Professional Documents
Culture Documents
circles
Mechanisms behind the circles
• Average performance is an exception: service
companies do pretty well or have problems
• Success symptoms: profit, growth or conscious
resistance to it, good working climate, low
customers turnover, successful recruitment
• Opposite symptoms: poor economic
performance, slow or no growth, sloppiness,
low morale, customer and staff turnover
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Mechanisms behind the circles (cntd.)
• Only rarely does a single problem lie at the
root of the trouble
• Better to speak about vicious circles: many
different factors reinforce each other
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At the origin of vicious circles
• Complicating the service management system
• Growth without control
• Inappropriate power structure
• Mismatch between service package and
customers’ expectations
• Bad or sloppy operations management
• Inappropriate economic control systems
• Inability to attract staff
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An example: mismatch package‐
expectations
• An airline facing economic pressure cuts some
peripherals
• The saving may be marginal, while the client may
perceive a strong decrease in quality
• This affects the social climate, reducing
enthusiasm and motivation
• The client’s negative experience grows bigger,
and he reduces its contribution to quality
• Some clients will leave, the economic
performance will worsen, the vicious circle can
only continue
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But there are also virtuous circles
• Improving the peripherals may cost relatively
little money – but please the customers and
start a totally different virtuous circle
• Thus, in some cases pointing to genuine
excellence in both the core service and the
peripherals may be the right move
• What’s in the service package? What
constitutes quality to the client?
• 12 pluses needed to cancel out a single minus
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Ecology of micro‐ and macrocircles
• Any analysis of service operations must begin
at the moment of truth
• If both the service supplier and the client feel
uplifted by the interaction, a virtuous circle
exists
• Example: airline after reform programme
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Ecology of micro‐ and macrocircles
(cntd)
• The long‐term success of a company is heavily
influenced by a strong market position, good
economic results, maintenance and evolution
of the service management systems
• These do mutually reinforce and constitute a
virtuous macrocircle
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Ecology of micro‐ and macrocircles
(cntd)
• The internal service circle: the company’s internal
climate accords with the standards of excellence
necessary to offer good services
• The company must give value to its employees
• Thus, a single set of basic principles has to
pervade the whole organization, from the top to
the bottom, right up to the moment of truth
• Double signals would create schizophrenic
situations
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Relationships between three levels
• Circles at different levels are often closely and
directly interrelated
• Consequently, major lifts or reversal can often
be obtained, with dramatic results, even in a
short time: see change processes (later)
• Important to understand the dynamics of
virtuous circles: figure 4.6
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