Sorting Things Out: Classification and Its Consequences.

Why are a select few service firms better at what they do - year in and year out - than their competitors? For most senior managers, the profusion of anecdotal "service excellence" books fails to address this key question. In this pathbreaking book, world-renowned Harvard Business School service firm experts James L. Heskett, W. Earl Sasser, Jr. and Leonard A. Schlesinger reveal that leading companies stay on top by managing the service profit chain. Based on five years of painstaking research, the authors show how managers at American Express, Southwest Airlines, Banc One, Waste Management, USAA, MBNA, Intuit, British Airways, Taco Bell, Fairfield Inns, Ritz-Carlton Hotel, and the Merry Maids subsidiary of ServiceMaster employ a quantifiable set of relationships that directly links profit and growth to not only customer loyalty and satisfaction, but to employee loyalty, satisfaction, and productivity. The strongest relationships the authors discovered are those between (1) profit and customer loyalty; (2) employee loyalty and customer loyalty; and (3) employee satisfaction and customer satisfaction. Moreover, these relationships are mutually reinforcing; that is, satisfied customers contribute to employee satisfaction and vice versa. Here, finally, is the foundation for a powerful strategic service vision, a model on which any manager can build more focused operations and marketing capabilities. For example, the authors demonstrate how, in Banc One's operating divisions, a direct relationship between customer loyalty measured by the "depth" of a relationship, the number of banking services a customer utilizes, and profitability led the bank to encourage existing customers to further extend the bank services they use. Taco Bell has found that their stores in the top quadrant of customer satisfaction ratings outperform their other stores on all measures. At American Express Travel Services, offices that ticket quickly and accurately are more profitable than those which don't. With hundreds of examples like these, the authors show how to manage the customer-employee "satisfaction mirror" and the customer value equation to achieve a "customer's eye view" of goods and services. They describe how companies in any service industry can (1) measure service profit chain relationships across operating units; (2) communicate the resulting self-appraisal; (3) develop a "balanced scorecard" of performance; (4) develop a recognitions and rewards system tied to established measures; (5) communicate results company-wide; (6) develop an internal "best practice" information exchange; and (7) improve overall service profit chain performance. What difference can service profit chain management make? A lot. Between 1986 and 1995, the common stock prices of the companies studied by the authors increased 147%, nearly twice as fast as the price of the stocks of their closest competitors. The proven success and high-yielding results from these high-achieving companies will make The Service Profit Chain required reading for senior, division, and business unit managers in all service companies, as well as for students of service management.

The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value (Цепочка создания прибыли в сфере услуг: как ведущие компании связывают прибыль и рост с лояльностью, удовлетворением и ценностью)

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Bureaucracy: What Government Agencies Do And Why They Do It

This study empirically examines the impact of service innovation on performance in developing countries such as China. We construct a more integrative model linking service innovation, service quality and performance and collect 277 samples in the Chinese tourism sector. The findings are: First, service innovation affects firm performance through direct and indirect paths where service quality plays a positive mediating role, and the direct impact is larger than the indirect one; Secondly, the innovation mode is cost-reductive, which focuses on eliminating internal cost rather than improving service quality; Third, the assessment of service quality emphasizes the dimensions of assurance and reliability.

The impact of service innovation on firm performance.

Competing in a Service Economy: How to Create a Competitive Advantage through Service Development and Innovation

Much of the innovation literature focuses exclusively on product-oriented companies. While scholars have begun researching innovation in service companies, the field of service innovation remains undeveloped and relatively immature. This paper begins with a summary of the various differences that distinguish services and products-building a key framework for analyzing services proposed by Bitran and Lojo (1993). Case studies of three service companies then present detailed information regarding seven specific innovation decisions. The paper compares, contrasts, and integrates these seven innovation decisions to develop three testable propositions suggestive of a service innovation theory. I conclude by drawing attention to future research that might advance the development of service innovation theory and the ultimate generation of a general innovation theory that incorporates both products and services. Thesis Supervisor: Michael A. Cusumano Title: Sloan Management Review Distinguished Professor of Management ACKNOWLEDGMENTS I would like to thank Professors Michael Cusumano and Gabriel Bitran of the Sloan School of Management at MIT for their extremely valuable guidance and help in crafting this paper. I am particularly grateful to Professor Cusumano for selflessly reading multiple drafts of this paper and generously donating his time to a seemingly endless effort. Another individual at MIT who proved quite influential and helpful is David Verrill, Executive Director for the Center for eBusiness @ MIT (CeB). David's invitation to CeB events and consistent support of my efforts did not go unnoticed. This paper would not have been possible without the help of these three extremely talented professionals. One of the real benefits of attending graduate school in the greater Boston area is that one receives tremendous access to leading academics at MIT's peer institutions. My work, and the ideas discussed in this paper, benefited a great deal from numerous discussions "across the river." In particular, I want to thank Professors Amy Edmondson, Lee Fleming, Stefan Thomke, and Michael Tushman for their time, energy, enthusiasm, and support of my efforts. While all four of them were helpful, I want to especially thank Professor Tushman for generously spending a semester with me working through an independent study of the innovation literature. ABOUT THE AUTHOR Vikram Mansharamani spent three years in the venture capital business before enrolling at MIT to pursue his graduate education. During his three years with Boston-based Great Hill Partners, he was responsible for the firm's investments in the for-profit education, marketing services, and IT services industries. He was a member of the Board of Directors of Interelate, Inc. and ManagedOps.com. Prior to his position in venture capital, Mr. Mansharamani was in the Mergers & Acquisitions Group at Merrill Lynch and was a consultant with Booz-Allen & Hamilton. His other experiences include positions at the American Enterprise Institute, the US Embassy in Beijing, The White House, and Bear Steams. Mr. Mansharamani holds a Masters of Science degree from the MIT Political Science Department (Security Studies Program) and is a graduate of Yale University, where he was the recipient of the Marshall-Allison Prize and was elected to Phi Beta Kappa. He lives in Boston.

Towards a theory of service innovation : an inductive case study approach to evaluating the uniqueness of services

This dissertation is focused on the topic of service innovation and explores economies of scale and strategic differentiation in services via an inductive field-based case study of the world’s largest casino gaming company, Harrah’s Entertainment. It includes comparisons to services firms in other industries such as distribution/logistics (UPS) and for-profit/online education (Apollo Group/University of Phoenix). The findings suggest that scale and differentiation (considered by many to be mutually exclusive in services) can be combined through the strategic use of information technology in a manner that increases customer switching costs, resulting in improved profitability and returns. The limitations of standardization-only scale-oriented strategies are discussed, and the dissertation concludes with a description of the three key components needed by any firm seeking to employ a strategy of scalable service differentiation: (1) a loyalty program, or other means of linking specific transaction data with specific customers, (2) an analytic engine that determines the ranking/prioritization of customers and the criteria upon which to differentiate services, and (3) a set of information technology tools that automate consistent differentiated service delivery across a company’s touch-points with its customers. Thesis Supervisor: Michael A. Cusumano Title: Sloan Management Review Distinguished Professor of Management

Scale and differentiation in services : using information technologies to manage customer experiences at Harrah's Entertainment and other companies

This paper attempts to explain why the United States Coast Guard decided to undertake its most recent major capital asset replacement effort—the Deepwater Program—through the use of a systems approach. Several explanations are considered, but a series of interviews and a review of events during the 1996-2003 timeframe yield an explanation that points to bureaucratic politics and status dynamics as the most likely cause. In particular, the paper finds that the Coast Guard’s low status (vis-a-vis other organizations within the Department of Transportation) combined with the Deepwater community’s high status (vis-a-vis other communities within the Coast Guard) to produce a political environment that made the use of a systems approach almost inevitable. The paper closes by considering the policy ramifications of systems approaches used by relative weak organizations. Thesis Supervisor: Harvey M. Sapolsky Title: Professor of Public Policy and Organization ACKNOWLEDGEMENTS I would like to thank Professor Harvey Sapolsky (MIT Security Studies Program), Professor Richard Samuels (MIT Center for International Studies), and Professor Eugene Gholz (University of Kentucky Patterson School of Diplomacy and International Commerce) for their help in crafting the argument presented in this paper. I am also indebted to the MIT Security Studies Program for providing a vibrant community of scholars with whom to interact and share ideas. I particularly thank Harvey Sapolsky for including me within this community and for generously sharing his time and insights with me on a regular basis. This research would not have been possible without the help of numerous professionals at the US Coast Guard. In particular, Coast Guard Chief of Staff Vice Admiral Allen, Deepwater Program Executive Officer Rear Admiral Patrick Stillman, Captain Timothy Terriberry (Retired), Captain Jack McDaniel (Retired), and Seth Winnick selflessly spent time with me and helped me understand the Coast Guard. Finally, I want to thank (and apologize to) my wife Kristen for her endurance while proofreading numerous drafts and enduring the seemingly endless dinner conversations about the Coast Guard. It is unlikely this paper would have been completed without her help. All errors and omissions remain mine. ABOUT THE AUTHOR Vikram Mansharamani spent three years in the venture capital business before enrolling at MIT to pursue his graduate education. During his three years with Boston-based Great Hill Partners, he was responsible for the firm’s investments in the for-profit education, marketing services, and IT services industries. He was a member of the Board of Directors of Interelate, Inc. and ManagedOps.com. Prior to his position in venture capital, Mr. Mansharamani was in the Mergers & Acquisitions Group at Merrill Lynch and was a Consultant with Booz-Allen & Hamilton. His other experiences include positions at the American Enterprise Institute, the US Embassy in Beijing, The White House, and Bear Stearns. Mr. Mansharamani is a graduate of Yale University, where he was the recipient of the Marshall-Allison Prize and was elected to Phi Beta Kappa. He lives in Boston. The Deepwater Program: A Case Study in Organizational Transformation Inspired by the Parallel Interaction of Internal and External Core Groups The goal of this effort is not to replace ships, aircraft and sensors with more ships, aircraft and sensors, but to provide the Coast Guard with the functional capabilities required to achieve mission success safely...It is critical that the Deepwater system be viewed in its totality to develop a unified, strategic overview, ensure asset comparability and interoperability, and provide the most affordable solution for the taxpayer. (Integrated Deepwater System Mission Need Statement)

/pdf/the-deepwater-program-a-case-study-in-organizational-585171r2u7.pdf

Vikram Mansharamani

Papers

Towards a theory of service innovation : an inductive case study approach to evaluating the uniqueness of services

Scale and differentiation in services : using information technologies to manage customer experiences at Harrah's Entertainment and other companies

The Deepwater Program : a case study in organizational transformation inspired by the parallel interaction of internal and external core groups