After two years, my studies on service excellence are completed. During the two years I spent numerous hours working on the modules, resulting in various reports, case studies, exams, and finally the final thesis. This blog has been one outcome of my studies and I wanted to elaborate on selected topics related to service business as part of my learning experience.
The objective of my studies was to learn and update my knowledge about the business environment, including strategy, management and leadership since my MSc studies about 20 years ago. I chose focusing on service organizations and service excellence since I consider it a clear direction for several industrial companies as well as the future of developing the experience economy. Combined with my marketing background, I`m happy of what I´ve learnt and what I´ve focused on. The key learnings for me have been the need on internal communications and involvement of the organization throughout service development and differentiation of services based on customers needs. These studies have helped me in my current job, working on a customer focused strategy for a service organization.
It´s strange not having a business book or articles to read or a case report to write during a weekend or during summer holiday but I´m finally looking forward to spending a "real" holiday since a long time, just enjoying the spare time and having a break.
This blog will officially end though I may occasionally be inspired to share some further experiences related to services. I can warmly recommend similar learning experience for anybody who might consider taking a new challenge.
Sunday, February 19, 2012
Saturday, January 7, 2012
Services 2020
Tarja Tuominen from the Confederation of Finnish Industries (EK) presented a study by EK explaining the general forces for change in service industries operative environment. She also elaborated on competences required in 2020 for international service organizations.
According to EK study, the key forces for change are
a) globalization - enhancing internationalization and multiculture of services, multinational companies, increased competition and new kind of businesses
b) technological development and digitalization, creating prerequisites for services
c) networking - creating business opportunities across service sectors
d) ageing - threat for a competent workforce, setting challenges for responding to customer needs.
The underlying theme within Tuominen´s presentation was customer needs. Tuominen emphasized how we face customers, how we evaluate their needs, how we fulfil the requirements and competences providing the services.
Another trend within the services evolution seemed to be convergence of service sectors. You can see integration of services within various branches, resulting in providing packages of services. In Finland an example of such are the combinations of social services, real estate, retail and IT services, which can be seen merging for eg senior citizens.
According to EK, the trends and change factors set requirements for new competences towards 2020. The common competences needed are social skills, international operations and utilization of technologies. This does not sound like a groundbreaking news - but in the current market environment service providers already face problems of operating in the global market, lacking needed skills. Although companies are not active in the international market, globalization will affect domestic operations as well. It is important to be able to anticipate changes.
I think we say we learn for life. But there has to be some thought and discipline in regards to what takes the Finnish industries - and service businesses - forward internationally. Thus, engines for change are needed in a planned, systematic way, including educational plans as well as companies HR and HR development strategies.
According to EK study, the key forces for change are
a) globalization - enhancing internationalization and multiculture of services, multinational companies, increased competition and new kind of businesses
b) technological development and digitalization, creating prerequisites for services
c) networking - creating business opportunities across service sectors
d) ageing - threat for a competent workforce, setting challenges for responding to customer needs.
The underlying theme within Tuominen´s presentation was customer needs. Tuominen emphasized how we face customers, how we evaluate their needs, how we fulfil the requirements and competences providing the services.
Another trend within the services evolution seemed to be convergence of service sectors. You can see integration of services within various branches, resulting in providing packages of services. In Finland an example of such are the combinations of social services, real estate, retail and IT services, which can be seen merging for eg senior citizens.
According to EK, the trends and change factors set requirements for new competences towards 2020. The common competences needed are social skills, international operations and utilization of technologies. This does not sound like a groundbreaking news - but in the current market environment service providers already face problems of operating in the global market, lacking needed skills. Although companies are not active in the international market, globalization will affect domestic operations as well. It is important to be able to anticipate changes.
I think we say we learn for life. But there has to be some thought and discipline in regards to what takes the Finnish industries - and service businesses - forward internationally. Thus, engines for change are needed in a planned, systematic way, including educational plans as well as companies HR and HR development strategies.
Sunday, December 11, 2011
Competitive advantage - defining the sweetspot to complement your strategy
In strategy creation, there are two schools that bring benefits to strategy approach: planning and position school. The planning school is more traditional, providing a clear framework, tools and process for the strategy creation. The planning view includes a deliberate long term plan, carried out by top management. According to Kimmo Suominen from Perfecto, the position school for strategy creation is focusing on the analytics – how an organization positions itself to its environment with a most profitable way and thus finds a competitive advantage.
If you compare the two schools of planning and position, the planning school, through its formalization of the strategy, has traditionally a more visible role whereas position, through the analysis part, has not yet evolved to a systematic part of the strategy creation process.
Companies through their strategy creation approaches typically have defined vision, mission and values, but as Collis and Rukstad (HBR, 2008) point out, there are typically so many elements that people get confused to what is essential and what drives the implementation really forward.
In addition to the typical definitions, what would help companies is a clear definition of the competitive advantage. According to Collis and Rukstad, “your competitive advantage is the essence of your strategy: what your business will do differently from or better than others defines the all-important means by which you will achieve your stated objective. That advantage has complementary external and internal components: a value proposition that explains why the targeted customers should buy your product and a description of how internal activities must be aligned that only your firm can deliver that value proposition.” Therefore, clarifying the strategy in described form, in addition to the value and vision statements, would clarify the direction better for the employees and help set correct shorter term objectives.
What companies could do is use eg The Strategic Sweet Spot model in Collis and Rukstad (2008) ie finding the sweet spot that aligns the firm´s capabilities with customer needs in a way that competitors cannot match given the changing external context – factors such as technology, industry demographics and regulation.
Summarizing the competitive advantage would bring a welcome addition to the strategy elements, including a) objectives, ie ends of the strategy, b) scope, the domain of it and c) advantage, the means of achieving the end.
If you compare the two schools of planning and position, the planning school, through its formalization of the strategy, has traditionally a more visible role whereas position, through the analysis part, has not yet evolved to a systematic part of the strategy creation process.
Companies through their strategy creation approaches typically have defined vision, mission and values, but as Collis and Rukstad (HBR, 2008) point out, there are typically so many elements that people get confused to what is essential and what drives the implementation really forward.
In addition to the typical definitions, what would help companies is a clear definition of the competitive advantage. According to Collis and Rukstad, “your competitive advantage is the essence of your strategy: what your business will do differently from or better than others defines the all-important means by which you will achieve your stated objective. That advantage has complementary external and internal components: a value proposition that explains why the targeted customers should buy your product and a description of how internal activities must be aligned that only your firm can deliver that value proposition.” Therefore, clarifying the strategy in described form, in addition to the value and vision statements, would clarify the direction better for the employees and help set correct shorter term objectives.
What companies could do is use eg The Strategic Sweet Spot model in Collis and Rukstad (2008) ie finding the sweet spot that aligns the firm´s capabilities with customer needs in a way that competitors cannot match given the changing external context – factors such as technology, industry demographics and regulation.
Summarizing the competitive advantage would bring a welcome addition to the strategy elements, including a) objectives, ie ends of the strategy, b) scope, the domain of it and c) advantage, the means of achieving the end.
Sunday, November 20, 2011
Services value creation – the moment of truth
Jayawardhena (Journal of Business and Industrial Marketing, 25/5, 2010) in his study states that from the customer point of view, the most immediate evidence of service quality occurs in the service encounter. Therefore, this customer interaction with the firm is called the “moment of truth”.
Customers base their evaluations on their perceptions of the service encounter. Based on above, value creation of a business-to-business service concept should be defined as customer interaction during the service process. Next to standard services, value adding services should bring additional benefits to the customers´ business. The value is created through the implementation of the service process. Therefore it could be stated that customers´ ”moment of truth” happens during planning and implementation of the service creation process and analyzing its results, leading to improved business efficiency.
The implementation of a new service concept requires analyzing the customers´ business operations, identifying improvement areas and planning a solution that is tailor made for customer needs.
The most successful service organizations understand that the purpose of any business is to create value for customers, employees, and investors, and that the interests of these three groups are inextricably linked. Therefore, sustainable value cannot be created for one group unless it is created for all of them. The first focus should be on creating value for the customer, but this cannot be achieved unless the right employees are selected, developed, and rewarded, and unless investors receive consistently attractive returns (Paul O´Malley, 1998).
What O`Malley is suggesting is extremely relevant for service organizations since customers´ value creation does not take place unless the organization is internally geared towards the correct service level implementation and the correct mindset. An integral part of the value creation is the skills, knowledge and mindset of the personnel.
Saturday, October 8, 2011
Top service brands in Finland
The Finnish marketing and advertising magazine, Markkinointi & Mainonta published a list of most appreciated brands in Finland. The magazine highlighted the Finns now liking even more Finnish brands than before. The only foreign brand in top 10 was Google.
The respondents evaluated their appreciation, usage and awareness on brands and if they would recommend the brand to their peers. The study did not tell how many people participated in the survey.
Some interesting findings. Anni Helena and Riitan Herkku in top 200. These brands were higher in the list than Helsingin Sanomat and R-Kioski. I guess a national study influences a Helsinki area driven brand. Stockmann, the Finnish shopping flagship, in place 133 after Aino ice cream, Mustapekka cheese and Kivikylän kotipalvaamo? Even if Stockmann is present only in a number of cities, where and how do you actually find and see Kivikylän kotipalvaamo?
But what about service brands? As said, Google was the only foreign brand in top 10 - and the only service brand in top 10. The first Finnish service brand in place 14 is S-Etukortti. Most likely in most Finns´pocket. But that the service benefit is so much appreciated even after S-ryhmä stopped sending the annual bonus coupons, which I personally found the core benefit for my S-shopping behaviour?
The other kinds of service brands in top 100 were bookstores, banks (after all the discussion on banking services, one bank has managed to differentiate from others), radio and tv channels by YLE and travel brands Finnair and Aurinkomatkat.
Compared to the study made 10 years ago, biggest changes in service brands positions were first of all the drop by Finnair - then in position 8. Finnair (and Helsinki airport), having gotten all the prestigiuous service awards, has unfortunately been impacted by continuous problems in package handling and strikes by its own employees and partnering companies. Another loser is Silja Line, whose image worsened within the merger to Tallink and the lively management incidents. The bookstores still score high but Stockmann and Sokos fall behind.
The real big winners in the competition are symbols representing a new era: Finnishness, quality and ecology in general. Brands ranked in Top 30: Joutsenlippu, Joutsenmerkki, Avainlippu, Luomu.
Would this trend indicate that the Finnish consumption behaviour is moving towards specialized goods and services which clearly promote their company values and sustainability? Are service brands able to provide such an experience towards its customers? Matkahuolto, VR, Finnair, travel agencies, media companies, new emerging service brands that provide a unique Finnish, high quality, sustainable experience? Following this, I expect that the number of service brands on the list in 2021 has doubled.
The respondents evaluated their appreciation, usage and awareness on brands and if they would recommend the brand to their peers. The study did not tell how many people participated in the survey.
Some interesting findings. Anni Helena and Riitan Herkku in top 200. These brands were higher in the list than Helsingin Sanomat and R-Kioski. I guess a national study influences a Helsinki area driven brand. Stockmann, the Finnish shopping flagship, in place 133 after Aino ice cream, Mustapekka cheese and Kivikylän kotipalvaamo? Even if Stockmann is present only in a number of cities, where and how do you actually find and see Kivikylän kotipalvaamo?
But what about service brands? As said, Google was the only foreign brand in top 10 - and the only service brand in top 10. The first Finnish service brand in place 14 is S-Etukortti. Most likely in most Finns´pocket. But that the service benefit is so much appreciated even after S-ryhmä stopped sending the annual bonus coupons, which I personally found the core benefit for my S-shopping behaviour?
The other kinds of service brands in top 100 were bookstores, banks (after all the discussion on banking services, one bank has managed to differentiate from others), radio and tv channels by YLE and travel brands Finnair and Aurinkomatkat.
Compared to the study made 10 years ago, biggest changes in service brands positions were first of all the drop by Finnair - then in position 8. Finnair (and Helsinki airport), having gotten all the prestigiuous service awards, has unfortunately been impacted by continuous problems in package handling and strikes by its own employees and partnering companies. Another loser is Silja Line, whose image worsened within the merger to Tallink and the lively management incidents. The bookstores still score high but Stockmann and Sokos fall behind.
The real big winners in the competition are symbols representing a new era: Finnishness, quality and ecology in general. Brands ranked in Top 30: Joutsenlippu, Joutsenmerkki, Avainlippu, Luomu.
Would this trend indicate that the Finnish consumption behaviour is moving towards specialized goods and services which clearly promote their company values and sustainability? Are service brands able to provide such an experience towards its customers? Matkahuolto, VR, Finnair, travel agencies, media companies, new emerging service brands that provide a unique Finnish, high quality, sustainable experience? Following this, I expect that the number of service brands on the list in 2021 has doubled.
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