SQ Lecture Eleven - Change Management and Service Leadership


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SQ Lecture Eleven - Change Management and Service Leadership

  1. 1. JAN 2013 Semester1 Service Quality MKTG 1268 Lecture Eleven Organizing for Change Management and Service Leadership (Chapter 15)
  2. 2. Overview of Chapter 152  The Service Profit Chain  Integrating Marketing, Operations, and Human Resources  Creating a Leading Service Organization  Leadership, Organizational Culture and Climate  Leadership in the Future
  3. 3. Opening Case Study : Reinvention and Leadership at American Express3
  5. 5. The Service Profit Chain (Fig. 15.2)5
  6. 6. Links in the Service Profit Chain (Table 15.1)6
  8. 8. Interdependence Between Functions (Fig. 15.3)8
  9. 9. Service Leaders Integrate Functions9  Implementation of Service Profit Chain requires complete understanding of how marketing, operations and human resource functions relate to a firm’s strategy  Integrated functions create value for the firm  Strategies are defined and driven by a strong, effective leadership team  Has a coherent vision of what it takes to succeed
  10. 10. Defining the Three Functions10  Marketing Function  Target “right” customers and build relationships  Offer solutions that meet their needs  Define quality package with competitive advantage  Operations Function  Create, deliver specified service to target customers  Adhere to consistent quality standards  Achieve high productivity to ensure acceptable costs  Human Resource Function  Recruit and retain the best employees for each job  Train and motivate them to work well together  Achieve both productivity & customer satisfaction
  11. 11. Reducing Inter-functional Conflict11  One challenge is to avoid creating ―functional silos‖  High-value creating enterprises should be thinking in terms of activities, not functions  Top management needs to establish clear imperatives for each function that defines how a specific function contributes to the overall mission HOW ?  Inter-functional transfers will  Appointing formally provide a holistic designated individuals to perspective for individuals integrate objectives  Establishing integrated  Internal marketing and project teams training  Having inter-functional  Commitment of top service delivery teams management
  12. 12. Integrating Service Operations12
  14. 14. From Losers to Leaders: Four Levels of Service Performance (1)14  Service Losers  Bottom of the barrel from both customer and managerial perspectives  Customers patronize them because there is no viable alternative  New technology introduced only under duress; uncaring workforce  Service Nonentities  Dominated by a traditional operations mindset  Unsophisticated marketing strategies  Consumers neither seek out nor avoid them
  15. 15. Lack of leadership will lead to employee confusion and poor service performance15
  16. 16. 16
  17. 17. From Losers to Leaders: Four Levels of Service Performance (2)17  Service Professionals  Clear market positioning strategy  Customers within target segment(s) seek them out  Research used to measure customer satisfaction  Operations and marketing work together  Proactive, investment-oriented approach to HRM  Service Leaders  The crème da la crème of their respective industries  Names synonymous with outstanding service, customer delight  Service delivery is seamless process organized around customer  Employees empowered and committed to firm’s values and goa
  18. 18. 18
  19. 19. Companies that exhibit service leadership qualities19
  20. 20. Moving to a Higher Level of Performance20  Firms can move either up or down the performance ladder  Organizations that are devoted to satisfying their current customers may miss important shifts in the marketplace  As a result, they may face difficulties attracting demanding new consumers with different expectations  Companies defending their control of their competitive edge may have encouraged competitors to find higher-performing alternatives  Organizations with a service-oriented culture may turn otherwise as a result of a merger or acquisition that brings in new leaders who emphasize short-term profits
  21. 21. Effective HRM Practices Enhances Service Performance21
  22. 22. Leading Change in a Service Organization Involves 8 Stages 1. Creating a sense of 6. Producing sufficient 7. Building momentum urgency to develop the short-term results to and using that to impetus for change create credibility and tackle tougher change counter cynicism problems 2. Putting together a 5. Empowering 8. Anchoring new strong enough team to employees to act on behaviors in direct the process that vision organizational culture 3. Creating an appropriate vision of 4. Communicating that where the organization new vision broadly needs to go Source: John Kotter22
  24. 24. Leadership vs. Management24  Leadership  Concerned with development of vision and strategies, and empowerment of people to overcome obstacles, make vision happen  Emphasis on emotional and spiritual resources  Works through people and culture  Produces useful change, especially non-incremental change  Management  Involves keeping current situation operating through planning, budgeting, organizing, staffing, controlling, and problem solving  Emphasizes physical resources—raw materials, technology, capital  Works through hierarchy and systems  Keeps current system functioning
  25. 25. Setting Direction vs. Planning25  Planning a management process, designed to produce orderly results, not change  Setting direction  involves creating visions and strategies that describe a business, technology, or corporate culture in terms of what it should become over long term and articulating feasible way of achieving goal  Many of best visions and strategies combine basic insights and translate them into realistic competitive strategy  ―Stretch‖ – a challenge to attain new levels of performance and competitive advantage that might as first seem to be beyond the organization’s reach  Planning follows and complements direction setting, serving as useful reality check and road map for strategic execution
  26. 26. Individual Leadership Qualities26  Love for the business  See service quality as foundation for competing  Recognize key role of employees  Driven by a set of core values they pass on  Make communication a priority  Work with a team on decision-making  Know when to change when necessary  Walk the talk
  27. 27. Qualities Associated with Service Leaders27  Understands mutual dependency among marketing, operations, and human resource functions of the firm  Has a coherent vision of what it takes to succeed  Strategies are defined and driven by a strong, effective leadership team  Responsive to various stakeholders  Value created through customer satisfaction
  28. 28. Leadership, Culture and Climate (1)28  Leadership traits are needed of everyone in supervisory or managerial positions, including those heading teams  Effective communication is essential for a leader  Organizational culture:  Shares understanding regarding what is important in the organization  Shares values about what is right or wrong  Shares understanding about what works and what doesn’t work  Shares beliefs, and assumptions about why things are important  Shares styles of working and relating to others
  29. 29. Leadership, Culture and Climate (2)29  Organizational climate  The tangible surface layer on top of the organization’s underlying culture  Factors of influence:  Flexibility, Responsibility, Standards that people set, Perceived aptness of rewards, Clarity people have about mission and values, Level of commitment to a common purpose  Creating a new climate for service, based on understanding of what is needed for market success, may require  radical rethinking of HRM activities, operational procedures, and the firm’s reward and recognition policies
  30. 30. Creating a dynamic organization culture through strong leadership and management30
  31. 31. Service Insight 15.2 Reversing Course at the Museum of Fine Arts (MFA)31
  32. 32. Leadership in the Future• Leadership is more collaborative, using team approach with process of collective genius• Leadership is from behind, by a leader not afraid of sharing power with others• Innovation will remain key for organizations to succeed• Collective efforts will yield results far superior to individual efforts3 © Pearson Education South Asia Pte Ltd 2013. All rights reserved2
  33. 33. Service Leadership in a Global Context33
  34. 34. Summary of Chapter 15: Change Management and Service Leadership (1)34  Service profit chain provides useful summary of behaviors required of service leaders to manage effectively  Marketing, operations, and human resource management functions need to be closely coordinated and integrated in service businesses  Four levels of service performance  Service losers  Service non-entitites  Service professionals  Service leaders  Service leadership is not based on outstanding performance within a single dimension, but must cut across marketing, operations and human resources
  35. 35. Summary of Chapter 15: Change Management and Service Leadership (2)35  Leaders play a big part in nurturing an effective organizational culture that transforms an organization into a successful one  Leadership in the future does not just lie in one person. It relies on collective genius. Leaders of the future are not afraid of sharing power with others  Innovation will remain key for organizations to succeed