An Example of the Service-Profit Chain

July 28, 2009

Yesterday, the Wall Street Journal Online published an article entitled Companies Strive Harder to Please Customers.  I think this is a great example of companies trying to incorporate the service-profit chain philosophy.

One of the companies discussed in the article is Sprint Nextel Corporation.  I am a long time Sprint user, and I can confirm that I have noticed the difference in customer service.  Their service is not perfect, but they are very responsive and they do recover well when they make a mistake, which is very important to me.  I’ve ordered three new phones from them recently, each with a rebate, and they have screwed up the rebate each and every time.  I’m still dealing with one of the rebates, but they fixed the other two promptly. Their online chat service is very impressive.

As the article points out, the improved service did not happen by policy.  Some clueless executive did not issue a memo that said “Starting Monday, we WILL have better service around here – or else.”  That’s folly.

The improved service is a result of a change in the system used to provide service, and the accompanying rewards for behaviors the new system is designed to encourage.  I think this proves Pfeffer and Sutton’s (2006) point that the law of crappy systems trumps the law of crappy people.

Empowerment is overrated; focus instead on enabling your people to impress the socks off your customers.  Partner with them to improve crappy systems and give them the tools and training they need to provide kick ass excellence.

Filed in: Attitudes, Behavior • Tags: , ,

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  1. Wally Bock says:

    Great post, Bret. “Empowerment” is one of those phrases that management journals love. If people don’t have the resources to do what’s necessary, not much happens. The Roman Army wasn’t great because they had charismatic leaders. They had a system for everything from who carried what on the march, to how to set up camp, to how to divide a loaf of bread.

    I love Sutton and Pfeffer’s stuff on this, but the first time I heard the sentiment it was from Warren Buffet, that bad systems trump great managers.

  2. Bret Simmons says:

    Excellent example on the Roman Army. Here is the link to your full post on that, which is exceptional

    Thanks for the comments, Wally!

  3. Fantastic blog entry, Bret. I agree that your customer service team needs to be enabled through systems to provide great service. Looking at it through the eyes of a practitioner though, I disagree that empowerment is overated. In fact great systems are only built when people are empowered to help design them. Basically you say this in your last sentence. Empowerment, incentives, management and systems all have an important role in the customer experience. In and Out and McDonalds have similar systems but the level of service is completely different. Empowerment is a big part of that.

  4. Jim: Thanks for sharing your thoughts! Here is what I love about your comment “great systems are only built when people are empowered to help design them” You know I concur with that! Thanks!! Bret