The Ordinary Heroes of the Taj (PDF)

HBR.ORG DECemBER 2011 reprint R1112J...

HBR.ORG DECemBER 2011 reprint R1112J t os rP THE GLOBE The Ordinary yo op Heroes of the Taj tC How an Indian hotel chain’s organizational culture nurtured employees who were willing to risk their lives to save their guests by Rohit Deshpandé and Anjali Raina No Do This document is authorized for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860  The Globe t os rP yo op Photo Caption goes here tC The Ordinary Heroes Of the Taj No How an Indian hotel chain’s On November 26, 2008, Harish Manwani, the first gunshots from terrorists who were organizational culture chairman, and Nitin Paranjpe, CEO, of Hin- storming the Taj. dustan Unilever hosted a dinner at the Taj The staff quickly realized something nurtured employees who Mahal Palace hotel in Mumbai (Taj Mum- was wrong. Jagad had the doors locked were willing to risk their lives bai, for short). Unilever’s directors, senior and the lights turned off. She asked ev- to save their guests by Rohit executives, and their spouses were bidding eryone to lie down quietly under tables Do Deshpandé and Anjali Raina farewell to Patrick Cescau, the CEO, and and refrain from using cell phones. She welcoming Paul Polman, the CEO-elect. insisted that husbands and wives separate About 35 Taj Mumbai employees, led by to reduce the risk to families. The group Photography: Getty Images a 24-year-old banquet manager, Mallika stayed there all night, listening to the ter- Jagad, were assigned to manage the event rorists rampaging through the hotel, hurl- in a second-floor banquet room. Around ing grenades, firing automatic weapons, ABOVE Employees and guests of 9:30, as they served the main course, they and tearing the place apart. The Taj staff the Taj Mumbai hotel are rescued as fire engulfs the top floor on heard what they thought were fireworks kept calm, according to the guests, and November 26, 2008. at a nearby wedding. In reality, these were constantly went around offering water and 2 This Harvard Business document Review December is authorized 2011 for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860  For article reprints call 800-988-0886 or 617-783-7500, or visit hbr.org The Taj Approach to HR t os Seek fresh recruits rather Recruit from high schools Focus more on hiring than lateral hires. and second-tier business people with integrity and schools rather than colleges devotion to duty than on  ire from small towns H and premier B-schools. acquiring those with talent and semiurban areas, and skills. not metros. Induct managers who seek rP  a single-company career Train workers for 18 and will be hands-on. months, not just 12. yo asking people if they needed anything else. of firefighters amid the chaos. His wife and safe locations such as kitchens and base- Early the next morning, a fire started in the two young children were in a sixth-floor ments. Telephone operators stayed at their hallway outside, forcing the group to try to suite, where the general manager tradi- posts, alerting guests to lock doors and climb out the windows. A fire crew spot- tionally lives. Kang thought they would not step out. Kitchen staff formed human ted them and, with its ladders, helped the be safe, but when he realized that the ter- shields to protect guests during evacua- trapped people escape quickly. The staff rorists were on the upper floors, he tried tion attempts. As many as 11 Taj Mumbai evacuated the guests first, and no casual- to get to his family. It was impossible. By employees—a third of the hotel’s casual- ties resulted. “It was my responsibility…. midnight the sixth floor was in flames, and ties—laid down their lives while helping op I may have been the youngest person in there was no hope of anyone’s surviving. between 1,200 and 1,500 guests escape. the room, but I was still doing my job,” Kang led the rescue efforts until noon the At some level, that isn’t surprising. One Jagad later told one of us. next day. Only then did he call his parents of the world’s top hotels, the Taj Mumbai to tell them that the terrorists had killed is ranked number 20 by Condé Nast Trav- Elsewhere in the hotel, the upscale Japa- his wife and children. His father, a retired eler in the overseas business hotel category. nese restaurant Wasabi by Morimoto was general, told him, “Son, do your duty. Do The hotel is known for the highest levels of tC busy at 9:30 pm. A warning call from a ho- not desert your post.” Kang replied, “If quality, its ability to go many extra miles to tel operator alerted the staff that terrorists it [the hotel] goes down, I will be the last delight customers, and its staff of highly had entered the building and were heading man out.” trained employees, some of whom have T toward the restaurant. Forty-eight-year- worked there for decades. It is a well-oiled old Thomas Varghese, the senior waiter hree years ago, when armed ter- machine, where every employee knows at Wasabi, immediately instructed his 50- rorists attacked a dozen locations his or her job, has encyclopedic knowledge odd guests to crouch under tables, and in Mumbai—including two luxury about regular guests, and is comfortable he directed employees to form a human hotels, a hospital, the railway station, a res- taking orders. No cordon around them. Four hours later, se- taurant, and a Jewish center—they killed as Even so, the Taj Mumbai’s employees curity men asked Varghese if he could get many as 159 people, both Indians and for- gave customer service a whole new mean- the guests out of the hotel. He decided to eigners, and gravely wounded more than ing during the terrorist strike. What created use a spiral staircase near the restaurant to 200. The assault, known as 26/11, scarred that extreme customer-centric culture of evacuate the customers first and then the the nation’s psyche by exposing the coun- employee after employee staying back to hotel staff. The 30-year Taj veteran insisted try’s vulnerability to terrorism, although rescue guests when they could have saved that he would be the last man to leave, but India is no stranger to it. The Taj Mumbai’s themselves? What can other organizations he never did get out. The terrorists gunned burning domes and spires, which stayed do to emulate that level of service, both in him down as he reached the bottom of ablaze for two days and three nights, will times of crisis and in periods of normalcy? Do the staircase. forever symbolize the tragic events of 26/11. Can companies scale up and perpetuate ex- During the onslaught on the Taj Mum- treme customer centricity? When Karambir Singh Kang, the Taj Mum- bai, 31 people died and 28 were hurt, but Our studies show that the Taj employ- bai’s general manager, heard about the at- the hotel received only praise the day af- ees’ actions weren’t prescribed in manuals; tacks, he immediately left the conference ter. Its guests were overwhelmed by em- no official policies or procedures existed he was attending at another Taj property. ployees’ dedication to duty, their desire to for an event such as 26/11. Some contextual He took charge at the Taj Mumbai the mo- protect guests without regard to personal factors could have had a bearing, such as ment he arrived, supervising the evacua- safety, and their quick thinking. Restau- India’s ancient culture of hospitality; the tion of guests and coordinating the efforts rant and banquet staff rushed people to values of the House of Tata, which owns This document is authorized for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. CopyingDecember or posting 2011 is an Harvard Business infringement Review 3 of copyright. [email protected] or 617.783.7860  The Globe t os  nsure that employees E Insist that employees Use timely recognition, can deal with guests without place guests’ interests not money, as reward. consulting a supervisor. over the company’s.  nsure that recognition E Teach people to improvise Have incumbent managers, comes from immediate rather than do things by not consultants, conduct supervisors, not top rP the book. training. management.  yo the Taj Group; and the Taj Mumbai’s his- ies and towns such as Pune (not Mumbai); and neediness (how badly does his family torical roots in the patriotic movement for Chandigarh and Dehradun (not Delhi); need the income from a job?). a free India. The story, probably apocry- Trichirappalli and Coimbatore (not Chen- The chosen few are sent to the nearest of phal, goes that in the 1890s, when security nai); Mysore and Manipal (not Bangalore); six residential Taj Group skill-certification men denied J.N. Tata entry into the Royal and Haldia (not Calcutta). According to se- centers, located in the metros. The trainees Navy Yacht Club, pointing to a board that nior executives, the rationale is neither the learn and earn for the next 18 months, stay- apparently said “No Entry for Indians and larger size of the labor pool outside the big ing in no-rent company dormitories, eating Dogs,” he vowed to set up a hotel the likes cities nor the desire to reduce salary costs, free food, and receiving an annual stipend op of which the British had never seen. The although both may be additional benefits. of about 5,000 rupees a month (roughly Taj opened its doors in 1903. The Taj Group prefers to go into the hin- $100) in the first year, which rises to 7,000 Still, something unique happened on terland because that’s where traditional rupees a month ($142) in the second year. 26/11. We believe that the unusual hiring, Indian values—such as respect for elders Trainees remit most of their stipends to training, and incentive systems of the Taj and teachers, humility, consideration of their families, because the Taj Group pays Group—which operates 108 hotels in 12 others, discipline, and honesty—still hold their living costs. As a result, most work tC countries—have combined to create an or- sway. In the cities, by contrast, young- hard and display good values despite the ganizational culture in which employees sters are increasingly driven by money, are temptations of the big city, and they want are willing to do almost anything for guests. happy to cut corners, and are unlikely to be to build careers with the Taj Group. The This extraordinary customer centricity loyal to the company or empathetic with company offers traineeships to those who helped, in a moment of crisis, to turn its customers. exhibit potential and haven’t made any employees into a band of ordinary heroes. The Taj Group believes in hiring young egregious errors or dropped out. To be sure, no single factor can explain the people, often straight out of high school. One level up, the Taj Group recruits employees’ valor. Designing an organiza- Its recruitment teams start out in small supervisors and junior managers from ap- No tion for extreme customer centricity re- towns and semiurban areas by identifying proximately half of the more than 100 hotel-­ quires several dimensions, the most critical schools that, in the local people’s opinion, management and catering institutes in In- of which we describe in this article. have good teaching standards. They call dia. It cultivates relationships with about 30 on the schools’ headmasters to help them through a campus-connect program under A Values-Driven choose prospective candidates. Contrary to which the Taj Group trains faculty and fa- Recruitment System popular perception, the Taj Group doesn’t cilitates student visits. It maintains about 10 The Taj Group’s three-pronged recruit- scout for the best English speakers or math permanent relationships while other insti- ing system helps to identify people it can whizzes; it will even recruit would-be drop- tutes rotate in and out of the program. Al- train to be customer-centric. Unlike other outs. Its recruiters look for three character though the Taj Group administers a battery Do companies that recruit mainly from In- traits: respect for elders (how does he treat of tests to gauge candidates’ domain knowl- dia’s metropolitan areas, the chain hires his teachers?); cheerfulness (does she per- edge and to develop psychometric pro- most of its frontline staff from smaller cit- ceive life positively even in adversity?); files, recruiters admit that they primarily The Taj Group prefers to recruit employees from the hinterland because that’s where traditional Indian values still hold sway. 4 This Harvard Business document Review December is authorized 2011 for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860  For article reprints call 800-988-0886 or 617-783-7500, or visit hbr.org t os assess the prospects’ sense of values and employees will usually have to deal with at moments of truth. Trainees are assured desire to contribute. What the Taj Group guests without supervision—that is, em- that the company’s leadership, right up to looks for in managers is integrity, along ployees must know what to do and how to the CEO, will support any employee deci- rP with the ability to work consistently and do it, whatever the circumstances, without sion that puts guests front and center and conscientiously, to always put guests first, needing to turn to a supervisor. that shows that employees did everything to respond beyond the call of duty, and to One tool the company uses is a two- possible to delight them. work well under pressure. hour weekly debriefing session with every According to senior executives, this shift For the company’s topmost echelons, trainee, who must answer two questions: in perspective changes the way employees the Taj Group signs up 50 or so manage- What did you learn this week? What did respond to situations. Moreover, it alters ment trainees every year from India’s you see this week? The process forces the extent to which they act—and believe second- and third-tier B-schools such as trainee managers to absorb essential con- they can act—in order to please guests. A yo Infinity Business School, in Delhi, or Sym- cepts in the classroom, try out newfound senior executive told us that when an irate biosis Institute, in Pune, usually for func- skills in live settings, and learn to negotiate guest swore he would never stay at the Taj tions such as marketing or sales. It doesn’t the differences between them. This helps Mumbai again because the air conditioner recruit from the premier institutions, as managers develop the ability to sense and hadn’t worked all night, a trainee manager the Taj Group has found that MBA gradu- respond on the fly. offered him breakfast on the house and ates from lower-tier B-schools want to The Taj Group also estimates that a 24- provided complimentary transportation to build careers with a single company, tend hour stay in a hotel results in between 40 the airport. She also ensured that someone to fit in better with a customer-centric cul- and 45 guest-employee interactions, which from the next Taj property at which he was op ture, and aren’t driven solely by money. A it labels “moments of truth.” This leads to booked picked him up from the airport. Did hotelier must want, above all else, to make the second key assumption underlying its the trainee spend a lot of the company’s other people happy, and the Taj Group programs: It must train employees to man- money on a single guest? Yes. Did she have keeps that top of mind in its recruitment age those interactions so that each one cre- to ask for permission or justify her actions? processes. ates a favorable impression on the guest. No. In the Taj Group’s unwritten rule book, To ensure that result, the company imparts all that mattered was that the employee did tC Training Customer three kinds of skills: technical skills, so that her best to mollify an angry guest so that he Ambassadors employees master their jobs (for instance, would return to the Taj. The Taj Group has a long history of training wait staff must know foods, wines, how to The Taj Group’s training programs not and mentoring, which helps to sustain its serve, and so on); grooming, personality, only motivate employees, but they also customer centricity. The practice began in Trainees are assured that the company’s the 1960s, when CEO Ajit Kerkar—who per- sonally interviewed every recruit, includ- ing cooks, bellhops, and wait staff, before leadership, right up to the CEO, will No employing them—mentored generations of employees. The effort has become more process-driven over time. support any employee decision that Most hotel chains train frontline em- ployees for 12 months, on average, but the puts guests front and center. Taj Group insists on an 18-month program. Managers, too, go through 18 months of and language skills, which are hygiene fac- create a favorable organizational culture. classroom and on-the-job operations train- tors; and customer-handling skills, so that H.N. Shrinivas, the senior vice president of ing. For instance, trainee managers will employees learn to listen to guests, under- human resources for the Taj Group, notes: Do spend a fortnight focusing on service in stand their needs, and customize service or “If you empower employees to take deci- the Taj Group’s training restaurant and the improvise to meet those needs. sions as agents of the customer, it energizes next 15 days working hands-on in a hotel In a counterintuitive twist, the Taj them and makes them feel in command.” restaurant. Group insists that employees must act as That’s in part why the Taj Group has won The Taj Group’s experience and re- the customer’s, not the company’s, ambas- Gallup’s Great Workplace Award in India for search has shown that employees make sadors. Employees obviously represent the two years in a row. 70% to 80% of their contacts with guests chain, but that logic could become counter- Incumbent managers conduct all the in an unsupervised environment. Train- productive if they start watching out for the training in the Taj Group, which uses few ing protocols therefore assume, first, that hotel’s interests, not the guests’, especially consultants. This allows the chain to impart This document is authorized for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. CopyingDecember or posting2011 is an Harvard Business infringement Review 5 of copyright. [email protected] or 617.783.7860  The Globe For article reprints call 800-988-0886 or 617-783-7500, or visit hbr.org t os not just technical skills but also the tacit knowledge, values, and elements of orga- Many guests were an extraordinary service culture, but you may still wonder if the response of the Taj nizational culture that differentiate it from panic-stricken, Mumbai’s employees to 26/11 was unique. but the Taj rP the competition. Every hotel has a training Perhaps. Perhaps not. manager to coordinate the process, and At about 9:30 am on December 26, given that Taj properties impart training only in the areas in which they excel, they staff members 2004, a tsunami rippled across the Indian Ocean, wreaking havoc on coastal popula- vie with one another to become training grounds. remained calm tions from Indonesia to India, killing about 185,000 people. Among those affected was Like all the other companies in the and optimistic. the island nation of the Maldives, where House of Tata, the Taj Group uses the Tata tidal waves devastated several resort hotels, yo Leadership Practices framework, which including two belonging to the Taj Group: lays out three sets of leadership competen- pliments from colleagues, and their own the Taj Exotica and the Taj Coral Reef. cies that managers must develop: leader- suggestions. Crucially, at the end of each As soon as the giant waves struck, guests ship of results, business, and people. Every day, a STARS committee comprising each say, Taj Group employees rushed to every year 150 to 200 managers attend training hotel’s general manager, HR manager, train- room and escorted them to high ground. sessions designed to address those com- ing manager, and the concerned depart- Women and children were sheltered in petencies. The company thereafter tailors ment head review all the nominations and the island’s only two-story building. Many plans on the basis of individuals’ strengths suggestions. The members of this group de- guests were panic-stricken, believing that op and weaknesses, and it hires an external cide whether the compliments are evidence more waves could follow, but staff mem- coach to support each manager on his or her of exceptional performance and if the em- bers remained calm and optimistic. leadership journey. ployee’s suggestions are good. Then they No more waves arrived, but the first one The Taj Group expects managers to lead post their comments on the company’s in- had inundated kitchens and storerooms. by example. For instance, after a day of tranet. If the committee doesn’t make a de- A Taj Group team, led by the head chef, im- work, the general manager of every hotel cision within 48 hours, the employee gets mediately set about salvaging food sup- tC is expected to be in the lobby in the eve- the points by default. plies, carrying cooking equipment to high nings, to welcome guests. That might seem By accumulating points, Taj Group em- ground, and preparing a hot meal. House- old-fashioned, but that’s the Taj tradition of ployees aspire to reach one of five perfor- keeping staff retrieved furniture from the hospitality. mance levels: the managing director’s club; lagoon, pumped water out of a restaurant, the COO’s club; and the platinum, gold, and and restored a semblance of normalcy. De- A Recognition-as- silver levels. Departments honor workers spite the trying circumstances, lunch was Reward System who reach those last three levels with gift served by 1:00 pm. Underpinning the Taj Group’s rewards sys- vouchers, STARS lapel pins, and STARS The two Taj hotels continued to impro- No tem is the notion that happy employees shields and trophies, whereas the hotel be- vise for two more days until help arrived lead to happy customers. One way of ensur- stows the COO’s club awards. At an annual from India, and then they evacuated all the ing that outcome, the organization believes, organization-wide celebration called the guests to Chennai in an aircraft that the Taj is to show that it values the efforts of both Taj Business Excellence Awards ceremony, Group had chartered. There were no ca- frontline and heart-of-the house employ- employees who have made the manag- sualties and no panic, according to guests, ees by thanking them personally. These ing director’s club get crystal trophies, gift some of whom were so thankful that they expressions of gratitude, senior executives vouchers, and certificates. later volunteered to help rebuild the is- find, must come from immediate supervi- According to independent experts, the land nation. These Taj Group employees sors, who are central in determining how Taj Group’s service standards and customer-­ behaved like ordinary heroes, just as their Do employees feel about the company. In addi- retention rates rose after it launched the colleagues at the Taj Mumbai would four tion, the timing of the recognition is usually STARS program, because employees felt years later. That, it appears, is indeed the more important than the reward itself. that their contributions were valued. In fact, Taj Way.  HBR Reprint R1112J Using these ideas, in 2001 the Taj Group STARS won the Hermes Award in 2002 for created a Special Thanks and Recognition the best human resource innovation in the Rohit Deshpandé is the Sebastian S. Kresge System (STARS) that links customer delight global hospitality industry. Professor of Marketing and the faculty to employee rewards. Employees accumu- chair of the Global Colloquium for Participant- Centered Learning at Harvard Business School. late points throughout the year in three The Taj Group’s hiring, training, and rec- Anjali Raina is the executive director of the HBS domains: compliments from guests, com- ognition systems have together created India Research Center in Mumbai. 6This Harvard Business document Review December is authorized 2011 for educator review use only by SMITA CHAUDHRY, HE OTHER until Mar 2025. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860