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


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.



Agenda

• Variability in Service Systems• Definition of Service Improvisation Competence (SIC)• Antecedents of Service Improvisation Competence• Outcomes of Service Improvisation Competence• Conclusions



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)



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)



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



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,…



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



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).



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


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



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



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


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



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

(-)



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.



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



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



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.


Questions?

Thank You!

towards a theory of service improvisation competence enrico secchi ph.d. candidate, clemson...

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