Harvard Case - Productivity and Performance Systems: A Comparative Analysis of Northern Telecom and United Parcel Service
"Productivity and Performance Systems: A Comparative Analysis of Northern Telecom and United Parcel Service" Harvard business case study is written by Christopher W.L. Hart, W. Bruce Chew. It deals with the challenges in the field of Service Management. The case study is 21 page(s) long and it was first published on : Aug 25, 1988
At Fern Fort University, we recommend that both Northern Telecom and United Parcel Service (UPS) adopt a comprehensive approach to service management, prioritizing customer experience and employee empowerment. This approach should be underpinned by a robust service system design, a strong focus on service quality, and a culture of continuous innovation. The recommendations outlined in this case study solution aim to enhance both companies' productivity and performance, ultimately leading to sustainable business growth and a competitive advantage in their respective markets.
2. Background
This case study examines the productivity and performance systems of two leading companies in their respective industries: Northern Telecom, a telecommunications equipment manufacturer, and United Parcel Service, a global package delivery company. Both companies faced distinct challenges in the late 1980s and early 1990s. Northern Telecom struggled with declining market share and increasing competition, while UPS sought to maintain its dominance in the package delivery market while facing growing customer demands for faster and more reliable service.
The case study highlights the contrasting approaches adopted by the two companies to address these challenges. Northern Telecom focused on improving internal efficiency through a series of organizational changes, including restructuring and process streamlining. UPS, on the other hand, emphasized customer-centricity, investing heavily in service quality, employee empowerment, and technology.
The main protagonists of the case study are:
- Northern Telecom: The company's leadership, including its CEO, faced the challenge of revitalizing the company's operations and regaining market share in a rapidly evolving telecommunications landscape.
- United Parcel Service: The company's CEO, Michael Eskew, spearheaded the transformation of UPS into a customer-centric organization, emphasizing service quality and employee empowerment.
3. Analysis of the Case Study
This case study provides a valuable framework for analyzing the effectiveness of different approaches to productivity and performance improvement. We can use the following frameworks to analyze the case:
- Service-Dominant Logic: This framework highlights the importance of understanding customer needs and creating value through service experiences. UPS's focus on customer-centricity aligns with this framework, while Northern Telecom's internal focus appears less aligned.
- SERVQUAL Model: This model helps assess service quality by comparing customer expectations with actual service delivery. UPS's investments in service quality, evident in its focus on reliability, speed, and customer satisfaction, likely resulted in a higher SERVQUAL score compared to Northern Telecom.
- Service Profit Chain: This framework demonstrates the link between employee satisfaction, customer satisfaction, and profitability. UPS's emphasis on employee empowerment and training likely contributed to higher employee satisfaction, leading to improved customer service and ultimately, higher profitability.
- Customer Journey Mapping: This tool helps visualize the customer experience across all touchpoints. UPS's focus on streamlining and improving the delivery process likely resulted in a more positive customer journey compared to Northern Telecom.
4. Recommendations
Based on the analysis, we recommend the following for both Northern Telecom and UPS:
For Northern Telecom:
- Embrace a Customer-Centric Approach: Shift focus from internal efficiency to customer needs and expectations. Conduct thorough customer research to understand their pain points and expectations for service quality.
- Invest in Service Quality: Implement rigorous service quality standards and metrics to measure and improve customer satisfaction. Implement a comprehensive service recovery system to address customer complaints effectively.
- Empower Employees: Invest in employee training and development programs to enhance their skills and knowledge. Create a culture of employee empowerment, encouraging them to take ownership of customer service and problem-solving.
- Leverage Technology: Invest in technology solutions to improve service delivery, enhance customer communication, and streamline internal processes.
For United Parcel Service:
- Continue to Prioritize Customer-Centricity: Maintain and further strengthen UPS's customer-centric approach. Continue to invest in service innovation and technology to enhance the customer experience.
- Expand International Business: Leverage UPS's global network and expertise to expand into new international markets. Adapt service offerings to meet the specific needs of different countries and cultures.
- Embrace Diversity and Inclusion: Foster a diverse and inclusive workplace culture to attract and retain top talent. Promote employee empowerment and provide opportunities for career growth.
- Develop a Robust Innovation Strategy: Continuously explore new service offerings, technologies, and business models to maintain a competitive advantage in the rapidly evolving logistics industry.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: Both companies need to ensure that their service management strategies align with their core competencies and mission statements. For Northern Telecom, this means focusing on technological innovation and delivering reliable telecommunications solutions. For UPS, this means maintaining its commitment to reliable and efficient package delivery.
- External customers and internal clients: Both companies need to understand the needs and expectations of both external customers and internal clients. This includes ensuring that employees are adequately trained and equipped to deliver excellent service.
- Competitors: Both companies need to be aware of the competitive landscape and adopt strategies to differentiate themselves from competitors. This could involve offering unique service offerings, leveraging technology, or building a strong brand reputation.
- Attractiveness ' quantitative measures: The recommendations should be evaluated based on their potential impact on key performance metrics such as customer satisfaction, revenue growth, and profitability.
6. Conclusion
By adopting a comprehensive approach to service management, prioritizing customer experience and employee empowerment, both Northern Telecom and United Parcel Service can achieve significant improvements in productivity and performance. This will enable them to thrive in their respective markets, achieve sustainable growth, and build a lasting competitive advantage.
7. Discussion
While the recommended approach focuses on customer-centricity and service management, other alternatives could be considered. For example, Northern Telecom could focus solely on cost reduction and efficiency improvements, while UPS could prioritize expanding its product portfolio beyond package delivery. However, these alternatives might not be as effective in addressing the core challenges faced by both companies.
The key assumptions underlying these recommendations are that both companies are willing to invest in the necessary resources, including training, technology, and organizational change, to implement the recommended changes. There are also risks associated with these recommendations, such as the potential for resistance to change from employees or the possibility of unforeseen challenges in implementing new service systems.
8. Next Steps
To implement these recommendations, both companies should follow a phased approach, starting with a pilot program to test the effectiveness of the proposed changes. The following timeline outlines key milestones:
Phase 1: Assessment and Planning (3 months)
- Conduct thorough customer research and analysis.
- Develop a comprehensive service management strategy.
- Identify key performance indicators (KPIs) to track progress.
Phase 2: Implementation (6 months)
- Implement pilot programs to test new service systems and processes.
- Train employees on new service standards and procedures.
- Invest in technology solutions to support service delivery.
Phase 3: Evaluation and Refinement (3 months)
- Monitor KPIs and assess the impact of the new service management strategy.
- Make adjustments to the strategy based on performance data and feedback.
- Continue to invest in employee development and service innovation.
By following these steps, both Northern Telecom and UPS can successfully implement a customer-centric service management approach, leading to improved productivity, performance, and sustainable business growth.
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Case Description
Explores the issue of measuring and improving service quality and productivity by examining the radically different approaches of Northern Telecom and United Parcel Service.
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