Service Design Research

From the article: "The service sector contributes substantially to the US gross national product, however, little effort has been directed toward applying the rational management techniques so common in the goods-producing sector to the design and operation of services. It has been assumed that good service is a function of the particular style of an entrepreneur or business and that it cannot be quantitatively analyzed. A method is presented to turn the trial-and-error process of service design into a rational, systematic process. In designing a service, the processes constituting the service must be identified, areas of potential service breakdown isolated, the amount of time required for service delivery determined, and a standard of service delivery time must be established to ensure profitability. Alternative methods of delivery should be examined, and means of highlighting tangible evidence of the service for consumers should be identified. The service should make customers feel special, requiring hiring, training, and performance standards which stress courtesy and credibility."

From the article: "A company's competitiveness derives from its core competencies and core products. Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies. First companies must identify core competencies, which provide potential access to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate. Next companies must reorganize to learn from alliances and focus on internal development."

From the article: "Mistakes are a critical part of every service. Hard as they try, even the best service companies can't prevent the occasional late flight, burned steak, or missed delivery. The fact is, in services, often performed in the customer's presence, errors are inevitable. But dissatisfied customers are not. While companies may not be able to prevent all problems, they can learn to recover from them. A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact create more goodwill than if things had gone smoothly in the first place."

From the article: "In the new economics of service, frontline workers and customers need to be the center of management concern. Successful service managers heed the factors that drive profitability in this new service paradigm--investment in people, technology that supports frontline workers, revamped recruiting and training practices, and compensation linked to performance. The service-profit chain, developed from analyses of successful service organizations, establishes relationships between profitability, customer loyalty, and employee satisfaction, loyalty, and productivity. The authors provide a service-profit chain audit that helps companies determine what drives their profit and suggests actions that can lead to long-term profitability."

From the article: "Behavioral science offers new insights into better service management. In this article, the authors translate findings from behavioral-science research into five operating principles: 1) finish strong; 2) get the bad experiences out of the way early; 3) segment the pleasure, combine the pain; 4) build commitment through choice; and 5) give people rituals and stick to them. Ultimately, only one thing really matters in a service encounter--the customer's perception of what occurred. This article will help you engineer your service encounters to enhance your customers' experiences during the process as well as their recollections of the process after it is completed."

From the article: "In this article, Harvard Business School professor Stefan Thomke points out the challenges of applying the discipline of formal R&D processes to services: Because a service often exists only in the moment of its delivery to a customer, it is difficult to isolate in a traditional laboratory. And since many services are tailored to individual buyers at the point of purchase, they can't be tested through large samples. As a result, experiments with new services are most useful when they are conducted live--with real customers engaged in real transactions. But live tests magnify the cost of failure; an experiment that doesn't work may harm customer relationships and even the brand. Given such challenges, it's no surprise that most service companies have not established rigorous, ongoing R&D processes, Thomke says. Here the author provides an in-depth look at a five-step process that Bank of America has used to create new service concepts for retail banking."

From the article: "When customers lack the expertise to judge a company's offerings, they naturally turn detective, scrutinizing people, facilities, and processes for evidence of quality. The Mayo Clinic understands this and carefully manages that evidence to convey a simple, consistent message: The needs of the patient come first. From the way it hires and trains employees to the way it designs its facilities and approaches its care, the Mayo Clinic provides patients and their families concrete evidence of its strengths and values--an approach that has allowed it to build what is arguably the most powerful brand in health care. Marketing professors Leonard Berry and Neeli Bendapudi conducted a five-month study of evidence management at the Mayo Clinic. Their experiences led them to identify best practices applicable to just about any company, in particular those that sell intangible or technically complex products."

From the article: "Lean production is built around the concept of continuous-flow processing--a departure from traditional production systems, in which large batches are processed at each step. Jefferson Pilot Financial (JPF) appointed a "lean team" to reengineer its New Business unit's operations, beginning with the creation of a "model cell"--a fully functioning microcosm of JPF's entire process. This approach allowed managers to experiment and smooth out the kinks while working toward an optimal design. The team applied lean-manufacturing practices, including placing linked processes near one another, balancing employees' workloads, posting performance results, and measuring performance and productivity from the customer's perspective. The results were so impressive that JPF is rolling out similar systems across many of its operations."

From the article: "The loss of service jobs, which currently account for over 80% of private sector employment in the United States, is not merely an American phenomenon. The fact is that service sector jobs in all developed countries are at risk. We are in the middle of a fundamental change, which is that services are being industrialized. Three factors in particular are combining with outsourcing and offshoring to drive that transformation: The first is increasing global competition. The second is automation. The third is self-service. As these forces combine to sweep across the service sector, executives of all stripes must start thinking about arming and defending themselves, just as their manufacturing cousins did a generation ago."

From the article: "Most industrial manufacturers realize that the real money isn't in products but in services. Companies such as General Electric and IBM have famously made the transition: A large proportion of their revenues and margins come from providing value-added services to customers. It is not enough, the authors say, just to provide services. Businesses must now provide "smart services"--building intelligence (awareness and connectivity) into the products themselves. Four business models will emerge in this new, networked world. Embedded innovator, solutionist, aggregator and synergist. Woe to the company that takes none of these paths; it'll soon find its former customers locked in--and happily--to other smart service providers."

From the article: "Lean production transformed manufacturing. Now it's time to apply lean thinking to the processes of consumption. By minimizing customers' time and effort and delivering exactly what they want when and where they want it, companies can reap huge benefits. "

From the article: "Service businesses struggle with a reality that is foreign to manufacturers: Customers "interfere" with their operations. To deliver consistent quality at sustainable cost, companies must learn to manage that involvement."

From the article: "Extensive study of the world's best service companies reveals the principles on which they're built."