Where Does the Employee Fit in a Service Operation?

By: David Bowen

In the classic 1978 HBR article, “Where does the customer fit in a service operation?” Richard Chase described the impact of high or low customer contact on the efficiency of the service production system. The article also posed the question, “What do you, (a service operation), have to give up in order to let the customer have it his way?

Fast forward to today’s rapidly changing context in which services are delivered and the unanswered question now seems to be, “Where does the Employee fit in a service operation?” It often appears that employees are what service firms give up in order to let the customer “have it his way”.  Technology, particularly IT, frequently substitutes for frontline employees in both consumer retailing, and even some professional services (Brynjolfsson and McAfee 2011; Rust and Huang 2014). Ironically, this technology substitution is said to yield more personalized service (Rust and Huang 2014).  Technology allows the customer to get what they want, when they want it, in whatever way they want.

The Apparent Rise and Fall in Importance of Where Frontline Employees Fit

Many years ago, the emerging services marketing literature cast frontline employees in essential, critical roles in delivering service and creating satisfied customers. Christopher Lovelock (1981) described frontline employees as a “service trinity” who help run the service operation, market the service, and are equated by customers with the service itself.  In organizational behavior, the strong linkage between front line employee perceptions and attitudes and those of customers were highlighted (e.g. Schneider and Bowen 1985).

Now a robot (Ford 2015) can replace the “trinity” and services marketing theory has shifted from a producer/employee perspective to a consumer perspective on value creation (Vargo and Lusch 2004; Heinonen et al. 2010). The recent “Service Research Priorities” study (Ostrom et al. 2015) found that “understanding organization and employee issues relevant to successful service” was rated only 9th in importance out of 12 for moving the field forward. Today’s “stars” in successful service delivery are technology and customers.

Where Frontline Employees Should Fit Now and in the Future.

Service employees can make unique, irreplaceably “human” contributions to the customer experience. For example, consider four “new”, explicitly defined employee roles made all the more essential in the new context of service (Bowen, 2016):

  • Differentiator —providing the non-substitutable human touch that avoids commoditization and makes all the more difference in the context of large ecosystems and technology dominance;
  • Innovator—-human creativity is key for the ideational innovation necessary to drive business success and growth. Frontline employees significantly help drive innovation volume and radicalness (Ordianni and Parasuraman 2011);
  • Coordinator—integrating resources and actors across the service system to create a seamless, successful customer experience; and
  • Enabler—-providing customers the resources, role clarity, motivation and rewards they need to successfully do their “jobs” in coproduction (Bowen 1986; Bettencourt, Lusch, and Vargo 2014). Also, ensuring that technology fulfills its role.

Future research should specify: (1) actors’ roles in value co-creation, e.g. the roles of employees and technology on the frontline, and the role of the customer with which the frontline interacts, for different services (2) the types of interdependence patterns amongst these roles, and (3) the portfolio of coordination mechanisms best matched to different types of interdependence patterns that will help yield a seamless customer experience (see also, Ostrom et al. 2015). Finally, given the interdependent roles of employees, technology, and customers, this topic is primed for interdisciplinary attention.

A Need for Humanistic Management in the Internet Age

Many lower level, frontline employees would likely claim they never experienced the rise in perceived importance that service marketing academics advocated in the lower-tech early days of the services discipline! Actually, even with all the change in how service is delivered it seems one thing has remained constant: these employees tend to be low paid; little respected; “bossed” by supervisor and customer alike; poorly selected and trained; suspect job security;  have little autonomy; and marginal opportunities for advancement.

Yet one thoughtful observer opined that the emphasis on more value to the customer via the internet can take place only with more humanistic management of employees (Dennig 2015). He maintains that it will be impossible to give customers whatever they want, e.g. solving their problems in customized fashion, via old, stiff hierarchical approaches to management. More horizontal arrangements become necessary, for example. What a wonderful paradox if the rise of technology, often displacing employees, could spark a change to a more humanistic management philosophy that would appreciate where employees fit in a service operation yielding benefits for both them and their customers.

David Bowen will be speaking on “Can you copy the inimitable? Lessons learned from the Four Seasons culture” at the Center for Services Leadership’s 30th Annual Services Leadership Institute on March 21 – 23, 2016. For more information, visit the CSL website.

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References

  • Bettencourt, Lance A., Robert F. Lusch, and Stephen L. Vargo (2014), “A Service Lens on Value Creation: Marketing’s Role in Achieving Strategic Advantage,” California Management Review, 57 (1), 44-66.
  • Bowen, David E. (1986), “Managing Customers as Human Resources,” Human Resource Management, 25, 371-384.
  • Bowen, David E. (2016), “The Changing Roles of Employees in Service Theory and Practice: An Interdisciplinary View,” Human Resource Management Review, 26 (1), 4-13.
  • Brynolfsson, Erik and Andrew McAfee (2011). Race Against the Machine. Lexington, Mass.: Digital Frontier Press.
  • Denning, Steve. (2015), “The Internet is Finally Forcing Management to Care About               People,” Harvard Business Review “Managing People” posting, May, 5th, for upcoming 7th Global Drucker Forum.
  • Chase, Richard B. (1978), “Where Does the Customer Fit in a Service Operation?” Harvard Business Review, 56 (6), 137-142.
  • Ford, Martin (2015), Rise of the Robots: Technology and the Threat of a Jobless Future. Basic Books.
  • Heinonen, Kristina, T. Stranvik, K-J Mickelsson, B. Edvardsson, E. Sundstrom, and P.      Andersson (2010), “A Customer-Dominant Logic of Service, “ Journal of Service Management, 21, 531-548.
  • Lovelock, Christopher H. (1981), “Why Marketing Needs to Be Different for   Services”. In J.H. Donnelly and W.R. George (Eds.), Chicago: American Marketing Association.
  • Ordanini, Andrea A. and A. Parasuraman (2011), “Service Innovation Viewed Through a Service-Dominant Lens: A Conceptual Framework and Empirical   Analforysis,” Journal of Service Research, 14 (1), 3-23.
  • Ostrom, Amy L., A. Parasuraman, David E. Bowen, Lia Patricio, and Christopher Voss (2015) “Service Research Priorities in a Rapidly Changing Context,” Journal of Service Research, 18 (2), 127-159.
  • Rust, Roland T. and Ming-Hui Huang (2014), “The Revolution and the Transformation of Marketing Science,” Marketing Science, 33 (2), 206-221.
  • Schneider, Benjamin and David E. Bowen (1985), “Employee and Customer Perceptions of Service in Banks: Replication and Extension,” Journal of Applied Psychology, 70 (3), 423-433.
  • Vargo, Stephen L. and Robert F. Lusch (2004), “Evolving to a New Dominant Logic for Marketing,” Journal of Marketing, 68 (January), 1-17.
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About David Bowen

Dr. Bowen is The G. Robert & Katherine Herberger Chair in Global Management at Thunderbird School of Global Management, Arizona State University, in Glendale, Arizona. He also is an Affiliated Faculty of the Center for Services Leadership (CSL), W.P. Carey School of Business, ASU. David teaches leadership, change management, and managing people from a global perspective in Thunderbird’s degreed Masters’ programs, as well as in Executive Education programs. He has often taught managing service organization culture in CSL’s Services Leadership Institute executive program. His research has focused on how organizational behavior/human resource management (HRM) issues influence employee and customer satisfaction; the linkage between HRM practices and organizational performance; and Global Mindset. For example, he has published Winning the Service Game, Harvard Business School Press; the “Four Seasons Goes to Paris” HBS case; articles on employee empowerment in Sloan Management Review; and many scholarly articles in top-tier scholarly journals David received his Ph.D. in Business Administration (1983) and his MBA (1977) from Michigan State University. His B.A. (1973) is from Alma College, Alma, Michigan, and last year was invited to join Alma College’s Board of Trustees.

2 thoughts on “Where Does the Employee Fit in a Service Operation?

  1. Wilhelm Taurel

    In the title of your post you refer to service operations. I suggest that you distinguish different types of service operations. From your text I gain the impression that you mainly refer to service operations in contact centers and alike. There your points hold. Service operations in technology services and B2B service businesses staff does not encounter the same lack of importance. In such a community the front line employee – being on-site in field services or being remotely active with a client – has further employee roles than the ones you mention. Today the “trusted advisor” role is the one mostly requested and targeted. This role makes these employees even more important.

    Reply
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