The traditional advice for businesses is to “eliminate inefficiencies.” But a lot of the things that could be labelled as inefficiencies are actually what steer your product away from being a commodity. When you cut out anything that isn’t efficient, you wind up with a cookie cutter product.
Now that’s not to say you want your business to be riddled with random inefficiencies. It’s about what you purposely choose to leave in. It’s about deciding what’s important to your vision and then refusing to cut corners on those things, even if it might save you a few bucks.
“Customer Feedback Not on elBulli’s Menu” [via JK] is a Harvard Biz School look at Ferran Adrià’s restaurant El Bulli (ranked the #1 restaurant in the world). It talks about how streamlining operations at elBulli would turn it into just another restaurant.
There is much about the restaurant that is inefficient, as MBAs are quick to note: Adrià should lower his staff numbers, use cheaper ingredients, improve his supply chain, and increase the restaurant’s hours of operation. But “fixing” elBulli turns it into just another restaurant, says [HBS assistant professor Michael] Norton: “The things that make it inefficient are part of what makes it so valuable to people.”
Before you cut out something simply because it’s inefficient, ask if it’s adding value in some other way. Maybe spending extra to have pretty packaging or fresher ingredients or more durable stitching or a handwritten thank you note or whatever will wind up being why someone tells a friend about you. Often, the “wrong” things you choose to do are what set you apart and make your product unique. They’re the spice that make your dish special.
In the piece, Norton also uses Adria’s approach to highlight the distinction between understanding and listening to customers.
Adrià’s idea is that if you listen to customers, what they tell you they want will be based on something they already know. If I like a good steak, you can serve that to me, and I’ll enjoy it. But it will never be a once-in-a-lifetime experience. To create those experiences, you almost can’t listen to the customer…Adrià says he doesn’t listen to customers, yet his customers are some of the most satisfied in the world. That’s an interesting riddle to consider.
Related: More Signal vs. Noise posts about chefs
Rick
on 04 Dec 09There is a difference between asking a customer what will satisfy him and them providing him that thing and providing the customer a thing and then asking him if he was satisfied.
It’s completely reasonable to assess customer satisfaction post-consumption and incorporate that feedback in to your future work without asking the customer to tell you how you should go about satisfying them.
As for efficiency, the Mba approach seems to be based on an assumption that the goal of any enterprise is profit maximization. This is rarely the case. A more thorough framing of the goals of the organization would allow for efficiency thinking in the proper context.
ronp
on 04 Dec 09“If I had asked people what they wanted, they would have said faster horses.” — Henry Ford
Rob Poitras
on 04 Dec 09Caring about customers and taking time to interact with them is inefficient as hell but needs to be done.
Ryan Ripley
on 04 Dec 09Depends on how you define efficiency. If you are looking at things that directly leads to sales, then taking time to interact with customers is actually quite efficient! Efficiency without context (goals) is useless.
Jeffrey Tang
on 04 Dec 09Reminds me of what Seth Godin wrote in Free Prize Inside. It’s not always about being streamlined; it’s about being remarkable and marketable. Sometimes clunkiness actually attracts people – as long as it’s clunky by design and not by laziness.
Jagath
on 04 Dec 09I believe it is very important to understand what really is “the product” you are selling. To say that elBulli is selling food is just plain wrong. They are selling the mystery and the experience, starting all the way from getting on the reservation list, to finding the restaurant, to anticipating the dish that is about to be served. Once you understand your “product” at a deeper level, then you can identify where the “true inefficiencies” are. It is not always about cutting costs and producing cheaper, faster. On another extreme, Walmart is selling an opportunity to “buy a variety of economically priced goods under the same roof”. In that context, it is important to have a wide variety of goods, priced as low as possible. To achieve that goal, they need to focus on supply chain and operations to extract every penny out of the system. We all know how passionate Apple is about the “experience” starting from buying the product, to opening the package, to switching the computer on for the first time. That is not to say that these businesses who spend a lot on the “frills” are not profitable – in fact to the contrary, some of them are the most profitable in their industry. In short, first figure out what you are “really selling” to the customer, and then design your business model to support that process.
BillP
on 04 Dec 09I nominate Jagath for a ‘Royalty’ Hat…
Blue Sail Creative
on 04 Dec 09I agree with this but I also dont.
I think that it depends on how you define efficiency. If you are using a dollar a mount do describe efficiency then yes, it doesnt make sense to get rid of stuff that make you a dumbed down version of anything.
What you have to do is realize that certain things add value beyond monitary value. This is what you have to isolate and this is what you have to realize.
Sure, if your a baker, you may be able to get by with using cheaper flour but you must ask yourself if your getting good ROI for that flour in some other way that is harder to see.
Just more thoughts….
DR
on 04 Dec 09There is unproductive inefficiency and inefficiency that makes your product special. Where those blindly following the business school tripe fail is not understanding the difference. They see a slower process, higher unit costs, or doing things by hand as necessarily and equally bad.
Always lead with the question, are we making our customers happy? And next, how do we make them happier?
Steven R.
on 04 Dec 09An underlying theme here is the human element.
I worked at a large firm where they kept ‘cost cutting’ by firing people. Customers didn’t really notice since the standard for service was abysmal to begin with.
I ate at Charlie Trotters with my wife (once) – we had up to five wait-staff attending to us at any given time, plus a dedicated ‘primary’ who was the only one who actually spoke during our meal. We would have noticed if any of them were not there, since they were doing things like re-setting our table between courses in such a fast, smooth and discrete way, we didn’t notice – the waiter spoke to us about the next course, we looked up at him on our left, and magically our plates, utensils, napkins, crumbs etc, vanished to our right without either of us seeing or hearing the bus-person. Everything they did was as well choreographed. The bill was more than half a paycheck, but totally worth the experience.
Financially, Charlie Trotters could probably do away with a couple of people and still make money hand over fist – but it would not be the same. As it is, I look forward to spending two car payments there again one day.
Dave G.
on 05 Dec 09I understand that the point is that you can’t just look at any process in terms of its efficiency, and not ask if there is a good reason why. At the same time, it is easy to look at inefficiencies as necessary character.
What is awesome about this article is that it is based on a restaurant that us the exception, not the rule. I think understanding what part of the market you serve is a huge part of this. Do not look to the practices of El Bulli when you are really slinging burgers. Most restaurants need to operate at levels of efficiency you just will not find in most tech companies. To your average restauranteur, embracing efficiency is embracing bankruptcy.
So why is El Bulli different? First of all, it is frequently considered the best restaurant in the world. Also, it is believed that it operates somewhere between a loss and just above break even. Adria makes a lot of money on other businesses, largely due to the brand of El Bulli (and the fact that he is quite possibly the greatest chef of our time). And I’d bet you dollars to foie gras donuts, dusted with powdered jimmy jammies and sphered port wine that when you look at his other businesses, you will not see the same levels of inefficiency. I’d guess, El Bulli is probably more about his brand and a passion project than a primary source of income.
This is a restaurant that is closed for half of the year, does not do a tremendous number of covers in an evening (think 20+ courses per diner), takes a lot of staff to produce on any given evening, uses high quality ingredients and charges about as much as any other fine dining restaurant of its caliber.
I am pretty confident that he could be more efficient and not impact the dining experience in a way most people would notice (before even considering that most people can’t get one reservation, let alone two of them).
James Cole
on 05 Dec 09I notice some others have already said similar things, but I think the point is: efficiency and inefficiency are relative to what you want to achieve
Benjamin Chait
on 05 Dec 09An interesting comparison that I’ve noted is Peet’s Coffee vs. Starbucks; one is “slow” in relation to the other, but I find myself consistently choosing it as the baristas have time to build a relationship and know your name, along with a drink that is, to me, better than the other. The same applies for most local coffee shops in contrast to chains, at least in my area.
Speed isn’t always everything, and uniqueness is worth something, at least to me.
Frank Patrick
on 06 Dec 09Back when I was immersed in the management approach known as the Theory of Constraints, we always talked about strategy being about determining what your constraint was and managing the organization around the best way to capitalize on that constraint. The jargon was “subordinating everything else to the decision of how to exploit that constraint.” This subordination is another way of saying that doing things that others might deem inefficient is really at the core of your strategy.
You might overstaff your development team with hires or overspend on development with freelancers in order to make sure that your strategic constraint of design (if that’s the way you want to go) is fully exploited so that the output of the design constraint translates to completed projects with as little delay as possible.
It’s not so much the inefficiencies that make you special; at the deeper level, it’s the choice of constraint and the chosen strategy to exploit it that are the root of those “inefficiencies”.
Martial
on 07 Dec 09The problem is that a lot of people don’t know what they are selling. I work with humanitarian organizations and they all think that what they are selling is fast, life-saving action. But what their beneficiaries say is that they are selling – poorly – a relationship. Over and over, when I see someone doing a really good job at humanitarian work as measured by humanitarian metrics for saving lives and for sustainability (how many lives are still saved six or twelve months later), they were the team leader who sat down with the community and talked with them. Honestly, you do a better job if you move just a little bit slower than you think you should – just slow enough to chat.
This discussion is closed.