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Transcript of Towards a Theory of Service Improvisation Competence Enrico Secchi Ph.D. Candidate, Clemson...
Towards a Theory of Service Improvisation Competence
Enrico SecchiPh.D. Candidate, Clemson University
Aleda V. Roth Burlington Industries Distinguished Professor of Supply Chain Management, Clemson University
The Art & Science of Service8-10 June 2011, IBM Research – Almaden
San Jose, California
The Art & Science of Service 2011 San Jose, California
Service Improvisation CompetenceTM
The aggregate ability of the firms’ employees to deviate from established service processes in
order to timely respond to unanticipated events, using the available resources.
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Research Goal
The purpose of this research is threefold:1. Define the meaning and role of improvisation in a service
context;2. Develop a set of service delivery system design choices
that create the ability to improvise (Service Improvisation Competence);
3. Investigate the effectiveness of the development of a Service Improvisation Competence in managing variability in service systems.
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Agenda
• Variability in Service Systems• Definition of Service Improvisation Competence (SIC)• Antecedents of Service Improvisation Competence• Outcomes of Service Improvisation Competence• Conclusions
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Customer-Induced Variability
• Customers introduce variation in service systems (Berry 1980, Chase and Tansik 1983, Frei 2006)
• The management of such variability significantly impacts service outcomes (Bitner, Booms, and Tetreault 1990)
• Two approaches to variability management in service operations:Approach Example Goal
Reduction of Variability
A service firm can “teach” customers about their expected behavior in the service production process (e.g. McDonald’s taught us to clean our table)
Long-term efficiency gain (cost reduction)
Adaptation to Variability
A service firm can provide unexpected accommodations for customers’ needs (e.g. Southwest airline employee providing food and care for a distressed customer)
Gain in customer loyalty(increase in revenue)
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Managing Customer-Induced Variability:Variability-Reduction Approach
Variation in Service
Processes
CustomerRequests/Expectations Service Delivery System
Reduce Customer Choice (Frei 2006)
Standardize Processes
(Levitt 1976; Shostack, 1984)
Decouple Front and Back Office(Chase 1981; Chase and
Tansik 1983)
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Problems with Variability Reduction
Feasibility• Reducing customer choices
can be feasible only up to some point (without loosing competitiveness)
• The customer might require a significant amount of face-to-face time
Effectiveness• A decrease in variance can
convey the feeling of a less personalized service (John et al. 2006)
• Standardization can detract from the feeling of authenticity essential in many face to face services
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Managing Customer-Induced Variability: Adapting to Variability
r1 r2 r3…
d1 S z21 z31…
d2 z21 S z32…
d3 z31 z23 S …
… … … … …
Customer-InducedVariability
SDS
Resp
onse
s
The Law of Requisite Variety suggests that “only variety in R can force down variety due to D; variety can destroy variety” (Ashby 1956, p.207).
To achieve a satisfactory outcome, the set of
responses has to be as large as the
set of disturbances
D: Set of disturbances := d1, d2,…R: Set of responses := r1, r2,…
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
The Role of Improvisation
• The ability to deviate from established processes and routines can provide an efficient and effective way to multiply the set of responses in high-contact services:– The use of improvisation reduces the need for detailed contingency
planning, therefore avoiding the potential waste involved in excessive planning (John, Grove, and Fisk 2005)
– The use of improvisation allows for the delivery of a more personalized and authentic service experience (Victorino, Verma, and Wardell 2008)
These benefits are contingent on the other elements that characterize the service offering, such as the service
concept and the target market
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
A brief background of Organizational Improvisation
• The idea of organizational improvisation was first advanced as a useful metaphor to understand coordination and adaptation within organizations (Barrett and Peplowski 1998; Moorman and Miner 1998; Weick 1998)
• Research moved beyond the analogy with Jazz music and theater, and characterized as a distinct organizational phenomenon (Crossan and Sorrenti 2002; Kamoche et al. 2003; Vera and Crossan 2005)
• The concept of organizational improvisation is closely linked to the distinction between planned and realized strategies (Mintzberg 1978, 1994; Brown and Eisenhardt 1997).
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Definitions of Organizational Improvisation
Definition Main Themes
“The degree to which the composition and execution of an action converge in time” (Moorman and Miner 1998, p. 698) Spontaneity
“reworking precomposed material and designs in relation to unanticipated ideas conceived, shaped, and transformed under the special conditions of performance, thereby adding unique features to every creation”(Weick 1998, p.543)
CreativityBricolage
“the conception of action as it unfolds, by an organization and/or its members, drawing on the available cognitive, affective, social and material resources” (Cunha et al. 1999, p.302)
SpontaneityBricolage
“Intuition guiding actions in a spontaneous way” (Crossan and Sorrenti 2002, p.29) Spontaneity
“the creative and spontaneous process of trying to achieve an objective in a new way” (Vera and Crossan 2005, p. 205)
CreativitySpontaneity
“[Improvisation] can be seen as a combination if intuition, creativity, and bricolage that is driven by time pressures” (Leybourne and Sadler-Smith 2006, p.484)
CreativityBricolage
“The ability to creatively adapt” (John et al. 2006, p.248) Creativity
“the creative and spontaneous behavior of managing an unexpected event” (Magni et al. 2009, p.1045)
CreativitySpontaneityCopyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Designing Service Improvisation Competence• Given the relevance of the theatrical aspect of experiential
services to our research, we adopt Voss, Roth, and Chase’s (2008) terminology, and refer to design choices as follows: – Stageware choices concern the physical appearance and layout of the
service environment (structural choices)– Orgware choices concern management systems and organizational
policies (infrastructural choices)– Linkware choices concern communication and information exchange
systems (integration choices)– Customerware choices concern when and how the customer
encounter takes place
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Stageware
The physical environment of services has been recognized as an important driver of service operations effectiveness and
outcomes (Bitner 1992; Grove and Fisk 1992)
Proposition 1. The design of an operating environment that is accessible and transparent increases the relative degree of SIC.
Ability to evaluate
System State
Availability and
Accessibility of Resources
SIC
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Orgware
In order to provide employees with the freedom and correct incentives to improvise, the
orgware should be designed to encourage trial and error
activities and provide employees with the knowledge
and freedom to make judgment calls (Hartline and
Ferrel 1996, Weick 1998)
Empowerment
Problem Solving Oriented Incentive Structure SIC
Training
Hiring for Attitude
Proposition 2. Organizational design choices that foster and encourage employee empowerment, provide incentives that stimulate personal initiative, seek
employees with a service attitude, and offer the necessary mentoring and training for employees to consciously act on the system increase SIC.Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Linkware
In order to allow rapid and effective actions, the
employees’ cognitive load must be reduced by
disseminating relevant information both horizontally
and vertically within the organization (Galbraith 1973)
Proposition 3. Linkware design choices that serve to increase the frequency and quality of vertical and horizontal information exchanges about processes and
customers increase SIC
Information Exchange Activities
Use of Information
Systems
SIC
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Customerware
The literature on organizational improvisation suggests that, in
order to allow for improvisation, the service encounter should be
based on procedures that are not too complex or binding, referred
to as minimal structures (Kamoche et al. 2003; Cunha et al. 2009).
Proposition 4. Customerware design choices that rely on minimal scripting in the service encounter increase SIC
Degreeof
ScriptingSIC
(-)
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Outcomes of Service Improvisation Competence• We propose that the ability of the high-contact service
employees to respond through improvisation to unexpected events will produce two important outcomes:– Increase customer satisfaction by proactively adapt to
customers’ preferences and special requests– Increase the amount of service innovation through a continuous
effort to meet customers’ needs which are unfulfilled by the current system, and through experimenting with variations of service delivery processes.
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Customer Satisfaction
In high-touch service systems, the ability to accommodate
each individual customer request can be an important
differentiator.
Proposition 5a. The development of a Service Improvisation Competence increases customer satisfaction.
Proposition 5b. The relationship between SIC and customer satisfaction is moderated by the characteristics of the service concept (e.g. customization,
experiential content).
SIC Customer Satisfaction
Service Concept
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Service Innovation
The use of improvisation will increase the frequency by which new
ideas and solutions are found (Eisenhardt and Tabrizi, 1995; Miner
et al., 2001; Bansler and Havn, 2003). However, the amount of innovations will depend on the
presence of systems to retain the newfound solutions (Miner et al.,
2001).Proposition 6a. The development of a Service Improvisation Competence
increases the frequency in number of service innovations.Proposition 6b. The relationship between SIC and service innovations is positively
moderated by the presence of systems that allow for the dissemination and retention of successful innovations.
SIC ServiceInnovation
FeedbackMechanisms
Copyright Secchi and Roth, 2011
The Art & Science of Service 2011 San Jose, California
Contributions
• With this research, we offer several contributions to the literature and practice of service delivery systems design1. We propose SIC as a way to manage customer-induced variability in
services, alongside other methods offered by previous service operations literature.
2. By operationally defining the construct of Service Improvisation Competence, we enrich the understanding of service experiences with the insights that come from the organizational improvisation literature, as well as posing the basis for rigorous empirical analysis.
3. We build an empirical model that identifies the general characteristics of the service delivery design elements that influence the development of the ability to improvise, as well as its performance oucomes.
Copyright Secchi and Roth, 2011
Questions?
Thank You!