There are more aspects of the variability question, but our point here is fairly simple: customers can wreak havoc on your operations. It's what makes us hesitate when we hear "the customer is always right" or that the path to service excellence is to simply delight your clients. Performance can't be sustained by placing customers on a pedestal and indulging their every desire.' To create a system in which excellence is the norm, you need to manage your customers every bit as much as you manage your employees.

Think of all the resources you devote to hiring good employees: interviews; background checks; references; tests for ability, motivation, and cultural fit. Now think of the energy you spend on "hiring" the right customers. In most companies, there's no comparison, even though customer behavior can have just as much of an operational impact as employee behavior. Customers can play a defining role in your ability to deliver great service at a sustainable cost. And the greater your expectations for your customer-operators, the more time you need to devote to choosing the right people for the job.

UNCOMMON TAKEAWAYS

• Service customers don't just purchase a service; they also participate in creating it. Among other things, they make the service faster or slower, better or worse, cheaper or more expensive to deliver — for themselves and for other customers. They are active producers (and detractors) of the value they end up consuming.

• For example, a customer at a salad bar affects the quality of his or her meal, whereas patients who skip dental appointments drive up the costs of running the entire practice. When customers are influencing the service experience in ways like these, we call them customer-operators.

• Customers can be more or less involved operationally, depending on your industry and on your specific design choices — for example, how much self-service you build into your model and whether you involve your customers in your improvement efforts.

• The more dependent your service business is on the behavior of customer-operators, the more important it is to manage them successfully. Similar to employee management, the four components of a successful customer management system are customer selection, training, job design, and performance management.

• Not all customer-operators are alike. When compared with each other, they are faster, slower, smarter, pickier, later, earlier, or more or less prepared to perform their operational roles. This diversity increases the cost and complexity of running a service business.

• Assume that you don't know exactly how your customers are affecting your operations or how well your efforts to manage them are really going. Reframe any certainties as hypotheses that need confirmation. Test them. Fortunately, the data you need is usually right at your fingertips.

There are more aspects of the variability question, but our point here is fairly simple: customers can wreak havoc on your operations. It's what makes us hesitate when we hear "the customer is always right" or that the path to service excellence is to simply delight your clients. Performance can't be sustained by placing customers on a pedestal and indulging their every desire.' To create a system in which excellence is the norm, you need to manage your customers every bit as much as you manage your employees.

UNCOMMON TAKEAWAYS

• Service customers don't just purchase a service; they also participate in creating it. Among other things, they make the service faster or slower, better or worse, cheaper or more expensive to deliver — for themselves and for other customers. They are active producers (and detractors) of the value they end up consuming.

• For example, a customer at a salad bar affects the quality of his or her meal, whereas patients who skip dental appointments drive up the costs of running the entire practice. When customers are influencing the service experience in ways like these, we call them customer-operators.

• Customers can be more or less involved operationally, depending on your industry and on your specific design choices — for example, how much self-service you build into your model and whether you involve your customers in your improvement efforts.

• The more dependent your service business is on the behavior of customer-operators, the more important it is to manage them successfully. Similar to employee management, the four components of a successful customer management system are customer selection, training, job design, and performance management.

• Not all customer-operators are alike. When compared with each other, they are faster, slower, smarter, pickier, later, earlier, or more or less prepared to perform their operational roles. This diversity increases the cost and complexity of running a service business.

• Assume that you don't know exactly how your customers are affecting your operations or how well your efforts to manage them are really going. Reframe any certainties as hypotheses that need confirmation. Test them. Fortunately, the data you need is usually right at your fingertips.