| Published: | January 21, 2011 |
| Paper Released: | December 2010 |
| Authors: | Jonathan R. Clark, Robert S. Huckman, and and Bradley R. Staats |
Executive Summary:
In farming out work to an external service provider, companies often count on volume-based learning--the idea that outsourced workers will build experience and improve their productivity if there is a large volume of work for them to do, and that the bigger the volume, the more productive and efficient they'll eventually become. However, there are several factors that challenge that education process. This paper explores whether and how repetition can breed competence in a business setting, using data from a provider of outsourced radiological services. Research was conducted by Harvard Business School professor Robert S. Huckman, Jonathan R. Clark (HBS PhD 2010) of Pennsylvania State University, and Bradley R. Staats (HBS MBA 2002, DBA 2009) of the University of North Carolina at Chapel Hill. Key concepts include:
- In addition to technical aspects of the task, volume-based learning depends on the interpersonal interactions between the individual completing the task and the customer.
- The rate at which a worker learns depends independently on the customer, knowledge domain, and technology within which the worker accumulates volume-based experience. Workers learn faster from completing an individual task for a specific customer than they do from completing multiple tasks for multiple customers.
- Spreading a worker's experience over multiple customers may hinder the learning process, particularly with respect to the needs of specific customers.
Abstract
We explore the specificity of volume-based learning in an outsourced setting. When producing a unit of output, the content of the knowledge gained can vary dramatically from one unit to the next. This suggests that while aggregate experience in learning-by-doing is generally valuable, not all prior experience has an equal impact on performance. To examine these differences we introduce a framework to unpack the multiple dimensions of experience that exist within one unit of work. We then empirically examine the customer-, domain-, and technology-specificity of learning. Our empirical setting is the context of outsourced radiological services where individual doctors at an outsourcing firm complete radiological reads for hospital customers. We find that customer-, domain-, and technology-specific experience-as compared to other experience-leads to improved productivity. We discuss the implications of our results for the study of learning and experience, as well as for outsourcers and the firms that use their services.
Paper Information
- Full Working Paper Text
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- Working Paper Publication Date: December 2010
- HBS Working Paper Number: 11-057
- Faculty Unit: Technology and Operations Management
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