Service Businesses and Productivity*


  • *

    The author is indebted to Robert S. Collins of IMD, John Haywood-Farmer of the University of Western Ontario, James D. Blocher of Indiana University, and two anonymous referees for their comments on previous drafts of this article.


The records of superior performance of selected service firms over many years suggest that they may be more productive than others. This article uses the Theory of Swift, Even Flow to explain why that might be true. In the process, this article improves Schmenner's 1986 service process matrix. The redefinition of the axes of this matrix and of the resulting diagonal leads to enhanced understanding of productivity for service operations and helps to explain how some leading service companies have been able to sustain their competitive positions for decades.