Interview: Graham Clark
Service Operations Management
SM
This is a Cranfield School of Management Podcast – it’s one of a
series where we interview authors about their books. I am Steve
Macaulay and I am interviewing Graham Clark about his book that
he co-authored on Service Operations Management. Now
Graham, customers are the life blood of organisations, and yet you
wouldn’t think so sometimes – the way customers are treated. I
would like to explore with you the components of service delivery.
First of all, let’s start off with “What is Service Operations
Management?”
GC
OK, well, service operations management is exactly what you have
said really – it’s about the delivery of the service that customers
expect. What we often say is that service delivery is the acid test of
the strategy of the organisation, how well it manages its resources,
how well it motivates its staff and of course, how well it is engaged
with its customers.
SM
Some people see customer service as an art, it’s about theatre,
emotion, relationships; some people see it as a science, it’s about
process, it’s about analysis. Where do you fit on that spectrum?
GC
I think I have my feet firmly in both camps, Steve. If we don’t take
into account the emotions of the customers in the process of service
delivery, then we really, really miss a trick. So, if we don’t
understand when customers are anxious or even when they are
excited, then maybe we miss an opportunity to manage service
better. On the other hand, if we don’t think about how to manage
our processes and our resources more carefully, then all that good
work around that moment of truth when the customer meets us is all
for nothing.
SM
There has been a lot of focus on customers and customer service
and customer delivery over the last decade or so. What are the
components, as you see it, of good service delivery?
GC
I think good service delivery is about making sure that we are clear
as to what is the required outcome for the customer. We often talk
about something called the service concept – in fact the heart of the
book is about the service concept, clarifying what it is that
customers are buying as opposed to what customers are paying for.
So often, organisations concentrate on the ‘pay for’ proposition, so
we pay for the salaries, for the processes, for the materials and miss
out on what customers are really buying. Perhaps I could give a
quick example. If you go to a Do–It–Yourself store, then you are
Graham Clark
paying for wood, nails and all the rest of it, but actually what we are
really buying is the moment when we get all those materials home
and we complete the project successfully. And we stand back and
say wow, I did that! So the buy proposition is very different from
the pay proposition and there is an opportunity to really manage
service more effectively if we understand that.
SM
What puzzles me is why so many people get it wrong – you speak
to a neighbour, stories in the paper and there are countless times
when you say why did the organisation do this so badly? Can you
give me any clues on that?
GC
I think there is a real disconnect between strategy and
implementation. So often we work with organisations that get very
excited about creating a new strategy and we have senior
managers, who are involved in that process of creating a new
service strategy, but then it has to be rolled out and it has to be
rolled consistently over thousands and thousands of transactions,
often in many different locations. And that bit becomes quite
routine and boring. So I think the real trick, particularly for volume
services, is how to engage the service employees in such a way
that they are excited about delivering routine service – and that is a
real challenge, I think.
SM
You give lots and lots of examples in your book, which I was
fascinated with, and all sorts of examples that I thought well what
has this got to do with customer service – schools, prisons,
hospitals, as well as the more normal ones like banks, shops and so
on. Can you give me some insight into the rationale behind that?
GC
Well, yes, because service operations is about management
resource and that applies to whether we are talking about, if you
like, traditional customer service like retail operations, through to
how well am I served if I am a patient in a hospital? In a sense we
are customers, sometimes we are hostage customers like when we
are paying our Council Tax to the local government, but we are still
looking for value for money. We still want to be treated well in the
process and indeed, even if we go to a hospital, the better we are
treated, the more likely we are to be better patients, if you like.
SM
So, if you were to pick one example out of all of those and say, this
company seems to epitomise the sort of thing I am talking about,
and obviously it is very dependent on context and so on – but some
indication of what you see as an organisation that has geared itself
up to good service delivery?
GC
Yes, I think that John Lewis is one of those organisations, which I
think has many of the attributes that I admire. They pay a lot of
attention to the detail of service delivery, they measure aspects of
service delivery, like how quickly you are acknowledged when you
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Graham Clark
walk into the store – it has to be within two minutes, it is the
standard. They keep on managing and monitoring that, but through
to the way they motivate their staff, of course, who are, as most
people know, co-owners of the business – every employee has a
share in the business, they are not employees, they are partners.
And I think that package of good process, good measurement, clear
customer service standards, but ownership as well, is a very
compelling one.
SM
One of the interesting things – a word that I heard you use, was
about the strategic role of operations. Now, I have always seen
operations as very much at the doing end, there is a business
strategy, they are there to implement it. Now, you seem to be
seeing this in a wider role and I know the book talks a bit about that
too.
GC
Absolutely right, because a strategy which doesn’t have the
operations input is one which is deficient. A good strategy has to
be rooted in what is possible, so I need to engage the operations
people in the process of strategy development. Because they
come from the point of view of this is what is possible, they may
need to be stretched, they may need to be challenged to think more
strategically, but they have a contribution to the strategy
development, which nobody else has. It’s a real challenge, I think,
not least because we employ people in the operations role because
they are good at getting things done and so the process of thinking
strategically is maybe not something that they are used to, but that
is one of the challenges for senior managers to engage them.
SM
I would like to take you away from the lofty heights of strategy, to
some of the raw realities of the current downturn – pressure on
profits, pressure to reduce numbers and so on. What advice would
you give to people responsible for operations and service delivery in
a company in these very pressing times?
GC
I think that what happens in difficult times is that customers become
even more discerning, so they are going to be very careful about the
way that they spend their money and they are not going to settle for
second best. So I think that an organisation that pays attention to
the detail of operations, that finds ways of delivering value, looking
after their scarce customers now, and recognising that they are very
important to the business – I think these are the organisations that
will succeed and survive through difficult times.
SM
Because the reality is that many are going to cut their customer
service budgets and staff?
GC
I think that is right, but these are the ones in my opinion that will go
out of business first - customers have long memories. Even if they
survive through what looks like a recession, then they will not be
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Graham Clark
well placed in terms of customer loyalty when we emerge into more
profitable times.
SM
You have given us some very interesting views, Graham. Thank
you very much.
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Cranfield School of Management
Produced by the Learning Services Team
Cranfield School of Management
© Cranfield University 2008