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W ha t Busin ess A re W e In?

W ha t Service Pro cesses C a n Be U sed in O ur O pera tio n? (PRO CESS)

W ho A re O ur C usto m ers a nd H o w Sh o u ld W e Rela te to Th em ?

W ha t Price Sho u ld W e C h arge? (PRICE AN D O TH ER U SER O U TLAYS)

H o w to C o m m u nica te? (PRO M O TIO N & EDU CATIO N , PH YSICAL EV IDEN CE)

O ptio ns fo r D e livery? (PLACE, CYBERSPACE & TIM E, PH YSICAL EVIDEN CE)

H o w C a n W e Ba la nce ?PRO DU CTIV ITY AN D Q U ALITY

W ha t Sh o u ld be the C o re a nd Supp lem en ta ry Elem en ts o f O u r Service Pro duct? (PRO DU CT ELEM EN TS)

H o w Sh o u ld W e M a tch D em a nd a nd Pro ductive C a pa city?

W ha t A re A ppro pria te Ro les fo r Peo p le a nd Techno lo gy? (PEO PLE)

H O W CAN O U R FIRM A CH IEVE SERVICE LEADERSH IP?

Do we have a coherent vision for the future? Is this vision defined and driven by a strong, effective

leader (or leadership team)? Do our marketing strategies enable us to beat the

competition and create profits? Are our services recognized for superior value and

quality? Are we known for superior operations and innovative

use of technology? Are our employees loyal, productive, proactive, and

customer oriented? Do we have a reputation as an outstanding place to

work? Are we viewed as an ethical organization?

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Loya lty

Service Q ua lity

Productivity& O utputQ ua lity

EM PLO YEES

C apability

Satisfaction

ServiceValue

CU STO M ERS

Satisfaction Lo ya lty

RevenueG row th

Profitabilitiy

O pera ting stra tegy a ndservice delivery system

Serviceconcept

Ta rget M a rket

Interna l Externa l

1. Customer loyalty drives profitability and growth

2. Customer satisfaction drives customer loyalty

3. Value drives customer satisfaction

4. Employee productivity drives value

5. Employee loyalty drives productivity

6. Employee satisfaction drives loyalty

7. Internal quality drives employee satisfaction

8. Top management leadership underlies chain’s success

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Source: Heskett et al

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Customers

The Marketing Imperative

Human Resources Imperative

The Operations Imperative

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Defining Three Functional Imperatives

Marketing imperative •Target “right” customers and build

relationships•Offer solutions that meet their needs•Define quality package with competitive

advantage

Operations imperative•Create, deliver specified service to target

customers•Adhere to consistent quality standards•Achieve high productivity to ensure

acceptable costs

Human resource imperative•Recruit and retain the best employees for

each job •Train, motivate them to work well together•Achieve both productivity and customer

satisfaction

Transfers and cross training

Cross functional taskforces

New tasks and new people

Process management teams

Gain-sharing programs

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Service Losers› Only survive because of lack of viable alternatives in

marketplace› Delivering service seen as necessary evil

Service Nonentities› Traditional operations mindset--achieve cost savings

by standardization› Rudimentary marketing, often emphasizing price

discounts› Philosophy of “If it isn’t broken, don’t fix it”

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Service Professionals› Clear positioning strategy, pricing based on value› Operations driven by customer satisfaction,

competitive orientation› Employees are close to customers

SERVICE LEADERSSERVICE LEADERS› Crème de la crème of their industries› Names synonymous with providing outstanding

service, creating customer delight› Innovative in each functional area of management

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Create sense of urgency to develop impetus for change

Put together strong team to direct process Create appropriate vision of where organization must

go Communicate new vision broadly Empower employees to act on vision Produce sufficient short term results to create

credibility Build momentum to tackle tougher problems Anchor new behaviors in the organizational culture

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Source: John Kotter

Vision, charisma, persistence, high expectations, expertise, empathy, persuasiveness, integrity

Ability to visualize quality of service as foundation for competing

Believe in people who work for the firm, make good communications a priority

Possess a natural enthusiasm for the business, teach it to others, pass on nuances/secrets/crafts of operating

Cultivate leadership qualities of others in organization

Use values to navigate through difficult times

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Shared perceptions or themes regarding what is important

Shared values about what is right and wrong Shared understanding about what works and

what doesn’t Shared styles of working and relating to

others Shared assumptions and beliefs about why

these things are important

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Climate: Tangible working environment atop underlying culture

Influential factors for employees include:› flexibility: feeling of freedom to innovate, › sense of responsibility › level of standards that people set› perceived aptness of rewards› clarity about mission and values› level of commitment to a common purpose

Climate for service: shared perceptions concerning practices, procedures, types of behaviors that:› are expected concerning customer service, service quality› bring rewards for those who perform them well

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Ineffective Coercive leaders (“Do what I tell you”) Pacesetting leaders (“Do as I do, now”)

(unless team is highly motivated and competent)

Effective Authoritative leaders (“Come with me”) Affiliative leaders (“People come first”) Democratic leaders (“What do you think?”) Coaching leaders (“Try this”)

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Source: Daniel Goleman