Towards a Theory of Service Improvisation Competence: Empirical Evidence from the Hospitality Industry

This research addresses the role of improvisation in service delivery systems. To this end, we develop a new construct–Service Improvisation Competence (SIC)–which is operationally defined as the systemic ability of service delivery employees to deviate from established service processes in order to timely respond to unanticipated events, using the available resources. We posit that the development of SIC constitutes an alternative to the classic dichotomy between standardization and customization in services. Furthermore, we propose scenarios where service improvisation is best deployed to enable the service delivery systems to systemically adapt to customer induced variability, without developing a detailed set of options that would significantly increase operational complexity. We test our theory in the hospitality industry, which exhibits a significant degree of customer-induced variability, as well as a wide array of strategies to face it. Our data sources include a survey of front-desk employees, a survey of hotel managers, secondary data from an industry report firm (PKF), and J.D. Power data on customer satisfaction. We test a series of hypotheses about service design choices that lead to the development of SIC, as well as hypotheses about its outcomes, in terms of customer satisfaction and service innovation.

The data collected so far indicate that, in order for a service provider to develop a service improvisation competence, the design choices concerning the physical environment, the management of human resources, the IT systems in place, and the interaction between employees and customers, have to be coherently and consistently aligned. Counter to conventional wisdom, hiring and training the right people and empowering them to take initiative are necessary but not sufficient conditions to effectively enable improvisation in the face of unexpected events. The physical space, the resources at the employees’ disposal, as well as the design of the processes that inform the service encounter are additional important antecedents for effective improvisation.

Finally, we find that developing a SIC has generally a positive impact on customer satisfaction and service innovation. But improvisation can also have a dark side if it is not aligned with the target market, and more generally, with the service concept. For example, our empirical results show that in some highly experiential services the customers expect a tightly scripted and carefully choreographed environment, and the need to resort to improvisation can be seen as a failure in itself. We conclude with how services may best employ improvisation in their designs.