Chapter 3. Everything is a service

Our mission statement about treating people with respect and dignity is not just words but a creed we live by every day. You can’t expect your employees to exceed the expectations of your customers if you don’t exceed the employees’ expectations of management.

Howard Starbucks Coffee Schultz

Services cannot be designed and manufactured in isolation, like products. They are co-created with customers and are interdependent with wider service networks and clusters.

The Industrial Model

Most companies today are designed to produce high volumes of consistent, standard outputs, with great efficiency and at low cost. Even many of today’s services industries still operate in an industrial fashion. Schools efficiently produce standardized students. Hospitals efficiently move the sick and injured through a diagnostic and prescriptive production line. Drive-through restaurants efficiently move drivers through an order-fulfillment pipeline.

Service-Dominant Logic

But most of these services are not really services at all. They are factory-style processes that treat people as if they were products moving through a production line. Just think of the last time you called a company’s “customer service line” and ask yourself if you felt well served.

Sure, many services require some level of efficiency, but services are not production processes. They are experiences.

Unlike products, services are often designed or modified as they are delivered; they are co-created with ...

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