Friday, 13 February 2009

Service Innovation Part 3: Frontstage

In my previous post on this subject I have first given definition for both service and innovation in Part 1 and gave my take on the breakdown of the services economy in Part 2. I argued that we should forego the idea of economic sectors and instead focus on clusters of similar activities and we should also give up the product/service devide and use a transaction/transfer perspective instead.

Besides Araujo and Spring another source for the same idea is the book Services is Front Stage - We are all in services ... more or less by James Teboul. There is a lot of interesting stuff hiden in that book, but one of the most clarifying is the picture on page 8:

In it Teboul compares the customer-facing activities (front-stage) and production-like activities (back-stage) of three types of restaurants. First McDonalds on the left. Their backstage is enormous. The raise pigs, convert them into hamburgers in their own factories, run their own distribution fleet, are famous for their minite kitchen operations and run their business is very standardized outlets. That is the backstage. The customer facing part of McDonalds is quite meagre. A small front desk with trained employees that are all equally friendly, serving standard meals on trays, with self-seating in the "restaurant" where also the famous "ball and slide area" is situated and that must be looked over by the parents.

In  the middle we find a gourmet restaurant that has a kitchen that buys its own stuff from local sources, that prepares meals on order and that can handle special wishes like "done" or "half-done" or "bacon with egg, but please replace bacon with ham". That is the backstage, a lot smaller than in the McDonalds case. The frontoffice is quite big. Often it is a nicely fitted area with waiters that know their job, can advice customers on dish/wine combinations.

On the right we find the Benihana type restaurant. To my knowledge an unkown type in Europe, but maybe it best compares with the Japanese style restaurant. The backstage is very small in that type of restaurants. Food is sourced from "the best" sources and preparation is little as most of the work is done by chefs that prepare the food on the table, in full sight of the customers. They do their work in a way that we can truly speak of a dining experience.

Overlooking the three types of restaurant we see that the backstage is getting smaller and less organized, and the front-stage is getting bigger, but also better equipped with staff, luxury and increased dining experience. It will come as no surprise that Teboul argues that all three types of restaurants are in services, but for the Japanese/Benihana type the services part is much much bigger than McDonalds'

To me the front-stage/back-stage example nicely demonstrates the economic clustering idea.

1 comment:

Bart said...

Harold,
First my compliments on your blog. The quality of your posts is clearly increasing, keep them coming!

I do have a sidenote on your frontstage/backstage statement. Perhaps you underestimate here the value chain of restaurant-served food. At McDonalds, the part of the value chain that is under control of McDonalds is much larger than in the Benihana-case. Then again, in terms of (monetized) value the opposite is true: I doubt whether you can get a meal at Benihana Restaurant for $ 5.99, even though it covers a much smaller part of the value chain.

So, when you talk about the 'size' of the frontstage or backstage, could you define what you mean by 'size'? Is that square meters, monetized value (euros), coverage of the value chain?

Bottom line, I'm not too fond of using non-descriptive words like 'size'!