Exploring the elements of excellent service experiences from the perspective of operations management. Drawing from academic and practitioner insights, we point out examples of firms that have systems, processes, and practices that lead to consistent, meaningful experiences for customers.
I recently had a discussion with my wife while waiting in a long queue at a wedding reception about queue management. One thing I found out is that I have been saying "balking" wrong (pronounced "bawking" like a chicken - no 'l'). We discussed ways that the bride and groom could have managed the line different to make the time pass a bit better, like more pictures and stories to see about the bride and groom, maybe a sign saying "expect 10 minutes from here", fast pass given to special guests, etc.
Here was an interesting New York Times article I stumbled on with some things that Disney does (hat tip Design For Service). It is good article about taking queue management to an extreme and is worth a read. Here are some excerpts:
In one corner, employees watch flat-screen televisions that depict various attractions in green, yellow and red outlines, with the colors representing wait-time gradations.
If Pirates of the Caribbean, the ride that sends people on a spirited voyage through the Spanish Main, suddenly blinks from green to yellow, the center might respond by alerting managers to launch more boats.
Another option involves dispatching Captain Jack Sparrow or Goofy or one of their pals to the queue to entertain people as they wait.
The following sounds like revenue or demand management applied to queuing:
What if Fantasyland is swamped with people but adjacent Tomorrowland has plenty of elbow room? The operations center can route a miniparade called “Move it! Shake it! Celebrate It!” into the less-populated pocket to siphon guests in that direction.
Behind-the-scenes systems — typically kept top secret by the company as it strives to create an environment where things happen as if by magic — are also highly computerized. Ride capacity is determined in part by analyzing hotel reservations, flight bookings and historic attendance data. Satellites provide minute-by-minute weather analysis.
It used to be that if you wanted to build an organization, you had to be prepared to do a lot of manufacturing and assembly--of something. ...
Restaurants used to be built by chefs. Now, more than ever, they're built by impresarios who know how to tie together real estate, promotion, service and chefs into a package that consumers want to buy. The difficult part isn't installing the stove, the difficult (and scarce) part is telling a story.
I'm talking about intentionally building a structure and a strategy and a position, not focusing your energy on the mechanics, because mechanics alone are insufficient. Just as you can't build a class A office building with nothing but a skilled carpenter, you can't build a business for the ages that merely puts widgets into boxes.
Mr. Godin's thoughts are expressed in a different way, but I think the message is similar to a post I had yesterday. Let's start to flush this idea out a bit more by creating a classic 2 by two matrix with experience design capabilities on one axis (low to high) and operational capabilities on the other. Something like this:
So now what? Well, I imagine the the high/high quadrant is a good place to be, but it implies high costs, but also high quality and value - think Disney. The low/low quadrant on the other hand is low service and low value, low costs - think vending machines. It is interesting to think about the possibilities of the the other two quadrants. For high operational capabilities, but low experience think traditional fast food with factory like precision, but very little emotional experience. This quadrant has probably been well tread and is what most traditional operations management people consider when thinking about improving a service. Low operational capabilities but high experience design may lead to a service full of emotional stimulus, but with the risk of service failure lurking around since there is no operational backbone to support the experience.
I'm still a pretty slow learner and Sesame Street is at about the right level for me:
I watched this video with my son tonight and it reminded me of the HBR article titled "Breaking the Trade-Off Between Efficiency and Service" by Francis Frei. Professor Frei brings up the librarians problem, mainly that sometimes customers might want something that is not usually offered (um num num..cookies...) and service providers have to make a choice to accommodate or not. She argues that services that choose to accommodate special requests have higher levels of perceived service experience, but also have higher costs. She encourages service providers to think about different types of customer induced variance when trying to create an accommodation strategy.
The library, for example, is a pretty low accommodation service, but how could it maintain its low cost while adding a degree of accommodation? One way would be to create a self-service option that could provide some cookies in the library (vending machine). Another way would be to outsource some cookie production to another service provider that has the capabilities of producing cookies at a low cost. Finally, the library could maintain its "books only" policy by, as Frie puts it, "limiting the service breadth." I read that as meaning create a service process for which customers will not ask for special accommodation. In the case of the library maybe these means switch completely to e-books - if Cookie Monster still wants a cookie, send him am electronic tracking cookie...
This post was brought to you by the letters C and A and the number 4.
Two recent articles in WSJ have pointed out some operations of mega restaurants - both are worth investigating. The first is from the largest restaurant in the world in Damascus. Here is the video:
After watching the video, operations management folks like myself get a bit excited to think about the shear planning and organizing it takes to produce and deliver so much food every night. The kitchen essentially becomes an efficient factory and the head chef like a plant manager.
The next article is about the Tao in Las Vegas, sorry no video, but here a couple of pictures and quotes:
Seconds count because Tao's kitchen serves 1,400 dinners on a typical Saturday night, making it one of the busiest high-end restaurants in the country. While partially cooking dishes in advance isn't unusual in restaurant kitchens, doing so with quick-cooking fish is. That's one way Tao is able to keep the plates moving fast enough to get its legions of diners fed
click to see full size
Although it is only open for dinner, Tao operates 24 hours a day, preparing Chinese, Japanese and Thai-influenced cuisine. On Saturdays, the busiest day, the restaurant employs 57 cooks, eight chefs, 26 servers and 10 hostesses. It goes through 1,400 pairs of chopsticks, 50 pounds of rice and three gallons of Heinz ketchup—a key component of its kung pao sauce. A four-person set-up team folds 1,800 napkins, stocks bars with lemon, lime and apple slices and prepares Tao's over-the-top (think 20-foot-tall Buddha statue) dining room for the night, including lighting 269 candles. One employee does nothing but sweep for his eight-hour shift.
"In Las Vegas, everybody is looking for the big experience," says Rich Wolf, co-owner of the Tao Group, which owns Tao Las Vegas, 11 other restaurants and seven nightclubs in New York and Las Vegas. "It isn't your first thought for a quiet, intimate date," but it's where "people can go to when they want to be festive and celebrate and paint the town red."
The restaurant is part of a 60,000-square-foot complex that also includes a lounge, the popular nightclub and Tao Beach, an outdoor club (closed in winter) with a dance floor, pool and cabanas that offer food, drink and massages. Tao's strategy is to keep people under its roof, and spending money, all night long. Dinner is treated like a pre-party for the wilder antics upstairs at the nightclub. On a recent evening, two barely-clad models hired by Tao frolicked in a rose-petal-filled bathtub near the dance floor.
I suggest reading the entire article - it is fun to get a glimpse at how they do what they do.
I was struck, however, at the contrast between these two examples. The first Damascus video was nearly entirely focused on the operational execution that needs to take place every night - chopping, prepping, ordering, inventory, etc. The article about the Tao also spent considerable time on the topics of inventory, receiving, and food production, but on the other hand it emphasized the work that is put into creating experiences, for example:
By 10 a.m., the four set-up staff started preparing the dining room. One employee donned a harness and ropes to scale the 24-foot-high red wall and place rechargeable lights in the 48 candles highlighting the Buddha that rises above a pool filled with swimming Japanese carp. A representative from the Venetian hotel's floral department replaced the rose petals that filled the eight tubs dramatically lining the entrance to the restaurant.
I have no way of knowing if the Damsus restaurant does not spend similar resources on experience creation, but I think the contrast is interesting. One one hand, the factory approach is essential to ensuring consitent quality and delivery of food and the food certainly influences the experience. But, the experience must also consist of more than just the food and the Tao understands that well.
It is interesting to think about what the right mix of factory/production thinking and experience design thinking is right for specific service and how much resources should companies place in each area. I suppose it comes down to where the value is being created - is it the output of the kitchen (factory) or the atmosphere and experience of the dinning area. How much weight do customers put on each aspect? If a service designer is too biased toward one side or the other (factory vs experience thinking) what will happen?
Customer view - additional computer screen for customers to see what the server is doing on her screen. As seen at Cornell Post Office - picture taken by permission.
I saw this computer screen at the post office a couple of weeks ago and thought it was interesting. It allows customers a view of what the server is doing on her computer screen. It is nothing more than a duplicate screen of what the server sees, but I thought it was a good example of process transparency. It also forces the process to be simple enough that a lay customer can understand what is going on. Additionally, it allows customers to check on what's going on - am I getting charged for something I didn't want - and begins the training of customers on a self service option.
In general, most would say that transparency is a good thing. But when I asked the postal workers what thy thought if it they grumbled a bit and said they were not impressed by it. They said it often didn't work and that they had to shut it down when they were logging in. It sounds like it just added additional work for the servers. Unsaid, but a bit implied was that it gave customers a bit too much of a feeling of control, that is, I assume customers might start questioning a bit what is going on, especially if servers hurry through screens. So it might actually slow down the process if customers are able to see it.
So, is it the right thing to do? Under what conditions does added transparency work? Under what conditions might it harm things?
On a separate note, I was impressed by this offering:
This is a prepackaged, ready to send gift in the line at the post office. Think about it, if you are waiting in line at the post office to send your cousins and nephews and nieces all their Christmas gifts and you still have one gift left to get and suddenly a reasonably priced Christmas classic dvd appears in front of you ready to ship - talk about impulse buy!
So these break down along the lines of people may be stupid and caregivers may be given bad incentives. On the former, the concern is that people will opt for long drives or stay home because they are overly sensitive to waits. While I generally believe that it is never good to underestimate stupidity, this seems a bit much. As I said above, I am not sure that I would think to look at a Twitter feed when faced with a medical emergency. That is certainly clear if the emergency involved, say, chest pains. This really is about sprained vs broken ankles so this concern seems overstated.
What is interesting is that a number of the approaches the article highlights are pretty basic recommendations from the OM tool box. For example, shifting work to less expensive staff (e.g., having nurses give flu shots) is simply moving work from the bottleneck to less constrained resources. Having patients complete registration before arriving at the clinic or reducing unnecessary follow ups are examples of moving activities off the critical path or eliminating non-value added work
The idea behind the new technology is to do some pre-processing. Novartis will “develop a bank of synthetically constructed seed viruses ready to go into production as soon as the WHO identifies the flu strains”. In short, they will artificially create a bunch of potential viruses in the hope that one of them will turn out to be the useful one for production.
What will this extra time give them? The biggest advantage seems to be additional capacity. If a facility can make X doses per week, then adding 4 weeks to the schedule means 4x more doses for the season, pretty much with the same overhead as before.
Johnson & Johnson's recent battle with quality issues:
J&J and its McNeill unit has had a rather difficult two years, and a sweeping look at all manufacturing and perhaps supply chain processes is the right move. An overall revamping of all manufacturing operations is underway, including a new czar of manufacturing with an associated task team with sweeping organizational powers across all of J&J’s operating groups. The FDA also indicates that J&J faces additional close scrutiny and inspection by that agency. But the damage remains in millions of lost sales to date, over $100 million to upgrade McNeill’s plants, and uncertain consumer perceptions regarding brands.
Yet another well-run company with a stellar reputation for quality could not overcome a series of multiple back-to-back incidents relating to its process design and quality control processes. A compounding slow response and untimely or ineffective response by senior management was also evident.
Dentistry is basically the unpleasant experience. They poke in your mouth. It's uncomfortable. It's painful. It's unpleasant. You have to keep your mouth open. And I think all of this pain actually causes cognitive dissonance - and cause higher loyalty to your dentist. Because who wants to go through this pain and say, I'm not sure if I did it for the right reason. I'm not sure this is the right guy.
So you can imagine that at some point in your dental treatment, you have a choice between things that have the same possible outcome, but one of them is more expensive to you and better financially for the dentist. Which one would you choose, and how the duration of relationship be affecting that?
And it turns out that the more time people have seen the same dentist, the more likely the decision is going to go in favor of the dentist. People are going to go for the treatment that is more expensive but has the same outcome. More out of pocket for them, more money for the doctor. So in this case, loyalty actually creates more benefit for the dentists.
