Explicating the microfoundations of operational excellence in services: A capabilities perspective

Service firms implement operational improvement practices to enhance their competitiveness, but only a few firms succeed.
Individual operational improvement practices are insufficient for a service firm to gain a competitive advantage when almost all its competitors adopt the same or similar operational improvement practices.
We propose a capabilities perspective that unveils five microfoundations—four constituent capabilities (Discover, Improve, Align, Transform) and the cumulative sand‐cone structure—that redefine the trajectory from short‐term operational enhancements to enduring capability development, thus reshaping the discourse on operational excellence.