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One of the challenges we face when looking to build organisations that can remain viable in an ever-changing environment is the need for organisations to ‘appreciate’ (look for) and respond to feedback. The term ‘feedback’ is broad, and in practice it can take a whole variety of forms. We might immediately think of compliments or complaints as sources of feedback, and whilst this is true, there are many other sources beside. Some might be quantitative feedback signals and trends (“Product X has experienced a sustained drop in demand”) others might be qualitative (“Look at all these suggestions from customers that are in our mailbox!”). The challenge for organisations is knowing which areas to focus on—which elements of feedback to action, and which to disregard. A bigger challenge is to come up with a hypothesis as to why the trend has occurred and what needs to be done. Traversing this tricky road requires ongoing strategic business analysis, establishing what is happening in the external environment, and aligning potential opportunities against existing strategy (or in some cases considering a change of direction).
Partial Feedback: A Restaurant in Toronto
When it comes to analysing feedback—whether qualitative or quantitative—one particular challenge that should be kept in mind is the fact that partial feedback can be very misleading and can lead to costly mistakes. I was reminded of this recently when eating in a restaurant in Toronto, Canada (a very vibrant city that I hope to visit again soon!). One thing that varies a lot by culture and nation is the approach to tipping in restaurants. In the UK, tipping is normally considered optional, with 10% being usual for satisfactory service. I gather in the USA it is much higher, and in Canada I am told 15% – 20% is customary (although different people appear to have different views!).
Whilst the restaurant was nice, I noticed that some diners next to us had an appalling experience—their food was over an hour late, drinks were undelivered and even the bill itself took forever to appear. They were discussing how much to give as a tip—and from what I gather they agreed on leaving a very small tip (the logic being that a server that received no tip might think you have forgotten, a small tip shows you are definitely dissatisfied). As the group paid their bill and left, it struck me that serving staff in restaurants receive regular feedback signals from their customers, but they receive only partial feedback. And it is often related to events that are completely outside of their control.
Tipping as a Partial Feedback Signal
Firstly, the feedback is partial in that a low tip (or no tip) sends a signal of potential unhappiness. Yet, that might not always be the case. Sometimes it might be that someone didn’t have the right change, or is a tourist not used to tipping the expected amount. It would be very possible for the server to write off the signal “ah, that guy was just in a mood”, although a constant pattern of low tips would probably send a clear message.
Even with a pattern established, the server has no definite way of knowing why the customers are unhappy—unless the customers volunteer this information or they are asked. The server may assume that he or she offended them, when the issue might have been with the comfort of the chairs, the noise, or the temperature of the steak!
This brings us to the second issue, that the ‘feedback signal’ (tip) is attributed to the effectiveness and efficiency of the server (i.e. “do it well, and they will tip”). Yet the entire restaurant has to work as a system for customers to receive a good experience. A diner might experience slow service (as the restaurant is understaffed—a management issue), a cold steak (due to an error in the kitchen) and a mistake on the bill (due to a computer error). These might all be completely outside of the control of the server, but she or he takes the brunt. And perhaps if it keeps happening, they get fired (even though the real issue is with management….)
Of course, these are deliberately provocative examples, but I feel sure you will have seen similar examples. As business analysts we have a huge role to play in ensuring that the capture and analysis of feedback is built into our organisational systems and processes. This sometimes involves looking at problematic situations with a fresh pair of eyes, asking difficult questions and exposing the ‘cold hard facts’. It might involve proposing and implementing new Key Performance Indicators (KPIs), and in our restaurant example, perhaps introducing an electronic survey as people leave. Analysing the situation systemically, putting ourselves in the shoes of the customer and thinking holistically will help us work with our stakeholders to co-create interventions that drive the organisation forward. And it might even help avoid slow service 🙂
What are your views? Please add a comment below, and let’s keep the conversation flowing!
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About the author:
Adrian Reed is Principal Consultant at Blackmetric Business Solutions, an organisation that offers Business Analysis consulting and training solutions. Adrian is a keen advocate of the analysis profession, and is constantly looking for ways of promoting the value that good analysis can bring.
To find out more about the training and consulting services offered at Blackmetric, please visit www.blackmetric.com
Good article.
you are right about tipping in Toronto, which is where I live. Many restaurants have the payment system automatically set to calculate 15% or even 18% tip as the default option. A bit too much, I think.
Thanks Ligia! Good to know that I was on the right lines with the tipping %.
One restaurant had three default options on its card machine — 18%, 20% or 23%. I guess that’s an example of “nudging” people towards higher tips!