Gary Loveman, Ph.D., is currently Senior Lecturer in the Department of Finance at Harvard Business School. He previously taught Service Management in the M.B.A. and executive education programs at the School from 1989-1998. He was named the first recipient of the School’s Apgar Award for excellence and innovation in teaching. Loveman was awarded the B.A. in economics from Wesleyan University, and the Ph.D. in economics from the Massachusetts Institute of Technology, where he was an Alfred Sloan Doctoral Dissertation Fellow.
Dr. Loveman left HBS in 1998 and became Chairman, CEO and President of Caesars Entertainment Corporation. During his seventeen year tenure, Dr. Loveman oversaw a period of growth that included several major acquisitions making Caesars the largest and most diversified company in the gaming industry. In 2008, Caesars went private in a $30.7B transaction led by Apollo and TPG. He pioneered the use of cutting-edge technology and data analytics to deliver differentiated customer service and guest loyalty. Dr. Loveman also led the development of Wellness Rewards, Caesars’ widely recognized, incentive-based health and wellness program for the company’s 70,000 employees and their families. He was voted “Best CEO in the Hospitality Industry” for four consecutive years by the Institutional Investor magazine, was inducted into both the Hospitality and Gaming Halls of Fame and is the subject of case studies at HBS and Stanford Business School.
Dr. Loveman joined Aetna in October 2015, serving as President of Consumer Health and Service, Aetna’s health services business through January 2018. The Consumer Health and Services organization was responsible for helping Aetna members achieve their best health and for fostering innovative collaborations with health care providers to improve the overall quality, cost and experience for Aetna members. Dr. Loveman led the company’s population health management and consumer engagement strategies, health and clinical services, care management, digital consumer health products, analytics and data science, pharmacy and marketing areas.
From 2012-2015, Dr. Loveman chaired the Business Roundtable’s Health & Retirement Committee, which focuses on improving the quality and affordability of the nation’s health and retirement systems. He serves on the Board of Trustees at Boston Children’s Hospital and the Board of Directors of the Boston Celtics, where he is a member of the ownership group. He served previously on the Visiting Committee of the M.I.T. Department of Economics and the boards of FedEx, Coach and Ventas, Inc.
Among Dr. Loveman’s publications are five articles in the Harvard Business Review, including “Starting Over: Poland After Communism,” published in 1995 and “Putting the Service-Profit Chain to Work,” published in 1994 and co-authored with HBS colleagues James L. Heskett, Thomas O. Jones, W. Earl Sasser, Jr., and Leonard A. Schlesinger. Dr. Loveman has authored more than 30 case studies on a number of service organizations including professional service firms, airlines, hotels, business service providers and not-for-profits.
Loveman, Gary W., Simon Johnson, and David T. Kotchen. Managing Business Enterprises after Communism. Boston: Harvard Business School Publishing, 1994.
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Loveman, G. W. "Labor Markets in the 1990s: Building Commitment in Turbulent Times." In Proceedings of the Fourth German Business Conference Organizations Forum Wirtschaftskongress. Wiesbaden: Gabler Verlag, 1993.
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James Cantalupo, CEO of McDonald's International, and top management have a few months to decide how the McDonald's brand should be transferred into India. Faced with the challenges presented by the Indian market--80% of Indians are Hindus and cherish cows as sacred animals not to be eaten, for example--managers must determine a branding strategy in India. They asked themselves, "How can we transfer the McDonald's service concept into India and maintain our strong global identity?" They feared repeating earlier mistakes where the standard menu had been compromised to conform to local cultural tastes. Ideas included replacing McDonald's traditional beef burger with lamb or vegetable burgers.
Loveman, Gary W., and Sabina M. Ciminero. "McDonald's: International Expansion Strategy." Harvard Business School Case 899-005, September 1998.
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Many industry-leading service providers are expanding internationally, with varying degrees of success. This note presents a framework for understanding the managerial challenges facing service firms as they enter foreign markets. In particular, focuses on key managerial tasks for successful internationalization and expands the concept of the "strategic service vision" to include the specific issues associated with cross-border growth.
In an effort to improve its global distribution system and thus enhance customer service in its shops around the world, Laura Ashley entered into a path-breaking strategic alliance with Federal Express Business Logistics Services. Under the terms of a loosely structured partnership, Federal Express essentially takes over the warehouse and distribution activities formerly handled by Laura Ashley. The alliance is path breaking due to its largely informal structure, based more on trust and mutual benefit than on complicated rules and measures.
American Airlines' strategy calls for continued growth, improvements in customer service, and cost reduction. This case examines the Human Resource Management system at American Airlines and its role in the airline's past and continued success. May be used with American Airlines (A): Strategy in the 1990s, (B): Compensation and Cost Reduction, and (C): Committing to Leadership.
Li & Fung, one of the largest export trading companies in Asia, works primarily as an agent to connect U.S. and European manufacturers and retailers of nondurable, mass-market consumer goods with suppliers located all over East Asia who manufacture products according customer designs. Li & Fung's network of 2,000 suppliers in over a dozen countries is one of its most important competitive assets. This network consists of relationships with suppliers and knowledge of their capabilities and strengths. The network provides a number of benefits to customers, the most important being a wide variety of manufacturing options that differ by price, quality, and delivery time. Li & Fung's trading operations are organized into largely-independent, customer-focused divisions aided by regional branch offices. Its internal structure and incentives (especially compensation) are designed to motivate staff to customize service to each customer and to use the entire network to place each customer order with the supplier that most closely fits customer requirements. This design is especially important because of trading's low margins.
Shows students how a custom software programming company takes advantage of differences between the United States and India in the cost of skilled labor (software engineers) to give its customers rare expertise and lower prices. Asks students to examine the company from its customers' point of view. HCL America offers customers three ways to purchase its services. The company can send its engineers to work on customers' premises on a temporary basis; do programming projects at its U.S. facilities, or send work to its "software factories" in India. A range of factors, including cost, determine which of these methods is best for a particular customer's project. Customers who send work to India often save 50% off the costs of doing the work in the United States. The decision point presents a potential customer, Sateesh Lele, who must decide whether to hire HCL America or a competitor, or use his own staff, for a particular project. If he hires HCL America, he must decide between three methods of work--on-site, in the United States, or in India.
In 1993, Booz.Allen & Hamilton forsook its previous, highly local organizational structure. It was motivated by a desire to serve multinational clients more effectively and to provide greater value to clients with more localized business by collecting best practices from around the world. Following a plan entitled Vision 2000, the firm created unified staffing pools based on industry and functional (strategy, operations, or information technology) expertise, within each of the three large regions, Atlantic (containing Europe and N. America), Asia-Pacific-Japan, and Latin America. In staffing each client engagement, partners considered all available staff within their regions attempting to provide the best consultants for the project, regardless of where they were located. The firm also redesigned compensation and evaluation methods, segmentation strategy, and staff development programs to fit its more integrated service delivery system. New systems and programs for sharing intellectual capital between consultants increased the firm's ability to provide value.
Dr. Prathap Reddy has created India's first corporate hospital, Apollo Hospitals of Madras. The hospital is managed according to an integrated philosophy of customer service and support to employees. A new hospital, in the city of Hyderabad, has not performed as well, however. Futhermore, the company is considering widely franchising the Apollo brand name, and establishing India's first health maintenance organization. Main subjects for analysis and discussion include: the connections between Apollo's management philosophy and its success in Madras, the reasons for Hyderabad's less impressive performance, and the merits of franchising and establishing the HMO given Apollo's expertise and conditions in India.
The vice president of operations at Kuman Educational Institute USA is faced with the pressures of transferring a successful Japanese educational service concept to the United States. Kumon, a for-profit after-school supplementary educative center, specializes in teaching math to children. A highly successful model in Japan, Kumon has yet to be profitable in its 10 years in the United States, though significant progress has been made in the past 5 years. The founder is not satisfied with the results thus far and wants faster growth. In light of an upcoming meeting with Japanese headquarters, the vice president reviews potential strategies for positioning, marketing, and franchising to grow Kumon.
The Indian Hospitals Corp. (IHC), a branch of Apollo Hospitals Group, is considering building a hospital and primary-care medical center in Colombo, the capital of Sri-Lanka, a small island off the southern coast of India. This case describes economic, social, and political conditions in Sri Lanka, particularly in and around Colombo, and the proposed project. There are both promising signs and potential problems.
Describes the challenges facing a cellular telephone company in Mexico as it positions itself in the explosive cellular market and prepares to become a full-service telecommunications provider. Faced with declining market share, revenues per subscriber, and operating income, IUSACELL attempts to understand the economics of its customers and define its customer acquisition and retention strategies.
A very successful luxury hotel in Warsaw, Poland is faced with its first serious competition as new luxury hotels enter the Warsaw market. The case raises the general issue of how to sustain a competitive advantage in an international service business. A variety of strategic and organizational options are available and students must consider which are most appropriate given detailed information about the market.
Over the past several years both the share of women receiving accounting degrees and the share of women entering public accounting have risen substantially. However, the number of women holding senior positions, such as partner, remains low. This case provides data on retention of females in a large metropolitan office of a public accounting firm, asks whether the lower retention rate (relative to male associates) is a business problem for the firm, and if so, asks what the managing partner should do about it.
Multinational professional services firm Coopers & Lybrand has decided to enter the Hungarian market and weighs its strategic options in light of the environment in which it will operate and its resources.
Prochnik was a large state-owned clothing manufacturer located in the textile-production-intensive region of Lodz, Poland. In the early months of economic reform, Prochnik was one of the first five state enterprises to be privatized through initial public offerings and traded on the Warsaw Stock Exchange. The case describes the array of changes necessary to transform Prochnik into an internationally competitive private enterprise.
Habitat for Humanity, a not-for-profit, volunteer-based home builder, is coping with years of rapid growth and success. They now face a series of options to continue their successful course and must make corresponding organizational adjustments. Teaching objectives involve applying lessons learned in the Service Management course to this unique organization: specifically, can they think of themselves as a customer-focused organization and maintain their mission and culture, what are their best options for strategic growth, and how do they mobilize human resources and a headquarters organization at a grassroots nonprofit?
The Walt Disney Co. theme parks historically have thrived on the basis of a formula stressing excellent customer service and a magnificent physical environment. The formula has proven successful in Japan, as well as the United States. With the controversial opening of Euro Disney in France, however, there has become reason to doubt the international appeal of the formula. The case documents issues involved with Euro Disney. Examines the transferability of a successful service concept across international boundaries.
American Airlines' strategy in the 1990s calls for continued growth, improvements in customer service, and cost reduction. Central to cost reduction efforts is the need to contain labor costs. After having signed a very expensive new contract with its pilots' union in early 1991, American is now faced with the challenge of increasing productivity and controlling costs for its other employee groups.
In an effort to grow and contain costs, the airline initiates a series of cultural change programs designed to increase employee participation and decision-making, and accordingly decrease the proportion of supervisors. CTL is the most recent, and by far the most expensive and pervasive of these programs. The case poses the questions of how to evaluate, or quantify the gains from CTL, and how to further the cultural change effort.
American Airlines is pursuing a growth strategy through international and domestic route expansion. At the same time, the airline is working hard to cut costs while trying to provide the best customer service possible. Is this strategy achievable given the recent surge in jet fuel prices and the competitive framework of the industry?
Beer, Michael, and Gary W. Loveman. "People Express Airlines: Rise and Decline, Teaching Note." Harvard Business School Teaching Note 491-080, February 1991.
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