The cultural conservatism of contemporary business schools

Dear Reader

this time I share with you a paper, which might look a little bit old fashioned and abstract, as it consists of merely text.

Executive MBA in a modern Business SchoolClick and download the article

The purpose, however, ist quite interesting, as the piece is to examine and question aspects of the culture of the modern business school, and to investigate the possibilities for a more student oriented, more responsive, more flexible and performance-driven culture.

Business School “Old School”

In short, the paper is a critical discourse on the cultural conservatism of contemporary business schools, analysing the impediments to change, and examining the transformation
in the business education market and among students, that demand greater responsiveness.

Modern Business SchoolWhat are the needs of a modern, flexible business school?

Don’t you also think that the seismic changes occurring in technology and social practices beyond the business school are impelling business schools to adapt and become more agile?

This article provides insights into how a more flexible and responsive business school would operate and engage students. It delivers moreover a fresh assessment of where the business schools are, and where they will have to go to continue to engage the changing demands of business and managers.

Thank you for studying it and – share it!

Yours,
Peter Lorange

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Is this a great success story?

Sorry for the provocative title, but the answer is: of course it is!

It was just this week that the Swiss national newspaper „Tagesanzeiger“ (reaching up to 500’000 readers every day) published a portrait of one our EMBA graduates in its career supplement.

The young logistics manager Mate Vukorepa, currently working in a managerial position at the german HAWE Hydraulics SE, started his post-graduate education with a MSc in Management with a major in Logistics.

However, he had planned from the very beginning to make his EMBA. We are one of the few business schools which offers a consecutive curriculum. That means that we have our students start with a specialized education, say, and MSc in Management with one of four majors. Should they want to make an EMBA, they simply continue booking the missing modules to receive their EMBA, which is, as we all know, a generalist management education.

So, our graduate student Mate eventually has received two post-graduate degrees, his MSc in Management with a major in Logistics and his Executive MBA in the same time as others use for just one.

I recommend you to read his full story in the PDF below.

Yours,
Peter Lorange

EMBA Weiterbildung Tages-Anzeiger

EMBA Weiterbildung Zürich Tagesanzeiger

 

 

Lawyers, Is It Worth Getting an MBA ?

Dear reader

I am often asked: what is the pay-off for an Executive MBA?

The answer is simple. Should you have no or only basic knowledge in business administration and want to enter management, the skills you acquire during your MBA are extremely valuable to understand how to run a business.

MBA for lawyersLawyers, Is It Worth Getting an MBA

A more specified version of the pay-off question is whether it is worth for lawyers getting an MBA. My answer is the same but you might be more interested in what lawyers say who have made their MBA.

In this brochure provided by Association of Corporate Counsel

the Association of Corporate Counsel, two lawyers describe their situations and motivations prior and after the MBA in a, in my opinion, interview worth reading.

–>> Click the brochure to download it.

Yours,
Peter Lorange
Peter Lorange, Lorange Institute of Business

Business school culture

Dear reader

in an article I wrote (the official term is ‘research paper’) for ‘EDUCATION+TRAINING‘ (an Emerald Journal), I examined and questioned aspects of the culture of the modern business school, and investigated the possibilities for a more student oriented, more responsive, more flexible and performance-driven culture.

The paper is a critical discourse on the cultural conservatism of contemporary business schools, analysing the impediments to change, and examining the transformation in the business education market and among students, that demand greater responsiveness.

I find that while the traditional culture of business schools is deeply embedded in professional practices and axiomatic disciplines, the seismic changes occurring in technology and social practices beyond the business school are impelling business schools to adapt and become more agile.

I am convinced that the paper provides a fresh assessment of where the business schools are, and where they will have to go to continue to engage the changing demands of business and managers.

I invite you to download it and/or simply share this link.

Kind regards,
Peter Lorange
Peter Lorange, Lorange Institute of Business

Personal Strategie Meeting in Stuttgart

Geschätzte Leser

Kaum ein Unternehmensteil ist schon heute so tiefgreifenden Veränderungen ausgesetzt wie der Personalbereich.

HR Talent Retention und Talent Recuriting
Der Personalbereich und mit ihm die HR-Verantwortlichen befinden sich in einem Spannungsfeld von globalem Wettbewerb um Führungskräfte und qualifizierte Mitarbeiter, demographischer Entwicklungen und internem Kostendruck.

Talent Recruiting and talent retention: ein wichtiger Aspekt in der Weiterbildung
Am diesjährigen “Personal Strategie Meeting”, einem HR Strategie Meeting, das am 25./26. November 2013 in Stuttgart stattfindet, werden deshalb unter anderen gerade auch diese Themen im Zentrum stehen und von den Personalentscheidern diskutiert.

Wir vom Lorange Institute sind am Meeting mit eigenem Promotionsstand vertreten. Darüber hinaus führen wir vor Ort 12 bis 15 Treffen mit Entscheidungsträgern durch und leiten einen Diskussionsrunde zum Thema „ die neue strategische Rolle des HR“.

Talent Recruiting und Retention ist ein wesentlicher Aspekt in unserem Executive MBA sowie im Executive MSc mit einer Spezialisierung in Talent Management. Für uns als Business School of the Future ist es nicht nur wichtig, sondern selbstverständlich, dass wir dort aktiv präsent sind, wo sich die Entscheidungsträger der Branche treffen – zur Förderung der Qualität unserer Studiengänge und zum Wohl unserer Kursteilnehmer.

Ihr
Peter Lorange

Steering a ship is like leading a company

Dear reader

Some of you now that I have been fascinated by the sea ever since I was young. Growing up in Norway with its countless fjords and its shipping heritage might have ignited this fascination and been responsible that I went into shipping with my own shipping company.

BBC Chartering Group Magazine

Click the image to download the interview

Moreover I have been committed to shipping as business academic, and even today at my own business institute I organise a shipping module to discuss all the issues in and around the industry trying to pass on my knowledge – and still learning new things.

Today, shipping companies are challenged more than ever to innovate, not only regarding their assets, products and services but also their cultures, organizations and structures if they strive to stay as top performing companies.

What is needed to manoeuvre a shipping / transportation company through these turbulent times? Not only will we discuss these issues in the upcoming module

Innovation in Shipping on Februar 11 / 12

Probably the best MBA in Zurich - the Executive MBA of the Lorange Institute of Business

I furthermore have been interviewed by Raymond Fish of the magazine of the BBC Chartering Group about the challenges of the industry.

I would like to share this interview with you and hope to see you in February.

Until then I wish you always fair winds and following seas!

Yours,
Peter Lorange

Where and which Business School should you attend?

Dear reader

Why should a European executive travel to the USA to make an Ex. MBA?

There are reasons to do so. But there are also reasons to stay close to where you work.

In a remarkable article by the experienced MBA consultant Christiane Holländer, published last week by the German paper “Handelsblatt”, she made European business schools and their programs a subject of discussion and mentioned our business school as well.

You might already be aware that we at the Lorange Institute have a visiting faculty instead of a permanent faculty. She commentates on one core issue of a visiting faculty: after their teaching the professors leave and will only be back for the next module. That means there are little opportunities for discussions before or after let’s say a ten-day-module.

Artikel von Christiane Holländer in der deuteschen Handleszeitung

Click the image to download the article (5.5 MB)

But is this really true, and is it specifically true for a part-time Executive MBA? After completing a module, the participants go back to their jobs. Even with a permanent faculty they could not simply go and talk to the professors, but they might give them a call.

The same is true with a visiting faculty from overseas. Should participants really need to discuss something with a professor, they can rely on contemporary communications tools such Internet telephony, known as voice over IP, and, of course, e-mail.

I fully understand Christianes objection and would not want to play it down. However, I think that there are solutions for this issuee.

You can read Christiane Holländers article in this PDF. Simply click on the picture above to start the download.

Best regards,
Peter

Presenting faculty: Dr. Gianvito Lanzolla, Cass Business School

Dear reader

Until the end of this week we will go on with our two-week strategy module.

This block focuses on how to implement a growth-driven strategy, which also yields sufficient profits. The role of innovation is key and so is market segmentation as the basis for your strategy.

Three lecturers run the module. In one of our latest tweets we reminded you of Jamie Andersen. This time I present you Dr. Gianvito Lanzolla. He is currently a reader in strategy and director of the MSc in Management at Cass Business School, which he joined Cass in 2006 as a senior lecturer.

Prior to joining Cass he was a research fellow on the faculty of the London Business School (2003-2006).

Gianvito Lanzolla Lorange Institute of Business
Gianvito Lanzolla, Reader in Strategy and Director of the MSc in
Management at Cass Business School

Gianvito teaches strategy, corporate strategy and advanced strategy analysis in Cass MBA and MSc programs, both in London and Dubai. He is the recipient of the Cass 2009 “Excellence in Teaching” award.

His research investigates strategies and capability configuration mechanisms that firms should adopt to successfully deal with rapid technological and institutional change.

Gianvito works with companies and executives in fast paced industries  and has undertaken assignments in Europe, the Middle East, India, and the USA with several leading organizations including: Alghanim, Allianz, BSkyB, BT, IBM, ING, Nokia, Times of India, Unicredit, Vodafone Group and Vodafone India.

By the end of this week, he’ll be leaving, as our entire faculty is a part-time faculty. This allows us to permanently draw on leading specialists. During August 2013 Gianvito Lanzolla will be back at our institute for another two-week strategy module. I will early enough inform you about his comeback.

Yours,
Peter Lorange

P.S. You’ll find his research output published in leading outlets –

  • Academy of Management Review
  • Journal of Management
  • Harvard Business Review
  • Production and Operations Management
  • Business Strategy Review

International erfolgreich sein – nichts einfacher als das?

(ENGLISH VERSION  below)

Wie betreibt man Geschäfte in anderen Kulturkreisen? Dies ist wohl eine der Gretchenfragen unserer Zeit. Wir wissen zwar, dass wir in Japan die Visitenkarte mit beiden Händen fassen sollten, aber sonst?

Das interkulturelle Zusammenspiel ist mannigfaltig. Umso wichtiger ist es, darüber Bescheid zu wissen.

Vom 03.09.2012 – 04.09.2012: führen wir das Management-Modul Cross Cultural Competence durch unter der Leitung von Malvika Singh*), die wir zum Interview getroffen haben.

Sie können den zweitägigen Kurs einzeln buchen. Sollten Sie sich zu einem späteren Zeitupunkt für ein Studium (Exc. MBA, Exc. MSc) entscheiden, werden Ihnen die entsprechenden ECTS-Punkte angerechnet und die Kosten für das bereits besuchte Modul rückerstattet.

***

Mrs. Singh, im August führen Sie im Rahmen des Executive MBA Programms einen Kurs über interkulturelle Kompetenzen durch. Warum sollten wir solche lernen? Die Menschen sind verschieden. Punkt.

Es ist richtig: Wir sind verschieden. Ein wichtiger Schritt hin zum Verständnis liegt darin, diese Unterschiede zu anerkennen. Schliesslich ist das Arbeiten unter gegenseitigem Verständnis eine gute Grundlage, um das Arbeitsumfeld zu verbessern und die Performance zu erhöhen.

“Natürlich beeinflusst unsere Herkunft unser Verhalten”

Inwiefern sind aber diese Differenzen im Alltag von Bedeutung? Ein guter Verkäufer ist ein guter Verkäufer, hier bei uns oder im Norden von Indien.

Der an sich abstrakte Prozess “Ware gegen Geld” ist der gleiche. Nur die Menschen, die ihn vollziehen, haben ein unterschiedliches Bewusstsein, andere Voraussetzungen und Verhaltensweisen, die kulturell definiert sind. Solche Unterschiede können Ergebnisse in der Zusammenarbeit fördern oder behindern.

Im multikulturellen Umfeld ist es wichtig, seine eigene und die kulturelle Konditionierung des anderen wahrzunehmen. Erfolgreich sind wir genau dann, wenn wir Wege finden, diese Differenzen zu Gunsten produktiverer Interaktionen zu überbrücken.

Natürlich beeinflusst unsere Herkunft unser Verhalten, das sehe ich immer wieder an mir selber. Geboren in Indien, aufgewachsen unter anderem in Indien, Italien und Schweden, verbrachte ich meine Studienjahre in den USA und merke in gewissen Situationen heute noch, dass ich eine starke Verbundenheit zu meiner indischen Herkunft habe.

Das Verhalten ist also der Schlüssel…

… zahlreiche Firmen scheiterten, weil Sie unfähig waren, mit interkulturellen Verhaltensweisen umzugehen, während andere Erfolg hatten.

Der interkulturelle Diskurs, ob im Zusammenhang mit Führungsprinzipien oder dem Team Building, beginnt immer bei einem selber, mit unserer Selbstwahrnehmung und damit mit dem der Denkweise. Erst nachdem man diesen Punkt erreicht hat, gelingt es, kulturelle Differenzen zu überbrücken.

Denken wir an Gräben wie den zwischen Europa und China oder den innerhalb der BRIC Staaten, z.B. Indien und China, liegt noch ein weiter Weg vor uns.

Unabhängig der kulturellen Herausforderung ist eine Frage zentral: Ist nur “der andere” verschieden, anders? Nein, auch wir sind in seinen Augen anders. Deshalb müssen wir akzeptieren, dass es kein generelles richtig oder falsch gibt. Ohne richtig oder falsch müssen wir aufhören, die Unterschiede zu bewerten und, wie gesagt, die Differenzen integrieren und dadurch überbrücken.

Wenn unter diesen Umständen eine Firma einen Sitz aufbaut in einem anderen Land, sollte die Firma notwendigerweise mit einem einheimischen Management arbeiten um nicht als Invasor dazustehen?

Diese Frage kann man nicht klar mit ja oder nein beantworten. Menschen neigen eher dazu, emotional und nicht rational zu reagieren. Ich würde sicher nicht Herkunft über Kompetenz stellen. Es ist unmöglich, Fähigkeiten mit dem Geburtsort zu kompensieren, aber genauso wenig kann man im Ausland fähig führen, wenn man das kulturelle Umfeld komplett ignoriert. Jedoch ist es öfters hilfreich, kein lokales Management zu haben, zum Beispiel, wenn kulturell definierte Führungsqualitäten gefragt sind, die es so im Zielland nicht gibt.

Das klingt, als ob das Expat Management sich nicht an lokale Sitten anpassen sollte.

Mein Rat ist, sich nicht sklavisch den lokalen Sitten zu unterwerfen, sagen wir, wenn es um Hierarchien geht. Aber dennoch muss man sie bis zu einem gewissen Punkt befolgen. Wenn ein Land dafür bekannt ist, dass dort noch sehr hierarchisch geführt wird, können Sie keine Sitzung eröffnen mit dem Satz: “Leute, was meint ihr, sollen wir es so oder so machen?” Das lokale Management würde Ihre Qualität als Führungsperson sofort anzweifeln. Andererseits, wer ständig gegen die lokalen Eigenheiten ankämpft, wird scheitern.

Der Schlüssel liegt darin, sich seiner und der kulturellen Herkunft und Verbundenheit anderer bewusst zu sein und in dieser Situation fähig zu sein, wirksame Strategien zu finden, diese Differenzen wirksam einzusetzen.

Malvika Singh

ist Partnerin bei “Impact”, einer international tätigen Firma für Beratung und Weiterbildung von Führungskräften mit Sitz in der Schweiz und den USA. Sie erwarb sich einen Ruf als herausragende Führungspersönlichkeit bei Engelhard Corporation und gründete und leitete das Europageschäft der Specialty Minerals and Colors Group aus Zürich. Sie war als Beraterin im Chemie-, Finanz-und Bildungssektor tätig und hat einen Abschluss in Chemical Engineering von der University of Pennsylvania sowie einen MBA in Finance und International Business der New York University.

 

 ENGLISH VERSION

On September 3 and 4 we organize a two day management module on cross cultural competence. The module is run by Malvika Singh*), an experienced consultant with a multicultural background.

Should you start a master’s course after having attended one of our modules, all the credits awarded can be transferred to our master programs and the fee for this module will be fully refunded.

+++++++

In August you’ll be teaching at the Lorange Institute a course for MBA-Students on cross-cultural competencies. Why should we learn such competencies? People are different and that’s it.

You are right – we are different. Acknowledging these differences is already an important step towards understanding. Working with a mutual understanding is a good basis to improve the working environment and to increase performance.

How far are these differences relevant? Sales competencies are sales competencies – here in Western Europe as well as in Northern India.

The abstract move of exchanging goods for money is the same. But people have different mindsets, assumptions, and behaviors which are shaped by culture. These differences can hinder or enable impact.

In multi-cultural environments it is important to be aware of ones cultural conditioning and also that of others and success is when we find ways to bridge these differences to more productive interactions. Our origins undisputedly form and influence our behavior. I realize that myself: born in India, raised in India, Europe (Sweden, Italy) and then spent my college years in the United States I still feel that I have an Indian hard wiring in me.

Behavior is the key…

… Many a company failed, as they could not cope with intercultural behaviors. Others clearly succeeded.

Intercultural discourse – whether in the context of leadership or team building – starts always with oneself, with your own self-awareness and consequently with the awareness of your own mindsets. Only then are you capable of bridging cultural gaps.

As I think of gaps, which are not yet seen, we seem to have long way to go. Not only have we got cultural gaps between Europe and China, but also between the BRIC states, for example between India and China.

Whatever the cultural issue is, one question is fundamental. You have to ask yourself: is it only the other one who is different?  No, in his eyes you are different, too, and you must realize that there is no right or wrong. If there is no right or wrong, you stop judging and again integrate the differences and bridge the gaps.

Whenever a corporation enters another country or culture, should it necessarily rely on local management in order not to be perceived as an invader?

There is no clear yes or no. Humans are not rational, they are emotional. First, I would not trade competence against origin. You can clearly not compensate skills with the idea of a place of birth and on the other hand think of skillful doing when you completely ignore what is around you. There can be instances when it is helpful not to have local management. Let’s say, when you need culturally defined management skills, which are not perceptive in your destination country.

Should the expat management not adept to local customs?

My advice is not to be slavishly after the local customs, let’s say, when it comes to hierarchy. To a certain extent you should follow them. In countries where hierarchy is still widespread, you would hardly succeed asking your team “well, what do you think, how should we do it?”. They would doubt your qualities as a leader. On the other hand if you struggle against local customs, you’ll fail. The key is to be aware of your own culture hardwiring and that of others and to be able to find effective strategies to leverage these.

*) Malvika Singh
is a partner at “impact”, an international consulting and executive firm with offices in Switzerland and USA. She earned a reputation as an outstanding leader at Engelhard Corporation. She established and headed the European operations of the Specialty Minerals and Colors Group based out of Zurich. She has worked as a consultant in the chemicals, financial and education sectors and has a degree in Chemical Engineering from the University of Pennsylvania and an MBA in Finance and International Business from New York University

When dreams come true – Wenn Träume wahr werden!

Dear reader

On October 24 of last year, our faculty member William K. Holstein reported on a fascinating project how a student of our Business School put his thesis into practice. It’s the story of a restaurant in Munich. Recently, Bill visited the Restaurant together with his wife Audrey. Here is his report:

By Bill Holstein *)

Update on “Lorange Thesis” Opens in Germany

As promised, here we are next to the cappuccino machine at the Eat. Life Kitchen in Munich during our last trip to Europe for a workshop and to attend the March graduation at the Lorange Institute. Ralph Detert, the author of the Lorange thesis on starting a restaurant in Germany and the subject of my earlier blog, was our very gracious host.

After a pleasant ride on the EuroCity train from Zurich, Ralph took us to visit several of the sights in Munich, including the incredible market in the old town, and to lunch in a very traditional restaurant near the “Hofbräuhaus” for the obligatory Bavarian sausages and beer. Ralph and his wife Barbara picked us up at 19:00 for dinner at the EAT. Life Kitchen and we closed the place at 23:00 – a successful evening indeed. Perhaps we should have had the server take the photos earlier in the evening.

 

The ambiance immediately strikes one as contemporary, tailored, and ‘cool.’ The furnishings are ‘top shelf’ as the British would say – real wood, real leather (the same used on BMW 7-Series seats), the decoration understated and ‘with it,’ certainly not garish or loud. The feeling is at once peaceful, welcoming, inviting, informal and comfortable. The restaurant was full on the Saturday evening that we were there. Ralph had reserved ahead; we wouldn’t have simply walked in on our own.

Lessons Learned

Most of our conversation was about what Ralph and Barbara have learned about the business since the opening in September. Neither is he a restaurateur; he is a hi-tech company CEO, she the VP of HR at another German company.

Ralph and four other investors in his investment group own the business, but only Ralph (and Barbara) and one other partner spend any real time with the business. The others are full financial partners, but ‘silent partners’ in terms of involvement with the business. We met the other active partner towards closing time – he often drops in and checks the day’s financial performance.

Ralph and Barbara’s relationship with the staff was immediately obvious when we walked in. Every one of the staff knew who they were, greeted them and warmly greeted us as their guests for the evening.

The fact that the restaurant was full almost all of Saturday evening was not anticipated in Ralph’s thesis. His analysis predicted a lively lunch business, slower at dinnertime. Once they secured the lease on the property, which was not finalized when he finished his thesis, his lunch prediction was even stronger, with the expectation of slower business at dinner and very quiet on Saturday evenings.

Their location is downtown, two blocks from the main station, not near the walking streets of the old city. They are on the intersection of two busy streets, Karlstrasse and Luisenstrasse, around the corner from the new 5-star Charles Hotel. Their building also houses McKinsey’s Munich offices. Their prediction made sense: Lots of daytime foot and car traffic in the area, several office buildings around the restaurant, many ‘Yuppies’ (young urban professionals) working nearby, but quiet in the evenings, not much foot traffic in the neighborhood after dark, and no other restaurants or bars nearby. It all spelled ‘lunch,’ not dinner.

Quite the opposite has developed; lunch business, as expected, is very good, but dinner is great, particularly on Saturday evenings. Indeed, the dinner business is so good that the restaurant opened on Sundays starting in April and, now that warmer weather is here, an outdoor eating area has been added.

Why the dinner business far exceeding forecasts? I’m not a restaurateur either, but my guess is that it is a combination of the ambiance, the pricing, and the menu. The ambiance and the whole approach to the customer invite interaction – visiting, chatting, and casual conversation.

While that may be important at lunch, it is much more important at dinner. There is more time, you’ve chosen the restaurant as a destination, not just for convenience, and you are more likely to be there with a person or a group that you care about. New dishes, drinks and wines are added to the menu each week, so even regular customers can find something new to try and to talk about. Prices are relatively low, too low according to some reviews, despite several increases since they first opened. Service is programmed to not interrupt, not to rush, but not to keep you waiting too long either.

Consider a small detail in the design of the furniture. As seen in the picture to the left, the height of the tables in the front of the restaurant, the large room that you enter, is high with similarly high chairs. The tables and chairs in the smaller room in an ‘L’ off the main room are conventional height.

This idea came from the interior designer: People who like to chat with those around them, who enjoy interactions, even with strangers, and who want to be seen, want to be close to eye level and not feel like they are sitting in a hole when talking to a person standing next to the table. You don’t want to feel that people walking by are towering above you. (Note the height of the standing server relative to the seated guest with his back to the window.)

Thus the tables and chairs in the main room are designed to promote interaction and a feeling comfort and ease with the people moving about and around you.

‘Diners,’ on the other hand, typically focus on their partner or the people in their group at the table and prefer conventional seating. A small detail perhaps, but a huge contributor to the ‘ambiance quotient.’

Consider service. Ralph’s thesis included an extensive case study of a new restaurant chain with locations in Munich that included many of the ideas incorporated in the Eat. Life Restaurant – self-ordering, charging to a restaurant card as you go and paying once on the way out, fresh, healthy food, and a contemporary ambiance.

We visited the competitor in the afternoon. It was crowded at 15:00. There were several lines for different menu items and drinks. To get a complete meal, customers had to go through several lines and then search for a table. Two or more people eating together had to split up, go to the lines for the food they preferred, and then gather at a single table that the first one to get through the lines had commandeered. Order something else? Have another drink? Back in line.

How different is Ralph’s concept – no lines, no jockeying for a table, no carrying your own tray. You are taken to your table by the maitre de and each person is given a slip of paper about the size of a business card with a QR Code on it. At each seat is an iPad on a swivel mount that serves you and the person seated across from you. It knows who is who by scanning the QR codes. You bring up the menu and order by choosing from the items offered in several categories: drinks, wines, salads, soups, main dishes, desserts, after-dinner drinks, etc.

As you choose each item, you are directed to hold your card up so the camera on the iPad can read it. You simply orient the card so that the QR-Code is visible on the screen. You can order everything, from aperitif to after-dinner drink all at once if you wish, or one thing at a time.

Now comes the masterstroke of the system that Ralph and his partners developed: The custom-developed iPad software and your server keep an eye on your group, watching as your dining experience develops. The server brings what you have ordered in a relaxed, but strictly-timed sequence. If you order a drink, and then 15 minutes later order soup, s/he knows to bring your soup right away. If you order both together, the soup will come when it appears that you are slowing down on your drink or perhaps have finished it.

Ralph explains that this timing of service was not at all obvious at the beginning and that he thinks there are still improvements possible. Our impression was that the service was almost flawless, but congratulations to Ralph and his partners that they are concerned about service and continue to improve the relationship between the software, the server and the customer.

At the end of the evening, the cards with the QR-codes are scanned by the cashier near the exit door. If the host has collected all of them, s/he pays. If each person is responsible for their check, they can pay individually or the group’s cards can be aggregated in any combination. The process appeared effortless and smooth.

The reviews on Qype.com that were outstanding, approaching 5 out of 5 during the first few weeks, have fallen off a point or so, which is a great disappointment to Ralph. At first he took every negative comment personally but he is becoming inured to the occasional negative, even vicious or cruel, comment. “It just seems to come with the territory” he says.

He now realizes that pleasing everybody is an impossible goal, particularly in the shakedown phase of opening a business with so many innovative features. In answer to my last question: “When and where does the second restaurant open?” he was quite clear. “Not until we have studied and improved this one quite a bit more. There are still things to do that we know need doing, and until we’ve done all of them we won’t think about expanding.”

Lessons for us from Ralph’s Experience

  • In an already overcrowded market, think niche strategy and think differentiation, or what I call perceived value. In the Strategy Block I discussed ‘out-performing’ strategies which combine high perceived value with low delivered cost – not just high value, but value that is clearly perceived by the customer; not just low cost, but low cost throughout the whole business system or value chain. The perceived value is certainly visible in the restaurant, and the low prices relative to the competition suggest that Ralph is also handling delivered cost effectively.
  • Seek out the best advice and follow it. This shows in several areas of the business. The design and execution of the interior of the restaurant was expensive, but it is striking and makes a very good impression. The iPad software was developed specifically for their application, not purchased off-the-shelf or adapted from existing software. They are tweaking the software, incorporating new features like translation into languages beyond German and English, and constantly making it fit the needs of the business better. A top consultant chef advises them on menu items, visits once a week to work with the staff on new items, and keeps an eye on overall quality and visual appeal.
  • Hire good people, train them well, and listen to them. The kitchen staff, the wait staff and the management were carefully selected and trained. Selection and training of quality replacements remains a top priority. Many ideas for improvement come from management and the staff. Ralph and Barbara and the other active partner are constantly ‘tuned in’ to feedback. Certainly reviews on Internet sites contain some useful feedback, but the most important inputs are come from people who really know and who are living the experience, not just dropping by occasionally or who may be chronic complainers.
  • Don’t expand too quickly. Perhaps because of his background in high-tech industry working with things at the nano level, Ralph comes across as a perfectionist. It has to be perfect and improved to the point where no more improvement is obvious before he will turn to growth. Perhaps not good advice those operating in an ultra-high-frequency environment like Facebook, but probably very good advice for the rest of us.

Once again for those who find themselves in Munich and are looking for a delightful experience:

Luisenstraße 14 | 80333 München | T 089 638 591 21

http://www.eat-restaurant.de/

 

*) Dr. William K. Holstein

The former assistant at Harvard who earned his PhD in mathematical economics was (among many other teaching activities ) visiting professor at IMD.

Today, he has been an associate Partner at Crystal Partners AG, Zürich since 2008 and Senior Advisor at Lat Link-Partnership in Change Consultancy, Buenos Aires, Argentina. He is the author of three books on Information Technology, BASIC programming, Operations Management. One of his recent publications include ‘Efficient and Effective Strategy Implementation’.