The speed with which customers are embracing new Internet-enabled technologies is quickly changing the professional services landscape. Customers are better equipped with the tools to gather real-time information, ask probing questions of their service provider and, ultimately, make fully informed purchase decisions. More fundamentally, customers are increasingly seeing value in being able to participate in the design and delivery of professional services (Eisingerich & Bell, 2006). Increased customer involvement, however, implies increased variability and uncertainty within the service encounter (Chan, Yim, & Lam, 2010).

Traditional management practice, in the event of variability, has been to more closely manage the service process. Variability has been seen as something to be controlled or ‘managed out’ of the process in order to increase consistency and predictability for both employees and customers. Accordingly, the literature has been occupied with prescriptions for managing variability through either customer or employee training. More recently, as a result of the service-dominant ‘turn’ within the literature and the emergence of co-creation as an approach to doing business, we have seen firms begin to embrace variability as a potential source of customization, innovation, and value. The evidence for the effectiveness of co-creation is emerging as scholars are increasingly embracing this topic of research (Bendapudi & Leone, 2003; Prahalad & Ramaswamy, 2004).

Remaining somewhat neglected, however, has been the role of the employee as firms embrace the variability that is endemic to co-creation business models. This we see as an oversight. As such, we argue that variability can be dealt with in one of two ways; 1) by controlling the service process thus minimising the variability as has been the more traditional approach, or 2) by embracing, and working with, the variability. We propose a typology that reflects these two approaches in the context of supply (i.e., the management of service employees) and demand (i.e., the management of the customer interface) strategies. For instance, by educating customers on how to conduct themselves within the service, behavioural variability can be reduced. Similarly, through service process blueprinting or scripting, employees’ actions are able to be tightly controlled and monitored as appropriate for each service offering. Alternatively, firms can choose to embrace customer behavioural variability by embracing co-creation business models. The LEGO corporation, well known for its employment of a co-creation mindset, allows customers to submit new product ideas, to interact in online platforms with LEGO employees and other LEGO users, and actively participate in internal innovation processes (Hatch & Schultz, 2010).

Perhaps less frequently explored by firms are supply-focused approaches for embracing service process variability. The idea of improvisation, where employees react in the moment to the customer as they see fit, is one potential management strategy. Improvisation can be defined as the convergence of planning and action. A main tenet of improvisation is ‘yes-anding’ which involves accepting the offers of others and building on them. It enables individuals to focus on the in-the-moment process of creation rather than on forcing a desired result (Crossan, 1998; Vera & Crossan, 2004). This typology of controlling versus embracing customer variability was explored through qualitative research comprising semi-structured interviews with practitioners and employees in a health services context. The format of the interviews followed a broad discussion …