:47 And he changed my life at two sentences. Totally. Now, mind you, I was 14, I didn't know it in the moment, but he lifts those two students. sentences and it was overwhelming. You know, when you're 14, they're being formed still. Sure. And he said at the time, the first thing he said, now young man, tomorrow show up at 7 a.m.
Starting point is 00:19:09 If I meant one minute after 7, I would tell you so. Now, it translated in our after I could see, when we say something, we do it correctly, and we mean it, and we do everything right here. And then he said, and don't come to work tomorrow. Come here to create excellence. Now, I didn't get that. I went right over my head. I said, wait a minute.
Starting point is 00:19:34 Is do I have to do something else than I thought? I thought I would have to wash dishes, clean floors and so on. Yes, I did. That comes with it. Got it. So what was a sentence? Come here to work with excellence? Come here.
Starting point is 00:19:50 Don't come to work. Come here to create excellence. To create excellence. And how long did he stay as your mentor? How many years are you? Three and a half years. Three and a half years you worked under him. And he formed my life and everyone.
Starting point is 00:20:03 When he said, create excellence, he meant don't come here to fulfill a function. Come here for a high intent. Your function. And I'm jealous about it today. I wouldn't hire people to fulfill a function. I hire them for purpose, for high intent. He, for example, he made it very clear our function may be to bring and serve food and beverage. Our intent is to instill well-being in people.
Starting point is 00:20:38 So that from my life, I don't do anything without purpose. And I think you're not, in fact, I make it very clear and I use the same phrase than he did. the chairs on which you sit are fulfilling a function. You are a human being. You don't fulfill a function without purpose. And I find that even immoral that we as companies hire people to fulfill a function rather than to join us in our vision and our purpose.
Starting point is 00:21:10 On a vision, a mission, a purpose, something bigger than us. Purpose, that's right. So you picked that up from him. Did you spend a lot of time with that general manager or not that much? but you were more spending time. Because General Manager was the guy. Once in a while he passed by and said, good morning.
Starting point is 00:21:24 How serious was he? Was that a very common thing in Germany? Super serious, super disciplined. Were those the qualities? Absolutely. I lived in Germany for a year and a half. Absolutely. In Erlangen.
Starting point is 00:21:36 I was in Erlangen right outside of Nuremberg. Yeah. And it was in 1989 to 1990. And I went to school for two years. You know, it was a very, you know, military-like. Achtung, you know, it was a very, you know, be ready for it. Sure. It was a different intensity you got from them.
Starting point is 00:21:54 Absolutely. Yeah. Even right now, our son plays soccer, and we have an option to sending two different places to Germany or to Spain. All the coaches are sending Germany is more discipline. Spain, he'll learn the game, but I'll have fun, but Germany is very much, you better get your act together. Yes.
Starting point is 00:22:10 So what happens after that? So what happens you're there for three and a half years? What do you do next? And next, it was pretty common and also a reconno. amended again from that headwether to work seasons in various great hotels in Europe. So I went out and worked in in Berne and the Belleville Palace to create one of the great hotels with the world in Luzon in the Borovach Palace. I worked whole America line for for eight months.
Starting point is 00:22:36 I worked in Paris. I stayed there two and a half years in the Plaza Attenay, which was one of the creative hotels in the world, worked in the Savoy in London. And in the Savoy, as I worked as a way there, A guest said, you're a great waiter, do you want to come to America? And I said, sure. Now, if he would have said Zimbabwe, I would have said sure too. You just wanted to leave?
Starting point is 00:23:02 No, I was young. How old are you at that time? At that time, I was 23. 23, okay. Capture the world. Be and see the world. Capture the world. So he said, all right, give me your name.
Starting point is 00:23:16 I will send your papers. we are opening a new hotel in Houston. And once you get the papers, go to the embassy, and that's what I did. And in the embassy, so they, at that time, immigrant at that time, me. I went to a physical, careful physical. I went to an oral test.
Starting point is 00:23:39 I went to a written test. Yes. And in the evening, they gave me some... Get a job. Yes. And the evening they gave me some papers. and ask me, when will you go to America? And I said, when I get my papers,
Starting point is 00:23:52 and he said, you have them in your hand. And then I took the ship on which I had worked as a passenger. Stop it. Yeah. So you go with the ship to the States. Yeah. Oh, at the time, there were no planes at the time. Right.
Starting point is 00:24:09 Makes sense. Basically. Makes sense. I keep forgetting, you're born in 39. Yeah. Times are different when you're born in 39. You know, it's a very different world. When was the first time?
Starting point is 00:24:18 I remember you said when you first started working at the hotel, you're like, I wanted to work in luxury. I'm going to meet people. I'm going to meet these interesting people, powerful people. Who was the first person you met? That was a celebrity that you recognized. A very famous Sepan, who was a very famous soccer player before that. Sepan.
Starting point is 00:24:36 Yeah, that was more important than, oh, I met all the politicians of the time. If that was Arden, Nava, or also. At the time, everybody was there. That was the hotel where you were, was that one. And the general manager was right. The guests sitting there, all of them were important. That was the place to be. And it was at the same time a spa hotel and so on.
Starting point is 00:25:01 So when I met Sepund, that was meeting a great famous soccer player was more important than meeting all the other. Of course, politicians, the leaders. Sure. Later, for example, I worked. in the late 50s, 60 in Paris. You name it, even if it was Soraya at the time.
Starting point is 00:25:27 Or Chris Kelly or Gary Cooper, I served them all. Grace Kelly? Chris Kelly, absolutely. Did you ever serve onassis? Oh, yeah, sure. Onassis. I served them all. The begum and so on.
Starting point is 00:25:40 Those were the guests. What did you notice? Was there a pattern? what you noticed with this life of the rich and famous. What patterns did you notice with that? The pattern was that we who served them didn't really exist. Got it. Was that the mindset or was that the reality?
Starting point is 00:25:57 That was the reality because they were so used to people. They were just, we were just there. But I was okay with me. I had no problem with that. Interesting. Got it. Because at that time, you're not yet Horace Choltsy. You're just a young man working there.
Starting point is 00:26:13 I just, and I wanted to do, and I knew that when I was dreaming about it, and that I was taking care of very important people, and one of the other recognizes you, and I had any experience every other. When I worked, the first day I worked actually in the restaurant where I started, there were a couple sitting there, and they saw, of course, my beginning, that my knees were shaking and so on, and the chairman told me, come here, you're doing a great job and gave me five mark, which was a huge amount of tip at the time.
Starting point is 00:26:47 This is what year? That was 1954. That was a huge amount of money. But the encouragement of that moment was traumatic. It was traumatic. Unbelievable. Just to see that somebody is encouraging you, even though you think you're nervous, was he somebody or was he just a businessman?
Starting point is 00:27:07 I had no idea. You had no idea who was. So it wasn't a famous person. No, no. Was there any famous person that was sort of? super complimentary that left an impression on you when you were younger. Who was the kindest to you? Well, probably because we're told so, I'm not quite sure. It was Conrad Ardenauer, who was a guest several times there with, always with others, and of course security around them. But he looked at you
Starting point is 00:27:33 and said, good morning. He looked at you. Got it. And he didn't just pass you by. You existed. You you actually felt that you existed. Interesting. And I found that very encouraging, too, and so we all liked him for this very nothing that he looked at and said, recognized us. But you changed in that moment, that particular job, too, again with that Madre D.
Starting point is 00:28:03 I, typical chairman, you learn this work. Once a week you go to a school of your of your trade, in this case, hotel school, where all the kids from the area came, and after two years there, the teacher asked us to write an essay what we now think about our business. Going back to work that night, I was cleaning a table, and I watched a matter-D, that matter-de approaching a very important table. But they were all important. And in that moment, I realized, I had seen it before.
Starting point is 00:28:39 I never realized it. The guests on the table were proud that he came to them. He was a very tall man. He worked in tails and they worked fantastic. And I thought, wait a man, this is a reversal. Why are they, we are here, we are the servants. And I thought about that I had to write an essay that night for that school. And I thought about, I wrote the essay.
Starting point is 00:29:07 And for the first time in my life, I can't came to the realization, which kind of formed my life too. The reason those guests were proud that he came to them, because he had defined himself as a first-class gentleman. And I realized, wait a second, I can define myself, even if I was a dishwasher all my life. I don't have to be a bum. I still can define myself as a first-class gentleman.
Starting point is 00:29:34 How does one do that? By respecting others, by being honorable, not going against authority, if you will, by coming to work five minutes early and say maybe five minutes later and say, I respect what I'm doing here by saying good morning to your boss and not ignore, not hate him, but be thankful that he exists because otherwise I wouldn't have a job. So I still can define myself and do everything I do a little better than anybody. as simple as it is how powerful is that simple don't complain about business it's ludicrous how i when i
Starting point is 00:30:18 started ritz carlton i only took the job remember i had a great job i had golden handcuff i had everything in fact i people may heard that worked with me i was a young star in that company in and hired at the time in charge of 65 hotels in the united states food bearish operations and so on And I left for a dream, for a purpose, to create the finest hotel company in the world. Because they told me you can do what you want, basically, operationally. And I went there for that purpose. But I had to ask myself, is that purpose good for all concerned? First of all, is it good for the owners?
Starting point is 00:31:03 Because believe it or not, friends, you won't have a job without some owner. That was clear to me. Number two, is it good for every employee? It wouldn't be good for the employee. It wouldn't be good for the owner because we wouldn't have a job. Is it good for every customer? Is it good for society as a whole? And I question myself, would God approve?
Starting point is 00:31:25 Once I have this can answer that, clearly as yes, I cannot compromise it anymore. And now I have to find myself as the person who can do it. that's it is not a matter of just having a vision that vision has to be of value to all concerned that makes sense when you got that call at 23 to go to Houston was that Hilton or was that Hyatt? It was Hotel Corporation of America which became Sanesta later
Starting point is 00:31:58 okay and so I went to Houston frankly I didn't stay long very short because I was totally new, and when you have cultural beliefs, they're sometimes very stupid. And the first day, first of all, I lived in Hawaii, no air condition, and I got there late June. I've never experienced heat like that. In Houston? In Houston. And next door I worked, and the first day I worked, Aceveda, actually, was there a few days.
Starting point is 00:32:33 First day, I worked as aveda. I had an order of fish order and I looked where are the fish knives and the fish forks. I had worked in the finest hotels in the world, mind you. And they said, what is that? And I came to a conclusion
Starting point is 00:32:51 I'm working for barbarians. No fish knives, no fish forks. Cannot be. And I live and they live in a situation where human beings shouldn't live with this heat. I thought, I didn't know. was air condition. And Houston is pretty hot if you're coming from Europe.
Starting point is 00:33:10 You better believe it. Yes. My wife's from Houston. It's very hot. So I called a friend of mine who worked in San Francisco, in a civilian in a French restaurant. And I said, I'm going back. This is, this is their barbarians.
Starting point is 00:33:25 They serve fish without. How ridiculous can you be? That shows you how silly we sometimes have beliefs, our beliefs that we set, because the, the, culture is it is sometimes very silly. We have to look into it. So I left there, took the bus to
Starting point is 00:33:40 San Francisco, worked in San Francisco, started in a restaurant, but then I worked back in the hotel because I wanted hotels and worked for Hilton and afterwards joined hired. How long were you at Hilton? With Hilton, I was not long there, but then I went to the club and back to Hilton. I was with Hilton
Starting point is 00:34:02 for nearly four years. Four years. What did you learn at Hilton that you took on with your career? Well, process of manage of what you do or the organization. Because I worked for a while in catering, selling how you organized sell and so on. So I learned, but not traditional service because we have kind of all forgotten what is table etiquette and so on. I learned that when I was a kid, believe me, that made a deed, everything had to be 100% correct.
Starting point is 00:34:43 But in Hilton, it was working and systems. I realized that every effort has to have a process. Started learning that. And then I joined Hyatt. Is Hyatt where you became, where you made a name for yourself? Yeah. Because is Hyatt where you wrote your first book,
Starting point is 00:35:03 or was it at Hilton? No, I read that basically after retired. The book was written. I became quite good friend with Stephen Covey. And Stephen was urging me to write a book
Starting point is 00:35:21 about what we had accomplished with Ritz Carlton. So this is post-Hiatt? Yes. This is at Ritz when you met Stephen Covey and he said write a book. Yeah. Got it. Okay.
Starting point is 00:35:32 And he told me, didn't do it and he kept on telling me and then one day I was driving home and he called me and I answered Favon is Stephen that's how I talked you I'm disappointed so disappointed and he's telling you this yeah I said why Stephen you have still not written your own people you own people to write your book promise me you will and I promise you A few months later he died. And that's, when he died, I was so...
Starting point is 00:36:09 And he always said, I want to be the one who writes you forward. And he died, and he said, Stephen, I write a book for you now. Wow. Well, I mean, he wrote a book that sold, I don't know how many copies. Changed me. Oh, yeah. Impacted me. Yeah.
Starting point is 00:36:22 Life changing. Oh, no question. Seven habits. And then he wrote an eight habit, right? He wrote a book called Eighth Habits. Yeah, no family habit. One of a kind. He was very unique.
Starting point is 00:36:31 My... Unique. Very unique. So, okay, so walk me through when you're at Hyatt, you're making a name for yourself, Ritz comes and recruits comes and recruits you and you take your opportunities to risk. What happened there? First, I would like to say that because I would like to impact young people in the conversations. When you come to my age, you want to impact.
Starting point is 00:36:53 Sure, yeah. When I worked for Hyatt, I was Food and Barwich Director. That means I was in charge of the food and beverage operation of the hotel in Chicago. A year and a half later, I got a call for Mr. Freund, who was the president of Hyatt at a time, and said, host, sit down, we have something wonderful for you. You have done a great job with a European flair and all those things. We have what is maybe the best hotel in the company, and you're going to be general manager. This is a moment, a dream moment, the impossible moment, the moment that you will never accomplish but dream from.
Starting point is 00:37:31 and here he said, you're the general manager of the finest hotel we have. And I said, I won't take it. And he said, you're not leaving the company? I said, no, I'm not leaving the company. Because I want to be rooms manager first. I never was rooms manager. Stop it. Yeah.
Starting point is 00:37:49 And he said, we're giving you a rooms manager. And I said, yes, but I cannot be the best general manager in the company unless I have been rooms manager. Wow, what a message. And he said, I'm coming. He was in San Francisco and coming to Chicago and talked to you. You're leaving the company. I said, no, he came and said, no, I want to be room's manager.
Starting point is 00:38:09 He said, we have the finest hotel for you. He said, make me a room's manager. Give me the worst hotel. A year later, he called me. He made me a room's manager. A year later, he called me and said, remember what you said. Yeah, I want to be room's manager. He said, no, no.
Starting point is 00:38:25 You said, you want to have the worst hotel. We got it. And I got Pittsburgh. which was a dump. A real dump. What year is this? That is 1974. So I moved to Pittsburgh.
Starting point is 00:38:47 And two and a half years later, I was promoted to a larger hotel in Detroit. And a year later, I was promoted to regional vice president over 10 hotels. And two years later, I was promoted to corporate vice president. president and to Chicago. And that wasn't good because when you're corporate vice president,
Starting point is 00:39:08 you're one of a bunch of bumps. They're all vice presidents. If you're regional, you're the king in your region, you know, but, but still it was a lot of bombs. Still, it was a promotion. And so I moved to Chicago at a time. And then I got that call after I was there for nearly three years. To be to call that there is a job. We have. We, What they said, we are building two hotels, a holiday inn, but we cannot come to agreement. We want somebody recommended that we create our own brand. And you were recommended to run that brand. Who recommended you?
Starting point is 00:39:48 Somebody that had worked, a vice president used to be, had worked in Hyatt. At Hyatt. If you would have stayed with Hyatt, who would you have become? probably CEO you would have become the CEO of the company if you would have stayed with hire that was the trajectory
Starting point is 00:40:04 everybody knew okay it was obvious yeah oh yeah okay so why take this position this opportunity that comes along because at one word you said when I asked them what would you do with your hotels and they said
Starting point is 00:40:21 operations that would be up to you and I started dreaming and I saw a purpose and it started to control me. And I said to my wife, I will make this the best hotel company in the world. If they let me really operation do what I want to do. I saw because the leaders, mind you, there were individual hotels that were different, but the leaders of company leaders in hotel business was hired, Hilton International, Western and so on, intercontinental.
Starting point is 00:40:58 And they were basically all doing the same thing. And I thought I wouldn't compete with them, I just would go over them and pull the best out of them. And mix a little bit more, do not get away from the relaxed service element of America, but put a little bit more elegance and customer attention into it. and it seemed to me when I listen to other companies, not hotel companies,
Starting point is 00:41:27 there seems to be a lack of understanding that it's all about human beings. There are two groups of human beings when you're in business. The one group is your customer, the other group is your employees. So how do you? And both groups have emotion, thoughts, vicious, dreams, yet they're not taken into account
Starting point is 00:41:50 by those that run companies. I have to take into account. I have to know what is my customer's expectation from my product. What would they expect from me? And then I have to know as a good manager. I have to create processes, system and controls. So I deliver the expectation of the customer, hopefully superior to my competition.
Starting point is 00:42:16 But it only can be superior if I'm also a leader, not just a manager and lead my people to want to do that. This can only be done if my people are working for the same purpose. There's purpose.
Starting point is 00:42:36 And I still believe I said that again. It's not a job that's the biggest gift that company can give you. The biggest thing in company can give you is purpose. Purpose and belonging. You felt you didn't have that at Hyatt? I felt that wasn't managed well.
Starting point is 00:42:57 We still just hired people and then sometimes decided that employee is not good. Wait a minute. If that employee is not good, why did I hire him? It's leadership. Either I selected the right employee or I oriented the wrong or I trained wrong
Starting point is 00:43:22 or I have the wrong work environment so it's not the employee it's me and that acceptance wasn't was maybe there in some people but it wasn't organized and I knew if I organized
Starting point is 00:43:40 my selection my orientation my training and my sustaining the knowledge and create the right work environment I could be anybody. I believe that. I still believe that. I, sorry. Sorry anybody. Everybody thinks I'm very arrogant now. I think I could take any company in the world, make it the best company in the world.
Starting point is 00:44:01 You still believe that today? Yes, absolutely. Based on what premise? Based on the premise that I would offer purpose, that I would have, be very careful in selecting employees and not just hire people. Come on, people are not selected. They're hired. And I would orient them. to the shop. I opened every single Ritzkarton hotel and every Capella hotel myself. I didn't go there to drink champagne. Well, I did a little bit too, but I went there to orient the employees as to who we are and welcome them
Starting point is 00:44:37 and role play into them how we deal with customers and train them. So I was connected to the, so I met sure. But what did I train? I trained what I trained. knew the customer wanted, not what I want. Not what I want. Come on, I have been on a board and many boards. And most CEOs, nearly all, full of egos, full of emotion, full of insecurities, like we are as human beings. But has no respect that the employees and the customer has the same thing.
Starting point is 00:45:13 What does a customer really want from you? What do they really want? I spoke to classic hotels of America. Not long ago. And before me was a speaker who said, everything is new. Forget everything. Everything is technology.
Starting point is 00:45:30 Technology. Everything is new. 20 times, forget all you're new. If you're not in technology today, you are lost. I was the next speaker. And I said, nothing is new. Because you see, 5,000 years ago, human beings wanted to be respected.
Starting point is 00:45:48 And this was true this morning and a minute ago, tomorrow, and in 5,000. years from now. And if my technology helps you, my customer, to tell you that I respect you, and at the same time care for you and do my best for you, that's what it's all about. It's caring. And guess what? There's studies. And American consumer study, that's not very old, where the consumer 80% of consumers says, I deal with you if you care for me, even if I could buy the same product next door for less. So on the end, an organization's, the respect for an organization is how I care for people.
Starting point is 00:46:33 And that because that creates trust. People talk about loyal customers. Well, what is a loyal customer? A loyal customer is somebody who trusts you. They're not trusting you because of the product. They're trusting you because how you treated them, that you respected them. And that seems to be not understood. People work on the product.
Starting point is 00:46:58 And they do the best and they work hard. But I have to work and making sure that my customer knows I respect them. So, you know, when you think about three things, product, service price, in your eyes, In order, what would you put first? Product, service, price. Service first. What's second? Product.
Starting point is 00:47:22 Now, prices last. Because if you can get the first two, they'll pay anything for it. If I get the first, I get more. Listen, a good housekeeping was a magazine that developed value of product. They voted us in the early years as best value. We were the most expensive, but we were the best value. Wow. That's the point.
Starting point is 00:47:45 have the best value. Look, in our first hotel there, and I never forget it because it even shocked me. We put a chandelier up in our, as we were finishing it up in the elevator foyer. This chandelier went up and I realized there's an $28,000 chandelier hanging there. No guest ever commented on the darn chandelier. nor did I do on the $200,000 Oriental rock, nor on all the marble. We both hold mountains in Italy. Nobody commented.
Starting point is 00:48:24 How we respected them, how we treated them, how we were friendly, how we responded, that we cared. So could you have gotten away with a $800 rug and a $600 chandelier? You think you could have gotten away with it? Yeah. Yeah. Look at it. Look, that was luxury.
Starting point is 00:48:40 Because I see your Capella hotel. Your Capella hotels that you build, you know. It's not Chandler. Oh, yeah. It's still marble. It's beautiful, yeah. Oh, absolutely. Oh, absolutely.
Starting point is 00:48:49 But the key thing that we did Capella, only 100 rooms, so I can individualize service. I couldn't individually service in a 600 room. It's card. Because I had 450 check-ins today, 500 check-out. But in a hundred-room, Capella, with only individual and not conventions, I can call you before you come
Starting point is 00:49:14 and say, if you're coming to Singapore, what can I do for you? It's all about you. As long as it's more legal and ethical, I'll do it. There's no check-in time and checkout time. We will have a room for you when they arrive. You see, it works. We figured out how that works.
Starting point is 00:49:31 I saw you explained somewhere where you said at Ritz, customer would be unhappy if check-in took more than four minutes. right? At Capella, you brought it down to 20 seconds. Yes. In fact, that's the change of the human being. We knew after four minutes they will get angry. Today it's 20 seconds. The timeliness, we better know that as businesses,
Starting point is 00:49:56 timeliness expectations have become dramatic. True. Including responses to emails or so on. And it is, we better know that there are two things that are greatly different, and that is timeliness and individualization. The millennials say, do it my way. There you are again.
Starting point is 00:50:17 What business has ever met a study what the millennials really want? Shouldn't we, if we have a business, shouldn't I know what my new customer's expectation is from me? And one thing, expectation of a millennial is, do it my way, individualized to me. The difference, but look, if I would go to a McDonald, I would say, I'd take a number one. The millennial says a number one, but no tomato, two slices of pickles for the individualization.
Starting point is 00:50:51 And if I run any business, I have to understand that there is individualization is expected. Was that not the case before or that was always the case? Oh, much less. Much less. Much less. Much less. Really? So you just expect that whatever you sold, I accepted as a customer. That's it. Yeah. So how do you differentiate between the speaker that came before you, where he says, no, new, new, new.
Starting point is 00:51:15 What principles are evergreen, and what principles are changing? What's changing that you have to adapt to? The way it is done changes. The way it is done. And, of course, customers' expectations will change. I tell you a funny story on the customer expectation. When I opened the first Ritzkartan, at that time, the first plastic. card keys came out, which today's norm.
Starting point is 00:51:41 Well, this was nearly unheard of. They called them wing cards at the time. And I said, since this is new, we do that. You were the first. I was very early. This wing card. And it was, it's a good security piece. But our guest checked in and said,
Starting point is 00:51:56 your luxury hotel, you tell me, give me a plastic piece. Wow. So six months later, we changed the logs. Because that was, this silly thing was overwhelming to customer that I would give them a plus. Wow, so they saw it as cheap, not as a... But wait a minute, three months, three years later they said, you give me a hard key, that is very dangerous. What if I lose and they come into my room? So we changed locks again. Yes, you have to go with the customer. But on the end,
Starting point is 00:52:28 it's how I do it. It's how they feel what I'm doing. In the end, I have to tell them, I care for you. By that action, they don't know that I care. I just responded. But by me saying, friendly, instead of saying, hi, hey, saying good morning, sir, how are you today? And tell you with my eyes, I am here for you. I respect you. Amazing.
Starting point is 00:52:56 So the question down, here's the question I got for you. You go from keys to card to what is this. I want a key, back to key, back to card three. years later. Question for you is, who do you listen to? How do you know the right move is to go back to keys and the right move is to go back to cards? Is it the complaining customer? Is it majority? Is it employees? What patterns make you help you make that decision? You don't listen to your mother-in-law. That's a study of one. A complaint is also a study of one. You make customer surveys thoroughly ongoing. You have to understand what the market wants.
Starting point is 00:53:37 It's not the individual. And that's a bad thing companies do, particularly entrepreneur owners, the billionaire owners. His friend tells them, and then he comes and change it all because my friend told me. That's a study of one that you just don't respond to. You have to understand what the market is the whole ones. How do you do that? My main customer studies. We, of course, it was easy in a hotel.
Starting point is 00:54:02 I had a customer analysis done for it. I knew every month in every hotel in the world what the customer satisfaction was, what the employment satisfaction is, what my economics are, and what my future indicators are. That's the only thing I need to know. The rest are delegate. The rest are delegate. But if the customer satisfaction intended return was not there, we then could dig in why into the various studies.
Starting point is 00:54:33 We analyzed if there are in every hotel the same trend. Got it. So we know what is there. We then tweak constantly. You tweak so that you keep on serving the customer and the way the customer wants to be served. Like what is AI doing right now to the hotel and hospitality business that some people are using that you'll say,
Starting point is 00:54:57 I'll never do? And what is AI doing to the hospitality business that you love? Well, I'm not there. I mean, I'm generationally cannot quite accept it. I yet. Oh, but I'm saying I work with a technical group and we are leader in the technology that has created for hotels. That's Capella. No, that is the hotel company.
Starting point is 00:55:22 I'm working with a group KYC that puts technologies into hotel so we know everything. and we are partially AI for instance in AI I have I can do everything but I what is happening because of the AI is nearly every brand larger brand is becoming a commodity now means you check in with your iPhone pretty soon that's what you do you check in you call the elevator go into your room you will check out and so on. That means it is a commodity that offers shelters sleep. Hospitality cannot be replaced by AI. I still have to have a human being. I would still have, if I was running a hotel, I would do that, but I would have somebody on the front door that says,
Starting point is 00:56:20 welcome, and walk to you to the elevator and say, I'm here for you. You respect it here. and not just the AI but it's driven of course the company has to make an three-month report to Wall Street so I have to have people staying in the front of the
Starting point is 00:56:40 but that's the end of hospitality but that's why small hotels to do it will be the leader of excellence small hotels that do it yeah because they're able to control more of it they will control more often and they will and they will be successful because of their hospitality and not just because of shelter.
Starting point is 00:56:59 So then scale is harder today, the bigger the company is, because you can't maintain customer service. You could if you're willing to spend the money for it. But large companies don't because they're pushed by shareholders to make a little more profit. Who's the bigger company today, like, you know, that you still look at and say, wow, good for them. Big companies still maintaining customer service? Obergh is pretty big, becoming big, but there's still attention.
Starting point is 00:57:30 Rosewood are still paying attention to customers somewhat. But, you know, you see most big names that you know, and I will not repeat the names, are becoming commodities very fast. Do you, when you sold, when you stepped away from Ritz, what year was that when you stepped away from Ritz? Well, I have finished my work with Ritz in 2002. 2002. Yeah.
Starting point is 00:57:56 And you went to Ritz what year? 1974. From 74 to 2003, end of 73, yeah. The lady that was here, she said something. She said, she said, Ritz went from in the mid-nine, in 1991, have an employee turnover at around mid-furtz. 50% and then by the time it was done, it was around low 20%. That's the stats that she's given. 18%.
Starting point is 00:58:27 18%. And the industry was 120. Right. I mean, it's a 365, 24-7. You guys are always open. You're never closed. What did you do to, you know, lower retention, as many, increased retention as much as you did? We touched on it.
Starting point is 00:58:45 We offered purpose. Outside of that, though. Outside of that, what else did you do? Yeah. In the selection, we were very careful. We were very careful. We had a selection system. We very careful.
Starting point is 00:58:57 And we established standards already during the interview. Because, you know, people don't seem to get that. Most what you want, all of us from an employee, is the right behavior. But behavioral analysts, working with the University of Colorado and the University of Frankfurt on that, behavioral analysts will tell you behavior cannot be taught. after somebody's 16 years old. Wow. Yeah.
Starting point is 00:59:23 How? Unless, unless there's a significant emotional event in your life. Makes sense. And interviewing for a job is a significant emotional event. And what do we do, we just ask questions rather than establishing standards right there, behavioral standards. And Sir Patrick, you know, we have an attitude in our hotel, in our company.
Starting point is 00:59:47 We really, we are petted about it. We are very friendly to every guest. In fact, within 10 feet, we look him in the eye and say, friend, good morning. Can you do that? What will you say? You will say yes. Well, wait a minute, Patrick, I'm very serious about that.
Starting point is 01:00:01 We will say yes again. I just established a new behavior in you for your benefit to be successful. Timeliness is very important. So I will start trying to stop. But I do that and then orientation, first day of work, which every company does wrong, period. We didn't do that.
Starting point is 01:00:23 I went to the orientation. I roleplayed how to say hello in front of every new hotel and every takeover. Teach me. Teach me. How do I say hello? Okay, so you're a guest. Here's a guest coming.
Starting point is 01:00:39 Within 10 feet, 10 feet is the essential moment, but within 10 feet, they make a decision about you, us you make about them. Society lies about those things. You should look at a baloney. We are human beings. We cannot help. We make a decision about the other person. So what decision do I want you to make about us, about me? I want you to make a positive one. That's why we wear the right uniform. That's why we groom right and that's why we look in them in the eye no matter what we're doing. It's a non-negotiable.
Starting point is 01:01:15 That's what we do. We look him in the eye and said, Good morning, sir, or good morning, ma'am. How are you today? Now, watch me. Good morning, sir. Good, or good morning, ma'am. How are you today?
Starting point is 01:01:28 Welcome. And you're role-playing this with you. I'm role-played that. And I role-played how to talk to each other as employees. How do you do that? Well, if I work by, if I, we're working together and I walk. I want, I said, first of all, do you want a good work environment? Yes.
Starting point is 01:01:43 Oh, yes. So, okay. Now, Patrick, the people in the environment are responsible for the work environment. So I want to go to work environment. I walk by you and I say, good morning, Patrick, how are you today? And you may just say, but tomorrow morning I do it again. And pretty soon you will say, good morning, horse. How are you?
Starting point is 01:02:05 I am responsible. I am responsible for my work environment. Have you heard me all? And everybody will say yes in the room. Orientate. The day of orientation is a very significant. day. You see, we interview you. I interview you.
Starting point is 01:02:20 I really want you. The job is open. But our orientation day is not for 10 days. So I'm going to say, Patrick, I'm going to put you in the payroll, but you cannot show up. You cannot. But if you show up, you paid for the next 10 days,
Starting point is 01:02:37 but that's the day you start working. Because I want you to have a significant event when we do orientation. Stop it. Yeah. So you hire me Yes. You pay me those 10 days. Yes. And even the orientation is not in 10 days. That's right.
Starting point is 01:02:52 Why are you doing that? Because if I led you before without having the proper orientation, I didn't use the significant emotion then to teach you the right behavior. And what is the right behavior you're trying to teach me to pay me 10 days that I'm not working for you? I'm repeating things I told you during the interviewing process. The orientation is a day when we teach you again. Here is how we behave. Here's how the guest is important.
Starting point is 01:03:15 here's how we treat each other. You are part of something. Let me put this way. How are people being oriented? I can tell you. If you worked somewhere, I can tell you how you were oriented. Everybody orients like that. If you come to work and the boss tells you the rules of the company,
Starting point is 01:03:36 here's what we do and here's what we don't do. And then you get a handbook with more rules. And then you get insurance papers and all kinds of papers. And you go through all this work, and that's the day of orientation, first day of work. And when you finish with that, the boss makes his pathetic team speech. We're a team here, yeah, without giving purpose. A team is a group of people who work toward a common objective. Not given, just we're a team here.
Starting point is 01:04:11 And what's next? Oh, now, Bill, the new waiter, work with Fred. He's here nine months, and he knows the ropes. Somehow you're in rope business here now. You turn him over to Fred, and on the way to the kitchen, Fred tells Bill the new way that this company is no good. That is day of orientation, instead of the day orientation saying, here's who we are.
Starting point is 01:04:40 You're now part of us. and here's how we he's our customers and we are happy when they're here we respect them here's how we show them respect by saying welcome by responding to them
Starting point is 01:04:54 by looking them in the eye by caring for them that's our that's our part Patrick we have to give human beings purpose but we have to at the same time tell them
Starting point is 01:05:08 the motive of our purpose what did Adam Smith said, wait a minute, 300 years ago. Wealth of nations? Yeah, but he wrote another book about the behavior of the human being, and he said, impossible that people can buy into orders and direction. They can only buy into objective and motive. On what we do, we give orders and direction, instead of giving purpose and motive.
Starting point is 01:05:37 That is, the millennials say, what's in it for me? But tell him, if we accomplish that here's what, you will make, have more opportunities, you will make more money, you will be respected, we'll be honored. That's what's in it for me, for you. And that's why we have this beautiful purpose. And that's why we come to work.
Starting point is 01:05:57 We do not come to work for the function. We are not chairs. How do you teach, and she talked about it here as well that day, how do you teach employees to confront each other? What is the format of confronting? management to employees, employees, how do you teach me to do it? Yeah. Well, first of all, turn it around.
Starting point is 01:06:23 We had in our pockets first class cards. And everybody was encouraged to use that card. If they see anybody doing something good, a fellow worker, write down first class and give it to them. When I walked on there, people gave me first class cards. So that's the opposite. That is right away establishing the environment that you're here to deal with your,
Starting point is 01:06:48 with your fellow workers in a positive mode. And then what happens the more first class cards I get? No, you just collected the first card. I have 20 first class cards. How do you recognize the person that got the most first class cards in a month? Monthly, every department recommends an employee of the month. All employee of the months have a dinner. one of them gets employee of the month total.
Starting point is 01:07:18 For each department, but one gets for the hotel. Got it. They're 12 in a year. That's once a month. One of those 12 becomes employee of the year. He becomes a paid vacation with a spouse and cash. Paid vacation for spouse, with spouse. You find them a spouse or their spouse?
Starting point is 01:07:43 No, no. No. don't find him a spouse, because I don't think you're in that business. That's a different business. You don't want to say that. You'll attract a lot of different customers. But they tell me they make a lot of money. Make a lot of money. Yeah, you can do like only writs. If you did like something called only writs, not only fans, it would be a different business model. You'd be in. Success is built on how you think. Influence is built on how you show up. Every detail matters because presence speaks before you do.
Starting point is 01:08:15 This is more than style. The future looks bright. So let's say in this. So I get first class cards, but still, because when you're talking about this, the reality of running a company is you're not hiring everybody, right? You have direct reports who have direct reports and you have a chief HR officer that the interviews come through. how are you teaching me to hire Ritz type of people to the company?
Starting point is 01:08:49 What am I looking for? You're not doing 100% of the interviews. How do you teach me? Well, because when you came in, you were taught, and everybody understands the very minimum. Everybody goes through orientation and managers go through a special orientation. I gave every manager a leadership session.
Starting point is 01:09:10 The way our teaching worked beautifully, because we were, mind you, we started with no hotel. So every hotel we had was either new or take over. I got it. So you had an advantage? You had an advantage. I opened every hotel. I got it. I also knew, all employees knew me. It wasn't them. What a point. It wasn't them in the corporate office. You have to overcome the them. Because if I don't know you up there in my insecurity, I will. blame you what is wrong up there because I if I don't make it if I can't live up
Starting point is 01:09:50 by the rules it's your fault you have your own but but they didn't know me that's why the big thing that happened in Ritzkarton and in Ritzkarton is the empowerment piece when the which wasn't which was a nuclear explosion in all businesses when I said I empower every employee they make a decision up to two thousand if a guest has a... But I could do that. First of all, we did that very carefully. I didn't just say it.
Starting point is 01:10:21 We taught. I thought about it for a very long time. It was an economic decision. I didn't want to lose a customer. Because a customer that leaves unhappy becomes a terrorist against your company. You cannot afford that, really. I knew from the behavioral analysts that 96% of complaints is people that want to be able to be.
Starting point is 01:10:42 is people that want to get rid of their frustration. We learned, I thought they complain on the front desk or the concierge. No, they don't. They complain to anybody who listens. Anybody listens and if you don't accept it. So I had to make sure that a bus boy would accept as his TV, the TV that didn't work. Forgive me.
Starting point is 01:11:06 And so I didn't want customers to run out there and be unhappy. My guess is well connected. he calls his travel agency and says it was no good. His travel agency is part of a consortium, 500 travel agencies. So I want to be sure that everybody leaves us an ambassador.
Starting point is 01:11:26 So I had to teach our employees how to handle any complaint and say at the same time, I trust you. In fact, you can make a decision up to $2,000 to keep that customer. How much did that end up happening per month? Like at its peak, how many people
Starting point is 01:11:43 used the full $2,000 at its peak. In the last three years that was there once. Oh, wow. The rest was the bus by saying, did you have a nice day with us? No, my TV didn't work. Please forgive me about my TV. I will buy your breakfast.
Starting point is 01:11:59 And I guess the complainer now is embarrassed that he complained. And leaves as an ambassador. But we certified every employee, how to do it. So were you employing on one? Pardon me? Were you employee number one in Ritz? Yeah, sure. So you're the founder, president, and COO, the company, right? The co-founding member of the Ritz. So from one employee
Starting point is 01:12:23 to 47,000 employees, you've been parted that entire process. When I left, there 25,000. 25,000 when you left. I think today they're at, I don't know what the numbers. That's higher number. But from one to 25, that's 100% you. Question for you, did you guys buy other hotels or no? Yeah, we talk about, yeah, but wait a minute, we didn't own hotels. We managed Right. So, for instance... Yeah, we took over our hotel in New York. Consequently, I inherited a union. Got it.
Starting point is 01:12:53 None of our... none of my hotels, I opened San Francisco. New. Union was picking us for three years, but they never became union. So when you took, when you're, so you're taking opera, like, for example, two properties are opening up here in Pompano. One is Ritz, private residence. One is Waldorf Astoria. I want to look at a couple of them, and they'll say, Waldo. going to be managing this property for 30 years.
Starting point is 01:13:16 Yeah. So you were managing those hotels, servicing those hotels. Okay. But we insisted, we wouldn't have written a contract anymore unless you signed 50 years. 50 years. To you guys.
Starting point is 01:13:29 Yeah. And what is the business model? How do you get paid? I get a percentage of sales. Whatever sale they make, you make. Is it a profit or is it rev? I make off sales. If you own the hotel,
Starting point is 01:13:42 and the sales 100 million, I get 3 million. Got it. And you may be losing money to operation. So no matter what, you're making your 3 million. So it's more like a consulting firm. Yes, in a way, yes. But I also have an incentive after you make that service, I am sharing 10% of whatever in the profit after.
Starting point is 01:14:05 I got it. So I have an incentive to make a profit. So if I'm doing 100 million, no matter what I do, I've got to pay $3 million on my revenue. that goes to you, what is your incentive to make my $100 million, $200 million? Well, I get an incentive on anything over a certain profit. Is it an accelerator? Like, does it get really bigger?
Starting point is 01:14:25 No, no. It stays fairly at the 3% number. Yeah, but on the same time, I drive sales up, which I get my 3% on the sales. I drive the rate up, I drive the income up. And, of course, I drive the profit up and the profit. Now, there is an exit clause for you, the owner, that means we established in the beginning, who would be by competition? Who are the three best hotels in town? If I don't, if I'm not within 5% at least what they do, you can exit me.
Starting point is 01:14:59 You can throw me out. That's in the contrary. Oh, yeah. Oh, yeah. But they also want the name Ritz-Carlton on the property, right? They don't want to give us the Ritz-Karton. It's not only hotel. It's probably likely.
Starting point is 01:15:09 Of course, yeah, restaurant, all the other stuff. that's benefiting as well. At the peak, what was the revenue of all the hotels you guys were managing at the peak under your watch? Well, worldwide, we were close to $2 billion, including clubs and stuff that we had, everything included, yeah. Got it. So $2,60 million goes to you guys. Yeah. Got it. That's a pretty nice revenue going to you. So you made some real good money.
Starting point is 01:15:37 Yeah. Yeah. That's great. But going back to it. So you would come in, and your job was to inject the spirit and your philosophy to the way we managed our hotels. Sure. That's what you did. Sure. Okay.
Starting point is 01:15:50 And the processes. Make sure the process. For sure. And I love that. And by the way, the lady said the following. She says, you guys have this thing. And by the way, correct me if I'm wrong. I'm just giving you what she said.
Starting point is 01:15:59 She said they did any, you guys did an engagement study to identify which employees fell where. You guys found that, that you call them superstars or invincibles, where 32% of, employees who were energized and committed to do their work. Then 51% were neutral. You guys called them just there. They're just there. And you can correct me here. They showed up and do what is expected, but a little more. And the last one was Cave, which was around 17%. This is constantly against virtually everything. This is what the lady talked about. I never heard about that analysis. So this is not you. What do you think about this analysis? It's ridiculous. Tell me why it's ridiculous.
Starting point is 01:16:40 This is why I came to the source. I want to know what you think. Yeah, okay. Rob, are you tracking? Rob, were you in that meeting? Am I giving numbers that were numbers that were given to us? So please continue.
Starting point is 01:16:54 It's nearly pathetic. I'm please forget me. Okay. I mean, please forgive me. Tell me why, though. Tell me why it's pathetic. Because that means, Everything is wrong with the selection process already.
Starting point is 01:17:09 If you hire those poor percentages, then you better start selecting. Stop. Get somebody to help you selecting employees. But you said your retention hit 19%. Between 18 and 20% was the retention. That means you fired or lost 18% or 19% of them. Yeah.
Starting point is 01:17:28 You want to have 10% because you want to renew a little bit. So why did you lose 18 or 19%? Well, but partially because people. People moved or partially because, or we did make mistakes. But when I make a mistake, I have to say, now I have to, ah, this employee really didn't work out. So let's look where we made our mistake and tweaked our process. Did we hire them wrong?
Starting point is 01:17:55 Did we orient? Is something going wrong? I have to go back and tweak my processes, not the employees. And if I have those numbers, that means my processes. That says your processes are really screwed up, start over. That's what that says to me. Okay, how many times in your career did you fire people? How many people have you personally fired?
Starting point is 01:18:19 Well, I look at general managers. I roughly five or six. Five or six you fired in 30 years at Ritz. No, no, 20 years, 20 years at Ritz. That's between Ritz and Cappell. Hold it. That's between Ritz and Capell. So in 30 years.
Starting point is 01:18:38 Okay, so in 30 years, you fired five GM? Channel managers, general managers. How often did you fire people at Hyatt? How many people did you fire at Hyatt? Oh, that was earlier, and I was working different. I didn't fire a general manager's a lot, yeah. A lot. What's a lot?
Starting point is 01:18:56 50, 100, 200? Yeah, something. Okay. So tell me what got, what did a person do to get you to a point of wanting to fire them? Okay. For example, as a leader, we talk about delegating and so on, kind of what tested. What do you delegate?
Starting point is 01:19:12 You delegate except you don't delegate your vision and your purpose. You don't delegate the standards. You don't delegate the values. You don't delegate those things. They delegate how you think. But you let people do things. And then you measure and make sure they happen. You cannot hope then.
Starting point is 01:19:31 hope it's not a strategy whatsoever. So you measure. And you establish the, you established the expectation. You expect it to expect it. Makes sense. So my expectation, for example, was, and there was a key element here, employee satisfaction X, customer satisfaction, 92% top box, intend to return, intend to recommend.
Starting point is 01:19:59 92% minimum. And that was, I made very clear. If I hire you as Chen a mention, now I said, Patrick, now understand, that is, understand, I have no right to compromise. I am here for all concerned. Sure. My right of compromising is over. So my expectations, do you think you can handle it? By the way, and by the way, my role is to help you.
Starting point is 01:20:21 I'm here available. Call me any time. I'm here to help you. I will come to your hotel and spend time with you, but I'm here to help you. But here's the expectation. Here are the expectation, customer satisfaction, employee satisfaction, and so on. And I delegate you, and here's how our rules, and you go to an orientation, here's how we do it. They learned that the employee is a part of the company, not just working for the company.
Starting point is 01:20:45 They learned that any manager, that every employee works in an environment of belonging and purpose. Do you understand this, Patrick, I would say, belonging and purpose? So we go through all that, and then you have the precise numbers. and every year the precise budget numbers. Everything is clear. But now I see the customer satisfaction, which was my key. On the end of the month,
Starting point is 01:21:11 I see you are 86%. But 92 is the minimum standard. So I call you, part of the guy, he said, no problem with working on it. You will have careful customer service. You can dig into it.
Starting point is 01:21:26 I don't have it. I don't look. I have no time for that. Was it from this? was it, food, what was it? Corrected. Next two, next month is 94%. Now, Patrick,
Starting point is 01:21:39 now listen, buddy, you understand, I cannot compromise that. You understand, I'm getting upset. Next month, 85%. Patrick, find a chair, put it in the corner of your office, because your desk will be mine. I'm moving.
Starting point is 01:21:59 I would move to hotel. You're going to tell me this. Yes. And then how much longer after that are he firing me? Oh, you, I would keep you if you stand, if you stay. At 80. If you stay in the hotel and work with me and correct it till this 92, and keep it, keep it there, I'm fine. But if it slips again and say,
Starting point is 01:22:21 Patrick, do me favor, leave. You know, when you start hoping. So your number was 92. Yeah. Yeah. Month by month by month. So at the beginning... Oh, yeah, you can have a month slip. That's no problem. Totally get that. But what I'm asking is, so every month, when you would look at reports and data, beginning of the month, when all the numbers are done, it's January... Many things are data.
Starting point is 01:22:48 But what I'm saying is like at the end of the month, month is over, it's a new week. What reports did you want to see at all the hotels? What numbers did you want to see? Customer satisfaction. That's it? employee satisfaction, economics, comparison, and the future indicator of business that had to be above every very year ago. The indicator a year ago was we have already, hypothetically now, a year ago today, we have, we had for the year, thousand reservation. Today, I want to have more than thousand for the next year. You understand? I beat your prior bets. I fully get it. Yeah. So that was,
Starting point is 01:23:26 was one of them. Then the measurement, of course, I looked at what was done, what the business for last month, did we live up to the budget? How are we doing according to the budget? Certainly, I looked at the economics, of course. I looked at the employee satisfaction. We did only one survey, but it changed slightly by telephone calls from employees coming in, and the satisfaction survey for employees changed.
Starting point is 01:23:52 I looked for one question in the employee survey. that I insisted to be there that said, would you hire your mother, would you recommend your mother to work for our company? Would you, if your mother look for a job, would you recommend that she works for us? Are you asking me? That's what I did.
Starting point is 01:24:13 That's what we have. I don't know if I'm recommending my mother to work at the company. So what would you do? In my company. Are you asking a question to say, do you love the company so much that you would recommend somebody else?
Starting point is 01:24:24 That's right. My dad's 83. I don't know if I'm recommending him. Although he would be great customer service. Would, if it was possible, would recommend it. Everybody understood that. If they say no, a question. That's your most important question.
Starting point is 01:24:36 Yeah, most important question for me. It could be worded for. Would you recommend your best friend to work? 36 when I looked at that one. Right, right. But then I looked at the overall satisfaction. Give me some more questions on the surveys, employee survey. What else did you have?
Starting point is 01:24:50 Do you feel part of the company? Do you know your career path? and so on. Do you know your career path? What else? Most of it send that around. How many questions is it? How many total? 36. 36 questions every month. Yeah. No, no, no. That survey was only done once a year, thoroughly. And what month did you typically do it? Well, it depends on what you'll tell. It depends when they open. We usually did it three months after they opened, done that same month every year.
Starting point is 01:25:27 interesting system, it's based on when they open up. It's not calendar. No, no. So it's not like December or January. No, no. So three months after they open up, so it would make sense to a different kind of a business. So different kind of a business, you do it annually, and it's anonymous. You don't know who's answering it. It's just giving you data, so nobody feels uncomfortable, not putting it. That's right. And then how are you doing customer satisfaction scores? An outside company, calling. We get a number. Outside company calls the customer.
Starting point is 01:25:53 Yeah, yeah. And they give you the analysis once a month. I get the analysis for each hotel, intend to return. So now I'm moving to the hotel, and the general manager is with me. Now, most of them done quit. I consider them to be fired. They quit. They have to sit in the office with me, and I'm making all decisions, and so they're embarrassed, and they quit.
Starting point is 01:26:20 But what did I do? I looked at the survey. It's so simple everything. It's so simple, everything. I looked at the customer service where they were impacted negatively. By the doorman. They were not friendly. So what I do?
Starting point is 01:26:35 I go sit down with all the doorman and say now, guys, please help me. It seems that we didn't help you or didn't train your right. And I'm here to help you to become respected because you're not. But I'm here to help you. And I'm accepting that we made a mistake here somewhere. So help me. Guess what? Four weeks later, it was corrected.
Starting point is 01:26:55 It was so simple every time. It is not rocket science. You go and talk to the people connected to the process. But if you're not, you're living in Taylorism. Taylorism said, here's how. Tellerism said, in the Industrial Revolution, said, hire people who fulfill a function. We think and they do.
Starting point is 01:27:24 But this is ridiculous. After they do it, they know better how to do it than I do my thing in my office, instead of going to them and say, what can we do? At Medcan, we know that life's greatest moments are built on a foundation of good health, from the big milestones to the quiet winds. That's why our annual health assessment offers a physician-led, full-body checkup that provides a clear picture of your health today, and may uncover early signs of conditions like heart disease and cancer.
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Starting point is 01:28:11 I'm talking specifically this part, because when you're talking about Stephen Covey and seven habits of highly effective people, and then you said if a person after the age of 16, that's how they're going to be, unless if they have a life-changing event, which Stephen Covey would call Paralyptive. paradigm shift, right? To help somebody have a paradigm shift. What would you do for your management team to have paradigm? So, for example, beginning of the year, you're doing a kickoff, meaning you bring your leaders in. And if you did, what would you do to create paradigm shift in me, one of your leaders? Well, well, I'm with the leaders, it's easy. I mean, I'm the ex-
Starting point is 01:28:45 speaking into the mic. Yeah, with the leaders is actually pretty easy because I'm, I'm the standard set, I'm the objective set that. I set objectives. And When I asked them, I asked my leaders, my hotel leaders, when I was a manager, I asked my department leaders the same thing, by the way. I said, okay, tell me what they did the last three months to make sure that you have a better hotel. I asked them all, tell me what is the standard, how your hotel will be respected a year from now. I want to see if they have a vision. That's how, if they have a vision.
Starting point is 01:29:20 Look, I visited a hotel. In fact, I visited Milwaukee. The chairman manager picks me up. The chairman manager picks me up in the airport, which you always do. And I get the same story, which is, of course, a lie. We are so happy you're visiting because nobody wants corporate to visit. Also, we're so proud. And I'm in a limo.
Starting point is 01:29:40 And I ask him all kinds of questions. And then I ask him, what will be the position of your hotel? How will it be respected in the city a year from now? And he said, if I had a bigger ballroom, if my restaurant wasn't on the second floor, if this hotel would be closer to the city center, with other words, he made excuses for a vision he didn't have. I visited a few days later, Columbus, Ohio,
Starting point is 01:30:10 similar city, similar hotel, built by the same architect. And I was a general manager. And he said, you can check me. In a year from now, we will be respected and be the pride of the city. He says that to you. Yeah. And I realized he's somebody has a...
Starting point is 01:30:27 And when you walk through the hotel, you can feel. In his hotel, Columbus, people feel part of it. The other hotel, they work in there. Do you remember this guy? Oh, yeah. Oh, sure. Sure. Sure. Now, and then I said, wait a minute, I'm going to make a study
Starting point is 01:30:42 of all-gender manager, who has a vision, who doesn't. And for the next three years, I asked everybody the same questions. And after three years, mind you, is a study that I made, it wasn't scientific. But I'm generous, I mean, I tell you, there were five leaders, the rest were all managers. Now, they managed good results some of them.
Starting point is 01:31:01 Out of how many people? Out of 65. Out of 65, five were leaders. And the rest were managers. Eight percent. Yeah. And now, wait a minute, some of those managers had good results. Sure.
Starting point is 01:31:13 And by the way, the worst ones, and this is pretty common, became the recognition as manager of the year. They became a trip around the world and so. In Ritz? Not in Ritz. In Hyatt? In other companies. Okay, right. Now, why? Because they didn't paint anymore. And they didn't take the flowers away. And they were uploaded for making more profit and became manager of the air. Asteris destroying the brand. Why? Because that's the only thing corporate measures.
Starting point is 01:31:48 Because they don't measure. That's why I measured number one, customer satisfaction. Tell me your number one manager you had. Give me the profile of this individual. 34, 5, 6 things you can think of. What made him so special? Number one, the best one. Number one, absolute relentless communication with his employees. They knew what was going on.
Starting point is 01:32:10 They felt part in a relationship in which the employees felt part. Was number one. Process management with employees involved in building the process. Tell me what that means. Unpacked that for me. That means in the book, complain and room service, slow room service. He goes to room service and says, order taker, busboy, weather, cook,
Starting point is 01:32:35 find out the root cause, find the root cause, find the root cause why we have slow room service complaints. And the people connected to the process with the employees worked on it. I tell you his result. I tell you a result he had. That is unbelievable. When you start, you learn the second day, the non-negotiables, which everybody gets in their pocket.
Starting point is 01:33:06 If I catch somebody not carrying it in their pocket, I have a problem. Channel Manager or dishwasher, I want you to carry it, because that's who we are. And these are the non-negotiables. May I? Yeah. I give it yours a gift. It's in my book, by the way.
Starting point is 01:33:22 I love it. This is the Capella? Has it changed anything with Ritz? Oh, sure. So it's different than Ritz. Yeah. A little bit, a little bit, a little bit. And Ritz changed after I left.
Starting point is 01:33:34 Well, I agree with you that it changed. So this goes to every employee. Every single employee. At Capella. At Capella, when you start working, you get it in your hand. You can learn it. I want to go back to this number one manager of yours. So number one...
Starting point is 01:33:47 Wait, that's what I want to say. Okay, go for it. So, so this, when we talk over that hotel, It was so strong union, it was the worst employee survey and the worst guest customer survey ever had, New York. This manager got into New York, and the employee slowly adopted that. I tell you how well he changed it.
Starting point is 01:34:06 Two years later, the union contract was due. The employees insisted that the union adopters. That's a general manager who was leading his people, who were part of the people. For the union to adopt this. That's right. The employees insisted on it. So what did he do?
Starting point is 01:34:29 What did he really do? And that's what I'm appealing to every work, every boss. He offered them to be part of something. Even Aristotle said, you cannot be fulfilled in life unless you have purpose and belonging. Why wouldn't we offer that to our employees? That is really my number one point, offer them purpose, offer them belonging. Don't make them chairs.
Starting point is 01:34:58 My major D, the first one, remember the one? When I left there after three and a half years, he said, come here. Look me in the eyes. Promise me you never got to work. Promise you me not to become a chair. This is when you're leaving. When I'm leaving, three and a half years later, I was 17. Just the guy that impacted you heavily, not the GM.
Starting point is 01:35:19 but the other guy. Yes. Yes. Promise me you to become a chair. Because if you just got to work for the functions that you fulfill, your chair, you're fulfilling a function. You have to have a high intent.
Starting point is 01:35:33 The high intent is excellence in what you're doing. Promise me you don't become a chair. Yeah. Okay, so relentless communication with employees, process management root cause. What else made that number one? Environment of belonging and purpose and purpose. Got it. Got it. So those three things.
Starting point is 01:35:53 Yes. Promise me you won't be a chair. Okay. So question for you. And again, he was relentlessly working on all processes and continuing all. He was constantly seeking. It's very important, very important here. If a problem repeated itself, he was right away and said, okay, let's look at the process. Let's find a root cause. Why does process go? A root cause analysis. A root cause analysis. was his strength. And, you know, here's the thing. If you find root cause of your mistakes, you become efficient.
Starting point is 01:36:28 Because by eliminating the mistake, you improve the product and lower your cost. Instead of cost cutting, which means you take something away from the customer. Question. This guy, who did he end up becoming? He ended up becoming a vice president in the Beverly Hills Hilton
Starting point is 01:36:49 for those hotels. And here, around for many years, he just a year ago and so retired from there. You still keep in contact? Oh, yes, absolutely. So there's a friendship. Oh, sure.
Starting point is 01:37:00 Incredible. Well, friendship. Behind my back, some of those guys got together created a reunion for me a few months ago and people came from Europe and Asia and all over.
Starting point is 01:37:13 They're all running major companies. I know what happened. The truth is, I know what happened. He got together and said, Hoss is getting old. Let's get together before he dies. It's so.
Starting point is 01:37:26 You know that is true. Let me tell you, though. Let me tell you, though. Let me tell you one thing, that this is very important for the audience to know this. You're 19, so you're how old? You're January 10. So you just turned 87 three weeks ago, right?
Starting point is 01:37:38 Okay. So Matteo, Maya, he brings you in, and I said, how does he look and feel? He says, oh, he's so strong. I said, tell me why. He says, I tried to take the back from him He said, no, no, no, you can't take this back. There's a lot of money I can carry it myself.
Starting point is 01:37:53 Even at this age with the level of intensity that you have, it's so impressive. So I got a question for you. There's a book that was written five years ago called After Steve. And a book is about After Steve Jobs. What happened to Apple? Okay. When Tim Cook took over. What happened to, you know, when you left Ritz in the early 2000s,
Starting point is 01:38:17 what happened to the standards after horsed? Were they able to maintain it? Well, let me tell you, one sorry, I have to be careful here because I signed that I would not make disparaging remarks. However. 20 years you got, that's a long good. Long time ago.
Starting point is 01:38:32 However, our most complimented, non-negotiable, in Ritzkarn was number 16. It's number 12 on this one here. Capella, yeah. And Kappala. Escort guessed until they are comforted, with the direction and make visual contact with the destination, do not point. Okay, that was number 16.
Starting point is 01:38:57 That was the most complimented from the guest non-negotiable. People around and said, I asked the front desk, I came from outside, and they walked me all the way there. I cannot believe it. When I left, they eliminated that one. Because it cost money to take somebody away from this. Stop it. The most complimented point by,
Starting point is 01:39:19 customers was eliminated. And I understand where I come from, because nobody quite understood how deep those feelings were. You know, it was just, wow, that's what we do. Nobody looked up for the analysis that was the most complimented one. Sure. So, but altogether, who is rated number one today in the world? Capella.
Starting point is 01:39:43 There's a company created afterwards. Where's rich in that analysis, 26? And there's a facts. I can say facts here. You were number one when you guys left. Oh, sure. They dropped from 1 to 26 and Capella's number one. Yeah.
Starting point is 01:39:59 How important was it for you to prove that even afterwards, you're going to continue not stop? I could do it any time. I could do it anytime. I could do it anyway. Because I would concentrate on the human being and on the processes that I do. I would, in the meantime,
Starting point is 01:40:16 I would have to learn to even better select employees. be more respectful for them. And particularly, it's easier today because everybody complains about the millennials. But come on, learn how to handle them and do it. I agree. I agree. It's a lot of times.
Starting point is 01:40:32 Well, they've changed. They're lazy. They're this. Come on. You become a softer leader. You're the leader. You're the leader. You have to figure it out.
Starting point is 01:40:41 Yeah, I agree. You know what's crazy? When you read body language books, you know what they say about the lines in between the eyes? Yeah. Do you know what they say about it? No. Highly, highly intense, competitive individuals.
Starting point is 01:40:54 Okay, okay. You have those two lines. You have those two lines right here is what you have. So you're a very rare combination of extremely charming. And you know it. You're very charming, very. And you have a fun side to you that it's, it also feels like it's fun working with you.
Starting point is 01:41:12 But my God, I feel the intensity and the seriousness that you're not going to compromise the standards for nothing. Is that a fair assessment? But let's face it, I have no moral right to compromise. You have no moral right to compromise. Of course not. Tell me why. I know my objective is good for all concerned. In that moment, I would be going against the owners, against the employees, against society,
Starting point is 01:41:37 even against God. Because I question myself, would God approve. I question myself very careful. Is my objective would God approve? In that moment, I painted myself in the corner. I can't just compromise anymore. You know, that's one of the big problems with management. They want to be known as a nice guy.
Starting point is 01:41:58 That's not my business. When they make a speech, I don't go into the speech so that people think I'm a nice guy. I go into their speech so that I give something. What you think of about me, particularly my age, what are you going to do, fire me? But when did you believe in yourself to know your philosophy's work?
Starting point is 01:42:16 At what age were you bulletproof confidence that you know what you were doing? When I went halfway through my time in Hyatt, I was, I talked to Vars Hotel, I made it a major success and I knew the philosophy works. It wasn't so much, I'm the right thing, no, but the philosophy of respecting the employee and loving the employee
Starting point is 01:42:45 and make sure they're aligned, but not compromising and understanding the market and pushing those things together. That in a board meeting is fluffy conversations. But the same people have egos and feelings and totally ignore the feeling of those two entities that make a company. If you have a business, here, you have a business here, Patrick.
Starting point is 01:43:09 Walk in here at 3 o'clock in the morning. Is it a business? No, it's not. But now it is a business because you have people in here. So it is the people who make it a business. I have to accept that. Great point. Very good point. But so you were in your 40s when you realized you were bulletproof?
Starting point is 01:43:26 You were confident in your philosophies. I was totally confident and done because it worked. There were successes. And I knew in that moment I'm giving. I'm giving to people. I'm giving successes to people. You know, that is one of the honest. And we have to be conscious of that too.
Starting point is 01:43:41 and and and and I'm happy to be believer so what and and one of the key elements that I and Jesus forgive me that I touch on us for a moment is love your neighbor as yourself wait a minute are your employees not your neighbors are your guests not your neighbors they are my neighbors do I love them as myself but I cannot single out one and the other. I have to love them as a whole because otherwise I'm going against one and the other if I just single out.
Starting point is 01:44:22 When did Psalm 94 get a hold of you that I'm going to take you under my wings? How old were you? You talked about Psalms 94 somewhere. Oh, yeah. Well, growing up in a Lutheran church, which is very Bible-beating oriented, we had, for three years before you get confirmed
Starting point is 01:44:41 with 14, you go to Bible class. The teacher, the pastor gets to know you well, and when you get confirmed, gives you word for your life. And he gave me some, Psalms, 91.4. He will take you under swing. 91.4, got it. Yeah. And it is hanging in my kitchen. How old were you?
Starting point is 01:45:00 14. At 14, he told, he gave you that. Yeah, yeah. And it was with me ever since it is with me and is hanging in my kitchen. Interesting. To know that he's with you, he has your back. Yeah.
Starting point is 01:45:10 And, you know, as a young man, and I forgot it. But when something went wrong and went to look at us, wait a minute, where are your wings? Where have you been? I thought it was a promise. Yeah. That's funny.
Starting point is 01:45:25 So now, building the business, you know, and by the way, it's funny when you say Ritz-Kralton, it's clear because I go to Ritz a lot, but I had a bad experience with Ritz two months ago. And I said, I wonder if horse would even allow something like this to happen. This doesn't make any sense to me. I went to an event, Ritz Carlton. Every three to six months, we would do an event at the Fort Lauderdale Ritz.
Starting point is 01:45:47 No problem. This last one we go there, my EA says, you know, they put us in a different room. I said, why is that? We booked us 30 days ago, 60 days ago. He said, I don't know. They put us in a big room. Well, I'm not looking for a big room. I want a smaller room because I put sticky pads on the wall
Starting point is 01:46:02 because we're doing a strategy session with our executive. I want that room. They change it last night. They can't do that. Well, I talked to the director. He said, yes. I said, bring the director up. We get on the phone with the director right before the meeting.
Starting point is 01:46:14 This is 7.57. And meeting starts at 8 o'clock. And the director's not coming upstairs. And finally, I'm like, it's been 13 minutes. Where is the director? I'm talking to the other two boys. Wow. Whoa. Horse, I said I'm going to go see the director myself.
Starting point is 01:46:25 I go downstairs. I'm at the front lobby, at the Fort Lauderdale Ritz. He's behind the desk. And I see him. Finally, I say his name. And I said, I don't know what his name is. I can get it right. And I said, hey, Jose, are you going to make me stand here all the time?
Starting point is 01:46:39 are you going to come and talk to me? I've been asking you, why did you change my room? 30 seconds later, he comes out, and he's looking at me. I say, why did you change the room? I always get that room. Look, we just had to make the decision last night. I said, I'm going to go to the room right now to see if somebody else is there. You can't do that.
Starting point is 01:46:57 So me and my security, Dan, who is somewhere around here. I met him. You met him. He's got the tattoos on the next. It's like a very friendly guy. So we walk up to the room, and they're running after us. and I go in the room, nobody's there. I said, why don't you give me the room?
Starting point is 01:47:14 So then afterwards, I'm trying to find out what's going on here. One of the guys that works at Fort Lauderdale, Ritzie comes up to me, he says, Patrick, I told them, don't change the room on Patrick. He's not going to like it because he follows the content. I said, I still want to know what happened here. Anyways, the room was given to a soccer team, whatever, because they were doing massages there and nobody was there.
Starting point is 01:47:37 Remember, I booked this room. It's the room I like and I'm a B-back customer, right? No explanation, nothing. The next day, Rob, can you text Mattia? I want to make sure I give the right first names. I don't want to mess this up. So then the next day, Matteo calls me, he says, look at the email we just got. I said, what's the email?
Starting point is 01:47:56 He says, they send us an email saying they apologize for what happened the day before and they want to give us 50% of the cost for the room back. And I said, Mateo, I don't care about the money. I will never go to the... And it's all or nothing. I will never go to that Ritz Carlton and Fort Lauderdale ever again. I said, there is no way this is horse's standards.
Starting point is 01:48:25 So I'm telling him this. And they're going back and forth, back and forth, back and forth. And it was done. I was so disappointed. And you know what it made me think about? Here's what I made me think about. Here's a challenge, horse, and you got to coach me through it. And I need your help.
Starting point is 01:48:39 with this. Hear me out. And you don't know where I'm going with this, but I think you'll see it here in a minute. I'm a founder of an insurance company. We built it. We grew it from zero to 60,000 agents. We sold it. We changed a lot of people's lives, and we did something nobody thought was ever possible. Our mission statement, in July of 2009, when I came up with it, two and a half months before I started a company, was saving America by bringing back the free enterprise system and hope to American families. And we took this concept that was dressed as George Washington. My wife was dressed as Lady Liberty. We had a 40-foot mountain. Rushmore on the stage and we told everybody we're going to save America and we're going to help
Starting point is 01:49:12 people through free enterprise getting people to become insurance agents building their business. We did something nobody thought was going to happen. One office, Northridge, 50 states, we grew it. I sold a company three years ago. I haven't been the CEO for one year. I'm gone. Okay. The standards are the standards that you create. How do you deal with looking and seeing if those standards are being maintained or not by the leaders that come after you. How do you manage that yourself? Because I know just listening to you right now. Whether it's with your besties or date night, get to all the hottest concerts with Go Transit.
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Starting point is 01:50:12 Find out more at go-transit.com slash tickets. I got an email from a friend in Asia. It's onward about an experience in Rich Carlton. And it gave me so much pain still gives me pain. You cannot help it. Because if you have born an organization like you have, you give birth to that, you put pride and fulfillment into it. It is not a place, it's not a work, it's a fulfillment there, and done it if it is totally mishandled.
Starting point is 01:50:55 And here, some years later, I'm still hurt and in pain about it. I have a hard time. I try and I don't, I try not to stay in Redskarland's because when you walk into it, I'm, I feel I'm a stranger. Some of them I walk into, I feel I'm home still. I'm home. Very few. Very few. Forgive me when I said those things.
Starting point is 01:51:25 Ritz Carlton, don't sue me. But it is, if you have value in what you did, if it had a meaning, if it was a purpose, you cannot help but get hurt. Because that which you created, it is not different than if Picasso would sit there and you would scratch on his painting. He would be very hurt. It's his painting. It's his creation would be heard. You cannot get away from that. And unless we just created a business, the heck with it. But if that business was created with the heart and with the soul, which hopefully we do as human beings, particularly as creator, the creator, you get hurt.
Starting point is 01:52:16 You cannot get away from that. I was so hurt a few days ago. A few days ago, I got an email. I was so hurt, I still have it on my phone. I was really hurt. 20 years later, you're still hurt. Yeah, yeah. And I walk sometimes often in the one that you mentioned. Could it be any other brand? Yeah. It shouldn't be. It should be in there and say. I had a call one day from Shanghai, from a friend who walked into the Reds Card.
Starting point is 01:52:50 Maybe when I was run in Reds Carden said, I walked just into Reds Garden. And darn it, I could have complained, not seen a sign. I would have known at Sir Ritz Garden. I could feel it. How people looked at me. How people say, sir, or people help me. I would have known it, and it's called unquestionably. That's what you want to create.
Starting point is 01:53:11 That's it. But you can create that with a hardware store. You can create it. That's what I mean. It's hospitality that makes a difference, that makes a decision. It's not a product. By the way, hospitality, let's see what it is really.
Starting point is 01:53:27 It's service. Everything we talk about is hospitality here. The first person who taught hospitality was Saint Benedict. the creator of the Benedict monasteries throughout Europe. He sent a letter to the head of his monasteries in the year 500 and said, if a guest arrives, treat them as if it was Jesus himself. But otherwise, treat everyone as if they were the most important people in the world.
Starting point is 01:53:56 And he recommend, in fact, even if you're on a fast, break your fast if the guests by himself and have dinner with them, but after you wash their feet. Now, how close to we come for that? Why wouldn't we try and come close to that in businesses? Isn't that much more fulfilling for us rather than just fulfilling a function? Yeah.
Starting point is 01:54:19 Now, listen, the guy that you went into your room who runs our cigar lounge now, his name is Mikhail. I have to give him a shout out. Mikhail was the general manager of an Italian restaurant here that I would go to three times a week. I know. I told you the story? Yeah.
Starting point is 01:54:33 But I don't know, no, no. You used to three days, but you ended up going five days. Yes, but let me tell you what happened with them. Finally, one day, he wants to start his own thing. I said, why don't you come here and run this whole place? The feeling he gives you, horse, he's able to make the customer feel like you're the only thing that exists in the world. It is such a valuable skill for human being to have. It's such a valuable skill for a human being to have.
Starting point is 01:55:03 And I'm willing to pay premium for that. It's a very, very valuable thing for somebody. You work hard. You want to go to a place to be left alone. So where do you go to right now, restaurant? What do you go to right now where you feel like the service here is impeccable? What are some places you go today? You like the service you get.
Starting point is 01:55:21 We have some small places not known in Atlanta. You see, I travel still 100 days a year. I used to drive over 200 days a year. What happens when I arrive somewhere? where they pick you up with a limousine, they take you to a gourmet restaurant. I don't want to go to a gourmet restaurant when I come home with my wife. Is they home or we go to some similar? But people know us there.
Starting point is 01:55:44 And so you have the attention because they know you. And people say, we're glad you're here. And that's what you want. If that gentleman in the Ritz here would have said to you, my gosh, please forgive me. I messed up. I would have moved on. There you are.
Starting point is 01:56:03 By the way, I would have moved on the moment. If you would have just came up and give me the attention and say, we messed up, he told me the truth. And if there was a valid reason why they moved the room, I would have had no problem. That's what we certified earlier. We talked about that every employee on problemless solution. We certified every employee, 24,000 employees around the world.
Starting point is 01:56:26 And I said the first thing is you listen to the complaint. You listen. Then you show empathy. and then you apologize us if it was your own, but you own it, and then you make amends. And 50% is not an amend. A situation like that was, we will know, of course, we will not charge you.
Starting point is 01:56:43 Of course, we give you 50%, no, of course we will not charge you because we mess up. Forgive me. Yeah, and that's what it was. By the way, the guy that helped us out, his name was one, very nice guy. He said, Patrick, I told him, don't do it.
Starting point is 01:57:00 The director of events, was a guy named Chris. I won't say his last name. And then the other guy that called us the next day, the directive operations was a guy named Sam. And Jose was the GM. And I think Jose is the one that sent the email for 50%. I was very turned off.
Starting point is 01:57:15 I was very turned off by that. I mean, 50%. I could care less about the money. But it doesn't matter. It's a sad. It cares about the money. Like, you know, all you have. So, again, that's the challenge, right?
Starting point is 01:57:28 A brand, if the, if the existing founders, driver, CEO, doesn't run customer service properly. Starbucks hires a guy that comes to them. It's a previous guy from Pepsi who used to be a consultant for some big consulting firm. They bring him in 18 months, revenue drops. It's a messy of a culture. Then they bring a guy in Brian Nickel. Brian Nickel comes from Chipotle.
Starting point is 01:57:53 He gets in. He changes the culture. Starbucks is back on a rise again. One great leader can change a company. Of course. Of course, because you as a leader, you establish the philosophy comes from you because people immediately below you copy you and it goes all the way down. And if you do something negative, they think you want that.
Starting point is 01:58:14 That's it. All standards are gone. That's why I say that you don't compromise standards. You own the standards as a leader. You understand us as a leader. But coming down all to a simple thing, I cannot expect my thousands of Starbucks to each one be singly trained by me, but they all know, they all should know, here's the standard.
Starting point is 01:58:44 We are here to care for people. They have to know that. And they have to be a reminder of that. We remind those 20 things, you cannot go to work. You will be a reminder of one of them today. Today is number 12, tomorrow 13, and 20. day is number 12 again. I love that pointing finger. There's a bathroom horse. And we use a restroom, right there, walk down here. And done it, done it. Four cars and you get
Starting point is 01:59:09 lost. Yeah, versus somebody takes you there. So. And then we taught them, of course, you would take him there and you create a relationship. You say, have you tried our restaurant? Are you a hotel guest? Yes. Have you tried a restaurant? I hope you had a chance. If you're outside, but you, oh, you didn't, don't send with that, but you should try the restaurant. Everybody likes it. So you have conversation and you're selling something at the same time. Yeah. What would you say is your biggest gift? Like what's your superpower? Mine? What's your superpower? Oh, relentless. Relentless. Would your wife say the same thing about you? Probably. Yeah, probably. But in the positive way, take about wife, take about marriage.
Starting point is 01:59:53 It's the same thing. What's your high intent? What When I got married, before I got married, I saw my wife, and I was so much in love. I mean, come on. I mean, young men, you look, wow, this beautiful, wonderful human being and we're going to get married. And then I thought, wait a minute, I know friends are getting divorced because they don't feel like it anymore. And then I established my high intent. I will be in love for the rest of my life. In that moment, and that is the model of leadership. have intent purpose. But then you have to commit yourself to it,
Starting point is 02:00:36 not to have a pipe dream. And then you have to initiate the things that make it happen and keep focus on it. And that's where people break down. They focus all of a sudden on an excuse. What was your philosophy in raising kids? Raising Christ, two things we want to accomplish. My wife and I.
Starting point is 02:00:56 Please forgive me everybody. We want them that we believe us. Okay. And we wanted to have, understand the difference between wrong and right integrity. People with integrity. That's it? That's it. That's it.
Starting point is 02:01:10 Those are the key things that we worked on, prayed for, and were successful. Are they into business you're in or no? No. Not at all. Is it two girls or four girls? Four girls. Okay. I want to make sure I get that fact, right, because two places said two different things.
Starting point is 02:01:27 Yeah. That's great. So even even even. family, you have to have objectives. My objective was to be in love with my mother. And I am in love with my wife. But I work on my mind, even. When I drive into the driveway, the gate opens,
Starting point is 02:01:44 I say, thank you God for my wonderful wife. I can't wait to take an arm now. Affirmations. You have to work on it. I mean, if you let, and I'm multi-minded on that, first of all, I wonder for me. Secondly, I see the end of family happens and that it will be the end of our civilization unquestionably, unquestionably, if a family goes.
Starting point is 02:02:09 So I am sellous about what is marriage, work on it. I ask, in every speech, I asked, oh, guys in this room, have you asked your wife last time how you can be a better husband? She'll tell you. I saw that in a news of all. And after she cries, she will tell you. She will tell you. Did you guys ever have a moment where it didn't work out?
Starting point is 02:02:31 Oh, sure. Many. Really? In between not, we know, we didn't work out. Where it was like close, falling out big fights. No, not quite there. But there was. Fights.
Starting point is 02:02:40 Like, that's sure. Yeah. How do you overcome that? Sure. Well, by sitting down and talking and admitting that you were wrong. It was my wife who is 14 years younger. So I married I'm 14 and she's 26 and we have an argument. and I start screaming.
Starting point is 02:03:01 And she said, why do you scream? Why don't we talk about it? Maybe you're right. Oh, my. She said that to you. And I said, here this kid is teaching me how to communicate. Good for her. Wow.
Starting point is 02:03:16 And I realized I didn't want to talk about. What if I'm wrong? Yeah. Let's talk about it. Maybe you're right. Maybe you're right. Why, and you guys have been married now, what, 47 years? 47 years.
Starting point is 02:03:30 Unbelievable. Good for you. Oh, it's great. Good for your respect for doing that. What a great thing. Unbelievable. I mean, look, what is this marriage? The only God-ordained union, the greatest union there is. Why wouldn't you work like crazy on it? And she was a partner with you while you're building, traveling, moving, all this stuff. Yeah, yeah. Yeah, wow. Let me tell you, I admire her for, she raised children and I was on the road. And there too, I come back and I said, here's what we're going to do. And she said, whoa, whoa, whoa, whoa, whoa, whoa, here's what we have planned. And I had to learn in the beginning.
Starting point is 02:04:11 I said, wait a minute, here's this how. And she said, well, you weren't here. We had to make decisions. I had to learn to communicate and respect decisions that are being made with much more input and points that I wasn't even aware of. You were not there. You were not there in that sense. So a couple other questions before we wrap up.
Starting point is 02:04:32 You won the Malcolm Baldridge National Quality Award twice. That's correct. 92 and 99. No other company has ever done this before. So what is the significance of that? Because that's straight up from the White House, right? That's straight from the D.C. What is the significance of that?
Starting point is 02:04:49 It's a fantastic thing that the government did more intensely. that happened during the 80s when the Japanese became major competitors to us. They were taking over, they're buying everything and controlling and product and cars and everything. We didn't make no more TVs. When the Commerce Department said we have to study how to be more competitive with the Japanese,
Starting point is 02:05:20 studied the number one companies in the world, studied the companies that were sustained leaders in their product for many years, why and so on, found commonalities and created a criteria. And after what I said, we have to find out who in America comes close to that so we can make it an example for other companies. So when you studied and done apply, if you win the Baltic, you are obligated to open your company up for other companies come and learn for a year free. What a concept.
Starting point is 02:05:56 Yeah. For a year for free? Yeah. We had every Monday, 20, 30 companies there to learn. We created a learning center. No, I figured out how to make money on it. So we started at 7 o'clock Monday mornings, so they had to check out and Sunday, check in on Sunday.
Starting point is 02:06:14 So they still got to book the rule. That's great. So the companies would come and learn. Come and learn from us. If I'm not mistaken. Including job. Steve Job before they went into retail. I was about to just say Apple.
Starting point is 02:06:29 So Steve Jobs came to you. Yeah, yeah. Including for retail, including Disney was there many times and so on. People come in and learning how do we work the processes, the measurements, the process, the improvements, and so on.
Starting point is 02:06:48 And we were pretty good at us. said our general manager was kind of best at the improvement, the elimination of process permanently. I tell one story in the book, if you read it, Vincent, Excellence, in room service, room service, where we had for six years a complaint. I was a general manager of the first one, obviously. There was no other hotel. During my time, the complaint in room service, I managed it like a normal manager. I said, read my lips, fix it. It doesn't work that way. You have to find out the process. I learned very carefully from the Baltic office how to do that. I had my first Baltic meeting. Somebody said that up, we were the best hotel company in the world, and I had a lot of complaints. When somebody said,
Starting point is 02:07:39 well, I understand, they asked me, best hotel company, I said, maybe we're the best of a lousy lot, but we're not very good. And you said, you should look into the policy. criteria. Went to Washington, had a meeting with the head. He explained me the criteria for half an hour. I didn't understand the word he said, literally. And he said, you have time for lunch, at lunch with him. Years later, he asked me when I became an expert in the issue, you know why invite you for lunch? I said, why? He said, you didn't understand the word. I said, he knew it. Why didn't you understand what he said? But there was fishbow down on the parrata charts and things like that.
Starting point is 02:08:25 I see. I got you. So he knew. You have to understand. I left the school when I was 14 years old. That's right. I didn't go to business school. No college, no business school. But later when I was here, I talked to courses in Cornell and so on.
Starting point is 02:08:41 Didn't you later on get a PhD or doctorate from some school? What was it, an honorary doctorate? What school was it that I gave it to you? I'm sorry, I said the word now. When you ask me names, I'm always, I always put me in the world, Johnson and Wales. Okay, got it. Very cool.
Starting point is 02:08:58 Yeah. Very cool. So, Steve Jobs, what did he ask you? What kind of questions was he asking? I wasn't involved in teaching him at the time. I was out in Asia at a time. But he came in to ask, how do we treat customers? What do you think make us successful?
Starting point is 02:09:13 How do we make him successful? By saying hello. And he picked up. I know what he picked up. First contact. We teach, and that's what he got it. Most people don't get it even, what we teach. The behavioral analysts tell you,
Starting point is 02:09:31 you make a decision about somebody when you come with 10 feet. So how do I make sure you make a good decision? But wait a minute, they make a decision about you. So how make sure that decision is a good one? That's why when you go into the condition, they have somebody staying there right away, well-dressed. So say, welcome, can I help? What is the problem?
Starting point is 02:09:54 And they take you. And we had learned that from the behavioral analyst. I worked with the behavioral analyst University of Colorado and Frankfurt. They said the decision is made about you the moment when we make contact. That's why we taught you have, when somebody comes between 10 feet, no matter what you do, you look at him and I and say, welcome. So don't say hi. When you say hi, we are equal. But if I say, welcome, and so, sir, and look at you and I'm saying, I respect you.
Starting point is 02:10:25 But at the same time, Sam, you can trust me and professional. So we make sure that I hired kids from Center City. I've never seen anything elegant in their life. So now we put them in a great outfit. We teach them not to use certain words. Don't they ever hide. don't say okay, say my pleasure and so on. And three weeks later, this kid meets potential
Starting point is 02:10:52 with the chairman of the board of Bank of England, and it works. And it works. That's what he saw, and that's how he created the retail. And be impressed by the look of it, have this positive in mind. We looked, by the way, it's very important for people to know,
Starting point is 02:11:10 business to know. We looked at 400,000 common cards, beginning, we had comment cards. Chetty Power analyzed them for us. Whenever the first... 400,000 common cards? Yeah. What does that mean?
Starting point is 02:11:22 Guess that commented in the room. Oh, comment cards, got it. 400,000 comment cards. Yeah. They're not scientifically that important. The call in are much more scientific, by the way. But anyway, when I heard them, I worked with Chetty Power. Dave Power was a friend.
Starting point is 02:11:39 They talked and analyzed them. And they came back and said, 100% without exception, 100% when the first contact was excellent, never did a complaint follow, positive subconscious. Whenever there was one negative in either reservation domain or from desk, always did complaints follow. Wow.
Starting point is 02:12:02 I mean, wow. So I have to make sure that my first contact. That's why when you walked in the Reds card and first contact, that's why you saw huge flowers. First thing you saw, everything positive in your subconscious, so you feel positive about the rest. What presidents did you serve or which world leaders came to you guys at Ritz
Starting point is 02:12:21 that you had a relationship with? Was it an ongoing, hey, we're going to come in, we'd like to be taking care of? Yeah, well, I knew and then Bushed the second one very well. I knew him very well. And I knew Carter very well.
Starting point is 02:12:36 Carter, in fact, after he was president, he had, later he had an aparthe, and when the library was built, but before they were staying in the Ritz, and every morning he went chugging, I went chocking every morning.
Starting point is 02:12:51 Oh, Buckhead in Atlanta. I got it. It makes sense. And we went chocking every morning. We come around the corner, people go to the worker and we said, good morning, take a look, oh, good morning. Of course, security was running with us.
Starting point is 02:13:03 You felt safe. I knew them very well. Of course, I had, with Clinton gave me the award. I spent time with him. And Bush won gave me the award. And Ford was an owner of one of our hotels.
Starting point is 02:13:17 Really? Interesting. I knew several of them. Got it. Very interesting. Because I can only imagine that everybody comes in. By the way, two questions before we wrap up. Patel Motel group.
Starting point is 02:13:27 What do you know about the Patel Motel cartel that you don't know anything? You know how they say they own 70, 80% of hotels and their business model and the way they do it from India when they come in. You know nothing about those guys. No, I don't know much about it. It's a very interesting story. I heard about it, but I don't know much. Yeah.
Starting point is 02:13:41 Apparently, they bring it. bring their families. Yeah. And so the families would live in five rooms. And the families living in five rooms would allow them to charge the rooms at the lowest $29, $39, $39 a night. So others would stay over other hotels. And the next thing, that's how they build their empire.
Starting point is 02:13:59 Apparently now they want 70% of hotels in America. Very interesting. I don't think 70%, but they own quite a few. That's the numbers that you'll read about it. Yeah, right. They're roughly 70% of all Indian motel owners. Oh, India. Yeah, Indian motel.
Starting point is 02:14:11 A third of all motels owners in America are named Patel. Yeah, well, there are a lot of Indian hotel motel owners. A lot of them. They come in and that wasn't easy business going. Having some cash, they bought a motel and run it and then added, added, added. So a lot of Indian hotel owners here, yeah. Of course, a couple of very good touch hotels is a very good hotel company. Capella Group, your most recent one that you sold, I think, you said 2017 and then finalized in 2019.
Starting point is 02:14:38 You built a lot of the hotels. hotels in Asia, and I think one or two is in Saudi that you build. You can correct me if I'm wrong on these, but none in Europe. Why not Europe? We had one in Europe. You did build one in Europe? Well, one second. We're not owning.
Starting point is 02:14:55 Yes, they own. Operating. I totally get it, right. One was in Europe and this is a group. But when I left, they disassociate themselves. They were able to, there was a clause to get out when I left. So they left their independent now. Interesting.
Starting point is 02:15:07 Great hotel, by the way. Great hotel. What markets do you look at? to say these markets are good to build a hotel. Is there anything you look at? What demos do you look at? Well, you know, what I wanted to be, I looked at this at the time,
Starting point is 02:15:19 and it's still the same thing. If you start a hotel company, when you work a hotel company, you want to be in New York, you want to be in London, you want to be in Tokyo, you want to be, at the time, Hong Kong was a number one thing.
Starting point is 02:15:30 Today, Singapore is equally important. Still, Hong Kong, it's okay, but it used to be the financial place where you had to be Singapore today, much so, So in the key places. No, but my first hotel was Atlanta and then Deborn, Michigan, and so on.
Starting point is 02:15:46 And I had to still make it number one in the world. We became number one in the world, you know. And I dealt, later my competition was four seasons. They were in London and in Tokyo and in New York and everywhere. And I was, you know, now we ended up to be in Tokyo and so on also. And when we opened Osaka,
Starting point is 02:16:05 we were immediately, all the best hotel in Japan. I insisted wherever we are, we're number one, period. And I dealt with the general manager, will you accept that? Did you play sports as a kid? Where does your competitive fire come from? Why are you so competitive? I don't know.
Starting point is 02:16:25 No. You're very competitive. Mom or dad? Who's more competitive? Because you're very competitive. I think mom. Mom? Yeah.
Starting point is 02:16:31 Mom was competitive. Did mom and dad ever come to the States or no? Oh, yeah. Oh, yeah. Yeah. Well, you have to say, when I started off, particularly my grandfather, they all were embarrassed that I wanted to work in the hotel business.
Starting point is 02:16:45 That's not what they did in Germany. You want to have a technical job. If I would have said Rufa, that's honorable. Over a hotel. That's honorable, but in a hotel. So my father thought I would work as a Vedah for the rest of my life. And I was disappointed. But then, of course, had my successes.
Starting point is 02:17:05 they were very proud. Do you ever take your girls back to the city where you grew up in? Do you ever go and show the family there? We spend every summer there. Every summer there. Why? That's who I am. And I'm lucky my wife loves it as much as I do. Otherwise, I wouldn't have the house anymore.
Starting point is 02:17:26 What's great about the city there now? It's a village. It's a small village where you, like she just was there for a couple of days with my daughter. and she called me and said, I feel this peace again. I walked through the little village. It's dark and quiet. But I heard some people singing.
Starting point is 02:17:48 The Clee Club is rehearsing. And I heard some, and I said, and the piece that when I come back in the house, it's a piece that I cannot find anywhere else. And we feel that. We feel that. It's a different life. But it's also, I grew up,
Starting point is 02:18:05 And I don't want to become somebody else. I want to be the boy from the village. You know, there's something about that. In the meantime, I'm American. And I love the country. I have the same fears and hopes that most of us have. The fears have developed dramatically over the last 20 years in America. What ways?
Starting point is 02:18:37 Well, the values, we had a country, give you an opinion about it, and I hope the world is not going to, we had a country that had clear values, Judeo-Christian values. We didn't have to be believers, but we had Judeo-Christian values. Now we have 350 million different values.
Starting point is 02:19:01 Each one runs around because we didn't insist we gave up teaching those values. We gave up showing consequentless if we don't, including eternity, teaching in school. We have given up who we are, but we still want to be who we were.
Starting point is 02:19:24 That's kind of silly, but that's what we have done. And so we are on the edge of one way or another. We talk about socialism. And the people that talk about social and don't even know what it is. I haven't heard anybody explain socialism to me, or even those leaders that are foreign that are against it. The key element that America should know about socialism and doesn't. If you look at the countries that were socialists,
Starting point is 02:19:54 but take Europe, take all of the Eastern European countries for 70 years in socialism, communism, Take Russia out of the equation for a moment, all the other countries. In 70 years, we talk about freedom. There's something much deeper. Show me one thought that came out of those countries in the 70 years. With other words, you eliminate thinking, and that's what we want. And that's what we look at.
Starting point is 02:20:29 Well, we learned before that. And if we would still have Judea Christian values, we wouldn't accept it in the first place. That socialism, but we talk about it. Oh, all I can say to you, America, where the hell are you going? We still, oh, are we a critical God shed its grace on D, yes. But my goodness, we have to, we should really worry right now. We should really be concerned. We should really do something.
Starting point is 02:21:01 What should we do? We should demand and insist on thinking. Now, if I am going to say, men can have children, or if I cannot answer that question, that means I am not thinking anymore, or I refuse to think, if I am in a city like Detroit, which is a disaster to a great extent, please Detroit don't call me.
Starting point is 02:21:32 but it is I lived there for a while for 80 years yet I vote every year for the same every time for the same party I am not thinking we have to
Starting point is 02:21:44 encourage that people think in our schools again that at least they know a bit what do you think about you have that again high intent why do they march
Starting point is 02:21:56 against moving illegals because they have no intense, they have no purpose themselves. They have no purpose. So you look for a momentary purpose, which is gone. And done, you're really helpless. Purpose, we have to teach people again
Starting point is 02:22:18 with purpose, high purpose, purpose of value, purpose for a great country, they will respect each other, purpose of having a life that is fulfilled, We can think, we can express. Go and look at them. Could they express? No, that's why no thought came from Eastern Europe.
Starting point is 02:22:37 Those of us who lifted, actually, are lifted. I went every year to visit my cousins in East Germany. The stories I can tell you, it's unbelievable. And that's what we want. Because we have no higher purpose. Can you share one story? One story when you go visit East Germany from your family, what they experience. Okay.
Starting point is 02:22:58 my cousin, chief anesthesiologist in the number one hospital. I walk the sidewalks without light and with holes in East Berlin. I walked to her apartment. This all stair with one bulb hanging down, going into her apartment. She is a chief anesthesiologist. Her husband has this little technical magazine that he owns, that he does, was lost ownership. In their apartment, in the kitchen,
Starting point is 02:23:32 they have a plastic square with plastic curtains as their shower. Okay. That's how you live. But they have applied for another apartment. The average weed for another apartment is 10 years. They also had applied for a car six years ago, but it's not there yet.
Starting point is 02:23:53 Now, you tell me this works, and speaking up against it, they were not allowed. After all, you're not allowed. to think. So how can he get creative? Now the wall comes down. Four years later I visit them. They have a new house by a river with two Mercedes staying there. They live in a free country where they can work. Make it win. What do you want? But did it work for that now? You cannot live in a free country in hope that somebody buys it for you. That is that you sentence
Starting point is 02:24:27 yourself into that position. But you sentence yourself. It's not others. You define yourself. Not the government, not the president, not the other race. You define yourself. That is the thing.
Starting point is 02:24:43 And they were defined by the government. And suddenly come out and decide to define himself as winners and they're winning. Yeah, good for them. I mean, I went there in 89. I lived there in 89. And Germany was, you guys, in 1990, you won the World Cup.
Starting point is 02:25:04 Yeah. Right? That's when the famous singer was Matthias Chaim. For them, I love this, I love this, I love this not. Yeah. Was the song. For them, I'm, I brauch this. I'm something like that.
Starting point is 02:25:12 Yeah, yeah, yeah, yeah. That's when David Hasselhoff was God, when Sat Einds was the channel. And you guys had a Wheel of Fortune called Rudy Tutti, something like that. I don't know what it was called, the show with a girl, you know, half-naked girl, very weird. From Iran, you go to your. like, wait a minute, what's going on with Germany? What's going on? Yeah. I had a great time of
Starting point is 02:25:32 Germany, though. At a very good time of good memories in Germany. Horse, I can talk to you for hours. The amount of wisdom you have is unbelievable. And in my mind, I was hoping for this conversation and it was even a better conversation than what I thought it was going to be. Thank you very much. I appreciate you for coming down and sitting down. For the folks watching this, we're going to put the link below to the book, Excellence Wins. We'll put the link below for folks to go support this. The rest of the ideology will be. be in a book as well. Ors thank you so much for this. It's a pleasure having you on. I have gone through many sessions. It's how the discussion runs is always up to the interviewer.
Starting point is 02:26:10 Well, it was very easy talking to and I learned a lot. Thank you, sir. Thank you. Thank you. Delighted. Success is built on how you think. Influence is built on how you show up. Every detail matters. Because presence speaks before you do. This is more than style. The future looks bright.

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