FSU HFT 3240 - Chapter 1 – Sustaining Success in Service Companies

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11 18 2013 Oct 31 CAREER TIDBIT Paul Tang VP director of Hyatt Regency Be like a whack a mole in your career It is a good thing Every time your boss asks you to volunteer something pop up like a whack a mole Seize opportunity to be early to work stay late move to a new location etc Be like a whack a mole and pop up and volunteer yourself DISCOVERING THE SOUL OF SERVICE Author Leonard Berry This book hits a lot of different industries food and beverage airline consulting etc Chapter 1 Sustaining Success in Service Companies EX I hire Marie and we open an event planning company Marie and I are very hands on we are REALLY good at it They realize we need to hire people we hire a couple of people Open different offices and locations Lack of control from beginning to end is so different Difference between me and Marie controlling the entire company is stronger when just us two vs opening new chains and hiring new people we have A LOT less control over the entire company This chapter talks about sustaining success What is the service industry Restaurants and hotels Banks Department stores Airlines What else Theme parks As we grow larger policies become more important What is success The Container Store o Customers o Employees o Support systems o Strategy they look at customers employees and support systems o They target market customers o Very narrow niche for containers o Employees have been known to wait 6 weeks to hire the right person for job o Leaving a job open to wait for the right person makes sense because a wrong hire is going to cost a lot of money in many ways o Support systems what makes container store successful In the middle of the night they restock their shelves not during business hours If they run out of an item they will restock it during the day but that s not often o One of their core systems is letting employees know the sales in advance Success What does it look like Obtaining vs sustaining opened now they re not Growth and complexity o EX Primetime in Tallahassee used to be great when they first o Harvard case study on Starbucks Starbucks started to expand dramatically Went from very small to huge very quickly With growth comes complexity The faster you grow the more complex EX Marie and I event planning company above People Finances o How do we success sustain our business with good customer service and keep it financially afloat What are the key challenges o Effectively operating while growing o Price competition Cutting prices is temporary Cannot sustain success operations with success customer service with price competition There is a cost to cutting prices Its usually lacking customer service EX Wal Mart with more self checkout lanes and less employees vs Publix with great customer service and higher prices EX entrepreneurship program at FSU The bigger a company is you lose retaining spirit roots EX Marie and I event planning company have less control the more a company expands We cant control every single detail for so many locations and employees o Retaining the spirit roots o What are some issues with keeping people on board o Value jet did xyz and their issue with execution was o examples of test questions o 1992 1994 they were in huge trouble because rapid grown outstripped infrastructure new CEO senior mgmt stopped expansion totally Stopped growth and were stabilizing o issues o Had huge expansion 1993 1997 o Flight 592 ValuJet went down in everglades took off from miami and didn t make it far plummeted in everglades and the whole plane was lost ValuJet Execution vs growth CompUSA o They had really laxed controls Controls were a big deal They were laxed on them o Weak culture Every organization you work for has a culture EX Disney is all about pixie dust Culture about looking a certain way o Focus on money only Valujet became very dollar driven All companies DSS Discovering the Soul of Service talks about aren t money driven EX financial advisor o Main issue Outsourcing is the kiss of death Maintenance Training When baggage handlers put baggage in they blocked a place that needed ventilation hence why the plane caught fire and plummeted in the everglades Rapid grown issues problems with original Standard Operation Procedures selecting orienting training and educating your employees with rapid growth would be bad o People come and go opening new stores etc o select orient train and educate people internal communications reinforcing vision and culture o very easy to get laxed We do this ourselves delivering service o how do you do this over and over again We get tired Physically grueling and laborious Valujet changed name to Air Tran airlines Changed name because who would get on Valujet Changing of names is common in service industry Especially when something as terrible as what happened to Valujet happened changing the name gives it a new face so people don t associate Valujet and Air Tran together even though they essentially are the same company Airtran brought in 20 7 mill dollars their first year It took southwest 8 years to do this Southwest was the 1 airline Execution vs price Price differentiation o Are we going to differentiate our product or are we going to price cut o EX target has wider isles their employees wear a more standardize uniform Cleaner stores Shopping experience is different o EX Publix where shopping is a pleasure Music Nice Clean o EX Mudd jeans vs True Religion As price or service goes up you end up differentiating yourself o Author of book is correct in stating just because you give good customer service doesn t mean your product needs to cost more o Giving better service doesn t mean you charge more money o Instead of price cutting how do you differentiate your product Price cutting o EX Wal Mart is all about price cutting but they have issues with customer service o Albertsons Winn Dixie food lion etc Value vs price Do they mean the same thing No price is a part of value but not the whole thing Equation Value Benefits Burden Entrepreneurship vs maturity entrepreneurships celebrate improvement and discovery o entrepreneurs have a lot of energy spirit they celebrate look for improvement smaller newer personal energy and risks vs mature fear as a company grows they are more feared of what they re losing Adding locations employees ID better ways o Policies manuals should be thin Not thick Rules rules rules Turfism vs teamwork o As we mature we look at turfism vs teamwork o Turfism EX splitting the room with an invisible


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