POPin Blog

Leadership Is Communication: The Service Profit Chain

One of the most fascinating management theories is known as the service-profit chain, which holds that profitable growth is closely linked to employee engagement. The service-profit chain was first proposed in a seminal 1994 paper titled “Putting the Service-Profit Chain to Work,” by James Heskett and his colleagues at the Harvard Business School. Through extensive studies of service industries, the Harvard researchers found that profits and growth are stimulated primarily by customer loyalty, and customer loyalty is a direct result of employee engagement.