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Ominously, the rising clamor suggests that something fundamental may be wrong in the vaunted U.S. service economy, in which the country has put so much hope for future prosperity. If service industries are beginning to dominate the economy, one might ask, why is there so little good service to be found? Is America in danger of becoming the no-can-do society? The question is becoming increasingly urgent. As manufacturing has declined in relative | importance, the service sector has become the engine of U.S. economic growth. Of 12.6 million new jobs created since the end of the last recession, in 1982, almost 85% have been in service industries as opposed to goods-producing fields.
Sloppy service could become more than just a domestic annoyance. Economists have begun to warn that slipping standards could cost the U.S. its international competitive standing in services and thus worsen the country's trade problems. Japanese banks, for example, have already made inroads into the U.S. market. In the November-December issue of the Harvard Business Review, Professor James Quinn and Researcher Christopher Gagnon of Dartmouth's Amos Tuck School of Business contend that many U.S. service businesses have developed the same shortsighted habits and inattention to quality that American manufacturers have been guilty of -- with disastrous results. "While there is still time," they write, "it is essential to take a hard look at how we think about services, how we manage them, and how much they contribute to the nation's economic health."
The potential of service businesses losing touch is chilling because it was the U.S. that practically invented the concept of good service on a mass- market scale. The country's huge appetite for reliable service gave rise to such pioneers as AT&T, IBM, American Express, McDonald's and Federal Express. But many U.S. companies today are failing to achieve the right balance of high-tech expedience vs. personal attention. "The state of service is pretty bad," admits Kenneth Hamlet, president of the Holiday Inn Hotel Group.
Among consumers, swapping horror stories about their confrontations with poor service has become a cathartic exercise. Many have never obtained satisfaction for their gripes, despite exhausting efforts. Kevin Kinnear, a Chicago software engineer, became increasingly angry with each of four trips to his car dealer to get the cruise control repaired on his 1985 Buick Century. Finally, he gave up when the mechanics made it clear that they no longer wanted to deal with his problem. Jane Ullman, a Santa Monica, Calif., sculptor, thought her refrigerator problems were over when deliverymen installed a new deluxe model in her kitchen. But her woes were just beginning; the workmen broke the refrigerator's copper pipes, which took several visits from repairmen to fix. "People have learned to take shoddy service in stride," she says wearily. Even when they speak up and get their money back, consumers often come away with a feeling of being abused. Earlier this month, when a Los Angeles homemaker took back a foul-smelling piece of fish to a supermarket on the city's west side, she got a refund only after answering brusque questions and signing papers. At no time did anybody apologize or give the slightest sign that they regretted spoiling her dinner.