Developing an Effective Service Culture

Managing Service Culture:  The Internal Service Imperative

Dr. Brian Monger

Corporate culture is used to describe a set of more or less common norms and vales shared by people in an organisation.  Hence culture is an overall concept that explains why people do certain things, think in common ways, and appreciate common goals, routines and even jokes, just because they are members of the same organisation..  Culture provides the ‘rules of behaviour’.

Service Culture:  The Internal Service can be perceived as an internal climate.  Service firms have to organise and manage their internal climate for services, so that employees develop positive attitudes and common goals.

A weak corporate culture, where there are few or no clear common values and norms, creates an insecure feeling concerning how to respond to various clues and how to react in different situations.

For example, what to do when a customer has unexpected requests may be self-evident, when the culture is strong.  On the other hand, if there is a weak culture, such a situation frequently results in inflexible behaviour by the contact persons, long waiting times, and a feeling that you really do not know what is going to happen on the part of the customer.  This, of course, damages the perceived service quality.  In such a culture, employees do not have any clear norms to relate, for example, sales training or a service course to, and hence they do not know how to respond to such activities.

A strong culture, on the other hand, enables people to act in a certain manner and to respond to various actions in a uniform way.

Especially in service organisations, clear cultural values are particularly important for guiding employee behaviour.  In many cases newly employed persons are easily formed by the prevailing culture.  A customer conscious and service-minded person who is recruited for a service job may quickly be taken down to earth by his or her new colleagues, who share strong norms and values which do not honour interest in customers and in giving good service.

A  strong service-oriented culture easily snowballs.  Service-oriented persons are attracted by such an employer, and most new employees are formed in a favourable way by the existing service culture.

When employees identify with the norms and values of an organisation, they are less inclined to quit, and moreover, customers seem to be more satisfied with the service.  In addition to this, when there is a minimal employee turnover, service oriented values and a positive attitude toward service are more easily transmitted to newcomers in the organisation.

Moreover, the modern views of quality and productivity, and the relationship between them, “the wheel of fortune” if it can be identified and used by managers, are related to corporate culture.  “Improving productivity (and, for that matter, quality) is a matter of infusing a way of thinking into the organisation’s culture. . . .

Behavioural scientists are tentatively concluding that the improvement of both productivity and quality seem to result from or at least be related to corporate culture.

A strong culture is not, however, always good.  Especially in situations where the surrounding world has changed and new ways of thinking are called for, such a culture may become a serious hindrance for change.  It may be difficult to respond to new challenges.  In such a situation a strong culture does not only affect the responsiveness of employees in a negative fashion, it may paralyse management as well.  For example, a strong manufacturing-oriented culture may develop into a serious problem for a firm that obviously should respond to service-related changes in the market and in competition.  A service strategy is perhaps the obvious solution, but the management team may be too restricted by their inherited way of viewing the business.  And if only marginal   internal activities to introduce a service strategy are implemented, the equally or perhaps even more old fashioned ways of thinking among middle management and the rest of the personnel do not permit any major attitude change.

The Importance of an Effective Service Culture in Organisations

In a service context a strong and well-established culture, which enhances an appreciation for good service and customer orientation, is extremely important, maybe more so than in a manufacturing environment.  This follows from the nature of service production and consumption.  Normally service production cannot be standardised as completely as an assembly line, because of the human impact in the buyer-seller interactions.  Customers and their behaviour cannot be totally standardised and predetermined.  The situations vary, and therefore a distinct service-oriented culture is needed which tells employees how to respond to new, unforeseen and even awkward situations.

Since service quality is a function of the co-operation of so many resources-human as well as technological-a strong culture which enhances quality is a must for successful management of quality.

Moreover, since it is more difficult to control quality in a service context than in manufacturing, very service oriented and quality conscious values are necessary in the organisation.  In this way management can execute indirect control.

Profitability Through a Service Culture

Implementing a service strategy requires the support of everyone in the organisation.  Top management, middle management, contact employees, and support employees will all have to get involved.  An interest in service and an appreciation of good service among managers and all other employees is an essential requirement.  What is needed is a corporate culture that can be labelled a service cultureSuch a culture can be described as a culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers is considered a natural way of life and one of the most important norms by everyoneService has to become “the raison d’etre for all organisational activities

It does not mean however that service consciousness is not a marginal or even second-level concern, but a top-priority concern in strategic as well as operational thinking and performance.  It is one of the, say, three guiding philosophies shared by the people in the organisation.

A service culture means that the employees of the organisation can be characterised as service oriented.  Service orientation has been defined as “a set of attitudes and behaviours that affects the quality of the interaction between … the staff of any organisation and its customers”  In several studies service orientation correlates substantially with overall job performance.

Clearly, a service orientation enhances the functional quality dimension of customer perceived service quality, and it probably also supports the production of good technical quality.  Service orientation among the personnel fuels an important positive process internally in an organisation.  A service orientation that is a characteristic of a service culture improves service quality as perceived by customers.

Service-oriented employees who take an interest in their customers do more for the customers, are more courteous and flexible, try to find appropriate solutions to customers wishes, and go out of their way to recover a situation where something has gone wrong or an unexpected situation has occurred.  Furthermore, we know that customer perceived quality is a key determinant of profitability.

Hence, service orientation improves service quality, which, in turn, positively affects profitability.  And this favourable process continues as a spiral, because better profitability provides the means to maintain and further improve service-oriented attitudes among the personnel.

Shared Values

The values people in an organisation have and the prevailing norms are the foundation of the culture.  The shared values constitute guidelines for employees in performing their everyday tasks.

In an organisation with strong shared values three common characteristics are often present:

  • The shared values are a clear guideline for task performance;
  • The managers devote much of their time to developing and reinforcing the shared values; and
  • The shared values are deeply anchored among the employees.

It has also been found that performance is improved by strong shared values in an organisation.  Managers as well as their subordinates devote themselves more to issues and ways of performing that are emphasised by the shared values.  The performance is better, because people are more motivated.  Strong norms and shared values may, however, become a problem, too:

  • The shared values may have become obsolete and are therefore not consistent with current strategies and, service concepts; and
  • Strong shared values may lead to resistance to change, which makes it difficult for the organisation to respond to external challenges.

In many firms these are highly relevant problems.  Even though there may be no service culture, there may be a strong corporate culture.  The existing culture may emphasise manufacturing ideals or bureaucratic routines.  Today, in many manufacturing firms and institutions within the public sector, a strong culture that does not appreciate service is a major hindrance to change.  Challenges from the market and from society may go without notice, or the organisation is not capable of adjusting to the need for change.  The results are sometimes fatal.

The effects of even a single internal activity that does not have a strategic foundation will probably be counteracted by the hostile culture.  Internal marketing efforts easily fail if they are not in line with the prevailing culture, or if the objectives of the internal marketing efforts are contradictory to it.  On the other hand, a long-term internal marketing process is one ingredient in a process that aims at changing an existing culture.  A strategic approach to internal change is needed.

Requirements for an Effective Service Culture

Introducing and implementing a service strategy requires a service culture.  In many firms, or organisations within the public sector, a cultural change is called for.  Such a change is a long-range process, which demands extensive and long-range activity programs.

 

The requirements for good service are:

  • Strategic requirements
  • Organisational requirements
  • Management requirements
  • Knowledge and attitude requirements

If the four kinds of requirements are not all recognised, the internal change process will suffer and the result will be mediocre at best.

The different requirements are intertwined.  For example, a complicated organisational structure makes it impossible to implement a good service concept; or a service-minded and motivated contact person gets frustrated and loses interest in giving good service because he or she gets no support and appreciation from his boss, or finds it impossible to be service-minded because the service orientation is not derived from a strategic foundation and therefore sufficient resources are not granted.  In the following sections we are going to discuss the four requirements in some detail.

Developing a Service Oriented Strategy

By developing a service-oriented strategy the strategic requirements for good service are fulfilled.  This means that top management wants to create a service-oriented organisation.  The management team is not ‘just paying lip service to service orientation.

Here top management may be the CEO and his or her management team, but it may also be the head of a local organisation or a profit centre which can operate sufficiently well independently.

The business mission is the foundation of strategy formulation.

Based on the scope and direction of the business indicated by the mission, strategies are developed.

A service strategy means that a service orientation, which of course in different industries and even firms means different things, is to be achieved.  In this context we will not go into any details in this respect.

However, a service strategy requires that service concepts related to the business mission and the strategy be defined.  If service concepts are not clearly defined, the firm lacks a stable foundation for discussion of goals, resources to be used, and standards for performance.  As previously stated, the service concept states what should be done, to whom, how, and with which resources, and what benefits customers should be offered.  If these issues are not clarified, the personnel will of course not understand what they are supposed to do.  Moreover, goals and routines do not form a clear and understandable pattern, because there is no clear and well-known service concept to relate them to.  If the service concepts are not clearly understood at the middle management level, it will be difficult to perform supervisory duties in a consistent way.

Managers as well as the rest of the personnel easily feel a disturbing role ambiguity.

Personnel policy is an important part of the strategic requirements.  Recruitment procedures, career planning, bonus systems, and so forth are vital parts of a service culture, as they are of any culture.  Good service performance pretty much has to guide the administration of personnel.  The more aspects other than skills and service-orientation dominate, for example, recruitment procedures and bonus systems, the less inclined toward service-mindedness employees will be, and a service culture will be difficult to achieve.

Good service has to be rewarded and accomplishments have to be measured in such a way that employees realise the importance of service.  However, good people are often forced to do stupid things, because the measurement and rewarding systems are wrong.   If this is the case, and employees feel they are rewarded for accomplishments other than excellent service quality, any attempts to develop a service culture is bound to fall.

 

Dr. Brian Monger is the Executive Director of MAANZ International and a Principal Consultant with The Centre for Market Development.  He is an internationally well known speaker/presenter.

He is available for consulting tasks and speaking engagements

Did you find this article useful?  Please let us know

These are outline notes from a MAANZ course.  If you are interested in obtaining the full set of notes (and a PowerPoint presentation) please contact us – info@marketing.org.au

Also check out other articles on http://smartamarketing2.wordpress.com

MAANZ International website http://www.marketing.org.au

Smartamarketing Slideshare (http://www.slideshare.net/bmonger)

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