Restaurant Business and its lesson
Functioning of restaurants provide most operators an analogy to explain multiple aspects of business. I have been picking pieces across streams that use this trope to communicate few important business lessons in simple and relatable form.
In this post, I will cover two such concepts outlining constraints and training in different contexts.
Limiting Function in production
My first experience of reading this example comes from the book “High Output Management” by Andy Grove. In the opening chapter, he talks about basics of production using a breakfast making process while explaining an important concept called Limiting factor. The limiting step defines the pace of production.
The difference between the two is about figuring out which will be the limiting function basing on surrounding conditions like equipment avaialble.
Understanding this concept is important in devising any system or process to be followed. The bottleneck (limiting step) defines the throughput of your entire process.
If you are an operator managing a team, this lesson is relevant because the team member who is slowest in progressing defines the pace for your entire team. This is irrespective of how many stalwarts you have in your team, but the pace is set by the weakest link.
Training your team to be champions
Kevin is a product manager of square where he worked on multiple big product launches.
One thumb rules he mentions is training your team along with the change in your product. This is critical for companies or teams that are experimenting and increasing their pace.
The adoption is not some magic that just sticks, its a process of engaging with the teams who will be the champion of the product when interacting with the customers.
Most product teams are guilty of not indulging in training their operation(business) folks with the changes in the product. Especially when they believe they have product market fit. They are of the view that product will eventually replace these folks instead of focusing on helping them become product’s biggest champions.
This short sighted view creates two class structures of product team and operations (business)team. Where one wants to implement the best solution to the problem and the other just solves the problem at its doorstep. This constant tussle becomes a gaping void very soon if not curbed.
Restaurants are Business Laboratories
It all clicked for me when I read this old post from the Venkatesh Iyer on lessons from Gordon Ramsey’s show. I won’t go into the lessons he shares in this post but would like to use the framing he used for describing “why restaurants” work in explaining business concepts.
The restaurant works as a great laboratory for a new approach to management for one key reason: it is not so small a domain that the dynamics of effective decision-making and work are invisible (example, writing a book — staring at a typing novelist teaches you very little about solving interpersonal conflicts, even if there are equivalents going on inside the novelist’s head). ….
Another aspect about restaurant business tends to be about the immediate nature of feedback to the work you are putting in preparing a dish for a customer.
But most importantly, unlike a battlefield, where nobody ever really wins, and a lot of people die, in a kitchen, if things are right, beautiful value that we can all appreciate, is created: delicious food. Business is fundamentally a creative, generative enterprise, even if its fundamental mechanism is the churn of creative destruction. ….
Restaurant business create tons of complexity to be addressed while only the dish served and tables occupied are visible to the bystander/customer.
But beyond these “just the right size” and “generative” aspects, a restaurant also exhibits all the key phenomenology of any business, at the right scale and proportion, in very visible ways. All features of a good living textbook. There is a supply chain, a product/service mix, elements of vision, innovation, production, operations, sales, marketing — they’re all there. There are morale issues, talent issues, alignment issues — anything you care to name. Features of an enterprise that might be invisible in large organizations (like toxic people systems) are visible under the full glare of all-face-to-face conversations (no wars being fought invisibly over email — imagine a CEO yelling at a COO across a room containing all customers).
Experiencing a kitchen’s work of a restaurant can be similar to either an orchestra playing a symphony or sound of a crowded street on a busy evening. Either ways the final output, dish, gets served to the customers. Its about the process and details of how it gets done matters to an operator. There is no other business function that documents these cause and effect in such tightly coupled feedback loops.
Serving you the dessert
In the starting, restaurant examples served as just easy to understand examples for business lessons. But, after reading the work on Vaugh Tan on “Uncertainity Mindset”, i believe the contrary. More on that in subsequent posts.
Food and Restaurant businesses are complex, process centric and people driven. They resemble a structure of multi-layers that look simple from the outside but the deeper you dive, the more you are left to unpack.
More on complexity, uncertainity and innovation using the work referred in subsequent issues.
Until next time,
Enjoy your meal irrespective of how its made.