What Apple learned from a luxury hotel
Ritz-Carlton VP Diana Oreck leads a session for executives
Consulting firms bring in tens of billions of dollars a year, so there’s a lot of competition for that money. But increasingly, it’s not just among the large consulting firms. Companies like Disney and MTV are in the game too, further monetizing their brands and expertise by selling what they know to companies in a wide variety of unrelated industries.
This growing trend is on display at a Washington, DC hotel conference room. It looks like a typical presentation consultants give to execs, with PowerPoint slides and buzzwords, plus a side table with snacks and coffee. As this is the Ritz-Carlton Georgetown, they’re really nice snacks, including artfully-presented cookies and rich hot chocolate.
But Ritz-Carlton isn’t the mere location of an advisory meeting. It’s giving the advice, about customer service, talent management and more. And a wide variety of businesses are buying.
“We’ve had everybody, except other luxury hotel companies,” says Ritz-Carlton vice president Diana Oreck runs the company’s executive education and consulting. “Health care, financial, automotive, supermarkets, Internet companies.”
Years before, Oreck taught a class like this to a team from Apple. They created the retail store’s Genius Bar, which is an awful lot like a hotel concierge desk.
Clad in a necklace bearing the Ritz-Carlton lion and crown logo (elegant, though compliant with the company’s dress code, which frowns on flashy jewelry as distracting to the customer’s experience), she says the advisory arm is profitable and growing. Already trilingual from decades working in global hotels and resorts, Oreck is currently studying Mandarin as the consulting group moves ahead with plans to expand internationally.
Execs pay $5,500 plus travel and lodging expenses to attend the full three days of Ritz classes. That means a typical set of classes, offered many times a year, brings in a low six-figure sum to the hotel company. Some firms pay additional fees for customized advice and education that brings Ritz advisors to them.
It’s a nice side business that offers not only additional revenue, but also the opportunity for Ritz-Carlton to learn a little something from other industries. Having waves of high-level execs cozy up to the Ritz brand doesn’t hurt either. They’re also very desirable hotel clients.
Other companies doing this kind of work include Disney, which offers advice on creativity, innovation, leadership and service. MTV helps brands connect with Millennials through Viacom’s new consulting arm.
New York University management professor Anat Lechner previously worked at consulting heavyweight McKinsey & Company and still consults through her own firm alongside academic work. She says hiring non-traditional consultants can be a smart move bringing fresh perspective, but that firms also need to be careful in how they seek and use advice from advisors in a totally different industry. Non-traditional consulting has its skeptics, among them, of course, traditional consultants.
But for many who seek advice from these non-consultant consultants, the lack of industry-specific knowledge can be an asset, opening the door to innovation.
“I specifically sought out an industry other than mine,” says insurance company president Greg Howes. “This really forces people to think outside the traditional metrics and benchmarks of their industry and I think it really helps you improve your service.”
The luxury hotel business would appear to have little in common with the insurance industry, but Howes sees parallels and is putting what he learns from Ritz to work. He has sent employees to stay at Ritz-Carlton hotels as a lesson on service. And his company’s website promises “Concierge Insurance.”
There’s a roaring fire going in the lobby of the Ritz-Carlton Georgetown. Downstairs in a conference room, execs are getting advice. But the Ritz isn’t the mere meeting location. It’s giving the advice, about customer service, talent management and more. Ritz vice president Diana Oreck says a wide variety of businesses are buying.
Diana Oreck: We’ve had everybody, except other luxury hotel companies. Health care, financial, automotive. So we learn from them as they learn from us
Apple took a Ritz class like the one she’s teaching today. Oreck taught the team that created the store’s Genius Bar, inspired by a hotel concierge desk. Execs pay thousands apiece for a few days of classes, which means Ritz-Carlton grosses in the low six figures for a typical group, done many times a year. Big companies pay to bring Ritz consultants to them.
Others going after consulting business include Disney and MTV. NYU management professor Anat Lechner, a consulting veteran herself, says hiring non-traditional consultants can be smart. But there’s potential danger in taking advice from a totally different industry.
Anat Lechner: The risk will be in guaranteeing or insuring that the company that comes in has a deep knowledge of the space.
Back at the Ritz, insurance company president Greg Howes says lack of industry-specific knowledge can actually be an asset.
Greg Howes: I specifically sought out an industry other than mine. This really forces people to think outside the traditional metrics and benchmarks of their industry.
Non-traditional consulting has its skeptics, among them, of course, traditional consultants. But it’s growing, meaning any company just might be a consulting company too. In Washington, I'm Mark Garrison, for Marketplace.