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Wednesday, October 24, 2007

Optimizing for metrics

While waiting for Sharon yesterday, i was at the company's in-house library and read from cover to cover two to three small but good books. The topics range from various software development models, Mathematical Puzzles (gosh, how i missed doing the math and logic puzzles from Martin Gardner when i was in high school) and one on good management and leadership skills on a quality team!

The first book (Smart and Gets Things Done) that i just completed in about 20 mins was a book by Joel. Some of the chapters do not apply to me since i'm not a hiring manager, but the concise but very detailed chapters are great to incite ideas in my brain. I can see someone already shivering from afar.

An example that he mentioned on Starbucks vs other local cafes was just something that i personally observed recently. Having the chance to visit two similar Mexican fast food places, Chipotle and Qdoba, that have practically the same setup in terms of layout and menu options. They even had the same number of people queuing up for orders but somehow, one had a very quick flow while the other was stuttering along.

The only thing different is that Chipotle has a very optimized process from the point that the customer orders the food to the point where the customer pays for the food. The order is only taken once, and the necessary information is passed down the "service line" in an effective manner. This is something that Qdoba didn't do. First the customer give his order to the first "server", and then to the one that handles the condiments, and then to the cashier eventually.

Three times vs one time. Hmm.. So where's the secret trick that Starbucks and Chipotle do that the others don't? The person taking the order WRITES down all the necessary information in acronyms on the wrapper/cup, and basing on the provided information, the rest of the service line can continue on without impacting the customer.

I wonder why that there's such a big difference in the way the two sets of examples are doing processes that are inherently the same?

One way of looking at it is perhaps the way that the organizations are measuring their staff. What is the critical metric that they should focus on? Is it the eventual customer satisfaction, or the measurement of how long each member along the service line take?

That line of thought link the first book to the book with the mathematical puzzles that i just couldn't remember the title for. A puzzle that was detailed is the well known Prisoner's Dilemma. In this game, as in all game theory, the only concern of each individual player ("prisoner") is maximizing his/her own payoff, without any concern for the other player's payoff.

Since each member along the service line is measured for his own efficiency, the quicker he can move the customer down the line the more rewards he will get. He will not care for whether the downstream gets the necessary information to work with, or worse, whether the customer is even being frustrated by the repeated queries on the same order again.

Would i blame the folks on the service line? No. If their management gives them such a metric for measurement, chances are that the folks will find ways to optimize for the specific metric that gets rewarded, without actually achieving the most significant outcome that is desired. In this case, i believe that the management might want happy customers that will be glad to come back for future purchases, but will they get such repeated purchases? I know that i won't want to spend time in Qdoba. If i want the same kind of food, i'll go to the more effective and efficient Chipotle.

More book reviews in the future. I promise a more regular update on this blog. 8).

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1 Comments:

Blogger burrito eater said...

At your chipotle the first person writes down the items that everyone is getting?

That is interesting. I've never seen that before.

I have seen an entire team of college soccer players (50) dump onto a chipotle right at 11:00 and the manager went back through the line with a big order sheet and took them all and then built them and handed them out. That was smart. But I've never seen the first person in the line take the order and pass it along. That would (obviously) be genius.

5:24 AM  

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