The Frontiers in Service: Front-Line Employees and Middle Managers
In this article we analyze another issue that was presented by Professor Leonard Schlesinger from HBS in The Frontiers in Service Conference held at Gabelli School of Business, Fordham University, New York. It is a critical issue about “What great Service Leaders know and do”, and implies the leadership that should be developed at the different hierarchical levels, specifically at the middle level of the organization. This point refers to that service starts with frontline employees, and therefore, leaders hire them for attitude and train for skills. So, the question is: how can we understand this and how it should be applied?
For Professor Schlesinger and his fellow researchers, what influence the creation of customer value are employees’ satisfaction, commitment, loyalty and productivity, which should be measured as well as financial indicators. These measurements are among the most critical since a large part of service organizations’ performance is conducted by employees. That is, employees’ performance and behavior significantly impact on customers’ experience and satisfaction, and that determines not only economical results but also the organization’s image and future. Therefore, the best prediction of the future success of service is about nonfinancial measures such as customer and employee loyalty, their involvement and what they call ownership that is to feel like owners of the company. For these researchers it is vital to recognize that strong and adaptive organizational cultures can foster innovation, productivity and a sense of belonging between employees and customers. In this task, they compare companies that do not seek loyalty of their employees with those that have clear strategies for this purpose. Poor selection of candidates, poor training, low salaries, repetitive and boring jobs, an environment of mistrust, low levels of satisfaction, poor service attitude, high turnover, poor services quality, are the characteristics of companies with low loyalty of its members. The results for the organization are: relatively low costs, reasonable margins, acceptable profits, all of which may lead to the conclusion that the strategy is working. But the consequences can also be poor service quality during customers’ contacts, regular customer satisfaction rates, high customer turnover, lack of continuity in customer relations, substantial effort to attract new customers. These costs are often ignored in the economical analysis about low employees’ retention strategies. They give Costco’s business model as an example, a clear case that is based on the attraction and retention of excellent employees. Instead of reducing employee costs, they are convinced that it is much more beneficial in the long run to reduce turnover and maximize productivity, commitment and loyalty. Another example is Vanguard, a financial service company in Philadelphia, which uses the term “team members”, not employees. For them, the work quality environment begins with adequate recruitment and a solid system of human and ethical values: integrity, discipline, honesty, ambition, loyalty, creativity, innovation, cooperation and a sense of humor, which constitute the character of the company. This culture allows them to have a functional working environment with a consistent set of values, policies and practices, which builds trust, the strongest pillar that is sustained by leaders who make decisions based on their convictions which are compatible with organizational culture and a clear sense of responsibility.
Their analysis refers to a study developed by Service Management Group, which shows that employees give credit to three behaviors of their managers that have the greatest impact on their satisfaction, involvement and loyalty: 1) My supervisor is involved in my development, 2) my supervisor takes care of me and, 3) my effort is recognized. Additionally, the amount of training received and how well employees work as a team are factors that foster a solid relationship with collaborators. Therefore, this study concludes that the skills and behaviors of those who lead are much more important in influencing employees’ satisfaction than policies and procedures. On the other hand, Leonard Berry, a prestigious researcher in the field of services, points out with emphasis that providing a great service is a matter of mentality where values, not policies or procedures manuals, prevail. To us, it is important to highlight and clarify the relevant role of middle managers, which is just beginning at the supervisory level. Supervisors have the greatest challenge to keep satisfied, committed, loyal and productive collaborators. And therefore, they must develop not only skills, but also firm attitudes and values in order to support their actions coherently through consistent behaviors, the way to build trust and loyalty. Although it is important to select employees and executives with the attitude that the company values, it is also necessary that the leaders know how to maintain that attitude over time, as attitudes can change as people learn. But above all, it is essential that leaders learn to foster loyalty, which is not ordered or asked, it is obtained through an act of free will, not through an economical or psychological contract. When analyzing the study before referred, it is clear that a leader should look at the employee as a person who needs to develop all his dimensions and not simply that related to the operational service tasks. Likewise, taking care of employees and recognizing his effort, should not only guide him to develop his technical ability and appreciate his contribution, but also to value him as a person, which is in the ethical aspect. It can then be concluded that, supervisors are the key elements for the commitment and loyalty of frontline service employees, but at the same time those who lead them, their bosses, as they are influencing on supervisors. Thus, the assertion that service begins in frontline employees should not be understood as the unique way of analysis, it will depend on the type of evaluation that is done. We can argue that service begins at middle level, as leaders there are orienting and guiding employees’ effort and priorities. So, those leaders should receive sufficient energy from top management.
For these researchers, employees create expectations about an organization from a variety of sources, among which stand out: the reputation of the organization, the actions of leaders, the way in which employees express about their company, its advertising and public relations, the quality and value of its products and services. In this line, we must highlight the actions of leaders because those leaders especially at middle level are fostering strong relationships with employees, frontline and back-office. For example, it is noted that employee satisfaction is based on three key factors: freedom of action, autonomy to serve customers, and their ability which means their knowledge and skills to deliver results to customers. Undoubtedly, these aspects have a great influence on performance and behavior of collaborators than the simple policies and procedures. But, at the same time, these factors depend, to a large extent, on the style and character of those who lead at the middle, that is, on the type of leadership they exert. We think it is convenient to make this precision, because it is a decisive issue for the creation of value that the company expects. It is not enough to consider the employees on one side and the management on the other. It is necessary to identify the specific roles of those who lead service employees, and not only those who lead at the top level as they by their position and role do not have the greatest impact on the daily lives of frontline employees or back-office. Berry is also very clear in saying that leadership that comes only from top management is insufficient to sustain the values that guide service employees and inspire their discretionary effort. Thus he argues that companies that excel in services run through the values of middle-level leaders, in addition to the values of top-level leaders.
Another important requirement to excel in services is the need to get a solid employees’ commitment, and therefore, their satisfaction and involvement is not enough. Frequently companies confuse the concept of satisfaction with the concept of commitment. Satisfaction focuses on material and psychological needs, while commitment focuses on social and ethical aspects. Therefore, commitment must be consistent with ethical and corporative values which mean to be identified with the organizational culture. That is the reason why companies must take care about the influence of middle managers on employees, as they are the best referents of the culture and who communicate the language of service. If a company seeks loyalty from its members, it is an imperative to build trust in subordinate-boss relationships. Trust empowers a manager to exert his leadership role, influences organizational culture, and fosters personal commitment. So, it is important to consider middle managers’ leadership as a pillar to guide the specific behaviors of their collaborators, and to dedicate sufficient efforts to their concrete development. Commitment and loyalty of employees with a clear focus on value-for-service requires, fundamentally, a consistent leadership of middle managers. It is not possible to obtain them solely with mere policies, processes, or professional benefits.
While a right selection helps to get employees with the right attitude according to organizational culture, it is not enough to train them for skills. If a company seeks employees’ loyalty and identification with the organizational mission, it is necessary to contribute to their development and personal balance, which will also result in the favorable environment of productivity, quality and collaboration. For this purpose, the role and leadership of middle managers is fundamental. Therefore, a personal development must begin with those who lead at the middle level, hence our contribution to the chain of service proposed by researchers referred in this article, in English “The service Profit Chain”, has been the identification of the role of middle managers and a specific plan for their service leadership development, both their specific competencies and their personal qualities. Thus it is not enough to select people with the desired attitude, it is also important a constant growth and improvement in skills, and especially in those human qualities that favor the new behaviors and attitudes that will require in the future service organizations.
It is very relevant that these researchers reaffirm that all the parts and components of the organization are dependent on the most important element of all: the quality of leaders of the organization. However, to us it is essential to distinguish the roles of different leaderships according to the hierarchical levels. In that sense, middle level leaders, starting at the supervisory level, and continuing with their bosses, are the critical element in getting satisfied, loyal, committed and productive frontline employees.
Finally, these researchers point out that the core elements of delivering value to customers are: the work environment and employees who are led by leaders through effective policies and practices, and supported with technology and systems that contribute to competitive advantage of the company. Then these employees can deliver a world class service and become heroes in the eyes of customers. To us it is relevant to emphasize the work environment that is determined by how middle level leaders create a service climate and share the values of organizational culture through consistent practices and appropriate technology. But only by generating continuous learning in the operational and service dimensions, as well as in the integral personal development it will be possible to get satisfied, committed, loyal and productive employees, ready to face the new organizational challenges. We fully agree with Professor Schlesinger and his colleagues that non-financial indicators are the new elements to manage in order to drive excellence in services. There is no unique way to follow but the findings and conclusions they propose are useful for companies to seek the right path for creating value and contribute to global society.
 Heskett, J., Sasser, W., Schlesinger, L. (2015)
 Berry, L. (1995)
 Lescano Duncan, L. “Service Leaders, how to develop a trascendent leadership at the middle level of the organization”, eae (2017)