The latest 2010 Customer Satisfaction Index of Singapore has dropped to its lowest since 2007.

This shows that frontline training is not enough and that there are other factors responsible for customer satisfaction, which include understanding and catering to what customers want, and ensuring better communication between customers and service staff.

The National “Go-the Extra Mile for Service” (Gems) Movement is a national movement launched on Oct 6, 2005 that seeks to encourage everyone — from businessmen to service workers to customers — to play their part in improving service levels.

Five government agencies — Spring Singapore, Singapore Tourism Board, Singapore Workforce Development Agency, National Trades Union Congress and the Institute of Service Excellence at Singapore Management University— as well as private sector partners in service businesses, combined efforts to create a deeper sense of ownership among businesses, service staff and customers in the Singapore brand of service excellence.

A service-oriented culture — one with a multi-dimensional appreciation of service — is essential in strengthening Singapore’s positioning as a choice destination.

In the current phase of Singapore’s service journey, the “Gems Up” initiative launched in September 2009 aims to take service delivery to a higher level.

The spotlight is now on service leadership — encouraging businesses and business leaders to take the lead — not only to continue motivating and empowering staff to put customers’ satisfaction first, but also to embrace service transformation by innovative thinking.

But what could be hampering sustainable service excellence is perhaps the wired thinking behind service.

As Peter F. Drucker once said: “The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.”

For example, in business intelligence, take the goods-based classification system for capturing and informing changes in economic activity. The relative inadequacy of this format is becoming increasingly apparent in today’s competitive landscape of a seamless global marketplace.

The view of a product being a unit of output made up of the tangible component and intangible services may need a radical re-think.

Professor of marketing Stephen Vargo suggests removing the dichotomy implied in product tangibility.

He and Professor Robert Lusch (both framers of the Service-Dominant Logic theory) argue that the value proposition to the customer resides in the level of service.

Effectively, it is reversing the way people think about serving customers — service before the physical product, that is, service is the primary theme in Service-Dominant Logic (S-D logic).

Service-Dominant Logic

There has been significant attention to services as special types of products and as value-adding enhancements to tangible goods.

This trend, however, continues to subordinate “service”. Hence there has been relatively little progress in understanding “service” as a standalone variable.

The S-D logic mindset sharpens the focus on creating the environment for service excellence.

In creating the value proposition, a company engages with its consumers through collaborative processes.

For example, the Changi Airport Group (CAG) is a world-class airport management expert but the name of the game is service excellence.

In S-D logic, the physical attributes of Changi Airport are the conduit for CAG to procure service to travellers and airport visitors. Beautiful landscaping and hygienic practices complete with impeccable service make for exquisite in-transit experiences, distinguishing Changi Airport from other airports in the world.

The need for skilled staff

In the context of value creation, knowledge is the primal source of wealth and the only sustainable source of competitive advantage. 

When a company fails to retain skilled service staff, it is inevitable that service quality is unsustainable.

The leadership challenge here is obvious — training may not be the answer but rather, a re-think of human resourcing policies.

A company that manages to match capabilities with customer needs, guided by an on-going dialogue between them, will generate a long-term customer loyalty and competitive advantage.

Furthermore, S-D logic suggests that all parties in the value creation process should be viewed as active participants. It is a logic focused on “service in exchange for service”.

Professors Vargo and Lusch found two competences to be pivotal for an organisation to adopt S-D logic. They are:

* Collaborative capability: The ability of the organisation to work with other parties in an open, truthful and symmetric manner. The organisation would have to have internal specialised capabilities and knowledge, otherwise no other organisation would benefit from working with it.

* Absorptive capability: The ability of the organisation to absorb new information from the environment, including its collaborative partners.

No doubt, the culture of the organisation will have to embrace values that nurture and support these two capabilities for a service-dominant mindset to prevail.

New mindset

In a hyper-competitive global environment, change is not only rapid but also surprising — causing companies and even nations to beat down the innovation path.

In this pursuit, gaps in service science, management and engineering become obvious and call to be addressed.

As the scope of innovation moves beyond products, service logic offers greater opportunities for service leadership. And it is as fundamental as unlocking the true nature of exchange.