WHAT GREAT SERVICE LEADERS UNDERSTAND: THE "RIGHT SERVICE ENCOUNTER"

Many leadership practices have proved effective in any kind of organization. Still, great service leadership is distinguished both by the magnitude of its challenges and the priorities involved in addressing them.

Jobs in services involve personal relationships and require interpersonal skills to a greater degree than jobs in some other sectors. Unlike most manufacturing jobs, many service positions bring service workers into constant contact with customers in the service encounter. In many service occupations, the service is both produced and "consumed" at the time it is delivered. As a result, the service provider is able to see the customer's reactions and take satisfaction from them. In the customer's eyes, the provider of a personal service has skills and a personality that are at least as important as the company and its brand. The provider is an important factor in the purchase decision. Although the encounter may be less personal in services such as retail and transportation, the service provider still has a strong influence on customer loyalty. For example, in an industry with minimal service differentiation, Customers often cite Southwest Airlines' Employees (Customers and Employees are always capitalized in the airline's communications) as one of the primary reasons they fly the airline whenever schedules and itineraries permit.

Service encounters often require face-to-face customer contact, customization of a service, and the co-creation of services by employees and their customers.

The Need for Face-to-Face Contact with Customers

Services that entail face-to-face contact with customers—hospitality, entertainment, professional services, education, personal services, and health care, for example—often require employees to be deployed over large geographic areas in order to provide customers with easy access. Organizations thus might have multisite operations with relatively complex organizational forms. Managers may need to ensure effective communication through a multilayered organization, particularly when change is being implemented. They may have to deal with real estate to house widely dispersed service personnel as well.

Degree of Customization Required

Some services are best performed with little customization. At Shouldice Hospital in Toronto, for example, surgeons fix hernias by a time-honored method that provides quality (measured in terms of operations that rarely have to be repaired) much higher than the average for North American hospitals. They are hired primarily for their enthusiasm for work in an environment that provides regular hours and good work/life balance—but one in which they have very little latitude in what they do. Surgeons who easily experience boredom have no place in Shouldice's operating rooms.

In the same industry, the Cleveland Clinic looks for surgeons with an interest in research and the ability to use good judgment in treating patients with widely varying medical histories and needs. Innovation is a natural part of the job description for many of the organization's professionals. This requires that the service provider use judgment in customizing the treatment of individual patients.

Both of these organizations benefit because they carefully hire their employees and give them good training, excellent support systems, and, where it is appropriate, more (Cleveland Clinic) or less (Shouldice Hospital) latitude to use judgment in the face-to-face relationship. These practices ensure both great results and a high-quality experience for the patient, meeting our standard for breakthrough service.

Co-creation of the Result

Customers at Shouldice Hospital participate to an unusual degree in co-creating the service. They diagnose themselves and, if necessary, diet to make the weight limit that Shouldice doctors impose to qualify patients for surgery. Patients prepare themselves for surgery by shaving themselves, take charge of their own recovery by walking from the operating table, and counsel other patients who have not yet been under the knife. All of this helps Shouldice keep its costs to a minimum while offering jobs with more interaction with patients and fewer menial responsibilities. While it increases patient enthusiasm for the process and its results, it also requires that management hire and train people who can work with patients in ways often foreign to other hospitals.