Sunday, July 28, 2019

Reason's Swiss Cheese Model - Health

From  Perneger, T.V (2005). The Swiss cheese model of safety accidents: Are there holes in this metaphor? BMC Health Sciences Research, 5: 71 online here

Reason's Swiss Cheese model is often used to help organisations manage risk and errors in their operations.

All service organisations are to some extent managing risk. Service managers can learn from disasters and mistakes that occur in other businesses and organisations. Service organisations can also learn how important it is to have a culture of trust as an essential part of any safety culture.

The most common industry to hear about Reason's model is the airline industry as airlines understand safety culture and have highly developed techniques and processes for investigating air accidents so they can continuously improve safety in the airline industry more generally. They derived Reason's Swiss Cheese Model to explain accidents, and Reason's model is now widely used in other industries like health. Arguably all service industries need to have a safety culture in place and so can learn from the Swiss Cheese Model.

The Swiss Cheese analogy is pictured graphically above. Imagine a series of Swiss cheese slices lined up on top of each other. Each slice has a few holes in it. Each of the layers of the cheese represents some aspect of organisational practice. So for example, in a service industry like medicine (let's use the example of a hip replacement operation) where an error can cause catastrophic impact (death) then layers might represent screening patients, personnel factors, facility factors, and process factors. For a surgery screening factors could include checking patients are not allergic to medication and are healthy enough to cope with the operation, personnel factors would include aspects like proper staff training, facility factors might include appropriate equipment and cleanliness, and process factors would include triple checks that the person going into theater is, in fact, the correct person and is getting a hip operation. If the holes line up, then you may get an error. The aim of the service manager (or risk manager) is to ensure that the holes are as small as possible and that there are enough layers in the cheese that the holes have less likelihood of lining up.

It's really important to develop 'no blame' cultures in service organisations. Most airlines have a 'No blame' culture attached to any error that involves a safety issue. What this means is that if for example, a mechanic drops a screw into an engine, he or she should immediately report their mistake even if it means holding up a flight at the cost of hundreds of thousands of dollars. The mechanic has done the right thing and should not be punished or castigated for his or her error. In fact, this staff member should be celebrated as a 'Safety Champion' because his or her actions are to be encouraged, not discouraged (note the word 'courage' in encourage because this does take bravery).

The model represents the actual existence of unavoidable mistakes/errors in any process. Equipment will malfunction. People do make mistakes. Patients lie about their health. Surgeons have bad days. The idea is to manage and mitigate risk.

Saturday, July 27, 2019

Blockchain

The following explanatory Youtube video provides a nice introduction to blockchain technology at different levels.


Service Concept - Manage my Health

Manage My Health is an example of how self-service technology shifts a service concept towards co-creation of process. Note that the patients using Manage my Heath feel more in control of their health process.


Customer Problem - DLink


Thursday, July 25, 2019

Bottleneck Problem - Deep Creek Brewery


Deep Creek Brewery and Process Flow from Janet Sayers on Vimeo.

A bottleneck is an impediment to process flow. The above short film is by Minesh Pillay and is a response to an assignment to look at a bottleneck issue in a service business. The film was accompanied by a brief essay which identified the bottleneck problem (caused by a structural feature in the bar) discussed in relation to relevant service concepts. The film provides a lovely insight into a new bar in Browns Bay which has been very popular since it opened.  The film features the owner/manager and the bar manager speaking about the bottleneck problem which is caused by a structural feature in the bar area, and the ways they deal with the problem, as well as some footage of staff working around the structural challenge. Thanks so much to Minesh, Jarred Mclacahlan and Tom for their permission to publish Minesh's film. You can also get a very good impression of the vibrancy of the venue and I do recommend you go there for the beer, the food and the great atmosphere :o) I particular enjoy the  branding referencing to landmarks from Browns Bay itself where the bar is located and  I lived for many years  - Deep Creek Road and Deep Creek itself. Best of luck to Jarred and all the staff involved in this venture.  

Service Innovation - IT and Banks

Barras (1986, 1990) argues that service innovation involving IT  involves three phases he called the Reverse Product Cycle (RPC). The phases are: Improved Efficiency, Improved Quality, and New Services.

IT was first introduced to improve existing processes, and only later became the basis for service product innovation, reversing the “product cycle” model of manufacturing innovation popularized by Abernathy and Utterback (1978). For technologically sophisticated service sectors like financial services these phases roughly transpose to the 1970s, 1980s, and 1990s. So, "insurance services moved from computerization of policy records, to providing online policy quotations, and then to supplying complete online services during these three decades" (Miles, 2011, p. 440).

Miles says about the banking industry:
"Uchupalanan (1998, 2000) mounted a systematic critique of the RPC approach, tracing the history of five IT innovations through all firms in the banking services sector in Thailand. He uncovered a diverse range of innovation strategies and trajectories that were far richer than the RPC account. The banks were influenced by the strategies of competitors with respect to each given innovation, by their experiences with earlier innovations (and their plans for others), and by pressures from regulators and the market. The interrelation of market competition, firm circumstances and innovation dynamics meant that the RPC “story” of innovation processes was rarely applicable in this context. At best it was one of a number of possible patterns of development" (p. 441).
The RPC approach is often used in service innovation analysis even though it clearly does not explain all service innovation. For instance, it completely neglects non-IT innovations, but it does at least provide a framework which enables the recognition and legitimation of service innovation and its study and development as a field worthy of more attention.

Service innovations in banking include new service products (such as new types of bank accounts more closely tailored to the circumstances of individual clients) and delivery innovations (e.g. online banking and cash machines). Innovation has also been introduced in other customer-facing functions, for example in targeted marketing and in computer-assisted helplines, etc.


References

Miles, I. (2006). Innovation in services [Electronic Version]. The Oxford handbook of innovation, 433—458. http://www.oxfordhandbooks.com/oso/public/content/oho_business/9780199286805/toc.html.


Script - Equip Retail

This post is an essay by Natalie Mitchell, a student in an undergraduate class 'Managing Services' on scripting at Equip, a retail outlet selling mainly jewelry. Thanks to Natalie for permission to publish her essay on this blog. Natalie's essay provides a good example of writing that uses her own experience in combination with service management theory to  provide some reflections on a service management topic.   

The essay topic was:   
"Scripting is an important technique for managing service people and the processes they deliver. Using an organisation with which you are familiar critically discuss how scripting is used, and its advantages and disadvantages". Approx 2000 words. Use at least four journal references. 

Scripting is "the precise specification of actions to be taken by service staff, in particular situations" (Clark & Johnston, 2008, p. 251) and is an essential technique for managing in today’s globalized service environment. In a constantly changing competitive environment the use of scripting in mass service organisations ultimately provides consistency, efficiency and security for customers and employees alike (Clark & Johnston, 2008). This essay will first briefly outline the nature of scripting. Second, this essay will examine the organisation ‘Equip’ and investigate how scripting is used. Using real examples of scripting at Equip it is possible to analyse the disadvantages and advantages of this technique. Overall, this essay will argue that scripting is definitely a vital technique for managing service people and processes. However it has to be approached in a manner that does not offset the autonomy of employees and customers to an extent where the service experience is unpleasant. 

The term, ‘script’ is a "commonly used tool to design and manage the encounter between frontline service employees and customers" (Victorino, Verma & Wardell, 2008, p. 36). Scripting is often discussed in the context of understanding the service encounter as a performance, much like in the theatre, and so the script provides the lines and actions that employees (as actors) should play when they interact with a customer (Harris et al. 2003).  Scripting is also defined as a "design tool used to exert a degree of control over employee-customer interactions that may take place where there is no direct supervision or oversight" (Tansik & Smith, 1991, p.36). The use of scripting in service organisations aims to ensure a consistent level of service quality by creating procedures that assist employees in their daily tasks (Clark & Johnston, 2008). These procedures are typically a "predetermined set of specific words, phrases, and gestures, as well as other expectations for the employee to use during each step of the service process" (Victorino et al, p. 6). 

Equip, an Australian-owned organisation, is chain of affordable jewellery stores, targeting females of all ages. EquipYourself Online claim "join our fast growing team ... working in a fun, young team environment’. Many organisations, Equip included, not only hire young workers that can relate to their predominantly young customers, but also hire young people as they are assumed to be more compliant. Scholosser (2002) suggests the word ‘young’ used in the context of a service workforce often indicates an underlying belief that younger staff will be more flexible and conform to specific organisational procedures. This certainly appeared to be the case in the store where I worked, from the period of November 2010 till May 2011.  Equip's employee ages ranged from 17-23, with the store manager being 23. With such a young workforce employees may be more likely to respond to control mechanisms like scripts. 

There are ‘six steps’ to Equip's encounter script which guides the daily operations of its staff. First an employee must greet the customer with an initial smile or verbal welcome within the first thirty seconds upon entering the store. The employee must then initiate conversation with an opening line by asking a question that requires an interactive answer and not a simple 'yes' or 'no' reply. The third step determines the customer's wants and needs. The employee is required to ask whether they wear gold or silver, or ask "what in particular are you looking for today?" The employee must then suggest an ‘add on’: for example the matching bracelet to the necklace they have chosen. The employee should  then encourage the customer to touch the additional piece of jewellery to persuade the customer it is the right thing to do. Touching merchandise increases the likelihood of sales (Underhill, 2008). The fifth step is directly linked to the fourth: the employee must be able to handle any possible objections. This step is explained in more detail below. The final stage of the encounter is closing the sale which involves putting the item(s) through the PlatyPOS transaction system, placing the item in an Equip bag, and fare-welling the customer with a statement that will welcome them back again, such as ‘See you later!’ 

Equip further incorporates scripting for employees by guiding their interactions with customers when   answering the telephone. From my personal experience the phone has to be answered in a specific way with an initial warm welcome, stating the organisation and store location, and who is speaking. In addition to scripting answering the phone, scripting in Equip also extend to telling  employees where they are to be positioned in store, and what to expect and say in each of the areas they are responsible for. During the busiest time of the shopping season, primarily the Christmas period, an employee will stand at the front of the store and ask every customer possible that is leaving to open their bag to be checked. It is the organisation’s policy that the customer has a right to decline a bag check and that the employee must not physically touch the customer’s bag. 

Equip is successful in that they have avoided heavy amounts of scripting in a rather customised service delivery. Although guidelines are specific employees may deviate from the scripted ‘six steps’ if needed in order to please and meet the customers’ expectations. This stance towards scripting is encouraged by  management. Thus, scripting is not approached in a way that offsets the autonomy of employees and customers to the extent where the service experience is unpleasant. This plays to Equips advantage as customers tend to take a dim view of heavy scripting. Employees themselves take pride in their ability to create a positive, smooth delivery service, meeting and exceeding customer’s expectations and using their discretion when needed to respond to customers mood, body language and requirements (Chase & Dasu, 2001). 

Scripting is incorporated into Equips’ operations due to the vast advantages for their employees, customers and the organisation as a whole. With a clear set of rules and guidelines in place, employees are able to work more effectively as they have a clear understanding of their responsibilities and role (Johnston & Clark, 2008). Consequently a consistent, smooth work flow is generally established (Dilworth, 1986). This creates an environment with minimal stress and a "sense of security to behaviour" (Johnston & Clark, 2008, p. 251) for both the customer and the employee. Employees at Equip benefit from scripting as they can rely on the content of the ‘six steps’ in a service encounter to know exactly what to say, and in what manner they should approach each customer. Thus scripting is ideal for those employees who do not necessarily find it natural to strike up a conversation with an unknown customer. The employee's overall anxiety is reduced.   In turn, this set of scripting guidelines followed by Equip employees means customers can relax because they understand the rules by which the encounter will be played out, especially if they are repeat customers. Customers typically expect an opening line after the initial ‘warm welcome’ during the service encounter. Thus, customers anticipate the type of question that will be asked and this reduces the overall pressure they may feel as there "exists a good understanding of what will happen and what is required of the customer at each stage" (Johnston & Clark, 2008, p. 253). As Chase and Dasu (2001, p. 84) state "ultimately, only one thing matters in a service encounter—the customer’s perceptions of what occurred". 

Further, according to Tansik and Smith’s (2000) ‘functions for using scripting’, a main advantage of this technique is being able to accurately diagnose customers’ needs and wants. This is achieved through the ‘six steps’ that employees perform during the encounter stage. After greeting the customer and using an opening line that encourages he/she to ‘open’ up to the employee the employee will then ask about what in particular they are looking for. Equip needs this information in order to operationalize their brand values: they state this purpose in strong language: "…our complete devotion to help customers find that sought after latest accessory is what will continue to make the Equip brand so successful" (Equip Online, 2010). Understanding the customer   means that Equip can maximise their profits and growth. Thus by providing a step in the script that asks customers what they want and need, they provide a service for the customer, but also ensure Equip is enacting their brand purpose. 

Nevertheless it must be acknowledged that there can be a tension between 'service' and 'sales', and it can be difficult to get the balance right between serving the customer and making sure their needs and wants are met, and on-selling to them in a way that they do not find overly aggressive and pushy. Scripting, in the form of the ‘six steps’ used by Equip is clearly a way to control both the employee and the customer. Control is a major purpose of scripting (Tansik & Smith, 2000). Equip employees who base their interactions on the ‘six steps’ are advantaged if they use the steps along with an upbeat personality to encourage and subconsciously manipulate customers into purchasing jewelry item(s) the customer believes they ‘need’. Using an opening line such as "what a nice dress you have, where did you get it from?" ideally aims to initiate a positive relationship between the employee and customer. Therefore, this increases the chance that the customer will ‘add on’ to the jewelry they have already chosen, or make the customer more inclined to purchase at all. Employees’ that successfully achieve target objections, which means having  more than 45% multi sales, are rewarded with material goods, such as movie tickets and body wash. This practice encourages employees to add-on sales. However, employees can only succeed with multi sales if they create a positive and enjoyable service experience for the customer, and if their interactions do not feel false and inauthentic (Ashforth & Tomiuk, 2000). Employees can use the script to enhance the customer's experience and this adds value for them, which increases the profit that Equip can make, and can lead to rewards for the employee. Although some people  may see the script as requiring 'hard selling' for employees it can be very rewarding to use the script, coupled with knowledge of 'what looks good with what', to enhance the appearance of the customer, and generate sales. 

Another positive aspect of the way that employees can use a script to their advantage is through using Step Five well; the step involving service recovery. Step Five requires the employee to handle any objections effectively. For an example from my own personal experience, a customer wanted an exchange for the same handbag in another colour. The Equip store where I worked did not have the colour she wanted in stock, and only Equip at another outlet did. She refused to drive to the other store to do the exchange as asked by the employee. The employee handled the objection by phoning the other store to ask if they could transfer the handbag to our Equip store. This suited the customer and this assistance actually exceeded her expectations. Thus, by positively engaging the customer through service recovery the customer, who was more than happy to exchange the item, then also purchased additional items. Therefore, by enacting Step Five well, Equip benefited as this ultimately lead to multiple items being sold. This process helped retain the customer, and so overall the process may provide a higher customer lifetime value resulting in an overall growth in profits (Samson & Daft, 2005). 

Although Equip is growing in profit and claim that their brand’s success is due to their devotion to "help customers find that sought after latest accessory" (Equip Online, 2010) the use of scripting to achieve this is not entirely flawless, and does have its drawbacks if not approached in an appropriate manner. Again, from  my personal experience, mystery shopping, which is regularly used to assess quality at Equip, can backfire and actually cause poor performance. Mystery shoppers might assess an Equip store every 2 months to ‘monitor employees’ adherence to organisational scripts (Scharf, 2003). In one case where a mystery shop was conducted the result sheet was faxed to our Equip store. The report detailed how one identifiable employee had not met the six steps precisely. The mystery shopper had recorded that the employee did not greet them in the first 30 seconds of the store and used an opening line that could not be answered. The employee consequently failed the test with comments of too much deviation from the ‘six steps’. This resulted in the employee adopting a heavier approach to scripting, as she conformed exactly to the criteria of the ‘six steps’. Consequently, the employee’s multi sales dropped below the target of 45%. According to Johnston and Clark (2008) this is likely due to customers’ perception of ‘robot-like behaviour’. Greeting a customer within 30 seconds and initiating the six steps may be viewed as too interrogative, and viewed as ‘going through the motions’ of service delivery without any real sincerity (Lawrence & Weber, 2010). 

Another factor than may  create unintended negative consequences is Equips’ performance objective criteria which sometimes require employees to meet 45% multi sales. Each employee is sometimes given targets for each day depending on the hours they will work. During the busy shopping day periods these are appropriate targets. However, during quiet periods requirements to meet 45% multi sales can act as an organisational pressure for employees, resulting in unnecessary stress, and potentially requiring a more forceful service delivery and therefore a more unpleasant service experience for the customer (and the employee), and a feeling of constant competition between employees to ‘get a sale’. This can lead to poor morale and high staff attrition rates.  

Overall, this essay confirms that scripting is a vital technique for managing service people and processes. By briefly outlining the nature of scripting it is evident that it is indeed used in Equips’ management strategy. The use of specific guidelines for the ‘six steps’, telephone communication and employee positioning within the store portray how this technique is incorporated into Equips’ daily operations. Equip use scripting to create a clear understanding of roles, resulting in a consistent and efficient work flow, and overall reduced stress for  both customer and employee. This organisation further benefits from the technique through accurately diagnosing customers’ needs and wants and controlling the customer to an extent. Employees can reap rewards for high productivity and customers can experience a pleasurable service delivery, meaning  Equip  can maximise their profits. It is evident that scripting, used moderately and with common sense, is useful, especially  if managers  allow employees to deviate if necessary in order to maximise customer satisfaction. Generally, at Equip in my experience, scripting does not offset the autonomy of either the customer or employee to the extent where the service experience is unpleasant. Sensible approaches to scripting can be beneficial and Equip is an example of a successful organisation that has benefited from the use of scripting. 

References


Ashforth, B. & Tomiuk, M. (2000). Emotional labour and authenticity: Views from service agents. In S. Fineman (ed.) Emotion in organizations, London: Sage: pp. 184 — 203.


Dilworth, J. B. (1986) Production and operations management, (3rd ed.). New York: Random House 

EquipYourself Online. (2011) Work at Equip. Retrieved September 21, 2011, from http://www.equipyourself.com.au/equip_careers/positions.php

Harris, R., Harris, K., and Baron, S. (2003). Theatrical service experiences: Dramatic script development with employees. International Journal of Service Industry Management, 14 (2): 184-199.

Johnston, R. & Clark, G. (2008) Service operations management: Improving service delivery (3rd ed.). Essex: Pearson 

Lawrence, A. & Weber, J. (2010) Business and society: Stakeholders, ethics, public policy. New York: McGraw- Hill 

Samson, D. A. & Daft, R. L. (2005) Management (2nd ed.). Southbank, Victoria: Thomson. 

Scharf, A. (2003). 'Scripted talk'. From “Welcome to McDonalds” to “Paper or plastic?”: Employers control the speech of service workers. Dollars and sense: The Magazine of Economic Justice. Retrieved on September 20, 2011, from http://www.dollarsandsense.org/archives/2003/0903scharf.html

Scholosser, E. (2002). Fast food nation: The dark side of the all-American meal.  New York: Houghton Mifflin. 


Victorino, L. Verma, R. & Wardell, D. G. (2008) Service scripting: A customer’s perspective of quality and performance. Cornell Hospitality Report, 20 (8), 1-17. 

Underhill, P. (2008). The science of shopping. Why we buy. Simon and Schuster: New York. 

Service Innovation Types

Sevice innovation can be radical, incremental or technology-driven. Clark and Johnston (2008) use a radical-incremental-technology-driven scale for categorizing and understanding types of innovation. They provide the following types: 

1. Radical (3 types)
  • Major Innovation: new service driven by information and computer-based technology; 
  • Start-up Business: new service for existing market; 
  • New Services for the Market Presently Served: new services to customers of an organization. 
2. Incremental Innovations
  • Service Line Extensions: augmentation of existing service line (e.g. new menu items); 
  • Service Improvements: changes in features of currently offered service (e.g. Pacific Island/Maori Education Roles); 
  • Style Changes: modest visible changes in appearances (e.g. style changes). 
3. Technology Driven Service Innovation
  • E.g. Power/energy – e.g. international flights with jet aircraft; 
  • E.g. Physical design - enclosed sports stadiums; 
  • E.g. Materials - Astroturf and other new all-weather surfaces; 
  • E.g. Methods - JIT and TQM; 
  • E.g. Information - E-commerce using the Internet. 
Not all innovation is technology-driven, and innovations can be both radical (or incremental) and technology-driven.

Wednesday, July 24, 2019

Service Triad

The service triad is a concept used to discuss the tensions that there are between different stakeholders in any service system. These stakeholders are 1. customers, 2. front-line employees, and 3. managers. Remember that each of these groups of stake-holders participates in the service system for different reasons.

The customer participates to receive the service offered,  employees are usually most interested in meaning, autonomy and learning opportunities and managers (even though they are also employees) represent the interests of the firm which is to generate profits or whatever the performance measure is (not always money). A series of tensions are generated because of these different interests. The tension between managers and employees is around efficiency and autonomy. Management wants more efficiency but this is often at the expense of employee autonomy and meaningful work. The tension between managers and customers is around efficiency versus satisfaction. Managers again want to run an efficient business but they also need to serve customers. Difficult decisions can be around how much self-service to implement, or what services can be retained in a difficult economic climate. The tension between employees and customers is around perceived control. Customers are  'management agents' in service as they act as quality control mechanisms. Employees are interested, as mentioned previously, in their autonomy and this is also closely related to perceptions of control. Employees and customers are often in conflict over issues of who controls the relationship and the meaning, therefore, of the work. 

The diagram below represents these sets of tensions and also poses a scenario of how these tensions can be seen in an everyday common example of service. 

Customer is King

'Customer is King' and the 'Customer is Always Right'

The expression the 'Customer is King' is related to the saying that the 'Customer is always right'. Usually, it is best to think of the principle of the 'Customer is always right' as just that, a working idea, that can help guide an organization's value system (but customers are not always right as any service manager knows). Some businesses have used the idea that the 'Customer is always right' to lever service loyalty so much that this idea is central to their service concept and offerings. The concept is linked to the service guarantee. For instance, see “Bugs” Burger Bug Killers (BBBK), which is discussed in the classic service management text 'The power of unconditional service guarantees'. 

Service Innovation


Bdna cropped

Innovation is “the tendency to think about new and better ways of doing things and to try them out in practice” (Fagerberg, 2006, cited in Miles, 2006, p. x). Schumpeter, an influential innovation writer, has said innovation’s purpose is to create better or more effective processes and products. 

Most Research and Development (R&D) investment goes into manufacturing innovation, with comparatively little into service innovation (Miles, 2011, p. 437). 

When we talk about innovation usually people think of tangible things, like the latest iPhone, or a new bit of technology, or an invention. Often when people discuss innovation they are talking about tangible things discovered through scientific processes.

Service innovation is also usually talked about in terms of technology. For instance, a new application on a mobile phone (making ordering easier, shortening queues, providing information). But remember that service innovation means social innovation first and foremost; e.g. making things easier, simpler, faster, decreasing pain, or increasing pleasure and generally adding value to experience in some way.

Miles argues that a recent focus (in research) on service innovation has been because of the growth in service industries, but service innovation extends to all industries and sectors of the economy wherever there is service. Miles also argues that some services are more innovative than others, picking out FIRE (finance, insurance, and real estate services) as involving advanced innovation in information technologies, and comparing this to hairdressing which they argue use only ‘basic’ technologies. 

It is useful to categorize service industry groups together in order to see the types of innovations they might have in common. So, for instance, other than the FIRE category above Miles identifies HORECA as a subgroup of service industries (hotels, restaurants, and catering). These are all industries whose business consists of food preparation and delivery, hospitality, entertainment, and comfort. Thus innovation in one business may be a point of learning for another business. So, for instance, see the Go Amazon innovation in food retail service. 






Services innovation is often criticized because the self-service and technological innovations (usually standardization) such as the one shown above in restaurants and fast food outlets lead to low wage, low skilled (or even no job as at Go Amazon) jobs.  It is just as likely that services emulate the trend of manufacturing away from mass production (and standardization) to customization. Technology also enables this line of innovation as well. New jobs are created at Go Amazon as well. 

Another category of services is 'social and collective services' such as public administration, health, and education, which are often delivered through state mechanisms as well as private, as well as hybrids, and so their patterns of organization can vary quite widely, but nevertheless, the back-office processes are becoming highly IT-intensive.


Reference

Miles, I. (2006). Innovation in services [Electronic Version]. The Oxford handbook of innovation, 433—458. http://www.oxfordhandbooks.com/oso/public/content/oho_business/9780199286805/toc.html.

Forecasting Demand - Supermarkets and the Weather

Services can predict demand for services based on typical weather patterns. For example, the winter will usher in flu season and hospitals routinely prepare for a seasonal influx of patients seasonally.

With the development of huge amounts of more accurate weather data, there is the potential for better forecasting of demand.  

Weather Commerce provides targeted forecasts for British businesses so they can plan for specific weather conditions. For instance, if a very hot period is forecast for a particular area, then supermarkets can order appropriate products like water, suntan lotion and so on. Educated decisions can be made with historical data supplied by Weather Commerce with sales figures from the same period to plan stock and staff levels.




Weather services use the expertise of meteorologists to provide 'bespoke' forecasting services for a range of businesses which may be impacted upon by the weather. 

Experience Economy - Hospitals

Pine and Gilmore (1998) have popularised a key idea in service management; that we are now in an experience economy. Pine and Gilmore (1998) set out how theatrical and entertainment experiences are moving beyond and out of their traditional home in theme parks into restaurants (eater-tainment), retail (retail-tainment) and into all sorts of services one wouldn't expect to see entertainment (e.g. hospitals).

In the following diagram from their article, we can see that Pine and Gilmore see the development of the experience economy as being a part of an evolution in economies so that the experience economy is more advanced than service, industrial and primary economy.

The Progression of Economic Value - Pine and Gilmore (1998)


In the next diagram, we can see how relationships differ in each of the stages. For example, the consumer has moved from being called 'market', to 'Guest'.


Economic Distinctions from Pine and Gilmore (1998)

In the next diagram, we can see that experiences can be divided into four types. An example of an escapist experience could be an online gaming one. An example of an entertainment experience could be going to the movies or a concert.

The Four Realms of an Experience, from Pine and Gilmore (1998)


The following video from Ted Talks shows speaker Ted Lee talking about the relevance of Pine and Gilmore's work for the health sector, demonstrating its spread into other industries beyond Disney.




Story-boarding


Story-boarding is a technique service managers can use to make intangible processes tangible.
A storyboard can look like a comic book and provides one way to show to staff, managers and customers correct processes. Storyboards are also used to show typical faults in processes. Emotions can be shown in storyboards which makes them useful devices for focusing the attention of organizational members on resolving pain points in a process.

A storyboard can tell the story of a typical customer encountering a service. A customer journey is told as if it is a story, with all the 'moments of truth' or interaction points pictured.

One advantage of a storyboard is that it is relatively easy to imagine the various main steps that are involved in a process visually and represent them in a sequence as a story. A story-board communicates more effectively to many people than a process map (which can look very complicated!) and can communicate aspects of a process that are most important in service interaction.

Maister on Psychology of Waiting

Maister’s classic research on waiting and queuing - ‘Ten principles of waiting' explains principles of waiting.

1. Unoccupied time feels longer than occupied time

“Boredom results from being attentive to the passage of time itself”

Restaurant solutions: giving out menus before being seated (added bonus of decreasing wait time); turn waiting area into a bar (adds revenue also); posters, reading material, toys, memorabilia.

Telephone solutions: muzak (can have opposite effects if unrelated to service activity); menus and bars integrates service into waiting experience; an example of a sports team playing last week’s game!

Other solutions: Windy lines; different queuing systems and movement; medical waiting rooms (take the person's mind off the service - e.g. at the dentist.)

2. Pre-process waits feel longer than in-process waits

A person’s anxiety level is higher waiting to be served than while being served. People have a fear of being forgotten. Make first contact human and early in the process.

Example - triage waiting system. Assessment by a nurse while waiting to see a doctor.

3. Anxiety makes the waits seem longer

People have a fear of being forgotten

The other line always moves faster or, worry that there will not be enough room on a plane.

4. Uncertain waits are longer than known, finite waits

Example: if a patient told the doctor is delayed 30 minutes, they will wait, but once that time is met, becomes increasingly annoyed.

An important point to note: appointment defines an expectation that must be met.

5. Unexplained waits are longer than explained waits

Any explanation is better than none

eg. plane `technical difficulties’

eg. the sight of a serving person taking a break is a source of irritation

6. Unfair waits are longer than equitable waits

e.g. the situation where someone is felt to be `cutting in front’

FIFO rule - first in, first out - exceptions: emergency cases, table size (frequently resented), express checkout lanes (accepted).

Need to be aware of patrons sense of equity, feelings about status

7. The more valuable the service, the longer the customer will wait

The supermarket example moderated by this point (value of full cart higher than the value of lower and so people will wait longer)

Waiting for something of little value is intolerable. Post-process waits arethe most intolerable (eg. willingness to queue before the flight but impatience at baggage handling)

8. Solo waits feel longer than group waits

Promotion of group waiting experiences is beneficial - queuing for music tickets, the camaraderie that develops on plane delay, getting to know someone in a queue at Disneyworld.

9. Uncomfortable waits feel longer than comfortable waits

Uncomfortable waits sensitize people to time and poor service

10. New or infrequent users feel they wait longer than frequent users

The implication is to know who they are and provide reassurance

Reference

Maister, D. H. (1985). The psychology of waiting lines. In CZEPIEL, J. A., SOLOMON, M. & SURPRENANT, C. (eds.) The service encounter: Managing employee/customer interaction in service businesses London: Lexington Books.

DIY (Do-It-Yourself) - Ikea

Do-It-Yourself (DIY) can be seen as part of the co-production of service value. For instance, Ikea delivers flatpacks and the customer is expected to put the furniture together. This fits with Ikea's purpose of providing 'inexpensive design'; they can save costs on storage, transport, and assembly.

However, once the kit-set pack has left the facility, the satisfaction of the customer with the product is entirely down to the customer's ability to read and follow instructions (and the integrity of the pack). The customer may not have the skills to assemble the furniture, or the instructions may be unclear, or they may be too complex to follow. Negative experiences can then lead to dissatisfaction and complaints.

There is really no point in blaming the customer for incompetence. This just aggravates people and makes them angrier. The service provider should minimize the risk of mistakes in the self-assemblage process through good instructional practice. The service provider needs to understand their service extends outside the immediate environs of their own organization (premises, staff, and suppliers) and encompasses the consumer as a partial-employee, or a co-producer, of the firm.      

One solution is to offer instructions on how to build kit-set furniture online. Ikea has a Youtube channel in the USA 'How to build', which does just this. 


Unfortunately, there are no dedicated Ikea stores in NZ yet, although I have bought Ikea online.  I did have trouble putting it together. The following video is a parody of Ikea kit-set instructions. The quality of the video is deliberately bad, and it is quite good at demonstrating the service culture issues (i.e. top-down arrogant communication style) that lies beneath poor instructions.


Ikea Instructional Parody Video from Youtube




Tuesday, July 23, 2019

Queue Discipline Techniques

Queue discipline techniques are the rules placed over the behaviour of a group that tells the queue components how to behave. These components can be people, attributes of people (e.g. how loyal they are; how sick they are), material things, or information. The figure below illustrates discipline techniques by dividing them into two types; static (FCFS) and dynamic. 

Queue Discipline techniques 
On the left, we have a static rule FCFS. This is the 'First come, first served' rule. In this rule, which many service providers abide by, and can be seen in many other systems as well (like hiring and redundancy practices), the organisation simply serves whoever arrives first, and in order of arrival. This is a static queue because the organisation does not actively intercede in queue formation properties. 

On the right side is dynamic queue discipline. Queue discipline techniques are considered dynamic when managers actively intercede in the way that the queue is formed. So, two dynamic options are given for action in the above diagram: selection based on individual customer attributes; and selection based on the status of the queue.  In the 'Selection based on on individual customer attributes' we have three main queue discipline techniques; priority (the highest priority served first - e.g. cutting in line, or VIP - see below), preemptive (status is assigned based on how long a task takes and how long a component is queued), and  SPT (or standard processing time).

Image result for express queue at airport
Priority Queue Signage at an Airport



Queue Management (NZ Post)



NZ Post has challenging queue management issues because they deal with a wide variety of customer tasks (e.g. registering a car; a complex banking transaction; buying some stamps, etc..) that take different amounts of time. Many post offices use the preemptive system - e.g. they may have a bank customer only queue. Cashiers may intercede in the line to help train customers in how to skip the queue by using self-help facilities (like express deposit boxes for simple transactions).



Queue Types


There are three major types of physical queue configurations: multiple queues, single queue, and take-a-number queue.  Queue configuration tells us what a queue looks like.
Some basic queue configurations


A single queue system is sometimes called a snake queue. You often see these at airports.

A multiple queue system is often used in supermarkets and retail outlets.

This queue at the rugby sevens is a multiple queue.


Rugby Sevens queue at Westpac stadium in Wellington New Zealand


A 'take-a-number' queue is often seen at restaurants/bars, fast food places like Fish and Chip shops, and sometimes also at banks. A take-a-number type queue operates at 'Just Cuts', a franchised hairdressing salon. No appointments are taken, but your name is put into a 'line' on their computer (using the FCFS First-Come-First-Served rule) and they can tell you the approximate wait time so you can go off and do other things while you wait. Types of take-a-number technologies are improving and becoming more common. E.g. at busy one-stop-shop customer service centers.

Often a combination of queuing configurations can be seen. The above queue at the Rugby Sevens, although a multiple queue, is also like a snake queue.

Monday, July 22, 2019

Poka-yoke Devices - McDonald's

Poka-yoke is a Japanese term that means 'fail-safe' or 'mistake-proofing'. Originally called baka-yoke which means fool-proofing or idiot-proofing, the name was changed to a milder form of admonishment!  The point of a poka-yoke device is to provide a check-point to ensure a service can take place without hiccups. 

Imagine you are driving down a road. Down the middle of the road there are cats' eyes, slightly raised bumps that will make a noise and cause the car to judder, to give you a sudden reminder you have drifted into the wrong lane. On the outside of the road is the curb, which if you touch or hit will also remind you that you have strayed from the path you should be traveling. This is a type of Poka-yoke. Poka-yokes are everywhere once you start noticing them!

McDonald's

A Drive through Poka-yoke - Don't drive through the drive-through if your vehicle is over 2.7m high!




McDonald's uses the self-service principle and so they need to manage the behaviour of customers in their premises to keep them clean. Rubbish bins are placed near doors and in alleyways so that customers are reminded to place their rubbish in the receptacle when they leave. In McDonald's you are expected to clean your own table and so placement of rubbish bins here is a designed-in Poka-yoke device.   






Some more examples people have collected are here and also here.

More information about poka-yoke and its relationship to lean thinking management can be found here.


Poka-Yoke Devices - Hotels

Poka-yoke is a Japanese term that means 'fail-safe' or 'mistake-proofing'. Originally called baka-yoke which means fool-proofing or idiot-proofing, the name was changed to a milder form of admonishment!  The point of a poka-yoke device is to provide a check-point to ensure a service can take place without hiccups. Simple check-lists are examples, but there are also numerous devices you see every day but you may not realize they are an integral part of ensuring a service process runs smoothly.

Poka-yoke devices are devices built into a service process to minimize customer error.

Hotels are designed with the same principle in mind; minimize the likelihood of a user mistake through good design.  A patron is undergoing a journey through a hotel process. The journey the hotel offers is the same for everyone - basically a room for the night. In order for this process to be carried out with greatest efficiency and effectiveness, and because hotels' capital investment is mainly in the facility, the facility is designed to minimize the likelihood of anyone straying outside of the process. Ways patrons might stray outside the process include; stealing stuff, damaging stuff, losing stuff (like their keys), getting lost, hurting themselves (falling over in their room), wasting power or water, misusing the room (sneaking people in, cooking etc..) and so on (use your imagination!).     

On a recent business trip to Wellington, I stayed in an Ibis Hotel, and I photographed some simple Poka-yoke devices in my room in order to show how hotel design minimizes the likelihood of process errors. 

Some of the poka-yoke points include:
  1. The hotel lifts will only operate if I use my room key card to enable the lift. This is a security measure to ensure non-patrons cannot enter into room areas easily, helping to prevent theft. The lifts are within the sightline of the front-desk meaning it is difficult to sneak stuff into your room that shouldn't be there (like extra people).  
  2. When inside the room, you must place your key card into the slot shown below in order to enable power to the room including lights. This also means that when you leave the room and take your key card the lights to the room are turned off, meaning power is not wasted. It also means you are unlikely to forget your card. Your room will not lock unless the card is removed. 



3. You will notice that almost all hotel rooms have clothes hangers that detach leaving the hook behind. This is designed to stop patrons stealing clothes hangers.


4. Electrical appliances like irons and hair dryers are often wired into the wall. Again this stops them being stolen but also helps stop misuse (i.e. putting electrical appliances in water which is really dangerous).


5. Another simple design feature is to make all furnishings out of hard-wearing durable fabrics and materials, that are also easy to keep clean, and if a mark is made, not easy to see. So, for instance, carpets are often dark colors, in patterns and textures that minimize the appearance of wear and tear. 

  


Core and Supplementary Services

A core service is simply the fundamental service that the service is providing. A supplementary service is anything that could be considered an extra on top of that basic service. 

So for example, for a hotel, the core service would be providing a bed. The supplementary services are the services that add to that core experience. 







Supplementary services could include laundry services, business services, conference facilities, dining room, gymnasium, pool, mini-golf, vending machines, bar and so on. 


Defining what is core and supplementary can be difficult for many services as what might be considered supplementary comes to be considered core (e.g. McDonald's cafes were supplementary and are now a core part of their service). 

Services can also innovate around this idea by providing extra services or even stripping down service to its bare essentials. E.g. the Japanese capsule hotels - see below. 



Upside Down Service Pyramid

Inverted (or Upside Down) Service Pyramid 

In service management, it is common to hear talk of the upside-down or inverted service pyramid. The idea of the inverted service pyramid is that the traditional way of drawing organizational structure is inverted so that customers are at the top and the CEO and senior management are at the bottom of the organisational hierarchy. This is a very powerful way of illustrating the primary importance of service logic. This inversion symbolically represents the service ethic, or the service logic or the priorities service organisations should use and communicate to staff regarding their value system and culture. Supervisors, managers and even the CEO's primary role is to support front-line employees to deliver services to the customer. This is also a useful diagram to illustrate the principle of service leadership. 

Traditional organisational structure and inverted service pyramid





Notes on group fitness regimes and music as organisational technology

Photo license:   Flickr image by cooyutsing at http://www.flickr.com/photos/25802865@N08/6853984341/      Introduction The purpose of this a...