Ritz Carlton Founder Horst Schulze | PBD #735

I came to a conclusion, I'm working for barbarians. No fish, no fish for them. And they live in a situation where you shouldn't live. My father joined the Nazi party because he had to. And 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 in Forlaldedill ever again. You understand? I cannot compromise that. You understand? I'm getting upset. I said there is no way this is horse's standard. And then he said, and don't come to work tomorrow. Come here to create excellence. Now I didn't get that. You were number one when you guys left. Oh sure. They dropped from one to 26 and Capella's number one. Yeah, I insisted. There ever be a number one period. And I doubt that you're not going to manage it. Well, 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. 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 in 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, eventually starts Ritz Carlton later on, the only business ever to get two awards from the government for the best service in the world that 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 apples customer service better in the early 90s? The meeting she had, the people he served over the years, the philosophies. Yeah, I asked him a question. I said, tell me about the managers you manage. He said 65 managers. I said of the 65 managers, how many were leaders, how many were managers? Five leaders, five, 60 were managers. I said, give me the best one that you had. What did they do? He gave three principles of what the sky did, breaking it down. 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 Carlton and for Lauderdale. And I asked him, I said, so how has Ritz customer service been since you left? 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 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 here, 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, or I think almost 50 years, 47 years, raised four kids, broke down principles, values on personal life, all of that. I can go on with a ton of stories, but I'll wrap it up with just one quote that he said from early, one of his mentors, would you have to see when he tells the story to you? Please promise me you won't be a chair. The amount of money he's made, he's met people from onassus back in the days. Remember, this man's been around for 87 years 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 he 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 Schultzsie, enjoy this interview. I don't. The future looks bright. And Jacob is better than anything I ever saw. It's right here. You are one of one. I send you right there. I'll take a look at this. I said this for you. That's a simple decision to make my opinion. I agree with you. And by the way, Horst, you need to know this. I've gotten a follow on 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 2024, a Ritz trainer to teach on standards of excellence in this room. We took all our executive, all our managers for 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 idea is to talk to you. It's a pleasure. It's great having you on the podcast. Thank you. Great to be with you. Yes. And 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 1939 and stood guard Germany. Why? He stood guard, but was charmed out of here. He got in the wine area, you know, where wine, uh, yeah. And apparently it's right next to the Luxembourg and France on that area. That's right. Where's my 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 off the boy. I mean, if there was 39, in fact, my father was drafted late 39 and and and was came back in between, but left permanently, if you will, in 41, I got to know him. I got to meet him the next time when I was seven. So you don't you meet your father for for some at seven years? Well, consciously met him. I mean, I get, yeah, but yeah, yeah. Well, no, in fact, in fact, I was playing with another kid in the mud heap somewhere in the village. I live in the village that somebody came running. Go home, your dad came home. So I ran down the street. Go home was a couple of hundred years. Run there and there was a bunch of people assembled already. Every neighbor, everybody in town, that was the news when a guy came back from prison came, you know, and it was and he just came back and I went through the master. I knew it was him. He is a guy with a Tadad uniform. Everybody else wasn't. So I got in and I looked at him and I said that and then he knew who I was, you know. What was that reaction? Well, shock and moment and people crying and so on. That's what you remember the extremes. You remember in the moment. Do you remember that day till today? Oh, yeah, sure. Yeah. Yeah. No kidding. Yeah. I mean, I was born in Iran and 78. So when the revolution happened and we left in 89. No doubt. What did it do to you? Well, it, it, it, it, I don't exactly understand because I was there and with 11 years old and somehow that must have, all have an impact 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 it never, there was no hotel in the village. Never been in a hotel. It never been in the restaurant. So how do you know this? Are you watching a movie? Are you reading books? Everybody is wondering. I must have read something. Exactly. My parent, my mother never forgave me because they gave, never forgave herself because she didn't inquire how we're going to do that when I kept on begging and crying. And so somebody said, well, he should start in a very good hotel. 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 set down often with my parents and tried to analyze it. There was no real answer. No movie, no book, no person, no future. There was no movie, there was no time. I know what I'm trying to find out about Harry because I read somewhere as well that you said, as early as four years old, you know, you wanted to be in the hotel. No, no, what's 11? 11 years old. Yeah. But I read this. Where was it we read that said as early as four years old? I said four years old. For him to know how four years old, how does that happen? No. What was it like? Maybe, you know, because today when we read about it, 39 Germany goes to war in September. I think you're born April 25th. So five months. January 10th. January 10th. Okay. So January, online says April 25th, by the way. And I know you're pretty private with your, with your, yeah. So January 10th, you're born. 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 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. He was born. 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 heated Nazis, every morning came to my house. He lived in a different house. At 7 a.m., talked to the axe that was there on woodshopping plant. Instead, behind the door and looked through the slot in the door, it all wouldn't do it. Because the chief Nazi went to work that morning. When he went to work, he told stop in the families where the sun had fallen and informed them. Said, if our son died, he will die too. When he comes in here to the 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. So all men, or when there was a message that Hitler had been killed for a moment in the radio, my mother was in a grocery store. Buying groceries when it came, the furor has been killed. For a moment that was out, and of course, that changed a few minutes later. And my mother said, God said, don't thank God. It's for its time. She was arrested the next day. Stop it. Just for a day because her angle was a Nazi. So that's what life was. There was nothing. But what was there at the same time, everything was still continue, still had something to eat. There still was kindergarten. Even though when they had a right-walked kindergarten, they had to create the headler at the painting of Hitler. But it was all functioning somewhat. It's right after the war, when nothing was functioning anymore. And there was a total breakdown because there was no control. 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 wasn't a leadership role, if you were running water from-- you had to be a Nazi. You had to be a Nazi. Otherwise, you-- Sheld. So who do you put into this role now? It was Patton, in fact, who said, no, we're not going to do that. We have to put the people back to understand the job. I mean, that's how-- there was a total breakdown. There was no school. There was no transportation. There was nothing after the war, right after the war. So that was-- and of course, 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 wasn't a problem. She got arrested. And this was even the right one. This is the day that she thought he died, that he didn't. For the moment, for the moment was announced-- in Stauberburg, we tried to kill him, thought he was dead, he announced, and it was open. That's how everybody was exposed, because they got the message he died. Consequently, everybody that was part of the plot, 20,000 exposed himself, took over in various towns, and they killed afterwards. That's how they knew they were all involved, that huge plot. 20,000. 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, your man of faith, you speak in a very eloquent way. Even at that moment, were you staying positive? Was it your mom that helped you be positive? 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. For example, also, my dad, whom we didn't hear from for over a year, because his group was behind the line in Russia. So he didn't hear anything for over a year. And we didn't know if it was alive or dead. He was alive in our house. My mother said, oh, that's a good job. I would tell that, 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 seemed as if that's how mothers are. That's a mother. I mean, I told you, when I finally she talked me to this job, which was far away from home, she knew it was very homesick. But I wanted to be there. And she wrote me a letter every day. If I didn't have one today, I had two tomorrow. How many through? What an amazing mother. What a great story. It speaks about mothers, you know? Unbelievable. 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-- yes, older. He had left already. So he was in a military? No. No, he was studying and working. He started studying and working. So you were by yourself living with mom before you left at 14 years old? Yes, that's correct. OK. My father was there in the meantime. But I was 14. He came back when I was seven. So from seven to 14, your father was there. What influenced did your father have on you? Well, very high demand person, work hard, do everything right, everything with values. I read the bonehofer book where Metaxas says, tells about bonehovers, which was a very rich family sitting around the table. 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, eat, do everything right. Wow. Lots of wood. Unless it's sun-right. Is that a German thing? I guess so, but I believe me. Believe me, it wasn't Abahau. It's how Charlie is. I don't know. Got it. Yeah, Bonehofer is an amazing story. I might pass through Dudley Rutherford bought me a book 20 years ago, 18 years ago to read on Bonehofer, an incredible story on what he went through. So, but going back to it. So, that was order, structure, system, mom was attitude, positivity, everything's going to work itself. Love. Love? Love from mom. Oh, I've told you. How did she show it? By telling, by hacking, by holding, by saying, by saying, I love you. There was, and I don't think I was, there was a day where I wasn't told ten times that she loves me. I mean, and that, and that, of course, plays a role too. I can see that that's how I am to David my wife, of my children, you know. Same way? Oh, yeah, very much so. Are you more like your dad or your mom? My mom. More like your mom? My mom, yeah. But in my intensity of doing things, I'm, I'm not dead. You're your dad? Yeah. At 14 when you're left to go to your apprenticeship, and how long are you away? Are you coming back home? Are you seeing the family? What is that? Every three or four months. Every three or four months you're seeing them. Yeah. And this place you went to, where was it? What did I teach you? Oh, well, it was. My mother talked me there, and the first thing I meet is the general manager of the hotel, and I'm sure me, the general manager was a god, and I understand. And he told me he spoke to us for two minutes, and the only message was, now, you are here to study and learn how to become a servant to very important ladies and gentlemen, our guest. That's what I wanted. That's why I wanted. That was my dream to live in beautiful surroundings and serve wonderful people. But the next person was the head waiter of the hotel, the metrede the head waiter, whom I actually would work for. And he changed my life at two sentences. Totally. No, my new, I was 14. I didn't know it in the moment, but he lived those two sentences, and it was overwhelming. He, you know, even when you're 14, you're being formed still. Sure. And he said at the time, the first thing he said, now, young man. The moral show up at 7am. If I meant one minute after 7, I would tell you so. Now, it translated and, after I could say, when we say something, we do it correctly, and we mean it, and we do everything right here. Now, I didn't get that. But when I had a set waiter man, I had to do something else and I thought, I thought I would have the washed dishes, clean floors and so on. Yes, it did. But we did. Excellent. Now, come with it. Got it. So, what was the sentence? Come here to work with excellence? Come here. Don't come to work. To create excellence. And how long did he stay as your mentor? How many years did he do? Three and a half years of work done during it. Yeah. And he, from, and I've been everyone, 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 cells abouter today, I wouldn't hire people to fulfill a function. I had them for purpose, for high intent." Here 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. So that, from alive, 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, "I'm heated, 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 it even more that we as companies hire people to fulfill a function rather than to join us in our vision and our purpose. 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? No, no, no. We're more spending time. The general manager was the guy. Once in a while he passed by and said, "Good morning." 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 Erlang. And I was in Erlang in right outside of Normandy. And it was in 1989 to 1990. I went to school for two years. It was a different intensity. You got from them. Even right now, our son plays soccer. And we have an option to send two different places to Germany or to Spain. All the coaches are sending Germany is more disciplined. Spain will learn the game, but I have fun. But Germany is very much. You better get your act together. So what happens after that? So what happens? Three and a half years, what do you do next? Next, it was pretty common and also recommended again from that headwader to work seasons in various creative hotels in Europe. So I went out and worked in Berlin. And the Berlin-Belvet Palace, one of the creative hotels of the world, in Lusanne and the Borerspala's. I worked on the American line for eight months, worked in Paris. I stayed there two and a half years in the Plaza Artenei, which was one of the creative hotels in the world, worked in the Savoy in London. And in the Savoy as a work, as a waiter, 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 "Simbabwe," I would have said "Sure too." You just wanted to leave. I didn't want it up, but you wanted to leave. I was young. Yeah. How old are you at that time? I was 23. Okay. 23. Okay. I didn't see the world, captured the world, learned new things. So he said, "All right, give me your name. I will send you 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 through a physical, careful physical, I went to an oral test, I went to a written test. Yes. And then they even gave me some papers. Give me some. Yes. And they even gave me some papers and asked me, "When will you go to America?" And I said, "When I get my papers." And they said, "You have them in your hand." And then I talked to ship on which I had worked as a passenger. Stop it. So you go with the ship to the states. Yeah. At the time they were no planes at the time. Right, makes sense. Basically. Make sense. I keep forgetting you're born in '39. Times are different when you're born in '39. It's a very different world. When was the first time? 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. Oh my God. A very famous sepan who was a very famous soccer player before that. Sepan? Yeah. That was more important than, "Oh, I met all the politicians of the time. If that was Adam, now I'm awesome." So at the time, everybody was there. That was the hotel where you were. It was that one. And the gentleman was right. The guest sitting there, all of them were important. That was the place to be. And it was at the same time as spa and talons on. So when I met Sepan, that was meeting a great famous soccer player, it was more important than meeting all the other. Of course, politicians, the leaders. Sure. Later, for example, I worked in late '50s, '60s in Paris. You name it, even if it was Saraya at the time, or Chris Kelly or Gary Cooper. I served them all. Chris Kelly? Chris Kelly, absolutely. Yeah. You ever served onassis? Yeah, sure. Onassis all. The big gum and so on. That was where the guest. What did you notice? Was there a pattern which you noticed with this life of the rich and famous? What patterns did you notice with that? The pattern was that the video whose symptoms didn't really exist. Got it. Was that the mindset or was that the reality? That was the reality. Because they were so used to. They were just. They 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 horse chalcy. You're just a young man working there. I just. I wanted to. I knew that when I was streaming 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 time. And 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, the manis were shaking and so on. And the gentleman told me, "Come here, you're doing a great job." And gave me five marks, which was a huge amount of tip at a time. This is what you're? That was 1954. Okay. That was a huge amount of money. But the encouragement of that moment. What matters? From it was traumatic. Unbelievable. Just to see that somebody is encouraging you, even though you think you're nervous. Was he somebody? Was he just a businessman? I had no idea. You had no idea who it was. So it wasn't a famous person? No. Was there any famous person that was 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. There was a Conrad Ardenauer, who was a guest several times there with always with others and of course, security around them. But he looked at you and said, "Good morning." He looked at you. And he didn't just pass you by. You exist? You actually felt that you existed. Interesting. And I found that very encouraging too. 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 metradee, I, typical charm, you learned this work. Once a week you got to a school 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 metradee, that metradee, approaching a very important table. But they were all important. And in that moment I realized, I had seen it before, I never realized it. The guest on the table that brought that he came to them. He was a very tall man. He worked in tales and they worked fantastic. And I thought, "Well, man, this is a reversal. Why are they, we are here, we are the servants." And I thought about that. I had a writing essay that night for that school. And I thought about it. I wrote it essay. And for the first time in my life, I 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. How does one do that? By respecting others, by being honorable, by not going against authority, if you will. By coming to work five minutes early, and saying maybe five minutes later, and saying, "I respect what I'm doing here, by saying good morning to your boss and not hate him, but be thankful." I thought that he would have a job. So I still can define myself. And do everything I do a little better than anybody else. - As simple as it is. - I start simple. Don't complain about business. It's ludicrous. When I started Redskilden, I only talked to a job. Remember I had a great job. I had golden handcuffs. I had everything. In fact, people may hurt that work with me. I was a young star in that company in Hyatt at the time. In charge of 65 hotels in the United States, food and beverage 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 their owners? 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 their 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? 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. 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 San Nesta later. 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, there's sometimes very stupid. And the first day, first of all, I lived in Hawaii. No air condition. And I got a late June. I've never experienced heat like that. And Houston? And Houston. And next door I worked. And the first day I worked as a waiter, actually, I was there a few days. And the first day I worked as a waiter, 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, my new. And they said, "What is that?" And I came to a conclusion, I'm working for barbarians. No fish knives, no fish forks. Cannot be. And I lived and they lived in a situation where you shouldn't live. With this heat, I thought, I did know that was air condition. And Houston is pretty hot if you're coming from Europe. You better believe this. Yes. My wife's from Houston. It's very hot. So I called a friend of mine who worked in San Francisco in a surveillance in a French restaurant. And then I come back, this is their barbarians. This is their fish. How ridiculous can you be? That shows you how silly we sometimes have beliefs, our beliefs that we set because the culture is it is sometimes very silly. We have to look into it. So I left there, talked the bus to San Francisco, worked in San Francisco, started in the restaurant. But then I worked back in the hotel because I wanted hotels and worked for Hilton after I was joined Hayat. How long were you with Hilton? We were with Hilton. I was not long there, but then I went to the club and back to Hilton. I was with Hilton for nearly four years. Four years. Yeah. What did you learn at Hilton that you took on with your career? Well, a process of management of what you do or the organization. Because I worked for a while in catering and selling how you organized sell. And so on. So I learned but not traditional service. And because we have kind of all forgotten what is table etiquette and so on. I learned it when I was a kid, believe me, that metadata, everything we had to be 100% correct. But in Hilton it was working and systems. I realized that every effort has to have a process. Start learning that. And then I joined Hayat. Is Hayat where you became, where you made a name for yourself? Yeah. Because Hayat is Hayat where you wrote your first book or was it at Hilton? No, I read it after, basically after it, after it. And the book was written. I became quite good friend with Stephen Covey. And Stephen was urging me to write a book about what we had accomplished with Ritz Carlton. So this is post-higher. Yes. This is at Ritz when you met Stephen Covey and you said write a book. Yeah. Got it. He called me and I 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, "Farvan, it's Stephen." That's how he talked. I'm disappointed, so disappointed. And you-- He's telling you this. Yeah. I said, "Why Stephen? You have still not written your own people, you own it, people to write your book. Promise me, you will." I promise you, a few months later he died. And that's when he died, I was so. And he always said, "I want to be the one who writes your foreword." And he died. And then 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 Covey's. Change me. Oh, yeah. Impacted me. Yeah. Life-changing. Oh, no question. Seven habits and then he wrote eight habits. Seven habits. Right? He wrote a book called Eight Habits. Yeah. One of a kind. He was very unique. Unique. Very unique. So, okay. So, walk me through when you're at Hyatt, you're making a name for yourself. Yeah. Ritz comes and recruits you and you take your opportunities to risk. What happened there? First, and I would like to say that because I would like to impact young people in the conversation. When you come to my age, you want to impact. Sure. Yeah. I worked for Hyatt. I was a food and beverage director. That means I was in charge of the food and beverage operation of the hotel in Chicago. And yet, a half later, I got a call from Mr. Freund, who was the president of Hyatt at a time. And said, "Hast, sit down. We have something wonderful for you. We have done a great job with your European flare and all those things. We have what is maybe the best hotel in the company. And you're going to be a general manager." There's a moment, a three-moment, the impossible moment. The moment that you will never accomplish, but dream from. And here you said, "You're the general manager of the finest hotel we have." And I said, "I won't take it." And he said, "Are you not leaving the company?" I said, "No, I'm not leaving the company because I want to be a room's manager first. I never was a room's manager." Stop it. Yeah. And he said, "We're giving you a room's manager." And I said, "Yes, but I cannot be the best general manager in the company unless I have been room's manager." Wow. What a message. And he said, "I'm coming." He wasn't some Francisco. I'm coming to Chicago and talk to you. You're leaving the company. I said, "No, he came and said, "No, I want to be a room's manager." He said, "We have to find a hotel for you." I said, "Make me a room's manager. Give me the worst hotel." He a letter. 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 a room's manager." He said, "No, no. You said you want to have the worst hotel. We got it." And I got Pittsburgh, which was a dump. [laughs] A real dump. What year is this? That is 1974. Time. So I moved to Pittsburgh. And two and a half years later I was promoted to a large 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 into Chicago. And that wasn't good because when you're corporate vice president, you're one of a bunch of bombs. They're all vice presidents. If you're regional, you're the king in your region. You know, but still, it was-- Leader of bombs. It was still a promotion. And so I moved to Chicago at the time. And then I got that call after I was there for nearly three years. To be. To call that there is a chop. What they said, we are building two hotels, a holiday in. 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? Somebody I had that had worked in a vice president used to be-- had worked in Hayat, the-- At Hayat. Yeah. If you would have stayed with Hayat, who would you have become? Probably. CEO you would have become the CEO of the county if you would have stayed with here that was the trajectory everybody okay it was obvious yeah okay so why take this position this opportunity that comes along yeah it's because at one word they said when I asked them what would you do with your hotels and they said operations that would be up to you and it started dreaming and I saw a purpose and it started to control me and and I said to my wife I will make this the best hotel comment in the world if they let me really operation to what I want to do I saw because the leaders my new individual hotels are different but the leaders of company leaders in hotel business was hired Hilton International Western and so on intercontinental 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 listened to other companies not not hotel companies they there seems to be lack of understanding that it's all about human beings they took 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 by those that run companies I have to take in I have to know what is my customers expectation from my product what would they expect from me and then I have to know as a good manager I have the credit process a system and controls so I deliver the expectation of the customer hopefully superior to my competition 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 and I still believe I said it again it's not a job that's the biggest deal give the company can give you the biggest thing a company can give you is purpose purpose and belonging you felt you didn't have that at a high it I felt that wasn't managed well we still just hired people and then some don't decided that employees no good wait a minute if that employee is no good why did I hire him it's leadership either I selected the right employee or I oriented wrong or I trained wrong 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 my selection my orientation my training in my sustaining the knowledge of greater right work environment I could be anybody I believe I still believe that I sorry sorry anybody everybody thinks I'm very arrogant now I don't I think I could take any company world mega the best company world 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 come on people are not selected they're hired and I would orient them to the job I opened every single-rids card in hotel and every capela hotel myself I didn't go there to train champagne well a little bit too but I went there to orient the employees as to who we are and welcome them enroll plane to them how we deal with customers and train them so I was connected today so I'm I'm sure but what did I train I trained what I knew the customer wanted not what I want not I want come on I have been on a board with and many boards and more CEOs and on any all full of egos full of emotion full of insecurities like we are assume beings but has no respect that the employees and the customer has the same thing 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 technology there everything is new every twenty times forget all your new if you don't if you're not in technology today you are lost I was the next speaker and I said nothing is new because you see five thousand years ago human beings want to be respected and this was true this morning and then the go tomorrow and in five thousand 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 you guess what their studies and American consumer study does not vary all whether 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 organizations the respect for an organization is how I care for people and that because that creates trust people talk about loyal customers well what is a loyal customer loyal customer is somebody who trusts you they're not trusting you because of the product that trust you because how you treated them that you respected them and and that is not seems to be not understood people work on the product and to the best never 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 second product no price is last because if you can get the first two they'll pay anything for it if I get the first I get more listen good housekeeping was a magazine developed value or product they voted as it is called in the early years as best value we were the most expensive but we were the best value that's the point that's what I have and the best value look in in our first hotel and I never forget it because even shocked me we put the chandelier up in our as we were finishing it up in in the elevator for you this chandelier went up and and I realized there's a 28 thousand dollar chandelier hanging there no guest ever commented understand chandelier nor did I do under 200 thousand dollar Oriental Rack nor on all the marble we both hold mountains in Italy nobody commented how he respected them how we treated them how we were friendly how we responded that we cared so could you have gone away with a eight hundred dollar rug and a six hundred dollar chandelier you think you could have gone away with it yeah look at look at that that was that's your capela hotel your capela hotel that you build you know the no chaniers oh yeah it's still marble it's beautiful yeah oh absolutely oh absolutely but but the key thing that we did capela only a hundred rooms so I can individualize service I couldn't individualize service in a six hundred room it's called because I had 450 check-ins today 500 check-out but in a hundred room capela with only individual and not conventions I can call you before you come and say we're coming to Singapore what can I do for you it's all about you as long as more legal and ethical I'll do it there's no check-in time check-out time we will have a room for you when you arrive see it works we figured out how that works I saw you explain somewhere where you said at Ritz customer would be unhappy if to check in took more than four minutes right capela 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 time leanness we better know that as businesses timeliness expectations have become dramatic true or even responding, including responses to emails or so on. And it's, we better know that there are two things that are greatly different and that is timeliness and individualization. The millennials say, "Dude, my way." When there you are again, 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 customers' expectation is from me? And one thing, expectation millennial is, "Do it my way." Individualized to me. The difference, but look, if I would go to make them, I would say, "I take a number one." The millennial says, "A number one, but not tomato, two slice of pickles," individualization. And if I run any business, I have to understand that individualization is expected. Was that not the case before or there was always. Much less so. Much less so 40 years ago. Much less. Really? So you just expect to, whatever you saw, that 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, no, no." What is, what principles are ever green 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, one of course, customers' expectations will change. I tell you a funny story on the customer expectation. When I opened the first red card, at that time, the first plastic card keys came out, which today is norm. Well, this was nearly unheard of. They call 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. And it was. It's a good security piece. But our guest checked in and said, "You're luxury. You tell me, give me a plastic piece." Wow. So six months later, we changed the locks. Because this silly thing was overwhelming to customers that I would give them a. Plus. Wow, so they saw it as cheap, not as a. But, well, three months, three years later, they said, "You give me a heart 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, 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 respond it. But by me saying, friendly, instead of saying, "Hi." Hey. Saying, "Good morning, sir. How are you today?" And tell you, "My eyes, I am here for you. I respect you." Amazing. 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. - Through your slay. - Back to card. 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 makes 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. It's not individual. And that's a bad thing companies do. Particularly, entrepreneur owners, the billionaire owners, his friend tells them, and then he comes and changes 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 has a whole one." How do you do that? My main customer studies. We, of course, it was easy. You know, till we had a. 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 employee satisfaction is, what my economics are, and what my future indicators are. That's the only thing I need to know. The rest are delicate. But if the customer satisfaction in tender return was not there, we then could dig in. Why into the very studies? And 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 your. So do you keep on serving the customer, the very 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, "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, I'm generationally, cannot quite accept it. AI, yet. Oh, but I'm saying I work with a technical group, and we are leader in the technology that that has created for hotels. No, that is the hotel company. I'm working with a group KYC that puts technologies into a hotel. So we, so we know everything. We partially AI, for instance, and 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, reason that's what you do. You check in, you call the elevator, you go in the room, you will check out and so on. That means it is a, call, 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 under front door that says, welcome and walk to you today, let me tell you, I'm here for you. You respect it here. Not just AI, but it's driven, of course, the company has to make an end, a three-month report to Wall Street. So I have to, people stay in the front door, but that's the end of hospitality. But that's why small hotels would 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 be successful because of their hospitality and not just because of shelter. So then scale is harder today to 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 a shareholder, they're making a little profit. Who's the bigger company today? That you still look at and say, wow, good for them. The company's still maintaining customer service. Obersch is pretty big and becoming big, but they're still attention. Rosewood are still paying attention to customer somewhat. But 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. And you went to Ritz what year? 1974. From '74 to '70. '70, yeah. The lady that was here, she said something. She said, she said, Ritz went from in the mid-1991, having employee turnover, and she was at around mid 50%. And then by the time it was done, it was around low 20%. That's the stats that she's given. 80%. 18%. Right. And the industry was 120. Right. I mean, it's a 365, 24/7. You guys are always open. It's 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. 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. 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 are working with the University of Colorado and the University of Frankfurt on that. The behavioral analysts will tell you behavior cannot be taught after somebody's 16 years old. Wow. Yeah. How, unless, unless there's a significant emotional event in your life. Makes sense. An interview for a chop is a significant emotional event. And what we do, we just ask questions rather than establish and standards right there, behavior standards. And so, Patrick, you know, we have an attitude in our hotel. In our company, we really, we have petted about it. We are very friendly to every guest. In fact, within 10 feet, we look him in the eye and say, "Friend, a good morning. Can you do that?" What will you say? You will say, "Yes." Sure, yes. And now, what about Patrick? very serious about that. You will say, "Yes, again, I just established a new behavior in you for your benefit to be successful." Timeliness is very important to us. So I will try and-- but I do that and then orientation, first day of work, which every company does wrong. Period. We didn't do that. I went to the orientation. I roleplayed how to say hello in front of every newhood, every new hotel, and every takeover. I was the one. Teach me. How do I say hello? And so, OK. So you are a guest. Here's a guest coming with 10 feet. 10 feet is the essential moment. But within 10 feet, they make a decision about you. Ask your mega about them. Society lies about those things. You should look at a little baloney. We're human beings. We cannot help it. We make a decision about the other person. So what do we decision to? I want you to make about us, about me. I want you to make a positive one. That's why we bear the right uniform. That's why we groom right. And that's why we look them in the eye. No matter what we're doing with 10 feet, it's an undegotiable. That's what we do. We look them in the eye and said, good morning, sir, or good morning, ma'am. How are you today? Now, watch me. Good morning, sir. Good morning, ma'am. How are you today? Welcome. And you roleplaying this with me? I roleplay that. And I roleplayed how to talk to each other as employees. How do you do that? Well, if I walk 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. Oh, yes. So, okay, now Patrick, the people in the environment are responsible for the work environment. So I walked, I want a good work environment. I walk by you and I go, say, good morning, Patrick, how are you today? And you make us, but tomorrow morning, I'll do it again. And pretty soon, you will say, good morning, or so are you. I'm responsible. I am responsible for my work environment. Have you heard me all? And everybody will say, yes, in the room. Orient, the day of orientation is a very significant day. You see, we interview, I interview you. I really want you. The shop 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 when if you show up, you paid for the next 10 days, but that's the day you start working. Because I want you to have a technique for an emotional environment. We do orientations. 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. Why are you doing that? Because if I let you before, without having the proper orientation, I didn't use the significant emotion, but 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 have worked in? Oh, I'm repeating the things I told you during the interview process. The orientation is a day when we teach you again. Here is how we behave. Here is how the guest is important. Here is how we treat each other. You are part of something. Well, let me put this way. How are people being oriented? I can tell you. If you work somewhere, I can tell you how you were oriented. Everybody, oriented like that. If you come to work, and the boss tells you the rules of the company. 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 kind of papers. And you go through all this work. And that is 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. And what's next? Oh, now Bill, the new waiter, worked 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. An under-weighted kitchen, Fred tells, "Spill the new waiter. This company is no good." That's the day of orientation. Instead of the day of orientation, saying, "Here's who we are. You're now part of us." And here's how we-- he's our customers. And we are happy when they here. We respect them. He is how we show them respect by saying, "Welcome." By responding to them. By looking them in their eye. By caring for them. That's our part. Patrick, we have to give human beings purpose. But we have to at the same time tell them the motive of our purpose. What did Adam Smith say? Wait a minute, 300 years ago. Well, for 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. What we do, we give orders and direction. Instead of giving purpose and motive." That is-- the millennians say, what's in it for me? Well, tell them, if we accomplish that here, what you will have more opportunities, you will make more money. It will be respected. It will be on it. 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. We do not come to work for the function. We are not chairs. How do you teach-- 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 to employees. How do you teach me to do it? Well, first of all, turn it around. 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 right down first class and give it to them. Or when I walked on, tell 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 fellow workers in a positive mood. And then what happens to more first class cards I get? No, you just collected a first-- I have 21st class cards. Are you recognized a person that got the most first class cards in a month? Monthly, every department recommends an employee of the month. That all employee of the month has a dinner. One of them gets employee of the month total, for each department. But one gets for the hotel. That 12 in a year, that's one so month. One of those 12 becomes employee of the year. He becomes a vacation with a spouse. And cash. Paid vacation, four spouse, wood spouse, you find them on spouse or there's no one. You don't find them on spouse. 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. Like, tell me they make a lot of money. You make a lot of money. Yeah, you can do only RITs. If you did something called Only RITs, 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. This is more than style. 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 RITs type of people to the company? What am I looking for? You're not doing 100% the interviews. How do you teach me? Well, because when you came in, you were taught and everybody understands the very minimum. Everybody got through orientation. And managers got through special orientation. I gave every manager a leadership session. The way our teaching worked beautifully because we started with Norhotel. So every hotel we had was at a new or takeover. We got it. So you had an advantage. I 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 plan you what is wrong up there. Because if I don't make it, if I can live up by the rules, it's your fault. But they did knew me. That's why the big thing that happened in RITs Carden the empowerment piece, which was a nuclear explosion in all businesses. When I said I empower every employee to make a decision up to $2,000 if a guest has it. But I could do that. First of all, we did that very carefully. I didn't just say it. We thought. 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 analysis that 96% of complaints is people that want to get rid of their frustration. We learned I thought they'd complain on the front desk or the concierge, not it don't. They complained to anybody who listens. Anybody listens and if you don't accept it. I had to make sure that a bus boy will accept as his TV that didn't work. Forgive me. I didn't want customer to run out there and be unhappy. My guess is well connected. He calls his travel agency. It said it was no good. His travel agency is part of a consortium. 500 travel agencies. I want to be sure that everybody leaves us an ambassador. I had to teach our employees how they handle any complaint. I trust you. In fact, you can make a decision up to $2,000 to keep that customer. How much did that end up happen in per month? At its peak, how many people used the $4,000 at its peak? In the last three years, it was the once. The rest was the bus boy saying, "Did you have a nice stay with us?" No, my TV didn't work. Please forgive me about my TV. I will buy a breakfast. The complainer now is embarrassed that he complained. It leaves us an ambassador. But we certified every employee how to do it. Were you employing number one? Were you employing number one in Ritz? You're the founder, president, and CEO of the company. You call founding member of Ritz. From one employee to 47,000 employees, you've been part of that entire process. I left 25,000. 25,000 when you left. I think today they're at, I don't know what the number is, that's higher number. But from one to 25, that's 100% you. Question for you. Did you guys buy other hotels or no? We did own hotels. We managed hotels. We took all our own existing, for example. We talked over hotel in New York. Consequently, I inherited a union. None of my hotels, I opened some Francisco. New. The union was picking us for three years, but it never became union. So when you took all your, so you're taking opera, like for example, two properties are opening up here in Pompano. One is Ritz, private residence. One is Waldofah's story. I want to look at a couple of them and they'll say Waldof's going to be managing this property for 30 years. So you were managing those hotels, servicing those hotels. Okay. But we insisted we wouldn't have written a contract anymore, unless you sign 50 years. 50 years to you guys. 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 profit or is it rev? I make off sales. If you want hotel and the sale is 100 million, I get three million. Got it. And you may be losing money to operations. So no matter what you're making your three million. 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. So I have an incentive to make a profit. So if I'm doing 100 million, no matter what I do, I got to pay three million on my revenue that goes to you. What is your incentive to make my 100 million, 200 million? Well, I get an incentive and anything over a certain profit. Is it an accelerator? Like does it get really bigger or? No, no. Fairly at the 3% number. But at 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. No, no. There is an exit clause for you, the owner. That means we establish the beginning. Who would be my competition? Who are the three best hotels in town? If I don't, if I'm not between 5% at least what they do, you can exit me. You can throw me out. That's in the country. Oh, yeah. But they also want the name Ritz Carlton on the on the property. They don't want to give us the risk. Because it's not on your hotel. That's probably most likely. Of course. Yeah. Where are stront all the other stuff that's better than feeling 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 billion, $60 million goes to you guys. Got it. That's a pretty nice revenue going to you. So you made some real good money. Yeah. Yeah. That's great. 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. So, and the processes, make sure the process is short. And I love that. I'm mother with 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. She said they did it. You guys at an engagement study to identify which employees fell where? You guys found that that you call them superstars or invincible were 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 little more. And the last one was cave, which was around 17%. This is a constantly against virtually everything. This is what the lady I never heard about. So this is not you. That wasn't me. What do you think about this analysis? It's ridiculous. Tell me why it's ridiculous. I think this is why I came to the source. I want to know what you think. Yeah. Yeah. Okay. Rafa you track it. Rafa, were you in that meeting? Am I giving numbers that were numbers that were given to us? So please continue. It's nearly pathetic. I'm sorry. I'm sorry. Please forgive me. Tell me why. Tell me why. Because that means everything is wrong with the selection process already. If you if you if you hire those poor percentages, then you better start selecting. Stop. Get somebody to help you select an employee. But you said your retention hit 19%. Oh, between 18 and 20% was that is you fired or lost 80% or 19% of us. Yeah. Yeah. That's you want to have 10% because you're under a new little bit. So why did you lose 18 or 19% about partially because people moved or partially because all or we did make mistakes. But when I make a mistake, I have this now I have to. Ah, this employee really didn't work out. So let's look where we met our mistake and tweet our process. Did we hire them wrong? Did we orient? I agree with you. It's something going wrong. I have to go back and tweak my processes. Right. Not the employees. And if I have those numbers, that means my processes. That says your process is 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? Well, I look at channel managers. I roughly five or six. Five or six you fired in 30 years at Ritz from now. No, no, 20 years. 20 years at Ritz. That's between Ritz and Capella. So in 30 years. Okay. So in 30 years you fired five managers. Channel managers. Channel managers. How often did you fire people at hired? How many people did you fire at hired? Oh, that was earlier and I worked was working different. I didn't fire a channel manager, but managers a lot. Yeah. A lot. What's a lot? 50 hundred, 200. Yeah. Okay. So tell me what got what did a person do to get you to point out wanting to fire them. Okay. For example, I asked a leader, we talk about the delegating and so on, because kind of what Tesla, what do you delegate? You take 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. The delegate how they say so, but you let people do things. And then you measure and make sure they happen. You cannot hope then. Hope is not a strategy whatsoever. So you measure and you you establish the expectation. You expected to exist. So my expectation, for example, was and there was a key element here. Employees said this faction X, Cosmos other's faction 92% top box. Intender return. Intender. I recommend 92% minimal. And that was meant very clear. A higher US gentleman said, "Patrick, now understand. That is the understand. I have no right to compromise. I am here for all concerned. - Sure. - My right of compromising is over. So my expectations, excuse me, can handle it. By the way, and by the way, my role is to help you. - Okay. - I am here, Val, but call me anytime. 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 expectations. Customers are the affection, employee's expectation, and so on. And I delegate, and here's how our rules when you go through an orientation, how you ease how we do it. They learn that the employee is a part of the company, not just working for the company. They learn 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 got through all that. And then you have the precise numbers. And every year, the precise budget's numbers. Everything's clear. But now, I see the customer satisfaction, which was my key. On the end of the month, I see you are 86%. But 92 is the minimum standard. So I call you, Patrick, I, you know, is at last no problem of work on it. You will have careful customer service. You can dig into it. I don't have it. I don't look. I'm looking for that. Was it from there? Was it food? Was it what? What was it? Correct it. Next two. Next month is 94%. Now Patrick, now listen, buddy. You understand I'm 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. I will move to the hotel. You're going to tell me this. Yes. And then how much longer after that are you 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 there, I'm fine. But if it slips again, as Patrick, do me a favor. Leave. You know, when you start working, number was 92. Yeah. Yeah. Month by month by month. So at the beginning-- Oh, yeah, you can have a month slipped. 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-- You know what I'm saying? And then many things are data. 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 year ago was we have already hypothetically now. A year ago today, we had for the year 1000 reservation. Today, I want to have more than 1000 for the next year. You understand? I give you a prior best. I've fully yet. Yeah. So that was one of them. Then the measurement, of course, I looked at what was done, what the business for last month. They believe up to the budget. How are we doing with a funded 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. I looked for one question in the employee survey. That insisted to be there. And that said, would you hire your mother? Would you recommend your mother to work for our company? Would your mother look for a job? Would you recommend that she works for us? Are you asking me? That's what I did. That's what it was. I don't want to recommend 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? Do you recommend somebody else? That's right. My dad's 83. I don't know if I'm recommending. Although he would be great customer service. Would even pass possible with the recommended. Everybody understood that. If they said no, a question. That's your most important question. Yeah, most important question. It could be worded for, would you recommend your first friend? No, that's what it's called. It's when I looked at that one. Right. But then I looked at the overall satisfaction, of course. Give me some more questions under the service. Employee survey. What else did you have? Do you feel part of the. Do you know your career path and so on? Do you know your career path? What else? Most of it said that around. How many questions is it? How many total? 36. 36 questions every month. No, no, no. That survey was only done once a year, thoroughly. And what month did you typically do it? Well, depends on what you tell them. When they open, they usually do it. Three months after they open, done that same month every year. I got. So, interesting system. It's based on when they open up. It's not calendar. No, no. So, it's not like the sembrow January. No, no. So, three months after they open up, so it makes 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. That's it. So, nobody feels uncomfortable not putting it. That's right. And then how are you doing customer satisfaction scores? In outside company, calling. We get the number. Outside company calls the customer. Yeah. Yeah. And they give you the analysis once a month. I get the analysis for each hotel, in tender return. So, so now I'm moving to the hotel. And the gentleman is just 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 the decisions and so on. They're embarrassed and they quit. But what did I do? I looked at the service. It's a symbol, everything. I looked at the customer service. Where they may be impacted negatively. But the dormant. They were not friendly. So, what I do, I go sit down with all the dormants and now. Guys, please help me. It seems that we didn't help you or didn't train you 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, it helped me. Guess what? Four weeks later, it was corrected. It was so simple every time. It is not rocket science. You're going to talk to the people connected to the process. But if you're not living in terrorism. Terrorism said, here's how. Terrorism said, in the industrial revolution, said, higher people who fulfill a function, we think and they do. But this is ridiculous. After they do it, they know better how to do it. And I do mean my thing in my office. Instead of going to them and saying, what can we do? No, I love that. I love that. So, but how did you teach me? I come to you and I say, hey. And again, I'm talking for 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 paradigm shift, right? To help somebody have a paradigm shift. What would you do for your management team type paradigm shift? So, for example, beginning of the year, you're doing a kickoff meeting, you bring your leaders in. And if you did, what would you do to create paradigm shift in me? One-year leaders. Well, well, I'm with the leaders. It's easy. I mean, I'm the expert speaking into my conversation. Yeah, with the leaders, it's actually pretty easy because I'm the standard setter. I'm the objective setter. I set objectives. And 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 wonder, I wonder, see if they have a vision. That's how, if they have a vision. Look, I visited a hotel. In fact, I visited Milwaukee. The chairman manager picks me up. The chairman manager picks me up and there, 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. I'm so proud. And I'm in a limo. And I ask them all kinds of questions. And then I ask them, 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 big up all room, if my restaurant wasn't under the second floor, if this hotel would be closer to the city center, and in other words, he made excuses for a vision he didn't have. I visited a few days later, Columbus, Ohio, similar city, similar hotel built by the same architect. And I was chairman. 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 said, he said, he said, somebody has been, hotel 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, sure, sure. Sure. No, no, no, wait a minute. I'm gonna make a study of all channel manager who has a vision, who doesn't. And for the next three years, I asked everybody the same questions. And after three and a minute, my new is a study that I made, it wasn't scientific. But I'm generous in the name of tell you, there are five leaders, there are all managers. Not a managed good result, some of them. - Out of how many people? - Out of 65. - Out of 65 five were leaders. - There are as many managers. - Eight percent. - Yeah. And now, a minute, some of those managers had to go to results. - Sure. - And by the way, diverse ones, and this is pretty common, became the recognition of manage of the year, became a trip around the world and so on. - In Ritz? - Not in Ritz. - In Hyatt. - In other companies. - Okay, right. - No, why? Because it didn't paint anymore. And it didn't take the flour away. And they've been uploaded for making a profit and became managed of the year, as they're destroying the brand. - Why? - Because that's only seeing corporate measures. 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. 3456 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. They felt part in relationship in which the employees felt part. - Mm-hmm. - What was number one? - Okay. - Process management with employees involved in building the process. - Tell me what that means. Unpacked that for me. - That means it. And it's a complainant room service, a slow room service. He got, he got the room service and says the order takeer, passboy, Veda, cook, work, find out the root cause, find the root cause of 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. If I catch somebody not carrying them in their pocket, I have a problem. Chenementia or dishwasher, I want you to carry it because that's who we are. And these are the non-negotiables. So. - May I? - Yeah. I give it to you as a gift. It's in my book, by the way. - I love it. This is the Capella. - Capella. - Has it changed anything with Ritz? - Oh, sure. - So it's different than Ritz? - Yeah. - Okay. - A little bit, a little bit. And Ritz changed it after I left. - 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. - Wait, that's what I wanted to say. - Okay, go for it. - So. When we talk over that hotel, it was so strong union and was the worst employee survey in the worst case 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. Two years later, the union contract was due. The employees insisted that the union adopt us. 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. One thing. So what did he do? What did he really do? And that's what I'm appealing to every, 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. My major deed, the first one. Remember the one when I left there after three and a half years. He said, "Come here, look me in their eyes. Promise me you never got a word. Promise you me not to become a chair." - This is when you're leaving. - When I'm leaving, three and a half years later, you know, I was seven years old. - Just a guy that impacted you heavily. Not the GM, but the other guy. - Yes. - Promise me you don't become a chair. Because if you just got to work for the functions that you fulfill, you're a chair, you're fulfilling a function. I'll say, you have to have a high intent. The high intent is excellence in what you're doing. - 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. Promise me you won't be a chair. Okay, so question for you. - And again, he was relentlessly working on all process and continuing all this, he was constantly seeking, if 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 the root cause. Why does process go? 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 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 for those hotels. And he ran for many years, he'd just a year ago, and so retired from there. - You still keep in contact? - Oh yes, absolutely. - So there's a friendship. - Oh sure. - Incredible. - Well, friendship, behind my back, some of the guys got together, created a reunion for me a few months ago, and people came from Europe and Asia and all that. They're all running major companies. I know what happened, the truth is, I know what happened. He got together and said, "What's he getting old?" Let's get together before he dies. - It's so. - You know what I'm just doing. - Let me tell you though, let me tell you one thing that this is very important for the audience to know this. Your 19th, so your how old, your jazz attend, so you just turned 87, three weeks ago, right? Okay, so Mateo, Maillet, he brings you in, and I said, "How does he look and feel?" He says, "Oh, he's so strong." So 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 myself." Even at this age with the level of intensity that you have it's own 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, what happened to the standards after horse, were they able to maintain it? Well, let me tell you, one, sorry, I have to be careful here because I signed up that would not make dispiriting remarks. However. 20 years you got, that's a long good. Oh, Tim, however. However, our most complemented, non-negotiable in Ritz's car was number 16. It's number 12 on this one here. And Kabbalah, "It's caught guest until they are comfortable with their direction and make visual contact with their destination, do not point." Okay, that was number 16. When that was the most complemented from the guest, non-negotiable. People are all inside the, I asked her from this. I came from outside and they've 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 the-- Stop it. The most complemented point by customers was eliminated. And I understand where they come from because nobody quite understood how deep those feelings were. It was just, wow, that's what we do. Nobody looked up for the analysis that was most complemented. So, but altogether, who is Ritz number one today in the world? Kabbalah. There's a company great afterwards. Where's Ritz in that analysis, 26? And there's effects, I can say, effects here. Oh, sure. They dropped from one to 26 and Kabbalah's number one. Yeah. How important was it for you to prove that even afterwards you're going to continue not stop? I could do it anytime. I'd forget me because I was concentrated on the human being and on the process that I do. I would-- In the meantime, I 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 time. Well, they've changed their lazy their disc. Come on. You you you you become a softer leader. You're the leader. You're the leader. You have to figure it out. Yeah, I agree. You know, it'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. 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. 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 of you? Yeah, but let's say I said I have no more right to compromise. I have no more right to compromise. Tell me why I know my objective is good for all concerned. In that moment, I would be going against against the owners against the employees against society. 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 a corner. I can't just compromise. You know, that's one of the big problems with management. They want to be one being honest and nice guy. 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 the speech so that I give something. What do I think? What do you think of me? A particular my age. What are you going to do? Fire me. But when did you believe in yourself to know your philosophies worked? At what age will you bullet proof confidence that you know what you were doing? When I went halfway through my time in Hyatt, I talked to the verse of Teller, made a major success. 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 and make sure they align. 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. Walk in here three 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 a 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 bullet proof confidence in your philosophy. I was totally confident on that because it's it worked. There were successes. And I know I know 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. And I am happy to be believe it. So what and one of the key elements that I and Jesus, forgive me that I touched on does for a moment is love your neighbor or yourself. Wait a minute. Are your employees not your neighbors? Are your guests not your neighbors? They are my neighbors. Do a love them as myself. But I cannot single out one of the other after love them as a whole because otherwise I'm going against one of the other if I just single out. When it's 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. Well, growing up in a Lutheran church, which is very Bible beating already. We had for three years before you get confirmed 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 some 91 for he will take you under swing on this. 91 for God. Yeah. Yeah. And it is hanging in my kitchen. How old were you? 14. At 14 he told he gave you that. Yeah. Yeah. And it was with me ever since it is with me and it is hanging in my kitchen. Interesting to know that he's with you. He has your back. Yeah. And and you know, sometimes as a young man and extraordinary. I got it. But something went wrong. I went to look and I was wait a minute. Where are your wings? I thought it was a promise. Yeah. That's funny. So now building the business. You know, and by the way, it's funny when you say Ritz Carlton. It's 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 course would even allow something like this to happen. This doesn't make any sense to me. I was a one to an event. Ritz Carlton every three to six months. We would do an event at the four lot of Del Ritz. 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 this 30 days ago, 60 days ago. I don't know. They put us in a big room. Well, I'm not looking for big room. I want a smaller room because I put sticky pads on the walkers. We're doing a strategy session with our executive. I want that room. They changed it last night. They can't do that. Well, I talked to the director. He said yes. As a bring the director up. We get on the phone with the director right before the meeting. This is 757 and meeting starts at eight 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 you. Wow. Wow. Wow. Oh, horse. I said, I'm going to go see the director myself. I go downstairs. I'm at the front lobby at the four lot of Del Ritz. He's behind the desk. And I see him. I finally I say his name. And I said, I don't know what his name is. I can get it right now. I said, hey, Jose. Are you going to make me stand here all the time? 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 said, why did you change the room? I always get that room. Look, we just have 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. So me and my security, Dan, who was somewhere around here. I'm at him. You met him. He's got the tattoos. I'm a very friendly guy. So we walk up to, 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? So then afterwards, I'm trying to find out what's going on here. One of the guys that works at Fort Lauderdale. Ritsie comes up to me. 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 to your anyways. The room was given to a soccer team, whatever, because they were doing massages there and nobody was there. Remember, I booked this room. It's the room I like. And I'm a be back customer, right? No explanation. Nothing. The next day, Rob, can you text Mateo? I want to make sure I give the right first names. I don't want to mess this up. So then the next day, Mateo calls me. He says, look at the email we just got. I said, what's the email? He says they send us an email saying they're 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 other one. Nothing. I will never go to that Ritz Carlton and for Lauderdale ever again. I said, there is no way this is horse, horse, the standards. 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 with this. Here me out. And you don't know where I'm going with this. But I think you'll see it here in a minute. And we found over an insurance company we built that 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 the 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. I took this concept that was dressed as George Washington. My wife was dressed as Lady Liberty with a 40 foot Mount Rushmore in the state and we told everybody we're going to save America and we're going to help people through free enterprise getting people to become insurance agents building their business. We did something nobody that was going to happen. One office Northridge 50 states we grew it. I saw the 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? I know just listening to you right now. I got an email from a friend in Asia. It's on there about an experience in Redskarten. 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's not a place is not a work is a fulfillment there and done it if it is totally mishandled. Here, twenty. some years later. I'm still hurt and in pain about it. I have a hard time. I try not to stay in Red Skulls because when you walk into it, I feel I'm a stranger. Some of them I've walked into, I feel I'm home still. I'm home. Very few. Forgive me when I said those things. Red Skull don't sue me. But 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. You cannot get away from that. Unless we just created a business, the heck with it. But if that business was created hard and with the soul, which hopefully we do as human beings, particularly as creator, you get hurt. I was so hurt a few days ago. A few days ago, and 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. I've worked sometimes, often in the Wanda dimension. Could it be any other brand? Yeah. It shouldn't be. It shouldn't be in Dancer. I had a call one day from Shanghai, from a friend who walked into the Red Skull. Maybe when I was running a Red Skull, and I said, "I'm just in the Red Skull." And down it, I could have complained, not seen a sign, I would have known it, Serietz Garden. I could feel it. People looked at me, how people say, "Sir, or people help me." I would have known it, Serietz Garden unquestionably. That's what you want to create. That's it. But you can create that with a hardware store. You can create a business. 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. It's a service I was going to talk about this hospitality. The first person who taught hospitality was saying 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 him as if it was Jesus himself." But otherwise treat everyone as if they were the most important people in the world. He recommended, in fact, even if you are fast, break your fast if the guest by himself and have dinner with them. But after you've watched their feet, now how close to become for that? Why would we try and come close to that in businesses? Isn't that much more fulfilling for us rather than just fulfilling a function? Yeah. No, listen, the guy that you went into your room who runs our cigar lounge, now his name is Michele. I have to give him a shout out. Michele 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, but I don't know. You used to treat it, 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, Horst. 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 human being to have. And I'm willing to pay premium for that. It's a very, very valuable thing for somebody. Your work card, you want to go to place to be left on the. So where do you go to right now? Restaurant. Where 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? Well, I mean, we have some small places not known in Atlanta. You see, even I travel still 100 days a year. Really? I use to drive over 200 days a year. What happens when I arrive somewhere? I pick you up with a limousine. I take you to a gourmet restaurant. I don't want to go to a gourmet restaurant when I come home with my wife. I go home or because of some similar stuff. But people know us there. 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. in the. in the Ritz here would have said to you, "My gosh, please forgive me. I messed up." And. I would have moved on. There you are. By the way, I would have moved on. The moment, if you would have just came up. 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 with the environment. But that's what we. what we certified earlier, we talked about that. Every employee on a. on a problemless solution. We certified every employee. 24,000 employees around the world. And it's the first thing is you. you listen to the complaint. You listen. Then you show empathy. And then you apologize as if it was your own. But you own it. And then you make our demands. And 50% is not an amend. A situation like that, we will not. Of course, we will not charge you. Of course. We will not. give you a fee to present. No, of course, we will not charge you. Because we messed up. Yeah, forgive me. Yeah. And that's what it was. By the way, the guy that helped us out. His name was Juan. Very nice guy. He said, "Patrick, I told him, don't do it." The director of events was a guy named Chris. I won't say his last name. And the other guy that called us the next day, the director of 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. I was very turned off by that. I mean, 50%. It's. I could care less about the money. But it doesn't matter. It's just about the money. You know, all you have. So, again, that's the challenge, right? A brand. If the existing founder, driver, CEO, doesn't run. Customers service properly. Starbucks. Highers 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 and Brian Nichol. Yeah. Brian Nichol comes from Chipotle. He gets in. He changes the culture. Starbucks is back on the rise again. Yeah, yeah. One great leader can change a couple. Oh, of course. Of course. Because you. As a leader, you establish the philosophy. It comes from you. Because people immediately blow you. A copy of you and it goes all the way down. And if you do something negative, they think you want that. And that's it. Or standards are gone. That's why I say that you don't compromise standards. You understand as a leader. You understand as a citizen. But coming down all to a simple thing, I cannot expect my thousands of star buffs to each one be singly trained by me. But they all know. They all should know. Here's a standard. 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, the moral 13, and 20 days number 12 again. I love that disappointing finger. There's a bathroom, and when you use a restroom, right there, walk down here. And then it does it at four cars and you get lost. Yeah, versus somebody takes you there. And then we taught them, of course, you would take them then and say, you create a relationship. You say, have you tried our restaurant? Are you a hotel guest? Yes. Have you tried our restaurant? I hope you had a chance. If you're outside there, but 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, you're selling something. Yeah. What would you say is your biggest gift? Like, what's your superpower? Mine. Relentless. Relentless. Yeah. Would your wife say the same thing about you? She would say you're relentless. Probably. But in the positive way, take about marriage. It's the same thing. What's your high intent? When I got married, before I got married, I picked a summer wife and I was so much in love. I mean, come on. I mean, young man, you look. Wow. Wow. This beautiful, wonderful human being and we're going to get married. And then as I read 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 with 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. 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 kids. Raising kids. Two things we wanted. One to accomplish. My wife and I. And please forgive me, everybody. We want them to 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. Those are the key things that we worked on, prayed for, and were successful. Are they in the business you're in or no? No, not at all. 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. Yeah. That's great. Even family, you have to have objectives. My objective was to be in love, and I am in love with my wife. But I work on my mind. I drive into the drive, and the gate opens, 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 wanted for me. Secondly, I see the end of family happens, and that it will be the end of our civilization unquestionably, unquestionably, if our family goes. So I am sellers about what is marriage, work on it. I ask, in every speech, I ask the whole guy, guys in this room, when have you asked your wife last time how you can be a better husband? She'll tell you. I saw that in her. And after she cries, she will tell you. Did you guys ever have a moment where it didn't work out? Oh, sure. Many. And between, we're not, we're not, we didn't work out. But we were, we were like close, falling out of the fight. I'm not quite there, but we're there. There was a fight. Like, oh, yeah, that's sure. Yeah. How do you overcome that? Sure. Well, by sitting down and talking and, and admitting that you were wrong. It was, it was my, my wife was 14 years younger. So I married him 14, she's 26 and we have, have an argument and I start screaming. And she said, why do you scream? Why don't we talk about it? Maybe you're right. Oh, my God. She said that to you. And I said, here this kid is teaching me how to communicate. Good for her. Wow. And, and I, and I realized I didn't want to talk about what if I'm wrong? Wow. Yeah. Let's talk about it. Maybe you're right. Maybe you're right. Well, you guys have been married now. 47 years. 47 years, yeah. Unbelievable. Good for you. Oh, it's great. Good for your respect for doing that. What a great thing. Unbelievable. But I mean, look, look, look, what is this marriage? The, the, the only God ordained union, the greatest union is why wouldn't you work like crazy on it? Mm-hmm. And she was a partner with you while you're building, traveling, moving, all this stuff. Yeah, yeah. Yeah. Wow. I admire her for a, she, she raised children and I was on the road. And there too, I come back and said, here's what we're going to do. And she said, whoa, whoa, whoa, whoa. Here's what we have planned. And I had to learn in the beginning. So, well, when did he come? This is how. And he said, well, you weren't here. We had to make decisions. I had to learn to communicate it by, and respect decisions that are being made with much more input and points that I don't, wasn't even aware of. You were not there. Yeah. And that's, so, yeah. A couple of the questions before we wrap up, you want the Malcolm, Balridge, uh, uh, Baldrige, uh, 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 DC. Yeah. What is the significance of that? Well, it's a fantastic thing that the government did more intensely that happened during the, during the 80s when the Japanese became major competitors to us. They were taking over, they buying everything and controlling and product and cars and everything. No, we didn't make no material. When the, when the comments are promised that we have to study how to be more competitive with the Japanese, study the number one companies in the world, study the companies that have sustained leaders in their product for many years, why and so on, found commonalities and created a criteria. And afterwards said we have to find out who in America has comes close to that, so we can make it an example for other companies. So when you study and then apply, if you win the ball dish, you are obligated to open your company up for other companies come in and learn for a year free. Oh, wow. What a concept. Yeah. For a year? For free? Yeah. We had every Monday, 20, 30 companies there to learn. We created a learning center. Now I figured out how to make money on it. So we started the seven o'clock Monday mornings, so they had to check out and something, check in and something. So they still got to book the room. That's great. So companies would come and learn from us. If I'm mistaken. If I'm mistaken. Including Job, Steve Job, before they went into retail. I was about to just say Apple, Steve Jobs came for you. Yeah. Including for retail. Including this name was there many times and so on. And so people come in and learning what, how do we work the processes, the measurements, the process, the improvements and so on. And we were pretty good at that. As I said, our chin and manager was kind of best at the improvement, the elimination of process permanently. I tell one story in the book if you read it. Winns in the excellence in room service, room service, where we had for six years a complaint. I was a chin and manager of the first one, obviously. That was not a hotel. During my time at the complain 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 their process. I learned very carefully from the voltage office, how to do that. I had my first voltage meeting. Somebody said that. For the best hotel company in the world and I had a lot of complaints when somebody said, well, was 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 voltage 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 and why do you fall on the issue? I said, why? He said, you didn't understand the word I said. He knew it. I didn't. Why didn't you understand what he said? However, fishbowl announced a paratha charge and things like that. I said, what are they saying? I see. I got you. So he knew. Yeah. And 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 and Cornell and so on. Didn't you later on get a PhD or a doctorate from some school? What did an honorary doctorate? Yeah. Which school was it I gave you? I'm sorry. I said it was not. When you asked me names, I'm always, I always put me in the book. Johnson and Bales. OK. Got it. Very cool. Steve Jobs, what did he ask you when he was a little kind of question? He came in. I wasn't involved in teaching him at the time. I was in Asia at the time. But he came in to ask, how do we treat customer? What do you think make us successful? How do we make them successful? By saying hello. But-- 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 when we teach. The behavioral analysis tell you, you make a decision about somebody when you come with 10 feet. So how do we 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-- they have somebody staying there right away. Well-thrased. So say, welcome. Can I help? What does it take you? And we had learned that from the behavioral analysis. I worked with the behavioral analysis universe of Colorado and Frankfurt. They said, the decision is made about you. The moment when we make contact. That's why we thought you have-- when somebody comes with 10 feet. No matter what you do, you look at me and say, welcome. Don't say hi. When you say hi, we are equal. But if I say, welcome. And so-- and so-- and looking at you in the eye, I'm saying I respect you. 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 say, have a high. Don't say, OK. Say, my pleasure and so on. And three weeks later, this kid meets potentially the chairman of the board of Bank of England. And it works. And it works. That's what he saw. And that's what-- how we created the detail and being impressed by the look of it, have this positive in mind. We looked, by the way, it's very important for people to know, business, we looked at 400,000 common cards, beginning we had common cards, Chetty Power, analyzed them for us. Whenever the first-- - 400,000 common cards. - Yeah. - What does that mean? - Guess that common in their own-- - Oh, common cards, got it. - 400,000 common cards. - Yeah. - Got it. - They're not scientifically that important, they call in a much more scientific, by the way. But anyway, when I had them, I worked with Chetty Power, Dev Power was a friend, they talked them and analyzed them. And they came back and said, "100% without exception, 100% when the first count was excellent, never did a complaint for them." Positive subconscious. Whenever there was one negative in either reservation, domain, or from desk, always did complaints for them. Wow, I mean, wow. So I have to make sure that I'm at first contact. That's why when you worked in a risk account, 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 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, I knew, I knew I pushed the second one very well. - Time. - I knew I'm very well. And I knew Carter very well. Carter, in fact, after he was president, he had, later he had an apartment in the library was built, but before they were staying in the Ritz, in every morning, we were in shock, we were in shock every morning. - Oh, a buckhead in Atlanta, I got it, makes sense. And we've been shocking every morning, we come around the corner, people go to work, we say, "God morning, take a look, I'm going to work." Oh, good morning. Of course, security was running with us. - Yeah, you feel safe. - I knew them very well, of course, I had a little bit of a Clinton gave me their ward, I spent time with them. - I knew too. - And Bush won, gave me their ward. And Fort, Fort was an owner of one of our hotels. - Really? - So I knew it was interesting. - I knew it was several of them. - Very interesting, 'cause I can only imagine that everybody comes in. - Oh, wait, two questions before we wrap up. Patel Motel Group, what do you know about the Patel Motel? - I know. - Cartel that, you don't need them. 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. - No, no, I don't know much about them. - It's a very interesting story. I heard about them, but I don't know much. - Yeah, apparently they bring their families. 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 bucks a night, so others would stay over other hotels. And the next thing, that's how they build their empire. Apparently now they own 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. - Yeah, right, they're roughly 70% of all Indian motel owners. - Oh, Indian motel. - Third of all motels, owners in America are named Patel. - Yeah, well, there are a lot of Indian motel owners. They come in and that was an easy business going. They were having some cash to buy the motel and run it and then added, added, added. So a lot of Indian hotel owners here, yeah. - Yeah. - And 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 finalized in 2019. You built a lot of the hotels in Asia, and I think one or two is in Saudi, that you built. 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? - Yeah, we had one, about, one second. We're not owning, yes, they own stuff. - Operating, I told you, right. - One was in Europe and this is a little problem. When I left, they disassociated themselves, they were able, there was a clause to get out when I left. - Oh, I got it. - So they left, they're independent now. - Interesting. - This is a great hotel, by the way. - Interesting. - 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 and still the same thing. If you start a hotel, or 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, and at the time Hong Kong was a number one thing. Today, Singapore is equally important. You're still Hong Kong is okay, but it used to be the financial place where you, what had to be Singapore today, so in the key places. No, but my first hotel was Atlanta and then Debra Michigan and so on. And I had to still make it number one in the world. And we became number one in the world, you know. And I dealt, later my competition was for seasons, they were in London and in Tokyo and in New York and everywhere, and I was, no, no. We ended up being in Tokyo and so on, also. And when we opened Osaka, we were immediately at the best hotel in Japan. You know, I insisted wherever we are, we're number one. Period. And I dealt with the chin and manage, I believe, except that. Did you play sports as a kid? What does your competitive fire come from? Why are you still competitive? No, I don't know. Well, very competitive. Mom or dad, who's more competitive? Like, because you're very competitive. I think mom. Mom? Mom was competitive. Did mom and dad ever come to the States or know this thing? Oh yeah, oh yeah, yeah. What? You have to understand, when I started off, they were, they, my, but I think I'm a crampard, they all were embarrassed, I wonder if I can go to a hotel business. That's not what they did in Germany. You wonder if I have a technical shop. If I would have said Rufa, that's honorable. Overhooked that. That's honorable, but in a hotel. So my father thought I would work as a vet, I put a rest of my life and I was disappointed. But then of course, I had my successes, they were very proud. Do you ever take your girls back to the city where you grew up and 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 laughs at us much as I do. I said, I wouldn't have a house anymore. What's great about the city there now is a village. It's a village. It's a small village where you, like, like, she just was there for a couple of days, but my daughter and she, as she called me and said, I feel this peace again. I walk through the little village. It's dark and quiet, but I heard some people sing in the the clean club, it's rehearsing. And I heard some, and I said, in the peace that I come back in the house, it's a peace that I cannot find anywhere else. And we have, we feel that. We feel that is a, is a different life. But it's also, I grew up there. 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. I'm in the meantime, I'm American. I'm, 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? Well, the values, we had, we had a country, give you an opinion about it, and I hope the world is not going to be. We had a country that had clear values, a Judeo-Christian values. We didn't have to be believers, but we had Judeo-Christian values. Now, we have 350 million different values. Each one runs around because we said, we didn't insist. We gave up teaching those values. We gave up showing consequences 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. That's kind of silly. But that's what we have done. And so we are on the edge of one way or another. Every talk about socialism. And the people that talk about socialism don't even know what it is. I haven't had 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 socialist, include Cuba, but take Europe, take all of the Eastern European countries. For 70 years in socialism, communism, 70, and take Russia out of the equation for a moment. They are 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 70s, with other words, you eliminate thinking. And that's what we want. And that's what we look at. Well, we learned before that, and if we would still have to do Christian values, we wouldn't accept it in the first place. That's socialism. But we talk about it. Oh. I can say to you, America, where the hell are you going? We still-- oh, are we a cook? God shed its grace on these. Yes. But my goodness, we have to-- we should really worry right now. We should really be concerned. We should really do something. something. What should we do? We should go 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 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." But it is. I lived there for a while. For 80 years, yet I've worked every year for the same party. I am not thinking. We have to encourage that people think in our schools again, that at least they know a bit. What do you think about? You have to, again, high intent. Why do they march against moving illegals? Because they have no intents, they have no purpose themselves. They don't have purpose. So you look for a momentary purpose, which is gone. And then you are really helpless. The purpose, we have to teach people again, with purpose, high purpose. Purpose of value. Purpose for a great country. We 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. Those of us who lived it actually, I lived it. I went every year to visit my cousins in East Germany. The stories I can tell you are unbelievable. 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. My cousin, chief anesthesiologist in the number one hospital. I walk the sidewalks with outlight and with holes. In East Berlin, I walk to her apartment, this old stairway, when one ball hanging down, going into her apartment. She is a chief anesthesiologist. Her husband has this little technical magazine that he owns, that he does, that was lost ownership. In the apartment in the kitchen, they have plastic square with plastic curtains as their shower. Okay. That's how you live. But they have applied for another apartment. They average paid for another apartment is 10 years. Wow. They also have applied for a car six years ago, but it's not there yet. 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 you get creative? Now, the wall comes down. Four years later, I visit them. They have a new house by river with two Mercedes-Benz. They live in a free country where they can work. Make it. Make it win. What do you want? But it did work for that now. You cannot live in a free country in hope that somebody buys it for you. That is that you sentence yourself into that position. Or 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's the thing. And they were defined by the government. And somebody come out and decided to define themselves as winners in their winning. Yeah, good for them. I mean, yeah. I went there in '89. I lived there in '89. And Germany was, you guys in 1990, you won the World Cup. That's when the famous singer was Matthias Chaim. Was the song for them. Ish Brauchtisch. Ish Brauchtisch. Something like that. That's when David Hasselhoff was God. When Sat Eins was the channel. And you guys had a wheel of fortune called Rudy Frudy. Something like that. What it was called. The show with the girl. Half naked girl. And we were very weird. From Iran, you go there, like, wait a minute. What's going on with Germany? What's going on? Yeah. I had a great time in 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. 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 in a book as well. Horse, thank you so much for this. My pleasure. What's your having you on? I have gone through many sessions. It's how the discussion runs is always up to the interviewer. It was very easy talking to you. And I learned a lot. Thank you, sir. Thank you. Delighted. Every detail matters because presence speaks before you do. The future looks bright.