What Apple learned from a luxury hotel
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.”
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