The Four Seasons: Learning the French Way
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Individual Case Study #1The Four Seasons: Learning the French WayBy the 1990s Four Seasons was experiencing tremendous growth. From 1996 to 2000, operating margins increased from 58.5% to 67.9% with a compound rate of 22.5% per year increase. Unlike its competition, each hotel is tailor made to its location. While the Ritz Carlton emphasizes a uniform look, the Four Seasons emphasizes local architecture and styles with uniform service. By the end of the 1990s Four Seasons was embarking on opening their first luxury hotel in Paris, the George V. Over $125 million was spent renovating the property over two years but they still managed to open in December of 1999 at 100% of effective occupancy. During this process they faced several challenges, both external and internal, but managed to complete the project in a way which not only met the standards of Four Seasons management but retained its French origins. Four Seasons has done many things that have led to their success over the past 30 years from maintaining a strong corporate culture while ensuring flexibility where needed to meet local cultural needs. What has made Four Seasons successful over the last 30 years? There are several key reasons why Four Seasons has been successful over the past 30 years. First and foremost, they pay attention to the needs of the market. In the case of the George V, French culture mandated that a renowned French chef would be required for the public to view to hotel restaurant in a positive light. Four Seasons adapted, and employed a local chef with two Michelin stars. Typically Four Seasons brings in a “Four Seasons Chef” from elsewhere however by knowing that this would be seen as a repudiation of French culture, they wisely decided against it. This created a few smaller problems between the chef and the Four Seasons style of service but the hotel management was able to work through those differences.In addition, they took French culture and used it to their advantage. When dealing with unions, French managers and employees tend to dislike one another. One manager said, “In France one still finds a dose of antagonism between employees and management.” However, when Four Seasons brought in Le Calvez as their manager, he started off by creating a cordial relationship with the local unions. This took many people by surprise and helped change the perception of Four Seasons as a brutish North American company. After a while, they realized that despite the strong labor laws, union disputes weren’t so bad because they were predictable and it was possible to avert any crises from emerging. Furthermore, over the past 30 years Four Seasons has consistently emphasized local architecture in their hotels as opposed to uniformity. Each Four Seasons hotel is unique to the city in which it resides. The same is not true of their competition. Most other luxury hotel chains like the Ritz Carlton employ a uniform look that is consistent from location to location. By being more flexible with their décor and atmosphere, Four Seasons was able to adapt more effectively to the local markets for their hotels which has enabled them to consistently gain market share over their competition.
Does corporate culture play a role in Four Seasons success? If so, how and why? Corporate culture also plays a key role in Four Seasons’ success. By having a strong corporate culture, Four Seasons can keep all of its employees working towards the same goal which is preferable to fragmentation. According to a recent survey, 91% of companies with a strong sense of purpose and corporate culture also have strong financial performance. Therefore it is important for a company to have a unified direction in order for it to remain profitable.In the case of the George V, Four Seasons leveraged their culture in a way that changed not only the hotel itself but the French hotel industry. Four Seasons made several revolutionary decisions like advertising salaries to attract employees, hiring women to work at the concierge, and they had their employees smile more. These cultural changes along with the S.E.R.V.I.C.E. acronym (Exhibit 4), greatly improved the level of service provided by the staff and “Americanized” the culture. Initially the French balked at such improvements however by appointing people who believed in those changes to key positions, they were able to affect the change. The French tend to follow the trend rather than lead and so once Four Seasons had established that corporate cultural influence, the rest of the staff began to follow suit.Another effective cultural tool was adherence to the Golden Rule. The French hospitality industry functioned without regard to this philosophy before Four Seasons expanded to the market. Before Four Seasons took over the property, managers would sometimes be seated ahead of guests at the hotel restaurant. This changed once Four Seasons took over, everyone was to be treated as equals under this rule. No one received privileged treatment. Employees were also given several uniforms so they could feel dignified in their appearance. It is this philosophy that helped generate additional revenue by bringing in more customers but also moved Four Seasons onto Forbes list of the 100 best companies to work for.One of the most effective corporate cultural tools was the Task Force implementation. With each new hotel that Four Seasons operates, they send in a specialist team of about 35 people to “Four Seasonize” the staff and ensure a smooth opening. The case of the George V was no different. This specialized group was able to establish norms and communicate information to the new staff transferring the common corporate culture to the French managers. The Task Force functions like a symbolic human resource that promotes allegiance to the firm rather than just an individual hotel. This led managers to make the staff to be Four Seasons staff rather than George V staff and effectively demonstrated the Four Seasons values and expectations to any newcomers.