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Southwest and FedEx: Their Contrasting Organizational Cultures

Both companies fly airplanes.
Both are well-known (in the US at least.)
Both do their best to keep their employees happy.
But each one of them uses a different approach.
Those companies are Southwest Airlines and FedEx.
Southwest is “the extended Italian family you knew growing up.”
FedEx is “less touchy-feely,” and “employees float on a Nile of nomenclature.”
CMO Magazine published an article in their October 2005 issue comparing the contrasting organizational cultures of these two companies, and explains how they impact service to customers.
And the reason behind their ways? Here’s a quote from the article:

Make no mistake, employee-centrism at both of these organizations does not rest on altruistic motives. “FedEx and Southwest want to treat employees well, but they still want to make a profit,” says Brenda Ellington-Booth, a clinical assistant professor of management and organization at Northwestern University’s Kellogg School of Management. “And the way they make a profit is through their people.”

Great service to customers is great for business.

(we'll be moving to Servimetrica.NET soon)

High Altitude Outsourcing

It was on the front page of yesterday’s Wall Street Journal (paid subscription required) :
Northwest Targets Flight Attendants For Outsourcing: Ailing Carrier Seeks Savings By Pushing Veteran Staffers Off Prized Overseas Routes.
Flight attendants are not the only ones being considered for these changes. Here’s a copy/paste from a paragraph in the article:

Northwest also is seeking to outsource all ramp workers’ positions except at its hubs and all customer-service-agent jobs at its non-hub airports.

If this happens, maintaining morale among remaining employees will not be an easy task, which will impact the quality of the service that customers get.

Coming soon: outsourced pilots. Any bets?

Back to Basics: What's Service Quality, Anyway?

Some people say such-and-such company provides great service. Others say that the same such-and-such company really stinks.
Who’s right?
Service quality –just as beauty- is in the eye of the beholder. It is a matter of expectations and perceptions. If in a service transaction, the customer perceives he/she received better service than he/she expected, then he/she will evaluate the service favorably. The same applies the other way around for customers who get less-than-expected service.
In their book Delivering Quality Service -published back in 1990 by the Free Press- Professors A. Parasuraman, Leonard L. Berry and Valarie A. Zeithaml define service quality as

the extent of discrepancy between customers’ expectations or desires and their perceptions.

Therefore, the key to providing quality service resides in knowing what customers want and expect, and deliver accordingly.
Obviously, each customer is different; including his/her quite ambiguous and unique needs and wants. This is what makes service quality such an interesting subject.
At least for us.

(and yes... we are crossposting entries in Servimetrica.NET)

Yes, Service can be Inventoried

In their very peculiar way of course.
In an article published in the Fall 2005 issue of the MIT Sloan Management Review titled Managing Service Inventory to Improve Performance, Sunil Chopra and Martin A. Lariviere explain how “Creating “service inventory,” that is, a way to store completed work, can reduce costs and improve quality. For example, financial institutions establish predetermined rules to apply to customers based on credit scores. Hotels create systems to record guests’ preferences. In such cases, firms reduce the work required once customers enter the process.”

Bringing the Sizzle Back

After a series of unfortunate events that almost drove them out of the restaurant business, Sizzler’s is trying to make a comeback, Michael Hiltzik reports in his column in the Los Angeles Times.
One of the strategic missteps that preceded Sizzler’s bankruptcy in the 90’s was the evolution of the salad bar into an all-you-can-eat buffet, where “quantity” surpassed “quality”.
Now Sizzler’s is adapting itself to today’s market, aiming at consumers that have good memories of its restaurants of yesteryear, but offering a redesigned restaurants, menus and service.
Here’s an interesting passage that shows how consumer perceptions work:

When the company brightened the color scheme and decor of a prototype restaurant outside Sacramento, visitors remarked on the sudden improvement in the food, which actually had been upgraded the year before.

Service Quality for Taxis

Drive a taxi? How can you measure the quality of your service?
Lets see this example from Singapore:
First: Don’t get in accidents. The standard is not more than two accidents for every 10 million kilometers traveled.
Second: Answer your phone. In Singapore, cab companies are required to answer 90% of their calls, including a confirmation of availability in less than five minutes.
If these standards are not met, taxi cab companies are fined.
However no word about sticky floors and cardboard pine scents.
(From Channel NewsAsia)

A Year and a Half in Beta

Gmail –Google’s free e-mail service- was unveiled on April 1st, 2004. Since then, it has been labeled as a “Beta” release, meaning the service is still being tested. But so far, it has been under evaluation for more than 18 months!
(No… we do not need an invite. We have Gmail already. Thanks!)
Some observers have pointed out that Gmail still uses the “Beta” name to minimize the negative effect on users if something goes wrong with the service (“See? It wasn’t fit for general release yet! You should have known we were prone to a crash sooner or later because we are still in Beta testing!”)
However, we believe it still carries the Beta designator to increase the perception of newness of the service among users.
But, “newness” after 18 months?

We changed our minds...

…and we are renaming this blog CustomerServiceQuality.com back again. Hope you don't mind.

We’ll use the Servimetrica.NET domain for our new blog, which will replace this one in a few days.

In the meantime, we’ll continue posting to both blogs while we tweak the settings in the new one.

Domino effect: Great managers – great employees – great service

Looks quite difficult: how to deal with high employee turnover in quick service restaurants (a.k.a. “fast-food joints”)

This article in StartupJournal –a free website from the Wall Street Journal for entrepreneurs- shows Domino’s Pizza way: instead of paying higher wages than other chains, the company focuses on hiring and developing quality store managers.

And better store managers tend to have better employees, and better employees provide better service to customers.