Operational Management

Vadim Kotelnikov, a founder of Ten Business E-Coach, has underlined a strong relationship between customer’s satisfaction and overall employee’s satisfaction from his work with company’s benefits and growth. Kotelnikov’s service- profit chain links employees and customers thru leveraging the corporate performance and stressing on the role of people in it. Actually, he investigates the both sides – employees and customers. Comparing to Roger Schroeder’s service profit chain Vadim Kotelnikov has shown more direct line between providing quality services and sustainable profit growing.

While the Schroeder’s linkage between organization performance, competitive advantages and core operational management practices are reasoned by combination of employee’s satisfaction and career development in organization, product strategy, and quality management; the schematic view of service- profit chain introduced by Pr. Kotelnikov shows the direct dependency between quality of services and profit growth, which are influenced by people factors regularly.

The key factors in Kotelnikov’s scheme are employee’s performance and customer’s loyalty. Schroeder’s model is focused on the excellent management practices, the efficient combination of operational and strategic forces, narrowing the achievements to quality of particular services – such as costs quality, knowledge management, etc. On the other hand the bottom line of Kotelnikov’s article is hidden in understanding of extra steps necessity.

He stresses that creating an employee’s satisfaction as an organizational value will bring the assurance for extra steps made from employee’s side in order to satisfy the customer, and to add customer’s loyalty to company reputation, thus to add profit growth. Nowadays, when business operating with high quality standards and various metrics, it seeks for establishing a trustful and reliable partnership with employees in order to enhance their interest in organizational activity and to draw their attention to customers’ needs.

Employee-partner will be interested in customer’s involving and their staying with company as a guarantee of the future collaborations. The scheme looks quite transparent and modest; however there are the certain obstacles, which should be evolved from organizational activities as the key barriers to success. First of all the imagination about a client as a lifetime value relationship should prevail above the arithmetic sum of transactions made, there should be the real desire to build the relationships with client, some sort of synergy.

Tactics and strategy of gaining referrals should be practiced more frequently involving such methods as word of mouth and cross selling. One of the most important things includes building internal relationships with employees involving them into building and development of customers’ relationships. References: 1. Kotelnikov, V. (2001). Service Profit Chain. Leveraging Corporate Performance Through Linking and Satisfying Your Employees and Customers. Retrieved from http://www. 1000ventures. com/business_guide/im_s-p_chain. html on the 2nd of July, 2009.