by Anh H. Nguyen
Process, or lack thereof, lies at the core of business practice
Let's take a moment to think about the worst dining experience you have had this year. (If Covid-19 prevented you from going out at all, dial it back a few months.) For many people, it went somehow like this: you booked a table, but the hostess got confused and told you your name was nowhere to be found. Or you walked in, and the staff carried on as usual, barely giving you a glance. You sat down and looked helplessly around, trying to flag down someone to bring you a menu. You got the menu, chose what you liked to eat, but the waitress/waiter disappeared again. You managed to order, then waited and waited. The food finally came, but it was either the wrong item or cold, under-seasoned, overcooked. You complained and got an unsatisfactory response. You wanted to get the hell out of the restaurant but the check took forever to arrive, and it was the wrong amount to boost. The whole ordeal took from you time, energy, money, and gave you nothing but annoyance.
Sounds familiar, albeit stressful? Now compare it with the best time you had eating out. Chance is, the food itself was not everything. A great dining experience may start even before you step foot in the restaurant. When you called to reserve a table, the phone rep was pleasant, polite, and took down your infos cheerfully. The staff opened the door for you and greeted you with smiles. They then led you to your table and promptly brought the menu. The bread was toasty, the butter soft. The food arrived swiftly and was perfectly cooked and garnished. The restaurant gave you complimentary appetizers, refilled your water regularly, and saw you off with more smiles. Throughout the meal, the staff was invariably attentive, but never intrusive. You barely needed to raise your hand or voice to summon them, a turn of your head and they seemed to materialize exactly when you needed them to. I do not know about you, but the mere thought of such a blissful affair suffices to bring a smile to my face. When put together, the former and the latter's contrast is night and day.
At first glance, customers may be inclined to chalk up such a gap to the staff's training, attitude, and competence. But the truth is, people are not that vastly different. While there may be inconsistencies in natural aptitude, the average staffer is just that, average. What separates good and bad customer services is the structure that the workers operate in. Called process, it defines an organization's philosophy. In many cases, process is the inflection point between success and failure. In this article, we are exploring the four tiers of business operation: no process, manual process, digitized process, and AI-backed automated process, the highest level to date.
Demystifying the four kinds of process
1. No process: Whether you are a street food vendor selling duck egg noodles or the owner of a high-end boutique specializing in hand-crafted jewelries, you need some kind of process. The process could be rudimentary, for example a streamlined system for taking cash from eaters, directing them to sit on stools, and doling out portions of steaming hot soup. It could be sophisticated, involving multiple steps from welcoming customers to bidding them goodbye at the end of a shopping session. Having a process and implementing it are crucial for the success of a business. Yet a shocking number of businesses does not consider process an essential part of their functioning.
I myself visit a shopping mall nearby on a weekly basis and it is quite easy to see which retailer has a good process in place and which does not. A particular fashion brand has a great assortment of beautiful, affordable clothing that get refreshed frequently. Yet on more than one occasion, I had to walk around the entire floor to look for the sales assistants who departed their post for lunch or bathroom breaks, failed to locate them, and ended up leaving empty-handed. On the rare chance that the staff were present, they did precious little to help with my shopping besides processing the payment, barely keeping eye contact. Over time, I found myself visiting them less and less, until one day I just stopped.
This is not a case of less is more. A no-process approach only takes away from customer experience and harms the brand's reputation. No matter the quality of the goods on offer, a business with no process cannot thrive for long: the workers get lost, the customers get frustrated, the owners get nothing but chaos.
2. Manual process: This is one step above the previous scenario. In this case, the business owners are aware of the importance of process and takes actions to implement it. Manual process in business has continued for the entire length of human history. In the winter of 2017, I visited St. Peter Stiftskeller in Salzburg, Austria, the oldest existing restaurant in the world, dating back to 803 AD. It was humbling to sit within the walls of St. Peter Abbey and contemplate the number of illustrious patrons that had passed through there, including Christopher Columbus and Mozart. It was even a tad more stunning to reflect on the amount of cumulative labor that has kept such an establishment going century after century. Yet for most of its time on Earth, the process that governs St. Peter Stiftskeller's day to day has been of the manual kind, and expressed either in written or oral forms. Many small businesses in the world today still behave in pretty much the same way: the staff is told what to do, the manager (if there is one) keeps an eye on the overall performance, the profit is tallied at the end of the week.
Manual process does work, otherwise such longevity would not have occurred. But it is inefficient, cumbersome, and almost impossible to monitor in any meaningful way. For a business to truly thrive in this fast-changing world, a better solution is necessary, which leads us to...
3. Digitized process: Nintendo, one of the richest, most valuable companies in Japan started in 1889 as a humble card game shop. In its initial phase, the company's process could only be described as quaint: the owner originally made cards from white mulberry bark and painted them by hand. What led Nintendo to its current position as a computer game giant was the company's indefatigable quest for progress. Due to the rising popularity of its games, Nintendo first employed assistants to mass-produce cards, then automated the production. It was responsible for the release of Japan's first electronic toy, first handheld video game system, first video game with jumping characters, first console compatible with interchangeable game cartridges, etc., and too many more first to count. Nintendo's story is a significant part of the world's gaming narrative, and the company itself has always stayed ahead of the curve in terms of technology.
Nintendo's headquarter in 1889 vs. in 2000
What takeaway we could glean from this little example is that in the business world, it is impossible to ignore digital transformation. If the fastest athlete cannot outrun a guy in a car, then what about someone in a plane? A rocket? While a small company could get away with a manual process, the bigger the company gets, the more pressing it is to march in step with technology. Save for some extremely niche markets whose very survival depends on their claim on uniqueness, such as Yixing artisans shaping teapots by hand and bamboo tools, there is hardly any business that does not benefit from digitalization in some way.
Let's think back to the example at the beginning of the article. Imagine going to the same delightful restaurant, but you book your table via the website and customize the food with an Ipad. This frees up the workload of the staff to focus more on optimizing services, enhances the ordering experience, and reduces the margin for errors and miscommunication.
Digitalization could truly leave its mark on many facets of a business (do you know that cows could now milk themselves thanks to advances in robotics? What a world we live in.) But in all its incarnation, digitalization emphasizes the use of software to pre-define process, measure related metrics, and evaluate performances. Without a digitized process, a business is not ready for KPI-based management, simply because the KPI cannot be quantified, thus judged, correctly.
4. Data-driven, AI-backed, smart process: Retail therapy is alive and well despite recent setbacks this year. Case in point: One Shanghai Louis Vuitton store made a record-breaking $22 million in August alone. But a fashion retailer does not necessarily have to be French luxury house to see phenomenal growth. What if the staff could instantly "read" any shopper to recommend outfits most likely to sell? What if the marketers could tweak online and in-store campaigns to appease to the maximum number of audience? What if the manager could get staffing down to an exact science? Rest assured, we have not depart reality for the realm of fantasy. This is here, this is now, and this is developing swiftly as we speak.
What separates this most elevated form of process from its immediate predecessor is the use of machine learning to analyze large amount of data. Where do the data come from? The customers themselves. From this, retailers could learn patterns and predict the future with amazing accuracy. The results include, but are not limited to: better workflow, increasing marketing reach, more effective use of resources, improved customer experience, and many more. There is no end to this optimization journey: once it gets in motion, it stays there perpetually, getting better and better. Predictive AI analytics are the reason Google and Amazon grew to be the huge successes they are. Why not apply them to the real world?
No company is fully digitized or completely run by AI, of course. Most businesses combine a mixture of one, two, three, or all four types of process to best fit their operations. The market of Vietnam paints an uneven picture with manual process reigning supreme and digitized process trailing behind. Even then, there are hopeful signs that AI-aided process is slowly but surely gaining an edge. There are two main catalysts: Vietnam has one of the fastest growing market in Asia, and ranks third among most active startups in ASEAN. These create a conducive environment for tech-hungry businesses and AI companies to collaborate. It is a long way to go until AI process becomes ubiquitous worldwide let alone Vietnam, but the journey itself is worthwhile: economic miracles await those who innovate.