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“Cost cutting means you are taking away something from the customer..

“Cost cutting means you are taking away something from the customer. Efficiency means you are taking time and money out of your own processes without impacting the outcome.” Horst Schulze


The last of the 4 supreme objectives central to the The Ritz-Carlton Hotel Company, L.L.C.'s success that cofounder and former global President and COO Horst Schulze shared with us last week was "to keep working towards more and more efficiency."


In his book Excellence Wins and during our Tenfold Australia Masterclass Horst was quick to clarify that too often companies get the pursuit of efficiency mixed up with cost cutting and customer experience suffers.


Efficiency should not take away from the customer experience.


Whilst staying at one of my favourite hotels over the long weekend I was looking forward to picking up my free newspaper after breakfast and taking it back to my room to read. However there were no papers to be found.


The staff had new uniforms and the hotel had a new logo, a possible sign of new management, as was the noticeably absent free newspaper.


Management's efforts to be more "efficient" had directly impacted me. Not something that would have ever happen if Mr. Schulze was running the show.


In your pursuit for efficiency don't forget the first supreme objective for all organisations in all industry's according to Horst is "keep the customer".


Cost cutting is pointless if you have no customers to serve!