WHAT GREAT SERVICE LEADERS KNOW AND DO

From anecdotes, cautionary tales, and decades of research and observation, we have distilled here what great service leaders know and do. The summary in the sidebar provides the highlights of a rich story.

In reading this book, you will see that a growing number of practitioners and researchers have come a long way toward understanding ways of dealing with the challenges facing managers in the service sector today. There are many more examples of best practice on which to draw than when we first began examining the design and management of services nearly four decades ago. And there is more talent available to put them to work. It is an appropriate time to take stock, organize our thinking, and assess the basis for the further development of management practices in the service sector over the coming decades.

It is also clear that a lot of work remains to be done. A look at the data in the appendix regarding productivity and job satisfaction around the world leads us to conclude that service leaders are not doing well in living up to the magnitude of the task they face. The rate of increases in productivity lags manufacturing. Job satisfaction has rarely been lower.

Simply put, management has within its control the authority, and we think the responsibility, to improve service quality and productivity while increasing job satisfaction, employee engagement, and the bottom line for shareholders. It can be achieved through both/and thinking that rejects the popular notion of tradeoffs and leads to win-win-win results for employees, customers, and investors. This book is about ways it has been and will be achieved.

Reliance on stories about great service leaders involves a risk that we willingly assume. Our stories involve leaders whose organizations may not stand the test of time in spite of their efforts and ideas. For example, as we wrote the book, one of the leaders we profile, Gary Loveman, announced that he was stepping down as CEO of Caesar's chain of casinos. After putting together a service strategy based on pathbreaking ideas and practices, he saw a subsidiary of his firm driven into bankruptcy by the financial engineering of a private equity firm that purchased Caesar's for a high price and proceeded to load it with so much debt that its odds of success were greatly reduced, despite strong operating performance vis à vis competitors. An observer of Loveman stated "one of the drivers of his decision was he spent a lot more time on the balance sheet than he wanted to." In cases like this, which undoubtedly will be repeated in the future, outcomes do not dull our admiration for the practices implemented in the organization.

We know what has produced success in service endeavors in the past. We have observed and documented strong service principles and even developed some service management concepts ourselves that have endured in practice over time. However, it is quite obvious to us that what it took to produce a winning hand in managing in the service economies of the 1970s and 1980s is in many ways different than it is today. While many of the same questions prevail, management's responses must be sensitive to future challenges facing service industries. With the help of the thinking—and doing—of outstanding practitioners, our goal here is to provide insights into what it takes to succeed now and in the future.

In every service industry, one or two organizations—breakthrough services—are leading the way. They are providing the blueprint for service excellence in the future. If they are to be emulated, we need first to understand what is so different about leading a breakthrough service organization.