No substitutions allowed

One famous scene from the movie Five Easy Pieces shows Jack Nicholson ordering a side of whole-wheat toast with his omelet at a diner. He’s then informed that the system doesn’t allow sides of toast. So he orders a chicken salad sandwich on whole-wheat toast—without butter, lettuce, mayonnaise, and chicken.

Nearly everyone recognizes what’s wrong with the “system” in this scenario—the customer doesn’t easily get what he wants. But the traditional approach to “fixing” this might be to simply add more options for what the customer might want. That change would impact the diner’s ordering system, the inventory needed in the kitchen, and even how the kitchen staff cooks. So sometimes it’s easier to simply say, “the system doesn’t work that way,” or, in other words, “no substitutions allowed.”

In today’s world, Jack Nicholson’s character could easily gripe on Yelp that the diner doesn’t really cater to its customers, or is inflexible, or is just not worth going to. That’s clearly not a positive outcome for the business.

“Customers’ needs and preferences are changing faster than ever,” says Peter Weill, Senior Research Scientist, MIT Sloan School of Management. “Firms need to be able to listen to customers and quickly adapt to these changes.”

Weill has done extensive research on how companies interact with customers and has defined a successful strategy he calls “softscaling”— combining an emotional connection with customers with the optimization and automation of business processes.

As Weill details on the MIT Sloan Experts blog, “In research conducted in India, we studied five top-performing companies and found that all of them use this approach. It has enabled the firms to grow an average of 25% a year over the past five years and take advantage of emerging market opportunities and expand internationally.”

In industrial settings, softscaling often starts with sending product managers and senior executives out to the field to examine how and why customers use their products. In this case—the case of the restaurant—it’s much easier to create an emotional connection with the customer: each and every server has multiple opportunities to do so. And, chances are, the servers already have a sense of how and why customers customize orders.

As applied to our whole wheat toast scenario, if the restaurant adopted softscaling, it would take the opportunity to examine what variables customers may want in their orders, discover or develop a front-of-the-house system that could handle special orders, and find a way to carry that through to back-of-the-house inventory management and food preparation.

And in today’s world, that simple change—creating emotional connection with the customer and adjusting the business processes accordingly—could result in a happier customer, with positive social reviews. In today’s volatile business environment, why wouldn’t businesses consider softscaling to increase customer satisfaction, loyalty and profits?

Peter Weill is a Senior Research Scientist with MIT Sloan School of Management and Chairman of the Center for Information Systems Research.  He teaches in the MIT Sloan Executive Education programs, Revitalizing Your Digital Business Model and Essential IT for Non-IT Executives, as well as the Advanced Management Program (AMP).

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