Understanding how Customer Value shape shifts - a real-life foodie analogy.

Part 3 of a series that aims to help illumine the past to better glimpse the future.

Image copyright © Post, Newnham

This series is resulting in some very interesting feedback. It’s hardly a viral torrent, but when a bunch of people go to the trouble of actually talking directly to me about it, I rate that a success. Quality not quantity, don’t you know. Mind you, I wouldn’t say no to a bit of a viral torrent :-)

Anyway, I concluded Part 2 with the point that, for businesses and their customers, one of digitalization’s great achievements has been to solve a huge array of quality issues.

In pre-digital times quality, particularly manufacturing quality, was far more variable than it now is. Generally speaking, there was a direct linkage between quality and price, with higher quality costing significantly more than lower quality.

This made sense in a milieu where Value was considered an objective function of a product or service. The logic was straightforward: product or service quality was established in terms of the features and benefits of an offering, and the overall assessment made on the basis that Value was equal to Benefits minus Cost.

Digitalization changed all this. For a start, manufacturing became much more consistent and reliable. Right up into the late twentieth century one would hear, for example, about someone buying a “Friday afternoon automobile” - the idea being that, at the end of the working week, the guys on a motor car production line had had enough and were mentally distracted, thinking more about the up-coming evening’s entertainment than the work at hand. Consequently, there was a risk of sloppiness on the production line; steps missed out, faults overlooked and so on. But digitalization put a stop to this ‘human frailty’ variability. A robot simply does not get tired or distracted.

And this didn’t just impact manufacturing. The improvement applied right across the range of business functions. Whatever the type or size of a business, it was now able to operate world-class accounting, or procurement, or HR, or … you name it … simply by using apps.

Then, as I concluded Part 2, it followed that …

… the average level of performance across the entire range of services improved … but because it necessitated ‘standardization’ to a defined ‘best practice’, exceptional performance or new breakthrough performance was more likely to be missed or ignored.

That’s the point! We have increased the general level of performance across the board but, at the same time, put exceptional performance at risk.

Looked at another way, that means, of course, that there’s a hell of an opportunity!

Which brings me to the past few days.

Food, glorious food

John, a colleague and friend for the last half century, and, coincidentally, a globally-recognized pioneer of direct marketing, now lives in Bournemouth on the south coast of England. He has some health and mobility issues so my wife and I go and visit every so often and we all go for lunch.

Just a few months ago, in Bournemouth, a new restaurant in The Ivy Brasserie chain opened and we decided we should give it a try.

Now, I have experience of The Ivy - the original, that is. A few decades ago I had an office in London’s Covent Garden, just a couple of streets away from the original. We were in the advertising and marketing business and The Ivy was a perfect venue for wining and dining clients; the food, service and ambiance were great.

All these years later, the look of the Brasserie in Bournemouth is certainly up to snuff but the rest of our experience there was not so impressive. Don’t get me wrong, it wasn’t awful, it just didn’t live up to the expectations that we had, in terms of food quality and service.

Now, okay, you may quite reasonably say that these assessments are subjective, and so they are, but as far as we three were concerned the feeling was … how shall we say? … that it was all rather formulaic and somewhat disappointing. By analogy, it felt as though there was an app dictating and dispensing ‘best practice’, but it came across as a facsimile version of something rather than ‘the real thing’.

A couple of days later my wife and I traveled further south-west to Gloucestershire, to the home of my wife’s sister and her husband. They announced that they had booked a table at a restaurant in a nearby village. And so it was that we found ourselves at Post in the village of Newnham.

This was very different to the Ivy Brasserie - really just one room, nearly half of which is taken up by the kitchen end of the works, all unpretentiously presenting itself to the relatively small number of diners that the room can accommodate.

I had absolutely no idea what we were in for. But, when the first course arrived, one mouthful was sufficient to suggest that we were in the presence of culinary greatness. Seriously, one mouthful. And as the meal progressed the level of alchemy was maintained.

Subsequently, I have discovered that Post is owned by husband and wife team, Ben Thompson and Florence de Maré, both of whom are designers. Together they transformed the old village post office into its current incarnation. And right at the heart of this venture is a hugely talented and experienced chef patron, Fred Page.

Personally, I think the result is wonderful.

Now then, can I use the two restaurants to make a point about the way the world is going? Let’s have a go …

The Ivy Brasserie that we visited is one of a chain of more than forty outlets. Of necessity, there is an inevitable top-down brand management based upon a fairly high level of consistency across all of the outlets.

Post is the very antithesis, not only in the sense that there is just one outlet, but also that the concept is one of constantly changing food choices which are dependent upon the availability of fresh, local, seasonal produce within a community environment.

Both models are entirely valid but, in my view, although Ivy Brasserie can provide a fairly consistently high level of service and customer satisfaction, it is never going to be able to match the high level that Post achieves.

And that seems to me to be analogous to all digitalized (Ivy) versus human-only (Post) systems.

The two systems are not only different but antithetical. This, I suggest, can be further demonstrated from what I understand of the development of the McDonald’s fast-food chain.

There’s an entertaining 2016 movie called The Founder that tells the tale of how milkshake machine salesman Ray Kroc created the fast-food chain after discovering, in 1954, the original, one-off McDonald Brothers’ restaurant in San Bernardino, California. (Great performance, by the way, by Micheal Keaton as Ray Kroc.)

The film shows that a problem that Kroc faced in the early days of the chain was the apparently irresistible tendency for new franchisees to initiate menu additions based upon their own observations of what customers might buy. It is, of course, the natural human response: people spontaneously want to add something of themselves to any endeavor but, in pursuit of universal consistency, Kroc had ruthlessly to bear down on it to prohibit the natural human instinct.

Is this an analogy for what global digitalization, including AI, does? It may well be the case, mightn’t it? Doesn’t it then follow that digitalization enables consistently good performance but, because it relies upon rigidity, might well inhibit some outstanding, inspired, breakthrough performance?

More than that, in the process it must surely also favour and promote a rules-based, top-down order rather than a principles-based, bottom-up order … which leads me to wonder whether or not this makes it particularly problematic for the Anglo-centric world which has long-since promoted, and hugely benefited from, individualism.

I’ll pick up on this in the next in this series.

Thanks for reading.