New Dimensions of Service

11 Feb. 2019

The service industry is a unique powerhouse, which has seen constant growth over the past 20 years, with hospitality contributing some 10 percent of GDP. But what’s in store for the sector, particularly as it becomes ever more competitive and the pace of change ever rapid? At a recent event in Shanghai entitled ‘First Global Service Excellence Forum’ staged by CEIBS and Ecole hôteliere de Lausanne, we examined trends in the service sector.

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As the moderator of a panel discussion on ‘New Dimensions of Service’, we heard a range of quite varied perspectives on the topic from a hotel operator based in Shanghai, a senior executive with a multinational hotel chain, an architect/interior designer, and an educator. We explored how hoteliers seek to instill service momentum into their operations. Not a particularly easy task, given that we all have our own definitions as to how service is evaluated and that standardization in future will depend on what customers demand as well as on the processes in place.

 

For instance, Gina Wo, an EHL alumna who is senior vice president and head of greater China with the ONYX Hospitality Group, focused on the P&L. She told the session that ONYX, which has its headquarters in Bangkok, aims to deliver Asian service culture.

It’s a people business. As a hotel operator we have to look at different people’s needs. Who can serve the right customer? That’s the challenge in HR. Our goal is not to attract the most expensive or experienced (personnel) to our organization but we need to find the right fit for every member of staff.” It’s necessary, she added, to leverage both leadership and the service culture to attract the right people. - Gina Wo

Dr Inès Blal, executive dean of EHL, also highlighted the human aspect to service. It was important, she said, to crack the code of what she termed the ‘moment of truth’ where service is always about the interface with the hotel guest. “We’re not rational beings, she said. Maybe the waiter is having a bad day. This is the main challenge in service design.” Somewhat provocatively, she suggested that hoteliers, when designing hotels, tend to forget about the customer.

The challenge we have today is take everything we know about marketing to make sure customers behave the way we want them to … for that moment of truth, when each staff member has the responsibility of delivering the product.

- Dr Inés Blal

Claudio Salgado, who graduated from EHL in 1996 and is currently Vice President of Design Development Operations for Marriott International in the Asia-Pacific region, spoke about the need to create scale through standardization, while trying to maintain some flexibility. “A big challenge for us is to draw the line between prescriptive and individual design standards for hotels,” he said.

The more prescriptive you are, the more scalable your design process is, but then there’s the risk that everything becomes vanilla in design terms and that’s something we certainly don’t want. - Claudio Salgado

    

Although premium and luxury brands require design guidelines, he said, they should not dictate the interior design. “We still want each individual designer (such as Xiaobin Ding, founder of Shenzhen Alexander Architecture Interior Design, another of the panelists) to give their own interpretation to the design guidelines and have the freedom to create a specific design for a hotel design for a hotel in a particular location and market.”

 

So flexibility appears to be key, even when trying to create scale through standardization.

As educators, we need to build greater flexibility into the curriculum so that what we will be teaching service in five to ten years will still be relevant. This then is something of a paradox that we are facing: when you go for scale, how do you add that flexibility to your systems? When it comes to service design, is it better then to be small and flexible than a hotel chain with a million rooms?     

If we’re not very agile in how we define service, we will probably find it hard to keep hotel guests happy because they will experience new service concepts elsewhere.

 

It was somewhat appropriate that the CEIBS-EHL forum on service excellence should be staged in Shanghai. At present we are still very western-oriented with regard to service delivery, but it seems clear that China in the next decade and beyond will exert a greater influence on how service is defined in Europe and even North America. As Chinese hotel companies look to break into western markets and create international brands, Chinese travelers will be more likely to select the service brands they know as opposed to western ones. This should come as a wake-up call.

 

The ‘First Global Service Excellence Forum: East Meets West, New Dimensions of Service’ was staged at the CEIBS Shanghai campus in Pudong on November 7, 2018.

 

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Dr. Achim Schmitt
About the author

Achim holds a PhD from the University of Geneva, obtained his Habilitation at the University of Paris-Dauphine in France, and is a Visiting Professor at the University of Geneva as well as an Associated Researcher at the University of St. Gallen in Switzerland.

Before joining the academic world, Achim has been a strategy consultant for 4 years in Germany, Austria and Switzerland. He has gained academic experience at Audencia Business School in Nantes (France), Columbia Business School (USA), HEC University of Geneva (Switzerland), and the Universidad de Los Andes in Bogota (Colombia).

Achim’s research focuses on organization theory and strategic management, with particular interest in organizational ambidexterity, organizational decline, corporate turnarounds and strategic renewal.

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