Working Paper | HBS Working Paper Series | 2014

Creating Reciprocal Value Through Operational Transparency

by Ryan W. Buell, Tami Kim and Chia-Jung Tsay

Abstract

We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although existing theory posits that increased contact between the two parties can diminish work performance, we conducted two field and two laboratory experiments in food service contexts that suggest that the introduction of operational transparency improves service quality and efficiency. The introduction of reciprocal operational transparency contributed to a 17.3% increase in customer-reported quality and reduced throughput times by 13.2%. Customers who observed employees engaged in labor perceived greater effort, appreciated that effort, and valued the service more. Employees who observed customers felt more appreciated, and in turn, were more satisfied with their work and exerted increased levels of effort. We find that transparency, by visually revealing operating processes to both producers and consumers, generates a positive feedback loop through which value is created for both parties.

Keywords: operational transparency; service quality; efficiency; customers; employees; Value Creation; Production; Service Operations;

Citation:

Buell, Ryan W., Tami Kim, and Chia-Jung Tsay. "Creating Reciprocal Value Through Operational Transparency." Harvard Business School Working Paper, No. 14-115, May 2014. (Revised September 2014.)