Utsav Mahendra : Organizing for Service Leadership


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Organizing for Service Leadership

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Utsav Mahendra : Organizing for Service Leadership

  1. 1. Chapter 15Organizing for Service Leadership
  2. 2. Customer-Led versus Market-Oriented Philosophies of Management• Firms may lose market leader position if listen too closely to current customers• Service leadership requires curiosity, risk taking• Customer-led businesses focus on understanding expressed desires of customers in currently served markets• Market-oriented businesses commit to understand current/ latent customer desires plus competitors’ plans, capabilities – Scan market more broadly, have longer-term focus – Work closely with lead users (windows to future vs. anchors to past) – Combine traditional research with experimentation, observation• Conclusion: Pursue customer satisfaction, but set limits on being led by customers, especially during rapid change
  3. 3. The Service Profit Chain (Fig. 15.1) Internal External Operating strategy and Service Target Market service delivery system concept Loyalty EMPLOYEES CUSTOMERS Satisfaction Revenue Productivity Growth & Output Service Satisfaction Loyalty Quality Value Capability Profitability Service Quality• Workplace design• Job design Quality and productivity • Lifetime value• Selection and development improvements yield • Retention• Rewards and recognition higher service quality • Repeat business• Information and communication and lower costs • Referral• Tools for serving customers
  4. 4. Causal Links in the Service Profit Chain (Table 15.1)• Customer loyalty drives profitability and growth• Customer satisfaction drives customer loyalty• Value drives customer satisfaction• Employee productivity and retention drive value• Employee loyalty drives productivity• Employee satisfaction drives loyalty and productivity• Internal quality drives employee satisfaction• Top management leadership underlies chain’s success
  5. 5. Integrating Three Functional Imperatives (recap from Chapter 1)Marketing Human ResourcesImperative Imperative Customers Operations Imperative
  6. 6. 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 and motivate them to work well together – Achieve both productivity and customer satisfaction
  7. 7. Reducing Intra-Organizational Tension• Transfers and cross training• Cross functional taskforces• New tasks and new people• Process management teams• Gain-sharing programs
  8. 8. The Search for Synergy: A Top Management Perspective What do we want?What do our employees, What do our intermediaries, and customers want? other partners want? What can we do?
  9. 9. From Losers to Leaders: Moving Up the Service Performance• Service Leaders Ladder – Crème de la crème of their respective industries – Names synonymous with outstanding service, customer delight• Service Professionals – Clear positioning strategy – Sustained reputation for meeting customer expectations• Service Non-entities – Traditional operations mindset – Rudimentary marketing, often emphasizing price discounts• Service Losers – Only survive because of lack of viable alternatives in marketplace
  10. 10. Achieving Service Leadership by Focusing on Role of Each Functional Area• Marketing: move from tactical to innovative and strategic• Operations: move from reactive/cost oriented to focused, innovative, well coordinated with marketing and HR• Human Resources: move from tight control of low-cost workers to quality of employees as strategic advantage
  11. 11. Leadership for ChangeManagement Involves Eight Stages• 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 Source: John Kotter
  12. 12. Leadership Qualities Needed in Service Organizations• Vision, charisma, persistence, high expectations, expertise, empathy, persuasivene ss, 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
  13. 13. Transformational Leadership May Require Changing Corporate Culture• Corporate Culture: – Shared perceptions regarding what is important – Shared values about what is right and wrong – Shared understanding about what works and what doesn’t – Shared beliefs about why these things are important – Shared styles of working and relating to others• Climate for Service--Tangible working environment atop underlying culture. Influential factors include: