Ryan W. Buell is an assistant professor of business administration in the Technology and Operations Management Unit at Harvard Business School. He teaches Managing Service Operations in the MBA elective curriculum and in Executive Education programs at the School. He has also taught the Technology and Operations Management course in the MBA required curriculum.
Professor Buell’s research investigates the interactions between service businesses and their customers, and how operational choices affect customer behaviors and firm performance. He is affiliated with the Behavioral Insights Group
at the Harvard Kennedy School’s Center for Public Leadership. His work has been published in Management Science
, Production and Operations Management
, Quarterly Journal of Economics
, and Harvard Business Review
. It has also received media attention from outlets such as The New York Times, The Boston Globe The Huffington Post, The Financial Post
, The Guardian
, and Forbes.com
Professor Buell earned a DBA in Technology and Operations Management at Harvard Business School, where he received the Dean's Award and the Wyss Doctoral Research Award. He also received an MBA with high distinction from Harvard Business School, where he was a George F. Baker Scholar, and a BBA with high distinction from the Ross School of Business at the University of Michigan, where he was elected to Phi Beta Kappa.
Prior to his graduate studies, Professor Buell co-founded and managed the Tour Now Network, an online real estate virtual tour service. He has also worked at McKinsey & Company and General Motors.
As Americans' trust in government nears historic lows, frustration with government performance approaches record highs. One explanation for this trend is that citizens may be unaware of both the services provided by government and the impact of those services on their lives. This short talk describes research that suggests that operational transparency, revealing the work that government does, can improve resident perceptions of the government and improve support for government programs. For more details, click here to download the research paper, Surfacing the Submerged State with Operational Transparency in Government Services
Cooks Make Tastier Food When They Can See Their Customers
While existing theory suggests that increased contact between customers and employees diminishes efficiency, recent research demonstrates that when employees can see their customers, the beneficiaries of their efforts, the quality and efficiency of the service they deliver can actually improve. Studies in food service show how revealing customers to employees can lead employees to feel more appreciated, enhancing their job satisfaction and willingness to exert effort. For details, click here to download the research paper, Creating Reciprocal Value Through Operational Transparency
The Labor Illusion: How Operational Transparency Increases Perceived Value
A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results—even when those results are identical.
Think Customers Hate Waiting? Not So Fast...
Managers typically look for ways to reduce wait time to increase customer satisfaction. New research suggests there's a better approach: showing customers a representation of the effort, whether literal or not, being expended on their behalf while they wait. (The prototypical example is the travel website Kayak, which shows customers each airline it searches.) Studies show that customers prefer waiting when the work being done is transparent-even when the waits are longer or the results are no better than those obtained with shorter waits.
Are Self-Service Customers Satisfied or Stuck?
Numerous studies in the services literature have demonstrated that self-service customers are retained with greater frequency than their full-service counterparts. There are two competing explanations for this phenomenon. Either self-service channel usage promotes customer satisfaction and in turn, loyalty, or it imposes switching costs on customers that make it more difficult for them to defect. Our empirical analysis of multi-channel banking customers suggests the latter – that self-service customers may be retained through switching costs, not satisfaction effects. In fact, the results of our analysis suggest that self-service customers aren’t just stuck, they’re actually less satisfied.
'Last-place Aversion': Evidence and Redistributive Implications
We present evidence from laboratory experiments showing that individuals are "last-place averse." Participants choose gambles with the potential to move them out of last place that they reject when randomly placed in other parts of the distribution. In modified-dictator games, participants randomly placed in second-to-last place are the most likely to give money to the person one rank above them instead of the person one rank below. Last-place aversion suggests that low-income individuals might oppose redistribution because it could differentially help the group just beneath them. Using survey data, we show that individuals making just above the minimum wage are the most likely to oppose its increase. Similarly, in the General Social Survey, those above poverty but below median income support redistribution significantly less than their background characteristics would predict.
Rank and Position;
The Labor Illusion: How Operational Transparency Increases Perceived Value
A ubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggests that the longer people wait, the less satisfied they become; we demonstrate that due to what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous results—even when those results are identical. In five experiments that simulate service experiences in the domains of online travel and online dating, we demonstrate the impact of the labor illusion on service value perceptions, demonstrate that perceptions of service provider effort induce feelings of reciprocity that together mediate the link between operational transparency and increased valuation, and explore boundary conditions and alternative explanations.
Keywords: Online Technology;
Are Self-service Customers Satisfied or Stuck?
This paper investigates the impact of self-service technology (SST) usage on customer satisfaction and retention. Specifically, we disentangle the distinct effects of satisfaction and switching costs as drivers of retention among self-service customers. Our empirical analysis examines 26,924 multi-channel customers of a nationwide retail bank. We track each customer's channel usage, overall satisfaction, and retention over a 1-year period. We find that, relative to face-to-face service, customers who use self-service channels for a greater proportion of their transactions are either no more satisfied, or less satisfied with the service they receive, depending on the channel. However, we also find that these same customers are predictably less likely to defect to a competitor if they are heavily reliant on self-service channels characterized by high switching costs. Through a mediation model, we demonstrate that, when self-service usage promotes retention, it does so in a way that is consistent with switching costs. As a robustness check, we examine the behavior of channel enthusiasts, who concentrate transactions among specific channels. Relative to more diversified customers, we find that self-service enthusiasts in low switching cost channels defect with greater frequency, while self-service enthusiasts in high switching cost channels are retained with greater frequency.
Keywords: Service Delivery;
Banks and Banking;
Management Analysis, Tools, and Techniques;
Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "Are Self-service Customers Satisfied or Stuck?" Production and Operations Management
19, no. 6 (November–December 2010). (Awarded the Decision Sciences Institute Stan Hardy Award for Outstanding Paper Published during 2010 in the Field of Operations Management.) View Details
Lifting the Veil: The Benefits of Cost Transparency
A firm's costs are typically tightly-guarded secrets. However, across a field study and six laboratory experiments we identify when and why firms benefit from revealing unit cost information to consumers. A natural field experiment conducted with an online retailer suggests that cost transparency boosts sales. Six subsequent controlled lab experiments replicate this basic effect (Studies 2-6) and provide evidence for why it occurs: just as interpersonal disclosure of intimate information increases attraction, cost transparency by a firm increases brand attraction, in turn boosting consumer purchase interest. This relationship persists even after controlling for perceptions of price fairness and product quality (Study 3). Study 4 suggests that the beneficial effect of cost transparency holds when firms spend more on "less desirable" costs relative to "more desirable" costs. Studies 5-6 show that the effect of cost transparency weakens when high profit margins are made salient. Finally, Study 7 shows that the beneficial effect reverses (i.e. cost transparency backfires) when it is revealed that a firm's profit margins are high relative to those of its competitors.
Keywords: cost transparency;
Experimental Evidence on Decision Making Under Information Asymmetry
We provide experimental evidence on how individuals make decisions in an operations management setting when there is information asymmetry among the participants. Common equilibrium assumptions yield the least cost separating outcome as the unique equilibrium. In this equilibrium, the more informed party undertakes a costly signal to resolve the information asymmetry that exists. Our experimental results provide evidence that participants are unlikely to choose to separate when a pooling equilibrium is also available. This result is important for research and practice because separating and pooling outcomes have divergent implications. We also show that pooling choice behavior is influenced by changes in the underlying newsvendor model parameters. In robustness tests, we show that choosing a pooling outcome is especially pronounced among participants who report a high level of understanding of the setting and that participants who pool are rewarded by the less informed party with higher payoffs. Finally, we demonstrate through a reexamination of Lai et al. (2012) and Cachon and Lariviere (2001) how pooling outcomes can substantively extend the implications of other extant signaling game models in the operations management literature.
Keywords: Decision Choices and Conditions;
Creating Reciprocal Value Through Operational Transparency
We investigate whether organizations can create value by introducing visual transparency between consumers and producers. Although operational transparency has been shown to improve consumer perceptions of service value, existing theory posits that increased contact between consumers and producers may diminish work performance. Two field and two laboratory experiments in food service settings suggest transparency that 1) allows customers to observe operational processes (process transparency) and 2) allows employees to observe customers (customer transparency) not only improves customer perceptions, but also increases service quality and efficiency. In our fully specified models, the introduction of this transparency contributed to a 22.2% increase in customer-reported quality and reduced throughput times by 19.2%. Laboratory studies revealed that customers who experienced process transparency perceived greater employee effort, and as a consequence, were more appreciative of the employees and valued the service more. Employees who experienced customer transparency felt that their work was more appreciated and more impactful, and thus were more satisfied with their work and more willing to exert effort. We find that transparency, by visually revealing operating processes to consumers and beneficiaries to producers, generates a positive feedback loop through which value is created for both parties.
Keywords: operational transparency;
Surfacing the Submerged State with Operational Transparency in Government Services
As Americans' trust in government nears historic lows, frustration with government performance approaches record highs. One explanation for this trend is that citizens may be unaware of both the services provided by government and the impact of those services on their lives. In an experiment, Boston-area residents interacted with a website that visualizes both service requests submitted by the public (e.g., potholes and broken streetlamps) and efforts by the City of Boston to address them. Some participants observed a count of new, open, and recently closed service requests, while others viewed these requests visualized on an interactive map that included details and images of the work being performed. Residents who experienced this "operational transparency" in government services — seeing the work that government is doing — expressed more positive attitudes toward government and greater support for maintaining or expanding the scale of government programs. The effect of transparency on support for government programs was equivalent to a roughly 20% decline in conservatism on a political ideology scale. We further demonstrate that positive attitudes about government partially mediate the relationship between operational transparency and support for maintaining and expanding government programs. While transparency is customarily trained on elected officials as a means of ethical oversight, our research documents the benefits of increased transparency into the delivery of government services.
Public Administration Industry;
How Do Customers Respond to Increased Service Quality Competition?
When does increased service quality competition lead to customer defection, and which customers are most likely to defect? Our empirical analysis of 82,235 customers exploits the varying competitive dynamics in 644 geographically isolated markets in which a nationwide retail bank conducted business over a five-year period. We find that customers defect at a higher rate from the incumbent following increased service quality (price) competition only when the incumbent offers high (low) quality service relative to existing competitors in a local market. We provide evidence that these results are due to a sorting effect, whereby firms trade-off service quality and price, and in turn, the incumbent attracts service (price) sensitive customers in markets where it has supplied relatively high (low) levels of service quality in the past. Furthermore, we show that it is the high quality incumbent's most profitable customers who are the most attracted by superior quality alternatives. Our results appear to have long-run implications whereby sustaining a high level of service quality is associated with the incumbent attracting and retaining more profitable customers over time.
Keywords: Customer Relationship Management;
Customer Value and Value Chain;
Market Entry and Exit;
Oberoi Hotels: Train Whistle in the Tiger Reserve
Celebrated as one of the world's premiere luxury hotel brands, Oberoi Hotels attracts and serves some of the most quality-sensitive guests in the world. The case considers the challenge of how an organization, with a standardized service model, can repeatedly delight customers whose expectations grow with every interaction. To explore this question, the case details the design elements of Oberoi's complex service operation, including its approaches to employee management and continuous improvement, as well as the dynamics of service competition in a rapidly growing market.
Keywords: service operations;
service quality competition;
Customer Service Excellence;
IDEO: Human-Centered Service Design
The case describes IDEO, one of the world's leading design firms, and its human-centered innovation culture and processes. It is an example of what managers can do to make their own organizations more innovative. In reaction to a rapidly changing competitive landscape, a team of IDEO designers have been hired by Cineplanet, the leading movie cinema chain in Peru, to reinvent the movie-going experience for Peruvians. Cineplanet wishes to better align their operating model with the needs and behaviors of its customers.
Keywords: design thinking;
Innovation and Management;
Entertainment and Recreation Industry;
Buell, Ryan W., and Andrew Otazo. "IDEO: Human-Centered Service Design." Harvard Business School Case 615-022, October 2014. (Revised December 2014.) View Details
Compass Group: The Ascension Health Decision
In 2012, Compass Group (Compass) was on the verge of closing a $2 billion deal with Ascension Health (Ascension), one of the largest healthcare systems in the United States. Under the deal, Compass would provide foodservice management and cleaning services for 86 of Ascension's hospitals. Compass employs a "sectorized" approach to deliver service through a portfolio of focused brands, each of which targets focused groups of customers with specific needs. After months of negotiating, the deal had come down to a single request: Could Compass provide these two services through a single operation? Compass must weigh the benefits of operational focus against the prospect of a very lucrative contract. The case details the strengths and limitations of a sectorized strategy. It also provides a window into the complicated and time-intensive supplier selection process inherent in many business-to-business service relationships.
Keywords: service delivery;
Customer Focus and Relationships;
Buell, Ryan W. "Compass Group: The Ascension Health Decision." Harvard Business School Case 615-026, December 2014. (Revised February 2015.) View Details
Whole Foods: The Path to 1,000 Stores
The case examines the operations strategy of Whole Foods, one of the largest natural grocery chains in the United States. In late 2013, Whole Foods was expanding rapidly, with a publicly-stated goal of growing from 351 to 1,000 domestic stores by 2022. It was also engaged in a strategic initiative to combat "food deserts"—areas with limited access to affordable and nutritious food. In pursuit of these initiatives, the company's rapid entry into a heterogeneous set of new markets necessitated a reexamination of its store format, target customer base, and approach to human capital.
Professor Buell is advancing the understanding of customers by studying their relationship with service operations. He examines how operational choices intended to optimize firm profits may backfire if they diminish the quality of customer experiences or alter customer behavior in unintended ways. In his work, he uses large-scale econometric analysis and laboratory and online experimental methodologies.
Keywords: service operations;
Web Services Industry;
Food and Beverage Industry;
One important way that service operations are distinct from traditional operations is that service customers often engage directly with the production process. When operations are revealed to customers, design choices that are internally efficient may alter customer perceptions and behaviors in counterproductive ways. In such settings, how the customer experiences the operation should be factored into its design. My research in this first stream explores how operational transparency, how operations are revealed to customers, shapes their perceptions and behaviors, and in turn, firm performance.
While operational efforts to improve service performance tend to be inwardly directed (e.g., investments in training, process improvements, automation, etc.), the research in this second stream documents how an outward consideration – the degree of compatibility between the customer and the firm’s operating system – is also a crucial driver of service outcomes. My work to date in this stream has sought to quantify the performance benefits of customer compatibility, identify its determinants, and understand how firms can improve it.
Managing Service Operations - MBA Elective Curriculum
World-class service organizations deeply understand the needs and behaviors of their customers, and design, manage, and improve their operating models accordingly. This course investigates the distinct challenges inherent in leading service operations, which make up more than 63% of the global economy. In this course, students learn how to design distinctive and sustainable service strategies, how to manage customers and employees, how to develop a cohesive service culture, how to fund service excellence, how to leverage big data to enhance performance, and how to reshape their organizations to suit evolving consumer needs and changing competitive landscapes. The course draws upon cutting edge research and examples from a broad array of industries, including business services, entertainment, financial services, food services, government, healthcare, hospitality, retail, and transportation.
Technology and Operations - MBA Required Curriculum
This course enables students to develop the skills and concepts needed to ensure the ongoing contribution of a firm's operations to its competitive position. It helps them to understand the complex processes underlying the development and manufacture of products as well as the creation and delivery of services.
Awards & Honors
Received the 2015 Robert F. Greenhill Award for Outstanding Service to the HBS Community.
Winner of the 2012 Doctoral Programs Dean's Award, honoring graduating students who have made extraordinary contributions to the overall success of the doctoral programs, and to the Harvard, HBS, and broader communities.
Winner of the 2011 Wyss Award for Excellence in Doctoral Research, awarded to Harvard Business School doctoral students who have excelled at conducting outstanding academic research.
Won the 2011 Stan Hardy Award for Outstanding Paper published in the field of Operations Management from the Decision Sciences Institute for his paper with Dennis Campbell and Frances X. Frei, “Are Self-Service Customers Satisfied or Stuck?” (Production and Operations Management, 2010).