An interview with Dick Chase, Professor Emeritus, Marshall School of Business, University of Southern California

Citation

Smart, P.A. and Alves, K.V. (2014), "An interview with Dick Chase, Professor Emeritus, Marshall School of Business, University of Southern California", International Journal of Operations & Production Management, Vol. 34 No. 4. https://doi.org/10.1108/IJOPM-04-2014-001

An interview with Dick Chase, Professor Emeritus, Marshall School of Business, University of Southern California

Article Type: Operations Master’s Series From: International Journal of Operations & Production Management, Volume 34, Issue 4

Editor’s note: The aim of this Master’s series is to offer key insights from luminaries within the field of operations management. This is the third in the series and aims to highlight the trajectory of exploration pursued by Professor Dick Chase in the identification and development of phenomena associated with service operations management. Professor Chase is a leading international figure in service operations management. In this interview, he reflects on his research and his contribution to the field. He posits a number of challenges for the contemporary researcher and for the development of service operations management theory.

For this installment of the series, two researchers, Professor Andi Smart and Kyle Alves, conducted the interview over a six-hour period with Professor Dick Chase, Emeritus Professor at Marshall School of Business, University of Southern California at Professor Chase’s home in California. A set of predetermined questions was used to encourage reflection on influential work and important developmental periods. The interview was taped and transcribed. The resulting narrative followed an iterative development cycle between the researchers and the interviewee.

The customer contact theory has endured as a foundation to many subsequent contributions in OM as well as marketing; can you describe how Thompson’s (1967) book moved you toward your ultimate positions on customer contact influence on the organisation?

Thompson’s book provided just the right level of abstraction for linking operations management to organization theory. It proposed a very simple logic – organizations seek to protect their technical core from outside disturbances. For manufacturing, the technical core resides in the factory which can be protected by inventory buffers from outside disturbances of supply and demand. For services, I took the technical core to refer to the back office, which is buffered by the front office from the need to accommodate the physical presence of the customer.

The "Revisiting Contact Theory" chapter in the Service Science book acknowledges need for development of the concept. Has your definition of "customer contact" changed since the original position?

My definition is still the same – the physical presence of the customer is the key distinction in terms of operations. Technologies such as Skype can allow richer interactions between the customer and possibly the back office, but this is really nothing more than an enhanced phone interaction or web interaction in its impact on back office operations. A key point that most people do not think about is that the service encounter point itself may be the technical core; the back office simply being the support operations. Medical care, airline travel, and entertainment facilities such as Disneyland would be the strongest examples of this.

The "Where does the customer fit in a service operation?" (1978) HBR paper suggested there was increasing freedom to design efficient processes where customer contact was low. Is this still the case? – particularly where customers are resources working in service processes

Yes, I believe it is still true. When you have a financial advisor work on your retirement plan, he or she may spend an hour or two finding out some details about you but they do not want you looking over their shoulder while they develop the specifics of your portfolio. Probably nine out of ten companies want you to do things on-line, and I would assert that the tenth one only makes phone access available to provide a feeling of security for the customer (or of course, to sell you more). In fact, it seems now companies want you to complete back office type operations in your "back office" or more specifically, on-line.

In the "Revisiting Contact Theory" chapter (2010), you discuss how self-service technologies (high contact and high efficiency) are where the theory needs refinement or re-conceptualisation. Which part of the theory (customer contact or organisation technical core) should be addressed first and why?

I would say the technical core. It is difficult to define the real technical core – often it resides in the cloud. To give you an example, my son Andy runs an online recruiting business where he has minimized the amount of face-to-face contact he has with candidates by careful design of application forms and automated responses and guidelines. He limits his messaging to the strongest candidates and he may do this during timeouts in his kids’ soccer matches.

The 1978 HBR paper contains one of the earlier attempts to move away from organisational analysis based on SIC code. Was there a particular prompt which helped that concept develop?

Yes, the prompt was the need to write a chapter about service in my OM textbook with Nick Aquilano in 1977. Most classifications of service at that time were from an economics perspective and provided little guidance for managing the central feature of most all services – customer contact. Once I had the idea about the practical implications of contact, I was able to develop, rather easily, 58 propositions contrasting how high contact and low contact affect each of the major topics in OM (e.g. scheduling, location, and layout) along four dimensions: product, technology of transformation, operating and control system, and workforce. These were later boiled down to the high and low contact table in the 1978 Harvard Business Review article.

To what extent do you feel that the existence of the product-service division helps or hinders future growth of the OM discipline?

It is useful if one is talking about the core product of a business, e.g. health care product companies versus health care providers. But again, you have to get into the nature of the operations before you can say anything about specific companies, especially those that have both product and service components.

You have spent considerable time in your publications considering definitions of service. Where do you stand today? Is it becoming clearer, or is it more elusive than ever?

At the broader level, it is probably more elusive at least for operations purposes. In marketing where the definitional issues have been studied most intensively, the major development has been service dominant logic (SDL), wherein the broad goal of every aspect of a company is to contribute to serving the customer. This is a good philosophy and provides some strategic guidance but as an operations person I find it difficult to work with.

Another problem at the operational level is that service definitions still suffer from people confounding attitudes of the server with the actions he or she performs. I have tried to get around this by a simple definition of service that anybody can use: I call it the three Ts. The Task to be performed (getting the burger cooked right and delivered to the table quickly), Treatment (was the server friendly and courteous?); and the Tangibles, including sensory elements (was the restaurant clean and comfortable?). This rough distinction has been very useful in pursuing "fail-safe" services.

Service science as a discipline has gained acceptance in recent years, and many consider you as one of the early proponents of the concept. Is the development of the field progressing as you envisioned in your "Big Idea" paper with Uday Apte in 2007? How much does it rely on intense involvement of practice?

Service science has provided a strong and useful focus on analytics but has not developed the general management and the psychological aspect of service as much as I think is warranted. I do not see great theories coming from intense involvement of practice, although practitioners have played a major role in ideas on revenue management and identification of the experience economy. Who among us has not cherry-picked an example from Disneyland? Certainly testing the ideas in the field is a necessity.

OM is an applied discipline, how do we ensure that OM impacts on practice and does not fall into a purely theoretical work? How do we ensure OM remains relevant?

OM needs more cases like the wonderful Shouldice Hospital and Benihana of Tokyo. These provide the student with the opportunity to look at strategy and capacity decisions from a variety of perspectives in a very involving way. I would also recommend the development of field study courses such as one I developed at USC. The course was entitled "Service Excellence" and entailed a weekly visit to a local service company where the class would interview managers about their firm’s service practices. In Los Angeles, we went to a variety of organizations such as the L.A. Dodgers, the Getty Museum, and the Bel Air Hotel. Regarding research relevance, I am insisting that that any papers I review provide added insights from talking to managers and customers who are part of a study. We have to make this stuff interesting!

I am curious. You offered a money-back guarantee for your service operations elective in the early 1990s. How did that work out? Did you ever do it again?

It worked out quite well. My guarantee was: "If you are unhappy with the quality of the course, I will refund the cost of your books and cases, and $250 of your course fees." Students could collect the refund after the grades were submitted, but they could not collect if it was over a grade disagreement. They also had to tell me if they were unhappy before the course was over so I could make midcourse corrections. This attracted 80 students to the class, was written up in the Wall Street Journal, and resulted in TV and radio interviews. None of the students asked for a refund, although my insurance agent suggested I might want to increase my liability insurance! I have offered it from time to time with good results. The basic reasons for its success were first, that it signalled to the students that I would try very hard to make the class worthwhile; second, no one would want to spend a semester in a course they disliked.

Your contributions to service design knowledge are widely acknowledged. At what level should service design take place?

The broad features of service are set by the service vision and the service strategy. From there it becomes a process design exercise. An interesting development here is the work of Scott Sampson who has proposed the use of Process Chain Network (PCN) diagrams that characterize provider and customer process domains as independent processing, surrogate interaction and direct interaction. I identified these three conditions but never refined them to a level where one could apply network diagrams (as Scott has).

Was customer contact the only/main influence on your ideas on design? What about other contextual factors, such as the transformed resource?

I started out looking at service delivery as an input-output model, and in fact published an article in 1968 with Tom Robertson, a well-known Marketing Scholar, entitled "The sales process: an open systems approach." I was also influenced by in sociotechnical systems work out of the UK which looked at how workers and work groups interacted with technology.

The design decision domains (facility layout, worker skills, etc.) reported in your earlier work seem manufacturing orientated. Should these be refined or reconceptualised to take into account marketing concepts (servicescape, customer experience, co-production, etc.) to form a multi-disciplinary design framework?

Actually, I have been focusing on these issues for the last 12 years. I think we have made a mistake by positioning these topics as "marketing concepts". Any OM treatment of service has to include how the customer perceives and reacts to the service process, and his or her role in creating the service. The late Chris Lovelock, a Marketing Professor who wrote casebooks on services, confided his view to me that service marketing is more operations than marketing. To answer your question – we do need a multi-discipline design framework. The question is how much OR-oriented OM researchers and teachers are willing to dip into these "softer" issues.

How is service process design linked to an organisation’s competitiveness? Is productivity still a relevant measure in service?

For most service companies, the service process is the product, so obviously you must do a good job in process design. And for product companies, a lousy customer service system can create big problems. Productivity is a practical measure of the use of resources, of course. More current measures of performance are customer related – repurchase, positive word of mouth, etc.

There is a need for multi-disciplinary research to address the range of problems facing organisations, but academic research is traditionally performed within a single discipline. How do you reconcile this apparent problem?

Multidisciplinary research is desirable but in practice it remains very difficult to pull off. I have tried to cross boundaries, and some of my best friends are marketers and general management types, but a rookie professor still runs a risk at promotion time if his or her resume does not contain sufficient publications in the main-line journals of his or her field.

Given the importance and variety of services in the competitive business environment, and the range of practices that can be employed, which topic in service operations teaching requires more emphasis to equip service operations managers for the future?

I strongly believe that customer experience management is the area where service operations designers, as well as managers, could benefit greatly from further training. Service is ultimately about the customer experience, yet we in operations really do not study much more than waiting lines and service quality in dealing with enhancing the customer experience. Customer satisfaction measurement, for example, as currently conducted cannot get at the latent factors such as the customer’s mood before and during the encounter, and how that mood can be accounted for and addressed in each step of the encounter. (My USC colleague, Sriram Dasu is undoubtedly the leading OM thinker on this issue).

What are you working on these days?

Glad you asked! I have published a book, co-authored with Dasu, entitled The Customer Service Solution: Managing Emotions, Trust, and Control to Win Your Customer’s Business. This work grew out of a Harvard Business Review article we published in 2001 and further refined in a Sloan Management Review article in 2010. What we have done in this book is to show how concepts from behavioural science research can be used in the design of service encounters. More specifically, we introduce such concepts as sequence theory, emotional platforms, and "emotion-prints" to help managers better engineer service processes.

My other activities include working with professors around the country to collectively advise the Arizona Department of Economic Security. The aim of this is to develop a new vision of operations to focus on getting people off the welfare system into jobs; or simply, better lives of self-sufficiency. The Director of the Department, Clarence Carter refers to the goal as "providing a trampoline rather than a hammock" for citizens in the system. I am active in the Manhattan Beach Rotary Club. I play a lot of scrabble, and enjoy time with my wife Harriet and our kids and grandkids.

To read the two previous interviews in this series, see Vol. 33 No. 1 for "An interview with Wickham Skinner, Emeritus Professor at Harvard Business School by Steve Brown" and Vol. 32 No. 3 for "An interview with Terry Hill, Emeritus Fellow at the University of Oxford by Steve Brown".

P.A. Smart and K.V. Alves

Centre for Innovation and Service Research, University of Exeter Business School, Exeter, UK

Further Reading

Chase, R.B. (1978), "Where does the customer fit in a service operation?", Harvard Business Review, Vol. 56 No. 6, pp. 137–142

Chase, R.B. (2010), "Revisiting ‘where does the customer fit in a service operation?’ – background and future development of contact theory", in Maglio, P.P., Kieliszewski, C.A. and Spohrer, J.C. (Eds), Handbook of Service Science: Research and Innovation in the Service Economy, Springer, London, pp. 11–17

Chase, R.B. and Apte, U.M. (2007), "A history of research in service operations: what’s the big idea?", Journal of Operations Management, Vol. 25 No. 2, pp. 375–386

Chase, R.B. and Dasu, S. (2001), "Want to perfect your company’s service? Use behavioral science", Harvard Business Review, June, pp. 78–85

Chase, R.B. and Stewart, D. (1994), "Make your service failsafe", Sloan Management Review, Vol. 35 No. 3, pp. 35–44

Dasu, S. and Chase, R.B. (2010), "Designing the soft side of service", MIT Sloan Management Review, Vol. 52 No. 1, pp. 33–39

Dasu, S. and Chase, R.B. (2013), The Customer Service Solution: Managing Emotions, Trust, and Control to Win Your Customer’s Business, McGraw-Hill, New York, NY

Sampson, S. and Lemon, K. (2012), "Visualizing service operations", Journal of Service Research, Vol. 15 No. 2, pp. 182–298

Thompson, J.D. (1967), Organizations in Action, McGraw-Hill, New York, NY