Leveraging selected operational improvement practices to achieve both efficiency and creativity: A multi-level study in frontline service operations

Compared with the repetitive nature in manufacturing operations, frontline service operations are more dynamic because of the need to deal with many unpredictable customer-related activities. Thus, many service firms strive to achieve not only efficiency in service delivery, but also creativity in decisions or problem-solving with an aim to maintaining competitiveness in today's dynamic environments. However, the discipline of operations management has traditionally focused on improving efficiency in operational activities, while offering very limited insights regarding practices that can improve operational efficiency as well as employee creativity. Grounded in social cognitive theory, we identify three operational improvement practices in this paper, namely continuous improvement, structured methods, and psychological safety, which are pertinent to learning experiences and behaviours (i.e., major elements in developing individuals' creativity), can help service firms achieve both operational efficiency and employee creativity. We also adopt a multi-level analysis to study whether two relevant learning capabilities, namely potential absorptive capacity and ambidexterity, can enhance the effectiveness of the three identified operational improvement practices. We test our hypotheses by using survey data collected from 146 frontline teams in China's banking industry. We contribute to research on service operations management by offering new insights linking operational improvement practices and employee creativity. Service firms that value the importance of both operational efficiency and creative solutions should find our results particularly useful because our results provide precise guidelines on improving both operational performance and employee creativity through the adoption of relevant operational improvement practices and learning capabilities.