Why Service Operations are So Much Harder to Manage

We can be a little elitist in the service industry.  We look down our noses at our manufacturing cousins.  We deal with intangibles, they deal with things, and let’s be honest, they tend to be dirty noisy things at that.

But pride comes before a fall.  Here are a handful of prejudices about our uncouth relations.  What could we learn if we challenged them?

This is not a sausage factory, a service is far more difficult to deliver than a product

Is it, are you sure?  How about motor manufacturers?  They collect several thousand parts from all over the world, make sure that they come together at exactly the right time and place, assemble them and then drive the finished article off the production line.  Like clock work.  It is no mean feat.

A bank manager by contrast has to decide whether or not he should lend somebody money.  Fundamentally it is one decision, that is all.  We might think our lot is complicated, but how much of that is because we make it complicated?

Could we learn about attention to detail and precision from a motor manufacturer?

We are professional people

The whole essence of the service industry, be it insurance, medicine or hairdressing, is that trained professionals deliver the service.  Factories on the other hand are staffed by the hoi polloi.  The type of people you wouldn’t want your daughter to bring home.

Professional organisations rely on professional people, they are the nerve centres, they make all the decisions.  Manufacturing organisations rely on the system, they focus on making things easy to get right and difficult to get wrong.

What could we learn from a systematic approach?  Are our professionals above a little poka-yoke?

A bad system will always beat a good person ~ Anon

All our customers want different things

In factories they make the same thing over and over again. In a service operation though, every customer wants something slightly different, their problems are all unique, be it the shape of the head that their hair is growing on or the type of risk they want insuring.

In factories they aim to reduce variation and promote consistency.  In service industries we focus on providing bespoke solutions.

Could we apply the Pareto principle and made sure that the 80% of things that all customers need (billing, account set up, appointment creation…) were standardised, leaving us time to focus our talents on the 20% of things that should to be different?

Service delivery is intangible

In a factory the product is the product.  They can specify it, measure it and control it.  The customer sees the product and judges it for what it is.

In a service environment though there are so many peripherals that are important, the tone of voice an agent uses, how well we keep customers informed of progress, whether or not the waiting room was clean…

Could we measure the intangibles and then act to improve them?

In service industries customers and consumption are part of the process

We need to deal with customers on a daily basis, face to face.  We have to know our customer’s inner most desires and needs.  Manufacturers don’t see their customers from one year to the next.  They don’t have to worry about what the customer sees and thinks.

I worry we get blasé and take customers for granted.

Could we go to the lengths some manufacturers go to to overcome their lack of contact with customers,

A fish is always the last to see water ~ Anon

Hardly fair

Of course this is a rather one sided blog post.  It works both ways, manufacturers could learn a lot from us as well.

But if you want to see how the other half lives you need to get out of your organisation and go and have a look.  As a first step you could go on a visit, (try On Ste Insights if you are in the UK).  Alternatively decide what you want to get better at and choose a suitable benchmarking partner.  At worst you might learn a thing or two, and who knows, it might even kill the odd prejudice.


Read another opinion

Image by CECAR


  1. Hi James,

    Limiting our sources of learning and innovation to areas that are similar to us just speeds up the evolutionary cycle and brings forward our demise. Bigger issue is probably being open to new ideas and also not thinking that it is too hard to change.


  2. Hello James

    I have read your post after reading some stuff that Krishnamurit wrote on the difference between the minds of the young and the old. And the importance of keeping the mind fresh.

    Seems to me that you are pointing in the same direction. We can be intensely curious and seeking to truly get to grips with the situation at hand standing in the context that the more your understand something the more questions you have. Or we can stand in the space that we know all there is to know and our situation is unique and so we cannot learn anything useful from anyone else.

    It is even OK to think we know everything (like Steve Jobs did) if we then surround ourselves with people who have the balls to challenge our point of view and we are willing to listen.

    Can the call centre industry do better? Absolutely. From where I stand the call-centre industry is in the grips of various myths especially around best practice. Some that come to mind include: reducing quality to process compliance, assuming that someone who is a good agent will make a good manager, focussing on improving the call centre operation rather than addressing the areas that create issues for customers and thus drive/generate the demand that falls on the call centre; focussing on AHT; segregation between first line, second line etc as opposed to focus on flow…..

    All the best,

Speak Your Mind