Developing management competences

The manager’s role in the customer-oriented service company

From manager in a service organisation to operations manager of service production

Demands for increased productivity and increased customer focus may render it necessary for the manager/team leader to develop other management competences.

The manager's role in the customer-oriented service company

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There might be advantages if the repertoire includes more of the operations management disciplines where continuous prioritisation of tasks and the employees’ time consumption are given pride of place. As a matter of fact, both the customers and the bottom line may benefit from upgraded daily operations management.

Our point of view is that service delivery can, in many cases, be regarded as production; and we have experienced that there is much to learn about operations management from the classic industrial production environments and the management tools that have been developed and refined there through decades of learning.

The difficult task for the manager in the service company is to extend the role as a manager towards a more deliveryoriented management style (planning, operations management, follow-up) – without the employees losing their motivation. The potential incentive for the employees is reduced stress, the opportunity to deliver better service to the customers and more clarity as to when the individual employee is successful in carrying out the daily work.

With this article, we want to highlight the management role which is referred to as operations management in the industrial sector. In the service sector, this management role is often quite unknown as management is performed based on knowledge of the content of the service (expertise) rather than from an operations management point of view. The operations management role, however, contains a number of elements which can help fulfil – or exceed – the customers’ expectations with a limited number of employees. We believe that this is a substantial competitive advantage in a service sector which is becoming an increasingly important part of western economy.

The challenges of the service organisation

Countless service organisations – public as well as private – have, to some extent, been occupied with development and improvement of processes as a consequence of demands for increased efficiency and bottom line focus while at the same time having to fulfil the customers’ wishes for high quality, short delivery times and low prices. For a number of years, the most common approach to process optimisation has been the Lean philosophy, where Womack & Jones’ five principles from studies of the Japanese motor industry have been applied to service environments.

In the companies that have worked with Lean, this has resulted in an exploration of processes and a large number of activities involving the employees and the managers in creating an overview of how the company’s services are delivered.

The process work has typically been centred around Value Stream Mapping in accordance with the second Lean principle, and the organisation has subsequently worked on identifying and eliminating waste – typically inspired by Ohno’s seven wastes. In order to handle ideas for process development, many companies have also introduced Kaizen processes. Here, the employees have been encouraged to bring forward ideas which have then been assessed according to different criteria, and the most feasible ones have been implemented.

The companies that seem to have experienced the most significant results from Lean are the ones that have also worked with optimisation of the process flow – especially including reduction of the delivery times to the customers, e.g. by aiming at day-to-day delivery or other very short delivery times. In many case administrating service organisations (e.g. insurance or public organisations), the reduction of delivery times from several days or weeks/months to a very short period of time is experienced as a quantum leap.

This requires that the backlog is eliminated so that focus, at all times, is on fulfilling the demand of the day. That, however, calls for a completely different type of management than traditionally used, and this is where the discipline of operations management becomes relevant. Employees and managers will typically experience it as a significantly different situation if they suddenly have to switch from facing the work accumulated through several days to continuously gearing the ”production” to the anticipated demand and a short reaction time.

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