Organizing For Service Leadership

Rommae ReyesJennifer SalazarVladimir Medina

BSBA4Mr. Abelito Quiwa

Objectives:• To know what actions required to move a service firm

from a reactive position of merely being available for service, toward the status of world-class service delivery.

• To understand the extent of marketing, operations and human-resources management functions interdependent in service organisations. 

• To discuss the causes of inter-functional tensions and how can be avoided.

• To know how does leading differ from managing.

Marketing’s Role in the Service Firm

As marketing gains increasing prominence as an orientation that everyone in the organization shares and as a process that all functions participate in deploying, a critical issue that arises is the role of the marketing function

Marketing as a Bridging Function

Marketers like to be thought of as professionals too. Part of their role is as social engineers, fostering a strong customer focus and linking the entire organisation to the markets in which it competes.

Changing Relationships Between Marketing, Operations and Human

Resources

One of the challenges facing senior managers in any type of organisation is to avoid “Functional Silos”,

The Marketing Function

• Evaluate and select the market segments to serve

• Research customer needs and preferences within each segments.

• Monitor competitive offerings

• Design the core product and tailor its characteristics to the needs of chosen market segments.

• Select and establish service levels for supplementary elements needed to enhance the value and appeal of the core product, or to facilitate its purchase and use.

• Participate with operations in designing the entire service process to ensure that it is “user friendly”, and reflects customer needs and preferences.

• Set prices that reflects costs, competitive strategies and consumer sensitivity to different price levels.

• Tailor location and scheduling of service availability to customer needs and preferences.

• Develop communications strategies.• Develop performance standards for establishing and

measuring service quality levels.• Ensure that all customer contact personnel.

The Marketing Function

• Create programmes for rewarding and reinforcing customer loyalty.

• Conduct research to evaluate customer satisfaction following service

The Marketing Function

Marketing function in service businesses is closely dependent on the procedures, personnel and facilities managed by the operations function and on the quality of the service personnel recruited and trained by the human resource function.

The Marketing Function

The Operations Function

The Operations function brings together raw materials with the production process to make products that customers need. It also shares ideas across the company about how to improve processes or achieve cost savings. 

The Human Resources Function

In many service businesses, the calibre and commitment of the labour force have become a major source of competitive advantage.

Inter-functional Conflict

As service place more emphasis on developing a strong market orientation and serving customers well, there is increased potential for conflict among the three functions.

• Cost versus Revenue Orientation• Conflicting Goal for Workers in Boundary-spanning

Jobs• Marketing Concerns with operational Goals.

• Cost versus Revenue Orientation

• Conflicting Goal for Workers in Boundary-spanning Jobs

• Marketing Concerns with operational Goals.

Inter-functional Conflict

• Cost versus Revenue Orientation

• Conflicting Goal for Workers in Boundary-spanning Jobs

• Marketing Concerns with operational Goals.

Inter-functional Conflict

• Cost versus Revenue Orientation

• Conflicting Goal for Workers in Boundary-spanning Jobs

• Marketing Concerns with operational Goals.

Inter-functional Conflict

Improving Intra-Organizational Coordination Transfers and cross training Cross functional taskforces New tasks and new people Process management teams Gain-sharing programs

Marketing Imperative

target “right” customers and build relationships

offer solutions that meet their needs define quality package with competitive

advantage

Operations Imperative

create, deliver specified service to target customers

adhere to consistent quality standards achieve high productivity to ensure

acceptable costs

Human Resource Imperative

recruit and retain the best employees for each job

train and motivate them to work well together

achieve both productivity and customer satisfaction

From Losers to Leaders:Four Levels of Service Performance

Service Losers Service Nonentities Service Professionals Service Leaders

Service Losers

bottom of the barrel from both customer and managerial perspectives

customers patronize them because there is no viable alternative

new technology introduced only under duress; uncaring workforce

Service Nonentities

dominated by a traditional operations mindset

unsophisticated marketing strategies consumers neither seek out nor avoid

them

Service Professionals

clear market positioning strategy customers within target

segment(s) seek them out research used to measure

customer satisfaction operations and marketing work

together proactive, investment-oriented

approach to HRM

Service Leaders

the crème da la crème of their respective industries

names synonymous with outstanding service, customer delight

service delivery is seamless process organized around customers

employees empowered and committed to firm’s values and goals

• Firms can move either up or down the performance ladder. Once-stellar performers can become complacent and sluggish. Organizations that are devoted to satisfying their current customers may miss important shifts in the marketplace and find themselves turning into has-beens that continue to serve a loyal but dwindling band of conservative customers.

Moving Up the Service

IN SEARCH OF SERVICE LEADERSHIP

• Service leaders are those firms that stand out in their respective markets and industries. However, it still requires human leaders to take them in the right direction, set the right strategic priorities and ensure that the relevant strategies are implemented throughout the organization.

Leading a Service Organization

• Josh Kotter, perhaps the best known writer on leadership, argues that in most successful management processes, people need to move through eight complicated and often time-consuming stages:

1. Creating a sense of urgency to develop impetus for change.2. Putting together a strong enough team to direct the process.3. Creating an appropriate vision of where the organization needs

to go.4. Communicating that new vision broadly.5. Empowering employees to act on that vision.6. Producing sufficient short–term results to create credibility and

counter cynicism.7. Building momentum and using that to tackle the tougher change

problems.8. Anchoring the new behaviors in the organizational culture.

Leadership versus Management

• Leaders need to be concerned with the development of vision and strategies and the empowerment of people to overcome obstacles and make the vision happen. Management by contrast, involves keeping the current situation operating through planning, budgeting, and organizing, staffing, controlling and problem solving.

Leadership versus Management

• Leadership works through people and culture. It is sift and hot.

• Management works through hierarchy and systems. It is harder and cooler...

• The fundamental purpose of management is to keep the current system functioning. The fundamental purpose of leadership is to produce useful change, especially non-incremental change. It is possible to have too much or too little of either. Strong leadership with no management risks chaos. The organization might walk right off a cliff. Strong management with no leadership tends to entrench an organization in deadly bureaucracy.

Leadership Qualities

• Vision, charisma, persistence, high expectations, expertise, empathy, persuasiveness, integrity

• Ability to visualize quality of service as foundation for competing

• Believe in people who work for the firm, make good communications a priority

• Possess a natural enthusiasm for the business, teach it to others, pass on nuances, secrets, crafts of operating

• Cultivate leadership qualities of others in organization

• Use values to navigate firms through difficult times

Evaluating Leadership Potential

• As we have seen, the need for leadership is not confined to chief executives or other top managers. Leadership traits are needed of everyone in a supervisory or managerial position, including those heading teams. Federal Express believes this so strongly that it requires all employees interested in entering the ranks of first-line management to participate in its Leadership Evaluation and Awareness Process (LEAP).

1. LEAP’s first step involves participation in an introductory, one-day class that familiarizes candidates with managerial responsibilities.

2. The next step is a three-to-six month period during which the candidate’s manager coaches him or her based on a series of leadership attributes identifie3d by the company.

3. A third step involves peer assessment by a number of the candidate’s co-workers

Leadership, Culture and Climate

• In an organizational context, the word “culture” can be defined as including:

Shared perceptions or themes regarding what is important in the organization.

Shared values about what is right and wrong. Shared understanding about what works and what does not. Shared beliefs and assumptions about why these things are

important. Shared styles of working and relating to others.

Leadership, Culture and Climate

• “Climate” can be thought of as the more immediately tangible surface layer on top of the organization’s underlying culture. Among six key factors that influence an organization’s working environment are it’s:

flexibility-how free employees feel to innovate Their sense of responsibility to the organization The level of standards that people set The perceived aptness of rewards The clarity people have about mission and values; And the level of commitment to a common purpose

Leadership, Culture and Climate

• From an employee perspective, this climate is related directly to managerial policies and procedures especially those associated with human resources management. In short, climate represents the shared perceptions of employees concerning the practices, procedures, and types of behaviors that get rewarded and supported in a particular setting.

• Leaders are responsible for creating cultures and the service climates that go along with them.

• Creating a new climate for service, based upon an understanding of what is needed for market success, may require a radical rethink of human resources management activities, operational procedures and the firm’s reward and recognition policies.

Leadership, Culture and Climate

• Every manager should be role a role model to his or her peers and subordinates. All supervisors’ should be role models to those whose work they supervise. Experienced employees should be mentors and role models for new employees. The skills and behaviors that are taught in training sessions must be exemplified day-in and day-out on the job. Otherwise much of the effort put into careful recruitment will be wasted; a leadership will degenerate into “do as I say, not as I do”.

• No organization can hope to achieve and maintain leadership in an industry without human leaders who can articulate a vision and help to bring it about. Service leadership encompasses high performance across a variety of dimensions that fall within the scope of the marketing, operations and human resources functions. However, since these functions often overlap and are interdependent, it is difficult to perform really well without internal collaboration and cooperation.

Conclusion

• Within any given service organization, marketing has to coexist with operations traditionally, the dominant function-whose concerns are cost and efficiency centered, rather than customer centered. Marketing must also coexist with human resources management, which usually recruits and trains service personnel, including those who have direct contact with the customers. An ongoing challenge is to balance the concerns of each function, not only a head office, but also in the field.

Conclusion