What makes a service firm SUCCESSFUL? A few secrets

For service firms, a satisfied staff and inspired leadership are crucial, writes V S Mahesh

The new optimism generated in Indian corporate circles by the recently announced bold policies of the central government deserves to be nurtured.

Let me add my two bits' worth by using this column to write about two outstanding examples of Indian service organisations that have done very well even during the phase when there was paralysis in decision making.

Orange County is a resort tucked away atop the Western Ghats in Coorg.

I was holidaying there a few months ago -- and not as a travel writer who is obligated to write positive things about a resort because he is offered a free stay.

I paid my bills. I do not know the management.

Nor do they know me.

. . .

On the last day of the week I spent there, I got into a casual conversation with a room supervisor who had come to check on the evening turndown service.

In response to my question,

"This resort is extraordinarily clean, as also the surrounding areas.

What makes it so?" the room supervisor held forth almost as if he were some sort of public-relations representative of the resort.

For 20 minutes, he spoke with a sense of pride that is such a rarity.

The owner-cum-CEO was the main reason for the maintenance of such excellent standards, the room supervisor told me.

. . .

For example, in the early days, the CEO began walking inside and outside the premises with a bin bag in hand, collecting rubbish like a rag picker.

Soon, most of the staff joined him with their own bin bags.

The local people joined in soon thereafter.

Within a year, the locals set themselves a target to have the environment so clean that the "Orange County rag pickers" would not even be able to fill half a bin bag!

The staff primarily consist of locals who had been recruited as freshmen and trained to achieve the highest standards of service.

. . .

The CEO took care of their needs, viewing their welfare as a priority.

The guests were made to feel a part of the resort.

Some were urged to plant trees in the resort.

One saw names of celebrities like Javagal Srinath and Anil Kumble -- rather than political leaders' -- on simple placards next to trees they had planted.

An organic farm that grows vegetables for the kitchens in the resort takes pride of place, with the manager of the place ever so eager to convert every visitor to thinking 'organic'.

IndiGo, the airline, is another example of an outstanding service organisation.

Its record of on-time departures and arrivals -- backed by impressive service delivered by courteous, well-trained and well-groomed staff -- has made it the best in its class.

. . .

It appears to be way ahead of its competition in everything, including in clear and explicit communication to all sections of passengers.

For example, besides providing ramps for people to ascend into and descend from their aircraft, every ticket bought comes with a communication directed at passengers with special needs.

They have an inventory of four wheelchairs for passengers and urge those who need them to communicate ahead of time, so that they can provide the service required.

When one compares these two organisations with others in our country, one is tempted to ask: "Why don't the others imitate them, for surely it makes for good business returns?"

. . .

The answer was provided by Herb Kelleher, former CEO of Southwest Airlines, the US carrier that recorded improved performance even in the years that immediately followed the infamous 9/11 terrorist attacks.

To a reporter who asked him why he allowed people to write about SWA in detail, as it might be copied by other airlines, Mr Kelleher replied that he was not worried at all.

It would take any organisation a minimum of 10 years or so to build a shared culture of service, one that became part of its DNA.

By that time, SWA would have taken several leaps forward, he said.

. . .

The secret behind a great service organisation is not really secret.

It is not just about getting the tangible part of the business -- location, rooms, aircraft, facilities -- right, which can be copied quickly by competition, at a price of course.

It is about a systematic approach to human resources planning and development built on a bedrock of fairness and equitable treatment, and augmented by inspired leadership -- an aspect of management that is both a science and an art form.

It is a tragedy that management students, including those in the Indian institutes of management, are taught very little about these aspects of management.

. . .

Marketing, finance and quantitative methods still rule the roost.

The engineer MBAs and their faculty thrive on these comfortable, objective areas of management and, for some unknown reason, look down with disdain at HR-related issues.

Indian organisations have their governments to thank, who have refused to give into western influences on treating employees as a disposable commodity.

Unfortunately, by corrupting the system, many employers have sought to get around this by engaging temporary, casual and contract staff in place of the sort of room supervisor I met at Orange County or the front-line staff one interacts with at IndiGo.

. . .

The temporary staff has no reason to feel any sense of loyalty or belongingness to organisations that engage them.

Researchers have established a direct correlation between employee motivation and customer satisfaction.

Alas, the vast majority of service organisations refuse to understand this simple logic.

They appear to prefer the kind of human resources practices that have been so common in many manufacturing organisations, the sort that recently brought Maruti management to its knees at its Manesar plant.

. . .

This is not workable in service organisations, as Jet Airways' management should know.

They could have been where IndiGo is today, but for one single error of judgement committed a few years ago -- of dismissing over 1,000 people, albeit trainees and apprentices, which effectively broke the strong bond of trust that had been built over the years.

It takes years to build a culture of trust and belongingness and just one mistake to destroy it.

That is why great service organisations are a rarity. Role models like Orange County and IndiGo exist in India for us all to learn from and emulate.

The writer, a former corporate executive, was the founder-director of the Centre for Service Management at the University of Buckingham, and is now MD of Chennai-based VSM Consulting Services.