Category Archives: Healthcare

What Service Innovators Can Learn From Coproduction in Prolonged Complex Services

By Jelena Spanjol

While frontline employees are critical in creating positive service encounters, many customers are left to their own devices to fully extract the potential value from a service. Across industries such as education, personal finance management, and healthcare, customers are the primary agents in the production of value from services provided by companies. For example, while a university might staff the classrooms with excellent faculty and administrative functions with well-trained employees, the value of a higher education is to a large extent created by the students themselves, through everyday dedicated learning, attending classes, etc. Similarly, financial advisors and counselors might have the best advice and tools to offer their clients to save for retirement and college funds, but customers have to do the hard work of cutting down on expenditures and persisting in budget planning and implementation. It is not surprising, then, that many college students do not finish their degrees[1] and many consumers of financial services firms do not achieve their goals[2].

Our research focuses on such prolonged and complex service encounters, where consumers are required to contribute resources (time, effort, etc.) and do so well beyond the immediate interactions with the service provider. We were particularly interested in exploring three major questions:

  • How do consumers experience such extensive service coproduction mandates?
  • What challenges do consumers face in their coproduction attempts?
  • What strategies and tactics do consumers use to successfully coproduce services over the long run?

To generate insight into the dynamics of complex and prolonged service coproduction, we focused on the healthcare services industry. This industry was particularly suitable for our inquiry, since healthcare services are predominantly consumed by individuals with chronic illnesses. The Robert Wood Johnson Foundation reported in 2010 that 93% of all prescriptions are filled and 79% of all physician visits in the U.S. are made by chronically ill patients, with an increasing trend. At the same time, about 50% of medications prescribed to manage chronic diseases are not taken as recommended, resulting in premature death, preventable hospitalizations, and $290 billion of avoidable annual medical spending according to New England Healthcare Institute. In this context, coproduction is critical in order to generate value from healthcare services. However, such coproduction reflects a continuous and laborious effort by consumers.

We conducted qualitative, depth interviews with hypertensive adults in order to understand how prolonged and complex service coproduction might be more successful. What we found indicates that consumers engaged in ongoing coproduction must develop a system that is contextualized in order to effectively integrate interdependent coproduction behaviors.

A contextualized coproduction system reflects and leverages the enmeshed nature of service coproduction in a consumer’s daily life. This encompasses coproduction behaviors that are defined by their scope as well as their temporal intervals and regularity. For example, finding the most effective pill containers, having medication refill routines in place as well as having a different set of routines for traveling or unexpected visits to one’s home, represent three different types of coproduction behaviors which, together, construct an effective coproduction system. The totality of the co-production system helps consumers prevent disruptions that otherwise might compromise their coproduction efforts.

Our findings have two critically important implications for service providers in education, financial management, and healthcare. First, many standardized tools that service providers offer to their consumers will fail to adequately help consumers in their coproduction efforts, if they do not take into account each consumer’s unique living condition, daily rhythms, social interactions, etc. For example, the standard pillboxes often don’t work for consumers, since they don’t fit into the enactment of coproduction behaviors. Customized and tailored partnering between service providers and consumers is paramount. Innovative solutions must not aim at improving coproduction per se, but rather at helping consumers discover the characteristics of their environment and existing behavioral patterns that impinge on coproduction efforts. In other words, supporting the development of tailored coproduction tools by consumers themselves, based possibly on a set of modular templates, would be much more fruitful for service providers to focus on.

The second implication stems from our finding that coproduction behaviors are interrelated and interdependent. Service providers should therefore develop specific coproduction behavior monitoring capabilities that support consumers in recognizing (and doing so more quickly) when their coproduction efforts are falling short and endangering the entire system. Innovative solutions will be aimed at supporting, not educating consumers. By deeply understanding what it truly means for consumers to coproduce prolonged and complex services, providers face a tremendous opportunity to create innovative new service components and truly enhance consumer wellbeing.

[1] The US Department of Education reports that only “59 percent of first-time, full-time students who began seeking a bachelor’s degree at a 4-year institution in fall 2007 completed the degree at that institution by 2013” (https://nces.ed.gov/fastfacts/display.asp?id=40)

[2] In an April 2012 survey of over 1,000 consumers who have retirement savings accounts, conducted by State Street Global Advisors and Boston Research Group, 78% reported knowing that saving more toward retirement is important and 83% reported being able to cut their household expenses by at least 5% to increase their retirement savings rate. However, only 33% of all respondents reported knowing how to go about increasing their retirement savings.

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The research Jelena Spanjol and her colleagues completed focusing on the topic of co-production in prolonged negative services was published in the Journal of Service Research as part of the Journal’s special issue on Transformative Service Research.

Transformative Service Research: A Multidisciplinary Perspective on Service and Well-being

Interview with Laurel Anderson and Amy Ostrom, Editors of the Special Issue of Journal of Service Research, Transformative Service Research: A Multidisciplinary Perspective on Service and Well-being

In August of this year Journal Service Research published a highly anticipated special issue on Transformative Service Research, a Multidisciplinary Perspective on Service and Well-being. The entire issue will be available free of charge till November 2015 and can be downloaded from the journal’s website. We’re very excited to feature the special issue in this podcast and on our blog, where we’ll be sharing posts by the authors of the three finalists for Best Paper Award.

Darima Fotheringham: Today I’m talking to the guest co-editors of the special issue, Professors Laurie Anderson and Amy Ostrom from Arizona State University. Professor Anderson, Professor Ostrom, thank you for talking to us today.

Laurel Anderson, Amy Ostrom: Thank you, it’s good to be here.

Darima Fotheringham: As you mentioned in the editorial, Transformative Service Research is a fairly new research area that’s been gaining momentum. For those who are not familiar with the term, can you start by defining Transformative Service Research, or TSR, and explain why it is receiving so much attention and interest in the research community today?

Laurel Anderson: We define TSR, Transformative Service Research, as focusing on services and well-being, and in particular, as research that has to do with creating uplifting changes. And one of the key things about the definition is that we look not at just individuals but also at collectives like family or communities, ecosystems, society. These aspects are some of the things we found in the papers that came in that were different from a lot of the research in service.

Darima Fotheringham: And going back to the second part of the question, why do you think there is so much interest from the research community in this particular topic?

Amy Ostrom: There’s always been some interest in studying well-being issues in general, but I think we’ve seen an increase interest in the last five or six years. Some of it, likely due to discussions about what should research priorities be in the service field. And as part of some research priority setting efforts, this idea of studying service and well-being really came to the forefront. We’ve seen really a community of service researchers form, who really want to better understand this connection between service and well-being. And as that community has grown, we’ve seen more and more special sessions at conferences, research projects at a significant nature getting started, and it’s really been very exciting to see.

Darima Fotheringham: The TSR special issue includes ten very diverse articles. They’re from around the world and cover different industries, discuss different cultures. In the editorial you identified three big themes. Can you talk a bit about those themes and share a couple of examples that would illustrate some of the new interesting concepts that the readers can take away?

Laurel Anderson: We were just really excited to see the diversity of the papers that came in. That’s part of what we wanted to accomplish also, to indicate how broad this field is both in method, and cultures, and content, and theories conceptually. So the three themes that we found arising from the data were ones that we thought were innovative, and provocative, and had a lot of heft to them. For example one is the de-struction of value. We always talk about the co-creation of it, creation of value, but haven’t really given time to look as much at some of the destruction of value. That is a really interesting topic. And as the papers in this area point out, sometimes it is unintentional, sometimes it’s unknowingly destructive, and sometimes it’s intended.

So for example, the article, the lead paper, which was the award winning article by Per Skålén, Kotaiba Abdul Aal, and Bo Edvardsson, looks at what they call strategic action fields. It looks at the incumbents in that field and it looks at challengers in this service area. This is amazing data because it looks at Syria and how the regime, as incumbents, took away services to many of the population. Then how that population reacted and created new services under the constraints that they had. So the destruction was an important part. That one is a very vivid, kind of unusual example. But sometimes it is also more everyday kinds of things, like chronic illness, where people really don’t want to be in a service. They’d rather not be participating in the service. There are a lot of negative aspects to the chronic part. We want to make sure that we’re looking at some of the negative aspects of services so that we can deal with those, which I think is really important.

Amy Ostrom:  One of the other themes that we highlighted involved co-production or co-creation, which are really looking at the roles and activities that consumers play as part of service. And while questions around co-production and co-creation have been the focus of a lot of research, not much of that work has really looked at well-being. We definitely had some articles where that was the focus, trying to understand how the activities and roles that consumers took as part of the service, how that ultimately impacted their well-being.

So for example, one of the papers authored by Jillian C. Sweeney, Tracey S. Danaher, and Janet R. McColl-Kennedy looked at what they call ‘effort in value co-creation activities.’ So really looking at how much effort consumers, in this case patients who are dealing with chronic illness, what kind of activities are they taking on? The whole idea behind their work was this notion that some of these activities or the roles are actually more effortful than others, and that patients or these individuals dealing with chronic illness will take on the easy activities first and then progress to the more effortful activities. So they were able to really look at the nature of these activities, things that they’re doing for themselves, things that they’re doing related to other people. What’s really fascinating is that they were able to look at the effort that these individuals were expending in terms of these various activities and relate that to things like quality of life. It really highlights, spotlights, how consumers and roles they’re taking on, the activities they are engaging in part of a service, really can impact their well-being.

Laurel Anderson:  We’ve looked at providers before to some extent, and the production, the co-creation, but not emphasized consumers and their well-being as much.

Amy Ostrom: It’s kind of exciting that we’re actually starting to see some research where we’re looking at more innovative measures. Oftentimes some of the research involves more perceptual measures. We are seeing that researchers are starting to use actual behavior measures or maybe more objective measures to really understand the nature of well-being, changes that are happening. So for example Martin Mende and Jenny van Doorn look at co-production in the context of consumers participating in debt management programs, and they look at, over time, the impact of consumers who are in those programs—their co-production and its impact on an objective measure, a change in credit scores, as well as things like increased stress perceptions. So we’re really seeing some interesting relationships between, again, how people are co-producing or their role within the organization and their level of well-being.

Darima Fotheringham: In your editorial you also identified specific areas within TSR that required further research. Can you talk about these areas and share examples of research questions that you personally find especially important or intriguing?

Amy Ostrom: One of the areas that we continue to talk about, and I know that others are really devoted to studying it as well, is what’s called Base of the Pyramid, or studying individuals, really billions of people in the world who are living under a few dollars a day. And a lot of the research that’s done in service work and just academic work in general in any area doesn’t tend to pay attention to individuals living in those particular types of circumstances. So there’s much to learn about consumers living in those situations, and a lot to learn from them, and the creativity that’s demonstrated in individuals that are living in what we refer to as the Base of the Pyramid.

Laurel Anderson: Another area, that we believe is very important, has to do with stress, being really cognizant of stress and the impact of stress on consumers. One of the other methods or approaches that we also feel is very important is an interdisciplinary approach where we’re bringing in knowledge from maybe the biological sciences, neurology, some of the other fields like nursing, or medicine, or law. One of the areas where there’s just fascinating research on stress has to do with the impact of stress on the body of a person. We’ve known for quite a while that stress impacts the well-being of a person, but there’s some very interesting research now that looks at the impact of stress on the body and then on how it’s passed on to the next generation—I think it just emphasizes the importance of well-being for the consumers that are participating in services and incorporating some of the interdisciplinary research that’s out there on the impacts of stress. So it’s a very fruitful and important area to pursue.

Amy Ostrom: The other area that we talk quite a bit about that’s not too surprising is the impact that technology is having in services that are based on technology and the relationship with well-being. And in this day where so much of our behavior can be tracked and monitored, issues around what that means for privacy and service settings and potential harm that can come from that. The fact that service providers now can know information about us and be continually tracking our behavior, the potential that raises for all sorts of potentially harmful well-being aspects, but at the same time a lot of benefits, when you think about monitoring and health related aspects, that can be really empowering for consumers to be able to live their lives knowing that the service provider, a doctor, is able to know at any time if there are any issue. But it does change the nature of the dynamic.

Laurel Anderson: It does, and it raises something we found throughout, which is trade-offs. There are trade-offs in some benefits to well-being and the negative aspects of, for example, technology and monitoring. Those are really important aspects to talk about and to research too. In addition, as far as trade-offs are concerned, sometimes there are trade-offs between the well-being of one group and the well-being of another group. And who decides then which is going to be prioritized in their well-being? So there are some really complex questions around well-being and trade-offs that we saw coming out of some of the research.

Amy Ostrom: I think it highlights the need to look broader than just the dyad, the trade-offs at community levels and service system levels. It is the key to why we have to look at the broader picture than often times we tend to do. It’s hard research to do, and very difficult, but very important given the nature of these kinds of interaction trade-offs that are effecting so many of us on a daily level.

Darima Fotheringham: You conclude the editorial by recommending specific actions that can help TSR make a real impact on society. The call to action is mostly directed to the research community, but as you mentioned we can all benefit from data in the field. Is there anything as consumers, as customers, or as individuals can do to support this research?

Laurel Anderson: I think that one of the areas that is challenging with regards to consumers themselves and well-being is a trend that we’re seeing that’s called responsibilization. What that means is that services, and governments, and policy are putting more responsibility for wellbeing onto the consumers. And it demands a high level of literacy on the part of the consumer, and so for example health—consumers have to know so much more now about the health, and their bodies, and the medical field because the responsibility is being put more on them than in the past. So as far as consumers are concerned that’s one of the issues as far as trade-offs. Yes, more of the choices on the consumers parts, but also more of the responsibility and decision making, maybe without some of the expertise to be able to do that. So things like literacy, having the time to do that, the resources and capacity I think are real challenges for consumers to manage. And if you have to do that in all the different areas of service, from health to legal to financial, it’s a lot to expect of consumers.

Darima Fotheringham: It’s very taxing.

Laurel Anderson: Right.

Amy Ostrom: When I think about what consumers can do, from the research perspective, what I hope is that the consumer would be willing to participate in some of the research that we and academic research, really globally, are interested in doing. The type of work that we do and the questions that we’re trying to answer really require partnerships with consumers to understand how the services they’re using day and day out are in fact impacting their well-being. Whether it’s healthcare, financial services, it requires that kind of participation. So I hope going forward that people will be willing to participate in research and share their thoughts, as I hope that organizations, individuals who work with consumers in different service settings are willing to collaborate with researchers. A lot of the research questions really require partnering with organizations, and one of the real goals of Transformative Service Research is to have impact—to actually improve the lives of consumers, and the only way that happens is really through organizations, companies who are basically effecting consumers day and day out—Learning what can positively impact well-being and doing more of those things, and learning what reduces well-being and stopping doing those things. And it’s those kind of partnerships that are actually going to lead to the impact that we’d want to see in the community and individuals.

Laurel Anderson: And I think it’s so important to listen to the customers in whatever service they’re in—the voice of the consumer. And it’s interesting because when we don’t, now consumers are creating their own research. There are communities of consumers that are doing research on topics that they think are important and that aren’t being followed up on by researchers. For example, a site called Patients Like Me where they’re monitoring themselves, and doing research, and finding significant results because the questions weren’t being addressed. So I think it’s really important to not just look at things from our research point of view, but to be listening to the consumer and to be incorporating those aspects that are frontline to them into our research too.

Darima Fotheringham: Great, thank you so much. We were talking to the editors of a JSR special issue on Transformative Service Research, a Multidisciplinary Perspective on Service and Well-being. You can find the entire issue, including the editorial we talked about on the website. Professor Anderson, Professor Ostrom, thank you for talking to me today.

Laurel Anderson, Amy Ostrom: Thank you, Darima


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Laurel Anderson is Associate Professor of Marketing at Arizona State University. She has degrees in both marketing and community health. She is deeply involved with development of Transformative Service Research (TSR).  In particular, she focuses on creativity and innovation, going between cultural worlds, health well-being, challenges and strengths related to poverty, culture and immigration and services as social structures. Previously, she was Director of the Institute for International Management at Arizona State University. Prior to academics, she developed community health programs focused on children and families, including a crisis intervention center for children.

Ostrom-Amy (Small) 2015

Amy L. Ostrom is the PetSmart Chair in Service Leadership Professor in Services Leadership, Chair and Professor of Marketing at the W. P. Carey School of Business at Arizona State University. She received her Ph.D. from Northwestern University. Her research focuses on issues related to services marketing including customers’ evaluation and adoption of services, customers’ roles in creating service outcomes, and transformative service. Ostrom, who was selected as the 2004 Arizona Professor of the Year and the 2007 ASU Parents Association Professor of the Year, has supervised numerous undergraduate Honors theses. She has shared the service blueprinting technique with small start-ups to Fortune 500 companies to help improve their service processes and develop new service offerings.

Differentiating on the Human Experience to Drive Customer Loyalty and Growth

DuffyBy M. Bridget Duffy, MD

In an era that challenges healthcare organizations to do more with fewer resources, patient experience is often considered an add-on. However, in an increasingly competitive environment, organizations can no longer solely focus on stripping out waste and reducing costs. A growing body of evidence points to the human experience as a key driver for employee and customer satisfaction, loyalty and performance.

Therefore, it is important to integrate traditional approaches to efficiency and quality improvement with strategies that transform the culture. The imperatives of this infrastructure include:

  1. Create an emotional connection

Customers choose service providers based on personal experiences, trusted relationships and valued recommendations. To understand customer needs and expectations, organizations must first map the gaps in efficiency plus empathy. Market leaders must provide services and use technologies that restore empathy to the customer experience. In addition, they must focus on building connection and relationships into all aspects of the organization – from executive leadership to frontline staff – so that from the first impression to the last, people feel a connection. Going beyond customer service to creating a real emotional connection to a product, service or company will drive market differentiation, customer loyalty and growth.

  1. Build a culture of humanity

An organization that cares about optimizing the wellbeing of its staff will deliver better results. It takes only one employee to destroy an optimal customer experience. Every employee must be connected to purpose and the mission of the organization. That is why organizations must create a work environment that allows employees to bring their full selves to work and don’t have to check their souls at the door. A culture that enables employees to feel empowered by and connected to the company and the mission drives results. Successful organizations foster a culture in which staff members at every level are viewed as valued members of the team. Organizational culture and communication among team members influences the quality of working relationships, job satisfaction, and has a profound impact on performance. Inspired, engaged and happy employees are loyal and powerful. They generate positive experiences that create market differentiation, loyalty and growth.

  1. Infuse the voice of employees and customers

To strengthen employee and customer connection, industry leaders must keep their finger on the pulse of what matters most to both of these stakeholders. Truly listening to these voices requires more than simply deploying random satisfaction surveys, which only scratch the surface. It is essential for organizations to build an infrastructure where staff and customers feel empowered to share their voice and know that they will be heard. Experience-focused organizations collect real-time staff and customer voice and tap into their wisdom in the design and innovation process for added insight into product and sales strategy.

  1. Create a Checklist of Always Events®

In healthcare, Always Events® are practices or processes that should always occur when patients interact with healthcare system. Borrowing from this concept, other industries must create a checklist of Always Events to hardwire humanity and empathy into day-to-day operations and design optimal experiences for employees and customers.

  • Map the gaps in efficiency plus empathy
  • Reconnect employees to purpose
  • Walk in the shoes of employees and customers
  • Create emotional connections and trusted relationships
  • Enable peak performance by empowering staff

To request the whitepaper Differentiating on Human Experience: How Healthcare Organizations Drive Lasting Loyalty and Growth, click here.

M. Bridget Duffy, M.D. will be speaking at the 25th Annual Compete Through Service Symposium on Thursday, November 6th, 2014.

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Bridget Duffy
, M.D., is Clinkedinhief Medical Officer of Vocera Communications, Inc. and co-founder of ExperiaHealth and the Experience Innovation Network, where her mission is to assist organizations in rapidly transforming the patient experience. Dr. Duffy was the first Chief Experience Officer in the United States, establishing that role at the Cleveland Clinic. She was an early pioneer in the creation of hospitalist medicine and launched programs to accelerate clinical discovery in the field of integrative and heart-brain medicine, helping establish the Earl and Doris Bakken Heart Brain Institute. Dr. Duffy is a frequent speaker on the subject of why patient experience matters and how it impacts clinical outcomes. Her work has earned her the Quantum Leap Award for spurring change in her field, and she was featured in HealthLeaders magazine as one of “20 People Who Make Healthcare Better.” In 2014, she was named one of the “Top 50 in Digital Healthcare” by Rock Health, a full-service seed fund that supports startups building the next generation of technologies to transform healthcare. Dr. Duffy attended medical school at the University of Minnesota and completed her residency at Abbott Northwestern Hospital in Minneapolis.

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How to Influence Patients, and Clients, to “DIY”

kathryn_k_eaton                                      By Kathryn K. Eaton

Over the last year, I have had the remarkable opportunity to work with the Obesity Solutions Initiative, which is a collaboration between Mayo Clinic and Arizona State University.  My work with this outstanding team of people has been varied and challenging, but my background in marketing has been a perfect fit for this endeavor.

When the Center for Services Leadership asked me to write a blog series about my experience working in obesity, I jumped at the chance. I feel that what I have learned here can be translated to many firm activities that take place today.

Obesity is an interesting challenge because I have to sell my “customers” the idea of health, and I have to sell this idea so well that these customers are willing to do something that they don’t really want to do in order to achieve it. This is similar to the research I did for my dissertation, where I worked with an energy company to sell the idea of mindfully reducing power consumption in the home in favor of the greater good. Continue reading

Putting Customers at Ease: The Patient’s Point of View

DoctorBy Andrew S. Gallan

Sally, a married 54-year-old mother of two teenage girls, had just returned from her mammogram follow-up appointment with a troubled look on her face. “What’s the matter?” asked her husband of 25 years. “Again, something showed up, so I have to go for another mammogram and some additional tests,” she responded. This second round of examinations had confirmed abnormal results in her breast tissue. As a result, she was referred by her primary care physician, a nice woman about her age whom she had seen for about 15 years, to a specialist at a local hospital. Although Sally thankfully had never been there before, she knew it had a good reputation for women’s health issues. Continue reading

Transforming Service Delivery in Higher Education and Healthcare

by Raghu Santanam

Service innovations are notoriously difficult. It takes decades for innovations to penetrate market. More importantly, managers and service professionals are incredibly slow to react to consumer needs. While many frameworks exist to help us think through innovation ideas, we often ignore lessons learnt from other industries.

The service related challenges in Higher Education and Healthcare are particularly vexing and can benefit from some lateral thinking borrowed from related professional services industries. Higher education and healthcare industries are a significant part of the service economy. According to the Department of Education, total revenues at U.S. public and private universities in 2009-10 exceeded $400 billion (National Center for Education Statistics). According to the Department of Commerce, US hospital revenues exceeded $800 billion in 2010, and outpatient services accounted for another $750 billion (SelectUSA). Clearly, the potential for improving societal welfare by addressing the service delivery challenges in these two industries is enormous!

Many academics, practitioners and entrepreneurs are busy addressing these challenges. However, in my opinion, the focus has been mostly on changing industry structure and funding models. Efforts to improve service delivery in both education and healthcare have been sporadic and limited. Clearly, we need to do more.

Let us look at higher education first. Continue reading