Frances X. Frei

UPS Foundation Professor of Service Management
Senior Associate Dean for Faculty Planning and Recruiting

Unit: Technology and Operations Management

Contact:

(617) 495-7968

Send Email

Frances Frei is a Professor in the Technology and Operations Management Unit at Harvard Business School and the Senior Associate Dean of Faculty Planning and Recruiting.  She is the best-selling author of Uncommon Service: How to Win by Putting Customers at the Core of Your Business (Harvard Business Review Press). Her research examines how organizations can build service models that reliably deliver excellence.  Her work has been published in top-tier journals such as Management Science and Harvard Business Review.  In addition, she has published dozens of case studies across a variety of industries, including financial services, government, retail, software, telecommunications, and hospitality.  These cases include Zipcar, eBay, Southwest Airlines, Tiffany’s, Houston Rockets, Commerce Bank, Progressive Insurance, Orient Express Hotels and Zappos, among others.

Many of those case studies appear in Managing Service Operations, an elective course she developed that investigates organizations’ efforts to diagnose and improve service experiences.  The course trains students on how to design operating environments that deliver on customer promises while creating value for broader stakeholders.  In support of this agenda, students learn to foster and manage organizational improvement, learning, and innovation.

Professor Frei recently led the development of the new FIELD curriculum at HBS, which focuses on learning experiences that are experiential and immersive, with the goal of advancing the School's mission to develop leaders who make a difference in the world. In addition, Professor Frei teaches in Executive Education programs throughout the university.  Professor Frei has received the HBS Student Association Faculty Award for teaching excellence on multiple occasions, as well as teaching awards from the Wharton School of Business and the University of Rochester.  Her teaching assignments at HBS include FIELD, Managing Service Operations, Strategy, Technology and Operations Management, and Why You Should Care: Creating a Culture of Excellence.

Harvard University encourages its faculty to disclose any activities that might present a real or apparent conflict of interest.  Professor Frei advises organizations on how to create the context for organizations and individuals to thrive.  In particular, she helps organizations address issues of customer focus, organizational change and how to scale inclusively and effectively.  This work stems from her work on service excellence, leadership, and strategy. Organizations that she has provided professional services to in the past three years are listed below. 

AIG, Amdocs, Andrews Distributors, BlackRock, Berkshire Partners, Best Western, Cactus Club, City of Hope, ClickSoftware, Colliers International, Council of Public Relations, Cross Country Group, Di-Corp, General Electric, Gerstein Fisher, Great Clips, Houlihans, InterContinental Hotels, Intercorp, iShares, Jack Morton Worldwide, JPMorgan Chase, Kaiser Permanente, Ketchum, Lowes, Mars, McAlisters Deli, MetLife, Nestle, Ocshner Health Systems, Omnicom, Porter Novelli, Postnet, Rackspace, Sewell Automotive, StellaService, Stream, Stryve, Susser Holdings, Tata Consulting, Tatra Banka, The Select Family of Staffing, United States State Department, United Technologies, Westcon, XL Axiata, and Young Presidents Organization.

Professor Frei has previously served on the Board of Directors of Advance Auto Parts and currently serves on the Board of Directors of Viewpost.  She has a significant financial investment in GenePeeks.

Professor Frei received her Ph.D. in Operations and Information Management from the Wharton School at the University of Pennsylvania.  She holds an M.E. in Industrial Engineering from Pennsylvania State University, and a B.A. in Mathematics from the University of Pennsylvania.

Featured Work

Publications

Books

  1. Uncommon Service: How to Win by Putting Customers at the Core of Your Business

    Most companies treat service as a low-priority business operation, keeping it out of the spotlight until a customer complains. Then service gets to make a brief appearance—for as long as it takes to calm the customer down and fix whatever foul-up jeopardized the relationship. In Uncommon Service, Frances Frei and Anne Morriss show how, in a volatile economy where the old rules of strategic advantage no longer hold true, service must become a competitive weapon, not a damage-control function. That means weaving service tightly into every core decision your company makes. The authors reveal a transformed view of service, presenting an operating model built on tough choices organizations must make: (1) How do customers define "excellence" in your offering? Is it convenience? Friendliness? Flexible choices? Price? (2) How will you get paid for that excellence? Will you charge customers more? Get them to handle more service tasks themselves? (3) How will you empower your employees to deliver excellence? What will your recruiting, selection, training, and job design practices look like? What about your organizational culture? and (4) How will you get your customers to behave? For example, what do you need to do to get them to treat your employees with respect? Do you need to make it easier for them to use new technology? Practical and engaging, Uncommon Service makes a powerful case for a new and systematic approach to service as a means of boosting productivity, profitability, and competitive advantage.

    Keywords: Customers; Business Ventures;

    Citation:

    Frei, Frances, and Anne Morriss. Uncommon Service: How to Win by Putting Customers at the Core of Your Business. Cambridge: Harvard Business Review Press, 2012. View Details

Journal Articles

  1. Market Heterogeneity and Local Capacity Decisions in Services

    We empirically document factors that influence how local operating managers use discretion to balance the tradeoff between service capacity costs and customer sensitivity to service time. Our findings, using data from one of the largest financial services providers in the U.S., indicate that customer sensitivity to service time varies widely and predictably with observable market characteristics. In turn, we find evidence that local operating managers account for market specific customer sensitivities to service times by deviating frequently and in predictable ways from the recommendations offered by a centralized capacity planning model. Finally, we document that these discretionary capacity supply decisions exhibit a strong learning effect whereby experienced operating managers place more weight than their less experienced counterparts on the market-specific tradeoff between service capacity costs and customer sensitivity to service times. Overall, our results demonstrate both the importance of local knowledge as an input in service operations and the potential for incorporating richer data on customer behavior and preferences into service cost and productivity standard metrics.

    Keywords: Customer Satisfaction; Cost; Standards; Service Delivery; Service Operations; Performance Capacity; Performance Productivity; Financial Services Industry; United States;

    Citation:

    Campbell, Dennis, and Frances X. Frei. "Market Heterogeneity and Local Capacity Decisions in Services." Manufacturing & Service Operations Management 13, no. 1 (winter 2011). (Lead Article.) View Details
  2. Stop Holding Yourself Back

    After working with hundreds of leaders in a wide variety of organizations and in countries all over the globe, the authors found one very clear pattern: when it comes to meeting their leadership potential, many people unintentionally get in their own way. Five barriers in particular tend to keep promising managers from becoming exceptional leaders: people overemphasize personal goals, protect their public image, turn their competitors into two-dimensional enemies, go it alone instead of soliciting support and advice, and wait for permission to lead. Troy, a customer service manager, endangered his job and his company's reputation by focusing on protecting his position, not helping his team; when a trusted friend advised him to change his behavior, the results were striking. Anita's insistence on sticking to the tough persona she'd created for herself caused her to ignore the more intuitive part of the leadership equation, with disastrous results—until she let go of the need to appear invulnerable and reached out to another manager. Jon, a personal trainer who had virtually no experience with either youth development programs or urban life, opened a highly successful gym for inner-city kids at risk; he refused to be daunted by his lack of expertise and decided to simply "go for it." As these and other examples from the authors' research demonstrate, being a leader means making an active decision to lead. Only then will the workforce-and society-benefit from the enormous amount of talent currently sitting on the bench.

    Keywords: Transformation; Decision Choices and Conditions; Leadership; Personal Development and Career; Personal Characteristics;

    Citation:

    Morriss, Anne, Robin J. Ely, and Frances X. Frei. "Stop Holding Yourself Back." Harvard Business Review 89, nos. 1-2 (January–February 2011). View Details
  3. The Cost Structure, Customer Profitability, and Retention Implications of Self-Service Distribution Channels: Evidence from Customer Behavior in an Online Banking Channel

    This paper uses the context of online banking to investigate the consequences of employing self-service distribution channels to alter customer interactions with the firm. Using a sample of retail banking customers observed over a 30-month period at a large U.S. bank, we test whether changes in service consumption, cost-to-serve, and customer profitability are associated with the adoption of online banking. We find that customer adoption of online banking is associated with (1) substitution primarily from incrementally more costly self-service delivery channels (ATM and voice response unit); (2) augmentation of service consumption in more costly service delivery channels (branch and call center); (3) a substantial increase in total transaction volume; (4) an increase in estimated average cost-to-serve resulting from the combination of (1) through (3); and (5) a reduction in short-term customer profitability. However, we find that use of the online banking channel is associated with higher customer retention rates over one-, two-, and three-year horizons. The documented relationship between the use of online banking and customer retention remains positive even after controlling for self-selection into the online channel. We also find evidence that future market shares for our sample firm are systematically higher in markets with high contemporaneous utilization rates for the online banking channel. This finding holds even after controlling for contemporaneous market share suggesting it is not simply the result of increased market power leading to the acquisition of online banking customers.

    Keywords: Cost; Service Operations; Distribution Channels; Consumer Behavior; Online Technology; Banks and Banking; Technology Adoption; Service Delivery; Market Transactions; Market Participation; Profit; Retail Industry; Banking Industry; United States;

  4. 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; Technology; Customer Satisfaction; Competition; Cost; Banks and Banking; Behavior; Market Transactions; Management Analysis, Tools, and Techniques;

    Citation:

    Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "Are Self-service Customers Satisfied or Stuck?" November/December Production and Operations Management 19, no. 6 (2010). (Awarded the Decision Sciences Institute Stan Hardy Award for Outstanding Paper Published during 2010 in the Field of Operations Management.) View Details
  5. The Persistence of Customer Profitability: Empirical Evidence and Implications from a Financial Services Firm

    Keywords: Customers; Markets; Information; Finance; Business Ventures; Profit; Financial Services Industry;

    Citation:

    Campbell, Dennis, and Frances X. Frei. "The Persistence of Customer Profitability: Empirical Evidence and Implications from a Financial Services Firm." Journal of Service Research 7, no. 2 (November 2004). View Details

Book Chapters

  1. Cost Structure Patterns in the Asset Management Industry

    This chapter examines patterns in the cost structure of asset management firms and establishes two important trends in cost behavior. First, when revenues are growing, "indirect" costs related to sales, distribution, marketing, personnel, technology, and occupancy are far from fixed in this industry. In some cases they are "supervariable" or rising at a faster rate than sales. Second, and in contrast, such indirect costs appear relatively fixed in the face of sales "declines" in this industry. We discuss potential sources of these cost-structure patterns and their implications for cost management efforts as asset management firms move forward from the financial crisis of 2008.

    Keywords: Financial Crisis; Asset Management; Cost Management; Financial Services Industry;

    Citation:

    Campbell, Dennis, and Frances X. Frei. "Cost Structure Patterns in the Asset Management Industry." Chap. 8 in Operational Control in Asset Management: Processes and Costs, edited by Michael Pinedo, 154–168. Denmark: SimCorp StrategyLab, 2010. View Details
  2. Value Creation and Process Management: Evidence from Retail Banking

    Keywords: Value Creation; Business Processes; Business or Company Management; Commercial Banking; Banking Industry;

    Citation:

    Frei, Frances X., and Patrick T. Harker. "Value Creation and Process Management: Evidence from Retail Banking." In Creating Value in Financial Services, edited by E. Melnick, P. Nayyar, M. Pinedo, and S. Seshadri. Kluwer Academic Publishers, 2000. View Details
  3. Inside the Black Box: What Makes a Bank Efficient

    Keywords: Banks and Banking; Performance Efficiency; Banking Industry;

    Citation:

    Frei, F., P. Harker, and L. Hunter. "Inside the Black Box: What Makes a Bank Efficient." In Financial Institutions: Efficiency, Innovation, Regulation, edited by P. Harker and S. Zenios. Cambridge: Cambridge University Press, 2000. View Details
  4. How Financial Firms Decide on Technology

    Keywords: Financial Institutions; Decision Making; Technology; Banking Industry; Financial Services Industry;

    Citation:

    Hitt, Lorin M., Frances X. Frei, and Patrick T. Harker. "How Financial Firms Decide on Technology." In Brookings Wharton Papers on Financial Services, 1999, edited by Robert E. Litan and Anthony M. Santomero, 93–146. Washington, D.C.: Brookings Institution Press, 1999. View Details

Working Papers

  1. 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; Quality; Customer Value and Value Chain; Service Operations; Consumer Behavior; Customer Satisfaction; Price; Market Entry and Exit; Service Delivery; Competitive Strategy; Banking Industry;

    Citation:

    Buell, Ryan W., Dennis Campbell, and Frances X. Frei. "How Do Customers Respond to Increased Service Quality Competition?" Harvard Business School Working Paper, No. 11-084, February 2011. (Revised April 2013, June 2014.) View Details

Cases and Teaching Materials

  1. Zappos.com 2009: Clothing, Customer Service, and Company Culture (MM)

    On July 17, 2009, Zappos.com, a privately-held online retailer of shoes, clothing, and other soft-line retail categories, learned that Amazon.com, a $19 billion multinational online retailer, had won its Board of Directors' approval to offer to merge the two companies. Amazon had been courting Zappos since 2005, hoping a merger would enable Amazon to expand and strengthen its market share in soft-line retail categories. While Amazon's interest intrigued Zappos' senior executives, they had not felt the time was right—until now. Amazon's offer—10 million shares of stock (valued at $807 million), $40 million in cash, restricted stock units for Zappos' employees, and a promise that Zappos could operate as an independent subsidiary—was on the table. Zappos' financial advisor, Morgan Stanley, estimated the future equity value of an IPO to be between $650 million and $905 million; this estimate skewed the Amazon offer—at least in financial terms—toward the high end of Zappos' estimated market value. Hsieh and Lin, Zappos' CEO and COO, respectively, knew that much of Zappos' growth, and hence its value, had been due to the company's strong culture and obsessive emphasis on customer service. In 2009, they were focusing on the three C's—clothing, customer service, and company culture—the keys to the company's continued growth. Hsieh and Lin had only a few days to consider whether to recommend the merger to Zappos' board at their July 21 meeting.

    Keywords: Customer Relationship Management; Online Technology; Mergers and Acquisitions; Organizational Culture; Growth and Development Strategy; Apparel and Accessories Industry; Retail Industry;

    Citation:

    Frei, Frances X., and Robin J. Ely. "Zappos.com 2009: Clothing, Customer Service, and Company Culture (MM)." Harvard Business School Video Case 612-701, January 2013. View Details
  2. Pret A Manger

    Pret A Manger, a London-based chain of sandwich shops, was known for its fast, genuine service and pre-packaged sandwiches prepared on-site daily. Instructed by its board to grow at 15 percent per year, Pret considered opening "twin" shops in locations too small to contain kitchens; these shops would receive sandwich deliveries throughout the day from a nearby "parent" shop. Would Pret's employees and customers accept twin shops or view them as counter to the Pret culture? Through this decision point, the case frames a discussion about how companies build service models to reliably deliver customer service excellence. The case also helps students understand the role of employee management systems in creating consistent service experiences and introduces a set of innovative employee management practices.

    Keywords: Customer Service Excellence; Growth Planning and Management; Employee Performance Management; Information Management; Production Planning; Employee Attitude Development and Empowerment; Employee Retention; Leadership Development and Career Planning; Service Delivery; Growth and Development Strategy; Business Model; Innovation and Invention; Employees; Performance; London;

    Citation:

    Frei, Frances X., Rick Goldberg, and Stephanie van Sice. "Pret A Manger." Harvard Business School Case 612-033, April 2012. View Details
  3. Zappos.com 2009: Clothing, Customer Service, and Company Culture

    On July 17, 2009, Zappos.com, a privately held online retailer of shoes, clothing, and other soft line retail categories, learned that Amazon.com, a $19 billion multinational online retailer, had won its board of directors' approval to offer to merge the two companies. Amazon had been courting Zappos since 2005, hoping a merger would enable Amazon to expand and strengthen its market share in soft line retail categories. While Amazon's interest intrigued Zappos' senior executives, they had not felt the time was right, until now. Amazon's offer—10 million shares of stock (valued at $807 million), $40 million in cash and restricted stock units for Zappos' employees, and a promise that Zappos could operate as an independent subsidiary—was on the table. Zappos' financial advisor, Morgan Stanley, estimated the future equity value of an IPO to be between $650 million and $905 million; this estimate skewed the Amazon offer—at least in financial terms—toward the high end of Zappos' estimated market value. Hsieh and Lin, Zappos' CEO and COO respectively, knew that much of Zappos' growth, and hence its value, had been due to the company's strong culture and obsessive emphasis on customer service. In 2009, they were focusing on the three C's—clothing, customer service, and company culture—the keys to the company's continued growth. Hsieh and Lin had only a few days to consider whether to recommend the merger to Zappos' board at their July 21st meeting.

    Keywords: Mergers and Acquisitions; Customer Focus and Relationships; Decision Choices and Conditions; Governing and Advisory Boards; Service Delivery; Organizational Culture; Online Technology; Valuation; Apparel and Accessories Industry; Retail Industry;

    Citation:

    Frei, Frances X., Robin J. Ely, and Laura Winig. "Zappos.com 2009: Clothing, Customer Service, and Company Culture." Harvard Business School Case 610-015, October 2009. (Revised June 2011.) View Details
  4. Discovering Hidden Gems: The Story of Daryl Morey, Shane Battier, and the Houston Rockets (A)

    As NBA Commissioner David Stern approached the podium, silent anticipation gripped the 4,000 Houston Rockets fans gathered at the Rockets Draft Party. "With the 8th pick in the 2006 NBA draft," Stern began, "the Houston Rockets select Rudy Gay from the University of Connecticut." The 4,000 Rockets faithfully erupted into euphoric cheers. Rudy Gay was a highly touted college prospect who some analysts projected could have been one of the top three selections in the draft. To be able to select him in the eighth spot seemed like a steal for the Rockets and their newly hired assistant general manager, Daryl Morey. Moments later, the assembled crowd's jubilation turned to horror as television analysts covering the draft announced breaking news. The Rockets traded the rights to Rudy Gay along with another Rockets fan favorite, Stromile Swift, to the Memphis Grizzlies for Shane Battier. Jeers of frustration rang from the Rockets fans. How could the Rockets trade Rudy Gay and Stromile Swift for Shane Battier?

    Keywords: Human Capital; Managerial Roles; Operations; Organizational Structure; Performance Evaluation; Groups and Teams; Sports Industry;

    Citation:

    Frei, Frances X., and Matthew Todd Perlberg. "Discovering Hidden Gems: The Story of Daryl Morey, Shane Battier, and the Houston Rockets (A)." Harvard Business School Case 610-038, November 2009. (Revised September 2010.) View Details
  5. Discovering Hidden Gems: The Story of Daryl Morey, Shane Battier, and the Houston Rockets (B)

    Supplement to the (A) case.

    Keywords: Sports; Talent and Talent Management; Sports Industry;

    Citation:

    Frei, Frances X., and Matthew Todd Perlberg. "Discovering Hidden Gems: The Story of Daryl Morey, Shane Battier, and the Houston Rockets (B)." Harvard Business School Supplement 610-039, November 2009. (Revised September 2010.) View Details
  6. Conceptualizing the Customer Operating Role

    The module introduces students to the concept and implications of a customer operating role. Building on the first year operations curriculum in which only employees' and machines' operating roles are considered, it provides the additional perspectives needed to bring the customer into this set. The module identifies the unique challenges posed by customer-operators and presents guidelines to help mitigate their impact. It then presents a taxonomy of the variability introduced by the presence of customer-operators and addresses the danger of misdiagnosing the type of variability. Finally, the module presents management techniques for handling this variability, with an emphasis on those that overcome the classic tension between operational efficiency and the service experience.

    Keywords: Customers; Performance Efficiency; Perspective; Management Analysis, Tools, and Techniques; Service Operations;

    Citation:

    Frei, Frances X. "Conceptualizing the Customer Operating Role." Harvard Business School Module Note 606-032, March 2006. (Revised April 2008.) View Details
  7. Managing Service Operations: Understanding the Customer Operating Role

    Describes Managing Service Operations: Understanding the Customer Operating Role, a second-year MBA course that consists of three modules. The first module, Conceptualizing the Customer Operating, explores the operational challenges and opportunites of managing customer-operators. The second module, Service Design in the Context of Customer-Operators, adresses the design and management of service operations with significant customer operating roles. The third module, Improvement with Customer-Operators, addresses how firms can systematically leverage customer-operators in the organizational improvement process.

    Keywords: Service Operations;

    Citation:

    Frei, Frances X. "Managing Service Operations: Understanding the Customer Operating Role." Harvard Business School Course Overview Note 606-092, April 2006. (Revised April 2008.) View Details
  8. Improvement with Customer-Operators

    Taught as the third module in a Harvard Business School course on Managing Service Operations: Understanding the Customer Operating Role (606-092). Explores how firms can systematically leverage their customer-operators in the organizational improvement process is investigated in the third module. This opportunity is addressed in two ways, (1) by surfacing and evolving the assumptions about customer-operators that are often built into service models, and (2) by utilizing the operational insight of customers. Both focal points build on firms' traditional use of employees to improve operations.

    Keywords: Service Operations; Performance Improvement; Customer Focus and Relationships; Framework; Employees; Business Model; Management Practices and Processes; Organizational Design;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Improvement with Customer-Operators." Harvard Business School Module Note 608-135, April 2008. View Details
  9. Service Design in the Context of Customer-Operators

    Taught as the second module in a Harvard Business School course on Managing Service Operations: Understanding the Customer Operating Role (606-092). Addresses the design and management of service operations with significant customer operating roles. The focus is on service operations because services are a dominant part of most economies, because customer-operators are typically involved in service production, and because many firms struggle in their efforts to achieve service excellence. These struggles are often marked, paradoxically, by increased costs and declining satisfaction. The module argues that an insufficient understanding of customers in the operating environment is a primary culprit.

    Keywords: Customer Satisfaction; Management; Design; Service Operations; Cost;

    Citation:

    Frei, Frances X. "Service Design in the Context of Customer-Operators." Harvard Business School Module Note 608-134, April 2008. View Details
  10. Exercise: Customer-Operator Letter Writing

    The exercise involves having students write letters to an organization of their choice describing their operating experience at a detailed level. The companies' responses are paired with the students' letters and the entire collection is made available to the class. The collection can be compelling. Students are quick to sense which organizations value customer communications as meaningful operational input. They find highly instructive the frequency with which situations laboriously recounted by their "valued customers" elicit generic responses from companies, and replies to detailed letters of praise get the tone dramatically wrong. At HBS, it is incorporated in a second-year elective, taught in a module devoted to utilizing customer-operators to improve operations (HBS No. 608-135).

    Keywords: Customer Relationship Management; Customer Satisfaction; Customer Value and Value Chain; Knowledge Sharing; Knowledge Use and Leverage; Performance Improvement;

    Citation:

    Frei, Frances X. "Exercise: Customer-Operator Letter Writing." Harvard Business School Exercise 608-126, April 2008. View Details
  11. Exercise: Challenging Operational Assumptions

    This exercise provides students with an opportunity to thoroughly test an operating assumption. Students state an assumption as a testable hypothesis, collect and analyze relevant data, and communicate the results. At HBS, it is incorporated in a second-year elective taught in a module devoted to utilizing customer-operators to improve service operations (HBS 608-135). The exercise is taught in three parts: in-class workshop, project presentation, and post-exercise poll.

    Keywords: Customers; Employees; Knowledge Acquisition; Knowledge Use and Leverage; Service Operations; Performance Improvement;

    Citation:

    Frei, Frances X. "Exercise: Challenging Operational Assumptions." Harvard Business School Exercise 608-128, March 2008. View Details
  12. New Service Design Exercise

    Used in the second module of a course on Managing Service Operations, which addresses the design of sustainable service models (606-031). Provides an opportunity for students to design a new service offering, paying careful attention to the link between strategic position, service offerings, and operations design. The corresponding module note further describes the exercise.

    Keywords: Design; Management; Service Operations; Strategy;

    Citation:

    Frei, Frances X. "New Service Design Exercise." Harvard Business School Exercise 605-053, January 2005. (Revised March 2008.) View Details
  13. Pilgrim Bank (A): Statistics Review with Data Desk

    Teaching Note for 602104.

    Keywords: Decision Making; Policy; Banks and Banking; Management Teams; Motivation and Incentives; Customers; Mathematical Methods; Service Operations; Banking Industry;

    Citation:

    Frei, Frances X. "Pilgrim Bank (A): Statistics Review with Data Desk." Harvard Business School Teaching Note 608-095, January 2008. View Details
  14. Cleveland Clinic

    Cleveland Clinic is consistently ranked among the nation's most eminent hospitals, and for decades has been a leader in pioneering cardiac care. This case evaluates the methods, processes, and personnel that the hospital has cultivated over the years in order to develop its track record of excellence. In light of this, three expansion opportunities are explored and the operational fit of each is investigated.

    Keywords: Health Care and Treatment; Medical Specialties; Innovation and Invention; Service Delivery; Expansion; Health Industry; Cleveland;

    Citation:

    Frei, Frances X., Amy C. Edmondson, Christine van Keuren, and Eliot Sherman. "Cleveland Clinic." Harvard Business School Case 607-143, May 2007. (Revised September 2007.) View Details
  15. Letter Writing Exercise

    Provides an opportunity for students to experience first-hand how service companies respond to customer feedback. The corresponding module note further describes the exercise.

    Keywords: Customer Focus and Relationships; Communication; Service Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Letter Writing Exercise." Harvard Business School Exercise 605-056, January 2005. (Revised August 2007.) View Details
  16. Dell Computers (B): The Transition

    The case presents the outcome of the (A) case and explores challenges in the PC industry up to early 2007. Michael Dell's return as CEO is also discussed.

    Keywords: Customer Relationship Management; Managerial Roles; Service Delivery; Service Operations; Hardware; Technology Industry;

    Citation:

    Frei, Frances X., and Christine van Keuren. "Dell Computers (B): The Transition." Harvard Business School Supplement 607-081, March 2007. (Revised August 2007.) View Details
  17. Westin Hotels and Resorts: Operations of a Lifestyle Experience

    Westin Hotels and Resorts adopted a new "lifestyle" brand strategy which provided guests with a new service experience. The dilemma Westin faced was how to operationally build a brand that delivered consistent service on intangible values.

    Keywords: Customer Relationship Management; Decision Choices and Conditions; Growth Management; Brands and Branding; Service Operations; Value Creation; Tourism Industry;

    Citation:

    Frei, Frances X., Chekitan S. Dev, and Laure Mougeot Stroock. "Westin Hotels and Resorts: Operations of a Lifestyle Experience." Harvard Business School Case 607-129, May 2007. View Details
  18. Dell Computers (A): Field Service for Corporate Clients

    Explores the highly successful PC and low-end server manufacturer's entry into the large-scale server market in the United States. A key difference of this new market is the intense service element required to support the larger hardware. Specifically, the industry standard is to have a technician onsite with a required part within four hours of problem diagnosis. This type of service presents a problem for Dell, as its potential customers are widely dispersed throughout the United States. Should Dell create an in-house field service team to ensure service quality and maintain control of its customer relationships or outsource the field service to a third-party provider? Complicating the issue is the presence of IBM, the biggest player in the large-scale server market.

    Keywords: Hardware; Customer Relationship Management; Job Cuts and Outsourcing; Service Operations; Business or Company Management; Emerging Markets; Problems and Challenges; Service Delivery; Computer Industry; United States;

    Citation:

    Frei, Frances X., Amy C. Edmondson, and Corey B. Hajim. "Dell Computers (A): Field Service for Corporate Clients." Harvard Business School Case 603-067, October 2002. (Revised April 2007.) View Details
  19. Magazine Luiza: Building a Retail Model of "Courting the Poor"

    Describes the innovative retail model of the Brazilian firm Magazine Luiza. Magazine Luiza enables low-income consumer credit by applying a flexible and nuanced evaluation system. Additionally, its dedication to customer service, employee motivation, and progressive use of technology have driven its success and expansion.

    Keywords: Motivation and Incentives; Information Technology; Income Characteristics; Innovation and Management; Success; Customer Focus and Relationships; Credit; Retail Industry; Brazil;

    Citation:

    Frei, Frances X., and Ricardo Reisen de Pinho. Magazine Luiza: Building a Retail Model of "Courting the Poor". Harvard Business School Case 606-048, October 2005. (Revised December 2006.) View Details
  20. GuestFirst Hotel (A): Customer Loyalty

    Provides a hotel context in which to explore the link between customer loyalty and financial performance, using four years of hotel data. Challenges students to find the extent of the relationship between loyalty and performance.

    Keywords: Motivation and Incentives; Mathematical Methods; Finance; Performance; Relationships; Customer Focus and Relationships; Data and Data Sets; Accommodations Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "GuestFirst Hotel (A): Customer Loyalty." Harvard Business School Case 602-099, November 2001. (Revised December 2006.) View Details
  21. Using Data Desk for Statistical Analysis

    Describes how to use the Data Desk software package to perform statistical analysis.

    Keywords: Mathematical Methods;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Using Data Desk for Statistical Analysis." Harvard Business School Background Note 605-060, February 2005. (Revised November 2006.) View Details
  22. Commerce Bank

    Commerce Bank has become one of the fastest growing banks in the country, despite having defied conventional wisdom about how to grow deposits. Banks historically have grown either by competing on deposit rates or through acquisitions that expand their deposit base. Commerce has the lowest deposit rates in each of the local markets it serves and has acquired no other banks, yet its growth rate is unparalleled. Its secret? Commerce differentiates itself on service. Explores the highly refined service model that guides the design of its operations and service features and considers the trade-offs involved in competing on service.

    Keywords: Business Model; Design; Growth and Development Strategy; Service Operations; Competition; Banking Industry;

    Citation:

    Frei, Frances X., and Corey B. Hajim. "Commerce Bank." Harvard Business School Case 603-080, December 2002. (Revised October 2006.) View Details
  23. Great Dakota Bank: Online Banking

    In 2002, Great Dakota Bank's retail division is considering how heavily it should be promoting the company's online banking service. A recent promotional campaign appears to have significantly increased enrollments in online banking, but it is unclear whether the bank should continue to trade promotional incentives for online subscriptions. Contains data that force students to consider the impact of adding a new low-cost channel (the Internet) on consumer behavior; this analysis raises questions about whether the new channel does, in fact, lower the cost to serve customers.

    Keywords: Banks and Banking; Internet; Customer Relationship Management; Consumer Behavior; Demand and Consumers; Technological Innovation; Customer Value and Value Chain; Customer Satisfaction; Management; Service Operations; Banking Industry;

    Citation:

    Frei, Frances X., Youngme E. Moon, and Hanna Rodriguez-Farrar. "Great Dakota Bank: Online Banking." Harvard Business School Case 603-011, August 2002. (Revised June 2006.) View Details
  24. Informing Service Management with Customer Data

    Taught as the third module in a Harvard Business School course on Managing Service Operations. Explores the role of data analysis in ongoing service management. Describes how to realize the maximum amount of value from analyses and use this information in decision-making while overcoming associated organizational resistance. Also addresses common pitfalls to designing and applying data analysis methods.

    Keywords: Decision Making; Design; Data and Data Sets; Service Operations; Mathematical Methods; Value;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Informing Service Management with Customer Data." Harvard Business School Background Note 606-097, April 2006. View Details
  25. Designing Sustainable Service Models

    Taught as the second module in a Harvard Business School course on Managing Service Operations. Addresses the challenge of designing service models that effectively incorporate a customer operating role, as well as how to align operations to deliver value to both the firm and the customer. Also explores the role of customer discretionary behavior as well as developing mechanisms to influence.

    Keywords: Business Model; Customers; Design; Managerial Roles; Consumer Behavior; Service Operations; Power and Influence; Value;

    Citation:

    Frei, Frances X. "Designing Sustainable Service Models." Harvard Business School Background Note 606-031, April 2006. View Details
  26. Economics of Retail Banking Note

    Explains the financial operations of retail banking, highlighting profitability challenges facing the industry. For U.S. banks, it is quite common for more than half of the customer base to be unprofitable and to have relatively few customers make up the vast majority of profits. Attempts to explain how retail banks generate revenue and incur costs while serving their customer base.

    Keywords: Customers; Economics; Cost; Banks and Banking; Profit; Revenue; Service Operations; Banking Industry; United States;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Economics of Retail Banking Note." Harvard Business School Background Note 602-153, April 2002. (Revised March 2006.) View Details
  27. Customer-Introduced Variability in Service Operations

    Presents a typology of customer-introduced variability and offers guidance on how to manage each type. Central to the ideas developed is how to mitigate the effects of the apparent trade-off between reducing variability and diminishing the service experience or accommodating variability and compromising operational efficiency.

    Keywords: Customers; Six Sigma; Consumer Behavior; Service Operations; Performance Efficiency;

    Citation:

    Frei, Frances X. "Customer-Introduced Variability in Service Operations." Harvard Business School Background Note 606-063, March 2006. View Details
  28. Influencing Customer Behavior in Service Operations

    Explores ways in which service firms can influence the behavior of their customers. Drawing from research on employee motivation and applying it to customer motivation, the note describes two levels of managerial control: instrumental control, which shapes behavior through the use of rational incentives, and normative control, which engages human emotions, motivating through the near-universal desire to be perceived in a positive light.

    Keywords: Customers; Governance Controls; Consumer Behavior; Service Operations; Emotions; Motivation and Incentives; Power and Influence; Service Industry;

    Citation:

    Frei, Frances X., and Amy C. Edmondson. "Influencing Customer Behavior in Service Operations." Harvard Business School Background Note 606-061, March 2006. View Details
  29. Yum! Brands, Inc: A Corporate Do-Over

    Describes the successful turnaround of the restaurant company Yum! Brands after its spin off from PepsiCo and covers how the company's leadership planned and executed on virtually every dimension of the employee experience. The main dilemma centers on what the company should do in terms of multibranding--housing two brands in one physical location.

    Keywords: Product; Brands and Branding; Service Operations; Expansion; Trade; Leadership Development; Business or Company Management; Food and Beverage Industry; Retail Industry;

    Citation:

    Frei, Frances X., Amy C. Edmondson, James Weber, and Eliot Sherman. "Yum! Brands, Inc: A Corporate Do-Over." Harvard Business School Case 606-041, September 2005. (Revised January 2006.) View Details
  30. eBay (A): The Customer Marketplace

    eBay, the popular Internet-based consumer-to-consumer marketplace, has recently become attractive to corporate customers. According to a vocal subset of eBay customers, the company has lost its way and is set to forsake its traditional business. Told from the perspectives of two eBay customers--a buyer and a seller--the case presents the challenges and opportunities posed by increased corporate involvement.

    Keywords: Customers; Multi-Sided Platforms; Problems and Challenges; Opportunities; Trust; Internet; Web Services Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "eBay (A): The Customer Marketplace." Harvard Business School Case 602-071, August 2001. (Revised September 2005.) View Details
  31. Celebrity Cruises, Inc.: A Taste of Luxury

    Describes the complex operations of the cruise industry. Positioned between luxury cruise lines and mass market lines, Celebrity struggles to find ways to create customer loyalty and increase profitability.

    Keywords: Customer Satisfaction; Profit; Product Positioning; Operations; Luxury; Shipping Industry;

    Citation:

    Frei, Frances X., Corey B. Hajim, and Christian Hempell. "Celebrity Cruises, Inc.: A Taste of Luxury." Harvard Business School Case 603-096, April 2003. (Revised September 2005.) View Details
  32. Pilgrim Bank (A): Customer Profitability

    Provides a context in which students can explore managerial decision making that is critically informed by data analysis. The setting is a retail bank and the decision making relates to the bank's policy toward online banking. The management team is evaluating whether the bank should charge for access to online banking, provide incentives to use the service, or devise some other policy altogether. With thousands of customers already using the online site, the bank is well positioned to assess the impact of the service on customer profitability and retention before making final policy decisions. Told from the perspective of a recent MBA graduate who was charged with performing the necessary data analysis and ultimately coming up with policy recommendations.

    Keywords: Banks and Banking; Customers; Profit; Banking Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Pilgrim Bank (A): Customer Profitability." Harvard Business School Case 602-104, October 2001. (Revised August 2005.) View Details
  33. BigEast Bank (A): Credit Card Approval

    BigEast is considering adopting a relationship-centric view in its credit card approval process. This would shift the bank's current practice of analyzing applications based on the merits of a single product to one where the customer's existing relationship is considered in the approval process.

    Keywords: Customers; Forecasting and Prediction; Banks and Banking; Data and Data Sets; Managerial Roles; Relationships; Adoption; Banking Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "BigEast Bank (A): Credit Card Approval." Harvard Business School Case 602-098, November 2001. (Revised August 2005.) View Details
  34. Store24 (A): Managing Employee Retention

    Provides a retailing context in which employee retention strategies are explored through analyzing detailed store-level data.

    Keywords: Retention; Management Analysis, Tools, and Techniques; Data and Data Sets; Strategy; Mathematical Methods; Retail Industry;

    Citation:

    Frei, Frances X., and Dennis Campbell. "Store24 (A): Managing Employee Retention." Harvard Business School Case 602-096, October 2001. (Revised August 2005.) View Details
  35. Zipcar: Influencing Customer Behavior

    At Zipcar, customers share the use of cars and, as a result, rely on each other for their service experience. Customers are required to keep the car clean and the gas tank full and to return the car on time. Told from the perspective of two customers: Sal Fishman, who has a car and is running late at an interview, and Anita Karr, who has just arrived at her reserved car's empty parking spot.

    Keywords: Technology; Governance Controls; Behavior; Service Delivery; Service Operations; Consumer Behavior; Leasing; Transportation Industry; Service Industry; United States;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Zipcar: Influencing Customer Behavior." Harvard Business School Case 605-054, January 2005. (Revised June 2005.) View Details
  36. Rapid Rewards at Southwest Airlines

    Southwest Airlines is well known as the low-fare airline that has achieved ongoing financial success in one of the most financially troubled industries in the United States. Told from the perspectives of two Southwest customers--a frequent flier and a more typical customer--the case revolves around two customer service requests from the frequent flier, both of which provide a compelling temptation to cater to the satisfaction of the airline's highest revenue customers. The requests are intriguing because they would neither add cost nor increase the turnaround time of Southwest's service.

    Keywords: Customer Relationship Management; Air Transportation; Service Operations; Service Delivery; Air Transportation Industry;

    Citation:

    Frei, Frances X., and Corey B. Hajim. "Rapid Rewards at Southwest Airlines." Harvard Business School Case 602-065, September 2001. (Revised August 2004.) View Details
  37. Innovation at Progressive (B): Homeowners Insurance

    Analyzes whether Progressive, strictly an auto insurer, should enter the home owner's insurance market. The critical decision is whether the competencies that made Progressive succeed in the auto insurance industry can translate to the home owner's insurance industry.

    Keywords: Market Entry and Exit; Insurance Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (B): Homeowners Insurance." Harvard Business School Case 601-138, June 2001. (Revised April 2004.) View Details
  38. Innovation at Progressive (A): Pay-As-You-Go Insurance

    Consumer auto insurance is a price-sensitive industry in which customers rarely pay a premium to a provider even for additional service features. Progressive spends more on additional service features than its competitors do; consumers don't pay extra for these features, yet the company makes money on a product its competitors often do not. Central to Progressive's success is its ability (a) to turn operational savings into value-added service and (b) to capitalize on its unique competencies through clever service design. Progressive is considering a national rollout of Autograph, a pay-as-you-go insurance service offering that recently completed a successful pilot in Texas.

    Keywords: Technology; Service Operations; Service Delivery; Insurance; Brands and Branding; Product Development; Innovation and Invention; Insurance Industry; Texas;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (A): Pay-As-You-Go Insurance." Harvard Business School Case 602-175, May 2002. (Revised April 2004.) View Details
  39. Ninth House: e-Learning Software

    Jeff Snipes, CEO of the Ninth House Network, a San Francisco-based E-Learning company, considers a strategy shift to address a recent slump in sales and to attract more customers. The revised strategy would require creating shorter, more directed content that could be delivered cheaply and quickly. A CD-ROM was being built as well to address customer concerns about bandwidth. The sales team was considering a narrow focus on companies with a connection to broadband services. But how would this affect the Ninth House culture? Would the organizational structure have to change? Would new content require a different selling model?

    Keywords: Online Technology; Service Operations; Organizational Structure; Groups and Teams; Corporate Strategy; Organizational Culture; Learning; Sales; Service Delivery; Entrepreneurship; Information Technology Industry; Service Industry; Education Industry; San Francisco;

    Citation:

    Edmondson, Amy C., Frances X. Frei, and Corey B. Hajim. "Ninth House: e-Learning Software." Harvard Business School Case 601-047, January 2001. (Revised January 2004.) View Details
  40. Intrawest Corporation

    Describes the dilemma surrounding Intrawest's growth strategy for the future. The organization must decide whether to continue its present development tactic or use its expertise to diversify its resort products in terms of location and type or spin off associated services such as reservation and real estate sales systems.

    Keywords: Diversification; Growth and Development Strategy; Accommodations Industry; Tourism Industry;

    Citation:

    Frei, Frances X., Daniel Rethazy, and Corey B. Hajim. "Intrawest Corporation." Harvard Business School Case 603-001, September 2002. (Revised January 2003.) View Details
  41. Transformation at the IRS

    Describes the service transformation occurring at the U.S. Internal Revenue Service. Plagued by a history of poor service, enormous complexity, and an insular employee base, the 100,000-person organization grapples with a turnaround process that attempts to change virtually every aspect of the organization, including IT systems, This case includes information regarding share services organizational structure, organizational culture, and customer service. This case includes information regarding shared services.

    Keywords: Service Delivery; Service Operations; Organizational Structure; Taxation; Organizational Culture; Transformation; Public Administration Industry; United States;

    Citation:

    Edmondson, Amy C., Frances X. Frei, and Corey B. Hajim. "Transformation at the IRS." Harvard Business School Case 603-010, September 2002. (Revised November 2002.) View Details
  42. Virgin Group, The: Filling in the Value Gap

    Chronicles the successes and failures of the Virgin Group. By examining these examples, students discover attributes of Virgin's overall service concept, which, at its core, competes on quality rather than on price. Students are challenged to consider how Virgin might extend its operations into the U.S. market.

    Keywords: Quality; Competition; Price; Business Conglomerates; Service Operations; Service Delivery; Market Entry and Exit;

    Citation:

    Frei, Frances X., Hanna Rodriguez-Farrar, and Corey B. Hajim. "Virgin Group, The: Filling in the Value Gap." Harvard Business School Case 602-057, September 2001. (Revised October 2002.) View Details
  43. Orient-Express Hotels

    Describes how a hotel and leisure company provides high-end service through its distinctive hotels and trains. Provides an opportunity to learn about the company's unusual quality practices and puts into doubt the unquestioned use of well-known practices, such as managing for consistency, offering incentives based on nonfinancial measures, and creating a unified message for a high-end brand. The main dilemma is whether the company should develop a loyalty program across its collection of hotels.

    Keywords: Service Operations; Quality; Management; Opportunities; Practice; Programs; Motivation and Incentives; Brands and Branding; Service Industry; Accommodations Industry;

    Citation:

    Frei, Frances X., and Corey B. Hajim. "Orient-Express Hotels." Harvard Business School Case 603-024, September 2002. (Revised October 2002.) View Details
  44. Creating New Services, Module Overview Note TN

    Taught in Managing Service Operations, an elective course in the Harvard Business School MBA program. Appropriate for any service course or service module within an operations or new product development course that targets MBA or executive education students. Supplements case teaching notes and provides guidance in the positioning of the cases and in the overarching themes.

    Keywords: Service Operations; Product Development; Business Education; Product Positioning;

    Citation:

    Frei, Frances X. "Creating New Services, Module Overview Note TN." Harvard Business School Teaching Note 602-178, May 2002. (Revised September 2002.) View Details
  45. Abercrombie & Kent

    Describes Abercrombie & Kent, the outdoor adventure company that has provided services throughout the entire history of the outdoor adventure industry. Provides an opportunity to learn how the company successfully grown into a premier player in the industry by adapting to the maturing needs of its customer base. The dilemma is to determine what the company should do now that its target market has aged and the primary growth in the industry is with younger travelers.

    Keywords: History; Financial Management; Activity Based Costing and Management; Service Operations; Marketing Reference Programs; Product Development; Business Growth and Maturation; Balance and Stability; Marketing Channels; Transportation; Growth and Development Strategy; Travel Industry;

    Citation:

    Frei, Frances X., Brian Corbett, Mark Partin, and Daniel Rethazy. "Abercrombie & Kent." Harvard Business School Case 603-002, September 2002. View Details
  46. Fraud Prevention at Omni Bank

    Omni Bank is undergoing a merger and has two important decisions ahead. First, should it enforce the use of its model-driven approach to interacting with customers at the recently acquired Friends Savings and Loan branches. Friends has a culture of personal touch with its customers and there will likely be resistance to impersonal changes. However, the impersonal models are much better at detecting fraud, which is increasing in the banking industry. The second decision is whether to use biometrics to help prevent fraud. Biometrics, such as eye and finger scans, can virtually wipe out certain types of fraud, but its implementation has serious consequences in terms of managing customer relationships.

    Keywords: Mergers and Acquisitions; Business Model; Crime and Corruption; Customer Relationship Management; Decisions; Banks and Banking; Banking Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Fraud Prevention at Omni Bank." Harvard Business School Case 602-068, September 2001. (Revised July 2002.) View Details
  47. Oracle Corporation

    Oracle Corp., the world's second-largest independent software company (behind Microsoft) was the world's dominant supplier of database software. Oracle also sold application software, such as the popular enterprise resource planning and customer relationship management applications. This case explores how, in less than one year, Oracle trimmed $1 billion in its internal cost structure. Nearly every aspect of Oracle's business, including operations, sales, and fulfillment, was affected. While reducing costs, Oracle also attempted to create a "pull" environment for sales by touting the results of using its own products as an example of potential cost savings. By understanding how Oracle reduced its internal expenses through automating, standardizing, and centralizing its internal and external business processes, students explore several questions: 1) When is off-the-shelf software appropriate for implementation, and when does "best of breed" or custom software make more sense? 2) How does delivering application hosting services differ from traditional software development?

    Keywords: Organizational Change and Adaptation; Internet; Service Operations; Service Delivery; Software; Management Teams; Innovation and Invention; Web Services Industry; Information Technology Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Oracle Corporation." Harvard Business School Case 601-043, November 2000. (Revised May 2002.) View Details
  48. FleetBoston Financial: Online Banking

    As the ninth largest bank holding company in the United States in 2000, FleetBoston Financial Corp. provided a myriad of financial services, including retail banking, loan origination, and brokerage accounts. This case explores how FleetBoston responded to the Internet and the rise of new competition from both within and outside the banking industry. The majority of the case acquaints students with how customers interact with financial services, how these firms make money, and what are their challenges and opportunities. The majority of retail banking customers are unprofitable, making for a unique operating environment in which innovations are consistently aimed at reducing costs. Because customer behavior contributes directly to costs, innovations center on providing lower cost channels for customer transactions. Unfortunately, each new channel increases overall costs, and banks are still faced with reducing costs. In addition, the Internet has given rise to new competitors, many with lower cost structures and revenue potential outside banking.

    Keywords: Business Model; Borrowing and Debt; Cost Management; Banks and Banking; Consumer Behavior; Service Operations; Competition; Online Technology; Banking Industry; United States;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "FleetBoston Financial: Online Banking." Harvard Business School Case 601-042, November 2000. (Revised May 2002.) View Details
  49. Gateway: Moving Beyond the Box

    Gateway has opened retail stores to differentiate itself from its competitors (e.g., Dell). Describes how the company has created an excellent service experience, but has struggled financially as a result.

    Keywords: Transition; Change Management; Valuation; Service Operations; Service Delivery; Distribution Channels; Computer Industry; Electronics Industry; United States;

    Citation:

    Frei, Frances X., Youngme E. Moon, and Hanna Rodriguez-Farrar. "Gateway: Moving Beyond the Box." Harvard Business School Case 601-038, July 2000. (Revised May 2002.) View Details
  50. Innovation at Progressive (C): Auto Repair

    Analyzes whether Progressive should enter the auto repair industry. The critical decision is whether the competencies that made Progressive succeed in the auto insurance industry can translate to the auto repair industry.

    Keywords: Market Entry and Exit; Innovation and Invention; Insurance Industry; Service Industry; Auto Industry;

    Citation:

    Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (C): Auto Repair." Harvard Business School Case 601-139, June 2001. (Revised May 2002.) View Details
  51. Vicinity Corporation: Turning Web Traffic into Store Traffic

    Vicinity uses its Internet and m-commerce technology to help drive traffic into its customers' physical distribution outlets. The company has terrific technology and is seemingly successful in getting more consumers into its customers' stores, yet it is in a precarious position. To date, Vicinity has not been able to identify which consumers it has influenced to go to the retail outlets. Without this ability, Vicinity can continue to get subscription-based fees from its customers but cannot get the much needed transaction-based fees. At the time of the case, Vicinity is in an unstable financial position and is facing the difficult dilemma of "closing the loop" and positively identifying consumers at the point of sale.

    Keywords: Internet; Consumer Behavior; Mobile Technology;

    Citation:

    Frei, Frances X., David Margalit, and Amanda Yelsh. "Vicinity Corporation: Turning Web Traffic into Store Traffic." Harvard Business School Case 602-031, August 2001. (Revised November 2001.) View Details
  52. Club Med (C): The "Re-New" Plan

    Supplements the (A) and (B) cases.

    Keywords: Business Subsidiaries; Industry Structures; Competitive Advantage; Organizational Culture; Cost; Customer Satisfaction; Accommodations Industry; United States;

    Citation:

    Frei, Frances X., Daniel Rethazy, and Hanna Rodriguez-Farrar. Club Med (C): The "Re-New" Plan. Harvard Business School Case 602-089, October 2001. (Revised November 2001.) View Details

    Research Summary

  1. Organizational Effectiveness

    This research studies the obstacles that systematically get in the way of organizational effecitiveness.  In the past I have paid particular attention to service organizations, which account for over 70% of organizations in most developed countries.  This research studies mature organizations as well as early stage ventures.  I am currently investigating two periods in an organizations lifecycle: rapid growth and turbulent times.

    Keywords: organizational effectiveness; organizations; entrepreneurship; service; Growth; management;

  2. Managing Service Operations Course Development

    Managing Service Operations is an Elective Curriculum course taught at HBS. Over thirty cases and exercises have been created for the course. For a list of the cases developed for this course, please see the Publications link below.  For the most recent syllabus, click here: MSO Syllabus.

  3. Managing the Operating Role of Customers

    Customers in operating roles introduce considerable variability into the production environment including differences in the demands they impose on the environment and the unpredictability of those demands. When customers are the source of production variability, the service experience can rely heavily on accommodating that variability. However, operational efficiency typically demands reducing variability. This research explores the challenge of managing the tradeoff between operational efficiency and service value, providing prescriptions for how to mitigate its effects through influencing customer behavior. See HBS 606-032 for a detailed discussion of managing the operating role of customers.
  4. Service Excellence by Design

    This research addresses how to design sustainable service models that deliver ongoing value to both customers and the firm. In particular, the research reveals three principles of effective service management (see HBS 606-031 for a detailed discussion of these design principles):

    • Ground the service offering in specific service attributes.
    • Build an explicit mechanism for funding the service offering.
    • Set employees up to reasonably deliver the service offering’s value.

  5. Managing Customer Information

    After a service offering is implemented, firms routinely collect significant amounts of data, including customer, employee, and firm financial data. However, service firms are not nearly as effective as they could be in taking advantage of these data. This research argues that a major shift in mindset is required before many organizations can effectively generate actionable insights from readily available data. See HBS 606-097 for a framework for approaching service management problems that can be informed by data analysis.
  6. How to Manage Customers for Increased Profits and Customer Satisfaction

    For many service firms, the customer plays an important role in contributing to the cost and/or quality of the service. This is very different than many manufacturing contexts, for example, where the firm has virtually complete control over product cost and quality. In these instances, firms need to design and manage customer involvement explicitly. By cultivating the appropriate environment, firms can harness customer efforts to the advantage of both the firm and customer. By not carefully managing this, however, firms can experience escalating costs in the face of eroding satisfaction.

    Teaching

  1. Field Immersion Experiences in Leadership Development

    HBS students have traditionally been immersed in a case-study method that has encouraged them to think like leaders. As a part of the school’s recent curriculum innovation, Field Immersion Experiences for Leadership Development (FIELD) gives students meaningful opportunities to act like leaders, translating their ideas into practice. FIELD is a required first-year course that spans a full academic year, divided into three parts: leadership intelligence (FIELD 1), global intelligence (FIELD 2), and integrative intelligence (FIELD 3). 
  2. Managing Service Operations

    Managing Service Operations (MSO) focuses on how firms can deliver excellent service while achieving business success. This involves a deep understanding of customers, competitors, and the firm's internal mechanisms.

    Career Focus

    Managing Service Operations investigates how to design and manage firms to achieve sustainable service excellence. Service excellence is sustained when value is created for owners, employees, and customers. This course is appropriate for those planning to work in service firms and for those working in companies that analyze or provide support to service businesses, such as consulting or venture capital firms. The course has a strong emphasis on consumer services, with only modest attention to business services.

    Educational Objectives

    The course explores how managers can influence customers, employees, and service designs to create and capture value. Through exposure to a wide range of industries (e.g., financial services, government, health care, hospitality, and retail) students will gain tangible lessons from each class that they can use in a broader context.

  3. Strategy

    The objective of this course is to help students develop the skills for formulating strategy. It provides an understanding of:

    • A firm's operative environment and how to sustain competitive advantage.
    • How to generate superior value for customers by designing the optimum configuration of the product mix and functional activities.
    • How to balance the opportunities and risks associated with dynamic and uncertain changes in industry attractiveness and competitive position.

    Students learn to:

    • Develop a mastery of a body of analytical tools and the ability to take an integrative point of view.
    • Use these tools to perform in-depth analyses of industries and competitors, predict competitive behavior, and analyze how firms develop and sustain competitive advantage over time.

    Particular attention is paid to competitive positioning; understanding comparative costs; and addressing issues such as cannibalization, network externalities, and globalization.

  4. Technology and Operations Management

    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.

    Topics encompass:

    • Process analysis
    • Cross-functional and cross-firm integration
    • Product development
    • Information technology
    • Technology and operations strategy
  5. Why You Should Care: Creating the Conditions for of Excellence

    CCE explores how to identify and overcome the barriers to personal and professional excellence. Through a series of case studies we will investigate the common challenges that hinder even the most effective organizations and individuals as they intersect with these structures. A belief in or curiosity about the personal point of view is required as we assess how to belong to and lead organizations.

  1. Received multiple HBS Student Association Faculty Teaching Awards.