Many articles exhort service firm managers to empower workers and first-line supervisors, exploit technology, focus on the customer, and, above all, provide outstanding service. This article proposes a framework to help you evaluate your company’s competitive standing in each of these areas. It discusses four types of companies on a continuum, from the company that is simply “available for service” to the firm that delivers world class service. The authors focus on operations, the function that controls the service encounter, and apply the manufacturing strategy paradigm to services as a means of implementing change.
1. J. Heskett, Managing in the Service Economy (Boston: Harvard Business School Press, 1986), p. 1.
2. Heskett (1986), p. 2.
3. There are, of course, other dimensions by which services differ from manufacturing, particularly at the point of encounter. Services are intangible, perishable (they can’t be inventoried), and heterogeneous (no two are exactly alike), and they are produced and consumed simultaneously. See:
W.E. Sasser, R.P. Olsen, and D.O. Wyckoff, Management of Services Operations, Text and Cases (New York: Allyn & Bacon, 1978), pp. 8–18.
4. S.C. Wheelwright and R. H. Hayes, “Competing through Manufacturing,” Harvard Business Review, January–February 1985, pp. 99–109.
5. At this point in the model’s development, positioning of a firm within it must depend upon managerial judgment rather than a formal scoring methodology.
6. R. Hill, “How the Business Traveler Changed the Economics and the Bottom Line at SAS,” International Management, February 1985, pp. 61–68.
7. One of the authors of this article had the unique experience of leading a service quality seminar for 103 members of the LAPD, including the chief, in June. The seminar focused on people as customers of police services.
8. See B. Ives and R.O. Mason, “Can Information Technology Revitalize Your Customer Service,” Academy of Management Executives 4 (1990): 52–69; and
R.E. Walton, Up and Running, Integrating Information Technology and the Organization (Boston: Harvard Business School Press, 1989).
9. G. Hector, “It’s Banquet Time for Bank of America,” Fortune, 3 June 1991, pp. 69–78.
10. W. Skinner, “The Focused Factory,” Harvard Business Review, May–June 1974, pp. 113–121.
11. W. Skinner, “Manufacturing—The Missing Link in Corporate Strategy,” Harvard Business Review, May–June 1969, p. 141.
12. R.B. Chase, “Where Does the Customer Fit in a Service Operation?” Harvard Business Review, November–December 1978, pp. 137–142.
13. Example provided by Dr. John Bateson of the MAC consulting group.
14. The reasons: Attentive customer service and free drinks and movies provided by foreign carriers. While U.S. airlines carp that “foreign service isn’t really better, just different from what they usually get,” passengers are voting with their seats, resulting in a two percent drop in one year in market share for U.S. carriers in trips between the U.S. and Europe. See:
“Patrons Are Defecting to Foreign Carriers,” Wall Street Journal, 15 May 1990, p. B2.