November 12, 2010

More thoughts on operational capabilities vs. experience design

From marketing guru Seth Godin's blog post today:

It used to be that if you wanted to build an organization, you had to be prepared to do a lot of manufacturing and assembly--of something. ...

Restaurants used to be built by chefs. Now, more than ever, they're built by impresarios who know how to tie together real estate, promotion, service and chefs into a package that consumers want to buy. The difficult part isn't installing the stove, the difficult (and scarce) part is telling a story.

I'm talking about intentionally building a structure and a strategy and a position, not focusing your energy on the mechanics, because mechanics alone are insufficient. Just as you can't build a class A office building with nothing but a skilled carpenter, you can't build a business for the ages that merely puts widgets into boxes.
 Mr. Godin's thoughts are expressed in a different way, but I think the message is similar to a post I had yesterday.  Let's start to flush this idea out a bit more by creating a classic 2 by two matrix with experience design capabilities on one axis (low to high) and operational capabilities on the other.  Something like this:

So now what?   Well, I imagine the the high/high quadrant is a good place to be, but it implies high costs, but also high quality and value - think Disney. The low/low quadrant on the other hand is low service and low value, low costs - think vending machines.  It is interesting to think about the possibilities of the the other two quadrants.  For high operational capabilities, but low experience think traditional fast food with factory like precision, but very little emotional experience.   This quadrant has probably been well tread and is what most traditional operations management  people consider when thinking about improving a service.  Low operational capabilities but high experience design may lead to a service full of emotional stimulus, but with the risk of service failure lurking around since there is no operational backbone to support the experience. 

Still working through this idea and wondering if it is of any value when considering service strategy?  I think we could find examples of service firms trying to shift their offering into a different quadrant, for example McDonald's with a major redesign of store and Starbuck's pulling on the reins of their baristas operational efficiency .

I'm interested in hearing what you think about the idea.

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