Where Does the Employee Fit in a Service Operation?

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 9^th 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.

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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, 5^th, for upcoming 7^th 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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