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In the TV series Kitchen Nightmares, UK chef Ramsay Gordon visits struggling restaurants and tries to help the staff to improve quality and attract more customers.
When he first visits the restaurants, what Ramsay often finds is that they have a menu the size of a book (in one episode, the resturant offered more than 100 options.)
Despite the wide selection, the food is not necessarily what people in the area would enjoy. And the large menu means that the logistics becomes complicated. Sometimes the staff don’t even know how to make some of the dishes.
The result is poor quality food and unhappy customers.
The solution, of course, is to offer a simpler menu.
To do this, the restaurant first needs to understand the needs of the customers. Then the kitchen staff can create a profile – focus on one type of food, and aim to deliver a smaller set of dishes in a consistently excellent manner.
A restaurant is just one example of a social system.
It’s a general principle: You get higher quality, as well as higher productivity, if you limit the number of things you do or the number of products you offer.
This effect can be observed in every industry sector. As another example, consider health care.
A team of researchers* conducted a longitudinal study of a medical group in Minnesota with 32 different clinics, some serving a narrow mix of patients and some serving a broader mix of patients (i.e., providing more diverse services or serving more diverse patient groups).
Here’s one conclusion from their study:
Clinic site visits by the researchers revealed that (…) patients served by less-complex, focused clinics are more satisfied with their care, perceive clinic staff as more courteous, and staff perceive they provide a higher quality of health care than broad clinics.
There are at least two different reasons that can explain this effect.
The first is well known – it was in described in 1776 by Adam Smith in theWealth of Nations: Specialization.
Smith wrote about individual workers, but the principle is the same.
A more focused sub-unit will increase its capability faster, because it can repeat the same (or at least similar) activities many times, instead of shifting between different activities.
This is well known.
But there’s another important factor, which, until recently, has received little attention:
With a broad mandate; when you combine many different activities, chances are that some of them will be in conflict with each other. You can call it “negative synergy”.
Sometimes this is the case when two activities have different time horizons, or compete for the same resources.
Consider, for example, a hospital with a surgery department that is responsible for both emergency and elective care (scheduled operations). The more acute medical cases are likely to be prioritized, and resources will then be allocated to emergency care, which will have a negative impact on the ability to provide elective care.
This is why experts recommend a separation between the two tasks, with one department within the hospital performing emergency care, and another performing elective care.
This makes sense intuitively, so we have to ask ourselves why unfocused units (or units with combinations of incompatible activities) even exist within large organizations.
There may be a universal tendency to increase the scope of what we are doing.
Over time, we take on additional responsibilities. We add things to the menu – literally or figuratively. Initially, it may make sense, but at some point, the complexity starts impacting our effectiveness.
So, how do we avoid it?
As always with these issues, awareness is step 1.
If we are aware of the tendency, we may periodically review our mission and mandate, and consider whether we have the appropriate scope.
If you are planning a re-design process, there are a couple of analytical techniques you may use.
The first is “top down” analysis. You start with the customer needs and define a set of goals/functions that the organization must perform to succeed.
You then review the key goals/functions against each other. Cross-tabulating them in a table is useful (For a more sophisticated methodology, see the appendix in this article that I published last year.)
You want to avoid (or minimize) situations where the achievement of one goal or function will be detrimental to achieveing other goals and functions (if this is a risk, you should allocate the goals or functions to different to internal units).
The second approach is “bottom up” analysis, starting with the roles and work processes. We need to understand how processes are related to each other, in order to design sub-units that have a set of highly related roles (the software tool I am developing is intended to support this kind of analysis.)
Are there any downsides to focus?
Yes, there may be.
The most important downside may be reduced task variety for employees – that is the whole point of a narrow mandate. For some employees, this may decrease their motivation.
But this challenge can be handled in other ways, such as by offering job rotation or possibilities for transfers to other internal units.
Overall, though, increased focus should be positive for employees – it will give them a clear direction for their work and allow them to excel at what they are doing.
*The quote above is taken from this article:
Van de Ven, A. H., Leung, R., Bechara, J. P., & Sun, K. (2011). Changing Organizational Designs and Performance Frontiers. Organization Science, 23(4), 1055-1076.