Very interesting article in the Harvard Business Review by Fuller and Shikaloff. They examine the idea that employees with high ‘engagement’ will be more productive than those not engaged. The identify one major problem to begin – namely that operators measure employee engagement in a number of different ways. Having done so, they looked at two companies in order to test if engaged employees were productive than engaged employees.
Company 1 used a commonly used measure – average weekly working hours – to measure engagement. Since productivity was measure by the number of hours employees worked, not surprisingly there was a strong correlation between engagement and productivity (basically because they were measured in the same way!).
In Company 2 engagement was measured in a different way (although the authors do not explain how). They identified that roughly equally there were 4 groups of employees within the company, each of which needed managing in a different way:
- Working long hours + high engagement
- Working long hours + low engagement
- Not working long hours + high engagement
- Not working long hours + low engagement
I’ve always been somewhat sceptical about loyalty programmes. but this is mostly personal bias, as I am deliberately ‘disloyal’. Here is Accenture’s latest take on loyalty and loyalty programmes, based on some research that they have conducted. They have five recommendations (for U.S. firms):
- “Identify and shut down programmes that dilute margin.
- Leverage connections of existing customers to acquire new ones.
- Millennials are less swayed by loyalty programs. Understand what they like, and what types of promotions they will embrace.
- Customers that recommend brands to others are critical. Invest in strengthening this loyalty behavior.
- Capture, analyze and act on customer feedback across silos. Work with partners to share expenses associated with loyalty.”
This video provides a brief insight into 10 planned developments for operating and/or living under the sea. Further details can be found by going to the links in the video.
Entrepreneur.com has just posted an article on this subject. It specifically looks at three countries – the Philippines, Vietnam and Rwanda (reflecting the expertise of the author rather than any operational reason?).
This report from Capgemini Consulting identifies that Asia now hosts nearly one third of all the innovation centres built and operated, overtaking Europe for the first time. Four Asian cities are leading the charge – Singapore, Bangalore, Shanghai, and Tokyo.
The National Trust is an interesting operation, or rather set of operations, to blog about. It faces various challenges not typically found in commercial businesses.
- It relies very heavily on membership and donations to help support its work, although it is increasingly generating revenue from its attractions, retail outlets, and catering facilities.
- A very high proportion of its ‘workforce’ are unpaid volunteers.
- By definition, it’s physical infrastructure is old and cannot be modernised very easily, if at all.
- It employs an extremely diverse workforce in terms of skills and expertise.
This is perhaps best illustrated by looking at the key performance indicators (KPIs) it now uses to measure its success. These are grouped into four main areas:
- “Looking after what we have got” i.e. their physical infrastructure
- “Creating experiences of our places that move, teach and inspire” is customer satisfaction
- “Growing our support” i.e. membership
- “Resources and skills” i.e. profitability and staff satisfaction
The last three years performance can be found here. It generally shows an organisational performance improving year on year in all its key areas.
Ombudsman Services has just issue a press release that highlights the findings of their fourth annual Consumer Action Report. It has calculated that the total cost to UK operators of poor service is £36 billion. The main points are:
- More than a quarter (28%) of consumers spent less or left a brand altogether as a result of bad service
- Number of complaints increased to 55 million in 2016 – up by three million from 2015
- Continued poor service by brands leaves customers disillusioned.
The sector which receives the most complaints is retail, with 24% of the total. The ombudsman calculates this results in over £10 billion of lost sales.
As we explain in our book (page 229), operators may be reluctant to shift from simple quality inspection, to the more sophisticated assurance approach because “the value of of lost repeat business and customer dissatisfaction is not easy to assess”. Studies like this now make it clear just how high such quality costs might be.
The so-called ‘gig economy’ has been in the news a lot just recently. This BBC News webpage provides a good overview of what this means, and reports on some of the recent court cases brought by unhappy ‘self-employed workers’. But as Matthew Taylor, who is leading a government review into current employment practices, pointed out on R4 Today programme this morning this phrase is an oxymoron – someone is either self-employed OR a worker. They cannot be both.
It seems that protagonists on both sides of the argument use the same phrase – the employer/worker “wants to have their cake and eat it”. This was certainly the case four days ago when the Today programme interviewed the operator Pimlico Plumbers. In this case, the Court of Appeal ruled that a plumber who was designated as ‘self-employed’, because he provided his own tools and paid his own tax, was actually a ‘worker’, entitled to holiday pay.
From an operations perspective, this is all about flexibility. Such workers typically work very flexible hours, partly to satisfy the capacity needs of the firm, but also to satisfy their personal needs. But it is also about cost, as operators only pay for hours worked – that was until the Pimlico Plumbers case…..
I’m not actually going to comparee T5 now with what it was like when I first blogged about it five years ago. Instead I’m going to compare it with what it was thought it would be like nine years ago. Here’s a video of a virtual tour around the terminal, as it was envisioned…
And just in case, you’re not sure what it is really like, here’s a video showing how it turned out. Interesting that the main difference is that there are no self-service check-in kiosks in the virtual tour…
One of the interesting things about looking back at operations I first blogged about five years ago is the extent to which they have developed as “theory” suggested they would. One such theory or model is the service firm life cycle (pages 72-74). This proposes that single concept service businesses (retail, restaurants, hotels, etc.) grow to become chains though four distinct stages. But this is not inevitable. Hence I am very glad that we state in our book “many firms do not follow the SFLC” for a variety of reasons.
One such operation is the restaurant concept Canteen. Five years ago they had four restaurants in London – today they have five (according to their website). It would appear that shifting into the growth stage of the SFLC is not on their agenda.