Hey guys! Happy 2017 once again!
Today I will write a book review on the book “Building Strategic Service Leadership: Titans of Service” with a focus on my interpretation of the implications on the evolution of the conceptualisation of”services” in recent years.
This book is written by Professor Kirsti Lindberg-Repo and Apramey Dube. It is targetted at a wide audience ranging from managers to students and service providers. Divided into nine themes/ chapters, each chapter discusses a specific service management that enables growth for a company:
- Evolution of services;
- Service Quality;
- Relationship Marketing;
- Internal Branding;
- Service Design;
- Service Experiences;
- Service Innovations;
- Service as Business Logic;
- B2B Services.
I can’t agree more with Professor Don E. Schultz when he writes–“This text is about people, not product or models or pricing schemes” (p.5). That’s why I had been pretty excited to read this book.
For, if a book is about people, then it will illuminate the the understanding of human nature, won’t it? That is, this book comes with a promise of how an understanding of human nature results in higher sustainable profits for the service provider.
Personally I think this book is awesome because it defines service as “the way in which business is conducted, i.e. service is conceptualised as a business logic” (P.12) If you view this from the context set by Singapore Management University’s Professor Rajendra K. Srivastava, that–
“We can pinpoint three major disruptive innovations. They are the Internet, search engine capabilities and smartphones. Disrupt to grow!”
–then you’d see why it is so exciting to be reading this book today. Because the internet, search engine and smartphones radically disrupt how you do branding and service!
So for this book review, I’d be writing some of my inspirations:
The evolution of services
The Introduction chapter states that there are three phrases in the conceptualisation of the “evolution of services”.
- Phase #1: Services are considered as invisible “extra-goods”. This reveals the heart of the business people then who are doing trade: The emphasis is on “goods” (the visible), not on some voodoo concept of “services” (the unseen).
Logically, this probably implies that the concept of branding probably wasn’t too strong during Adam Smith’s “Invisible Hand” era. Because if you can’t see something and value what you don’t see as necessarily lower than what you can see, how can you brand service? LOL. People then seem to purchase goods based on utility and practical function, not for unicorns and glitter effects.
At any rate, I just want to point out that during Adam Smith’s era, the concept of the labour theory of value applies. The labour theory of value is defined as:
“…a heterodox economic theory of value that argues that the economic value of a good or service is determined by the total amount of socially necessary labor required to produce it, rather than by the use or pleasure its owner gets from it.”
In simple language: Let’s say you use 1hour of your time to do something. Then you charge X. If you use 2hours of your time to do something, you charge 2X. The Labour Theory of Value is a theory that is based on linear thinking–that pricing should be directly proportionate to the number of man-hours put in.
A higher pricing otherwise = exploitation of labour by the evil capitalists.
Now, this implication on service is VERY BAD. It must have sucked very much to be a service provider during that era, because it seems that if you attempt to do personal branding then, people would think that you’re being exploitative.
Firstly, because service is already invisible and people probably cannot conceptualise paying extra for something they cannot see. Secondly, it is terrible to think about “value” in linear terms, especially for services. Assume that you are a factory worker producing scissors during that era–if you produce one pair of scissors, it takes X hours. If you produces 2 pairs, it probably takes 2X hours.
Does this theory necessarily apply for design or services? Assume that you’re a designer hired to make the design of the scissors better–Does it mean that you will produce a great, unique design in 2 hours consistently?
NO! Sometimes a designer can get great design done in 2 minutes, if he/she is inspired. Sometimes with 20hours, the designer might not even be able to get his great design done. Service providers are humans, and that is what makes the whole difference in the creation process.
How is it fair then, to pay designers based on hours like a worker who is making goods?
This reminds me of a quote by Warren Buffet–that “Price is what you pay, value is what you get”. I think Warren Buffet must have really scoffed at that the idea of the labour theory of value. Or maybe he simply kept quiet and exploited this loophole haha!
- Phase #2: Services are considered invisible and unique “offerings”.
- Phase #3: Services as the “way” in which business is conducted.
Now, fast forward to Phase #3 today, as we define “services” as the way in which business is conducted. Here, I’d expound on two inspirations I’d derived from the book.
Inspiration #1: The juxtaposition of Singapore Airlines and Finnair.
I LOVE the use of the examples of both Singapore Airlines and Finnair (pp.31-32) because it illuminates what it means by service as “the way of doing business”. For services is now not just “a person”, just an interaction between the provider and the consumer, but “the way”.
- Singapore Airlines is argued to enrich the service experience of each individual consumer through efficient management of service quality dimensions.
This is true based on what I’d observed–I have a few friends my age working in Singapore Airlines as air stewardesses, and they have to go through several rounds of interviews and training to be able to get the job. SIA is positioned as an innovative and luxurious brand with everything that is of super high quality and standards.
In common language: Hiring pretty, well-poised and young ladies who wear the exotic Sarong Kebaya and training them to make customers feel consistently safe and comfortable seems to be really effective! Also, if you can create a flight experience that equates luxury, you win in service!
This IS the SIA way of doing business.
- Finnair is positioned in a radically different manner. You definitely would NEVER associate Finnair with “luxury”.
I regularly fly by Finnair, and I remembered my 2nd flight when I had to walk down the aisle to request for hot water, simply because I couldn’t get the attention of the air stewardess.
Can you because of this experience, say that Finnair’s level of services pales in comparison to SIA? Actually no, because Finnair’s positioning is different. I agree with this book that Finnair’s strength is in its “timeliness”.
Now here, it is very important to consider the service design of Finnair, Helsinki airport and Finavia COMBINED. In other words, service can always be enhanced with close collaboration amongst entities, and when we think about service we can consider it in the larger system. This book says that there are “self-service check-in kiosks” at the Helsinki airport, which is done to increase the convenience and timeliness aspect.
I think this is important, because if you just talk about “Finnair” as an airline, you’d miss out on the underlying service STRUCTURE by the whole ecosystem. It is this ecosystem’s structure which dramatically improves customer’s happiness via self-service check-in kiosks and the super-fast wireless service (try using WIFI in the Turkish Airport to see how bad it is). Therefore, excellent service by a particular company cannot be considered in isolation with the supportive ecosystem.
And because of this excellent airport infrastructure which supports Finnair, the national carrier, it is fair to say that Finnair has excellent service, since service here is defined as “the way of doing business”. This “excellent service” however, is very very different from the SIA positioning of “excellent service”.
I guess in many ways, the differences in the positioning of Singapore Airlines and Finnair also reveal the differences in priorities of the people from Singapore and Finland.
Inspiration #2: Service as business logic–how the internet, search engine and mobile phone radically change business models.
On page 122 a quote by Stephen Vargo is mentioned, that–
“People don’t buy stuff because of stuff, but because of the service it provides. So think about the business models that we can create where you sell service.”
Okay let’s go back to the labour theory of value in phase #1. Now with the internet, boundaries related to space and time are broken down.
My suspicion is that most people simply don’t see that yet. They are still stuck with the mentality of the labour theory of value, that if I work 1 hour, I should charge X, and if I work 2 hours, I should charge 2X.
This is a toxic service framework for service-provider that does nobody any good. Because it seems that the service-provider will suffer from burn-out under this mental framework.
I love how this book is customer-centric– putting the emphasis on the perspective of the customer. If the average customer values your one product at 100X and you take 1 hour to produce that one product, should you charge X or 100X?
And with the internet, at any given time, you have access to many many customers without having to put in the additional time to pitch to them.
And because “service” is about humans–is this 100X negotiable? Of course it is. 😀
So all in all, it is very exciting to think about what “business logic” entails with the very exciting search engine, mobile phone and internet.
Mikko Hypponen, one of the tech guys I totally fangirl about, once said that the search engine’s history reveals a person’s heart. Which is true! If you want to find out more about a person’s heart, check his/her search engine history–it never lies. :DDDDD
I’d probably re-read this book again one month later and think more in the direction of the implications of the internet on the scalability of business model and “business logic”. Business logic is fascinating!
Parting Notes and Next-Steps
I like this book a lot–it’s a really exciting book with a lot of industry inputs!
I personally find this book exciting due to its implications, though at times I find some industry inputs as slightly “politically correct”, such as Case Digita (p.144).
What I mean by “politically correct” is the emphasis on “what should be” instead of “what is”. For example, in Case Digita, I felt that a historical context is needed, for Digita used to be a state-owned monopoly until it was sold to investors. IF your company used to be a state-owned monopoly, naturally you have more resources to build infrastructure and not care so much about branding. Simply because competition= zero and barrier to entry is high! 😀 Understanding this context will probably make the case study less “politically correct”–I did wonder about why Digita “suddenly” decided to care about their end consumers. Knowing their economic history and “following the money and change in ownership from public to private” would have helped illuminate the reality.
Overall this book is fascinating because of its emphasis on “co-creation” of service with the customers. One emphasis is on “listening” (p. 28) to the customers so that you can co-create exciting stuff with them, including manufacturing and execution of ideas.
So my next step is precisely to find out how to listen ACCURATELY to customers. I’m actually insanely into this activity because of my natural curiosity towards human nature and mass psychology.
For, how are you so sure that your customers won’t lie due to for instance, the Hawthorne effect? How are you sure that your most detailed business surveys won’t be outdated by the time you launch the said product, given that technology changes are so rapid these days?
Human nature can be fickle and unpredictable. I think the most reliable and easiest sort of business to do is when you can identify the “pain points” that are society-specific. This comes only after a period of time observing the social constructs/ contracts in any given society and being acutely aware of pain, ego and emotions.
The problem with human beings is that they don’t know what they don’t know, but they think they know. Most people lie without even knowing that they are lying, and most people don’t know their own hearts. If you simply observe based on reality and verifiable facts, you’d really observe a lot of contradictions in human behavior, myself included.
As my wise friend recently said, “Anything that is not verifiable and therefore not based on “reality” is ‘nonsense’.” 😀 Nonsense can sometimes be very good though, if it makes one happy. Unicorns 🦄 and glitter make people happy and they are really nonsense, for example.
And sometimes in service, unicorns and glitter and ribbons make all the difference.
I think this realization of how to systematically analyse human nature to increase and sustain the sales of a service-provider is the most exciting and fun part, which this book has highlighted very effectively. I would personally jot down the assumptions underlying each system and recommended process/ procedures so that they are clear to myself, which I’d probably do on the second reading of this book. And when a “disruption” happens, I can mark down which assumption(s) is/are violated and consider how to change my business model accordingly.
Yes, I’d recommend you get this book from Booky if you’re interested in reading it! 🙂 Or you can just borrow from me, lah, if you don’t mind my scribbles on the book.
Hope you’d enjoyed this review and have a great day ahead! Happy 2017 once again! ^_^