Friday, December 22, 2006

Pizza hut Vs Coffee house

This weekend I went to have Pizza and learned what the word ‘differentiation’ of employees exactly means. If you closely observe, guys out there would be wearing some interesting badges and symbols in their shirts. This time I couldn’t control my curiosity and asked what it means. The answer the bearer gave was pretty interesting. Each new joiner is put into a particular department (customer service, delivery, phone service, pizza preparation, pasta preparation etc...) and they have a strict evaluation system in place. When an employee becomes an ‘expert’ in a particular department he gets a badge with the particular name. Then I observed closely and it was fun to see badges like ‘pasta expert’. Apart from this when an employee reaches ‘excellence’ in any domain they get other special batches like ‘customer maniac’. Of course this is truly based on performance of the employees.

This also explains why a bearer who is not ‘assigned’ to your table doesn’t hesitate to serve pizza or water if you request them. Their internal system is so strong that they are able to give services like ’30 minutes delivery or free pizza’ their customers, which makes pizza eating as an excellent experience for customers. More than the product (in this case the pizza) the people ‘differentiation’ system is making Pizza Hut successful in the marketplace. Today working towards giving ‘aha’ experience to customers is the key success factor for individuals as well as organizations.

On the other hand, I had been to ‘coffee house’ multiple times and altogether had a different experience. Coffee house is a Karnataka Government owned organization, which has multiple branches in Bangalore. They serve excellent Dosas and coffee at a very optimal cost. The bearers normally dressed in old ‘british-naukar’ type uniform and will give you a ‘get lost’ look when you enter that place. Each table is assigned to a particular bearer and only he is supposed to be ‘responsible’ for that. Even if you ask for a cup of water to the other bearer they won’t bother to bring. They always say ‘your bearer will bring it’. In spite of having excellent products like dosa and coffee, the government run coffee-house is not a successful venture, reason being people system. People are not customer centric because they are not differentiated. Everybody gets equal pay whatever they do.

Couple of years back, I read Jack Welch’s book ‘Straight from the Gut’ and I was really impressed with his breakthrough ideas and thinking. I was so impressed that I went ahead and gave the same name to my blog. In his book Jack talks about the ‘differentiation’ theory, where he divided GE’s people into 10-70-20 ratio depending on their performance. The bottom 20 gets churned out as bad performers. In his book Jack argues, how important to build such a differentiation mechanism in any organization to make it successful. Even though this was one of the most controversial systems, it made wonders for GE.

I strongly agree that capitalism has its own limitations. If not for anything let us embrace capitalism to build ‘differentiation’. This would bring in excellent customer experience, profitable organizations and happy (!) employees. After all who don’t want to enjoy Pizza Hut like service in Coffee House also?

2 comments:

Harish said...

I agree with the core idea of consumer satisfaction .. but at what cost ? see the incentives that drive the system. I believe that the coffee house still survives because of a "superior" product unlike pizza hut which without service is just another pizza place which serves expensive pizza. I guess it will take us ("Indians") some time to switch our minds to put the customer in the center. All said, I am very confident that we will get there soon.. Good to see your blog, makes me think about things and glad that to be in touch with you too. Happy new year buddy.
-Harish.

Jayakumar Balasubramanian said...

Thanks for your words Harish!

I agree with you.But my point is in-spite of having a good product (like masala dosa) coffee-house people are lacking in the market. What is stopping them to create dosa joints in all part of the country? Its mainly the 'competitiveness' which will only come by making them go thro' competition. Nationalized Indian banks (SBI, Corporation bank etc..) are very good example and they are totally transformed and more customer focussed. As you said Indians will get there soon.