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BirdsEye View

 One of our favorite restaurants in Israel is The Old Man and The Sea.  It is in Old Jaffa and has been owned by the same family for three generations.  It is a fish place – they buy the freshest fish from the market in the morning and grill or fry it all day long for the patrons.  When you get in, you’re immediately seated and someone magically appears with a huge tray laden with fresh salads (15 or so of those, including humus, smoked eggplant, tabbouleh etc.).  Hot pita arrives as well, with a pitcher of home-made lemonade and you feast on those until the fish arrives.  The fish is so fresh you can even eat the dark meat without so much as a hint of fishiness, and the French fries are home-made as well.  When you’re ready for dessert, they bring a large plastic tub and throw all the food in it.  It goes straight into the trash.  No recycling for the next table.

For dessert the Mahalabi (milk pudding) in rose water and the Bavarian cream are fabulous.

We recently took American friends there, and they couldn’t believe the business model.  Why waste all the food?  Why not do like so many restaurants do at home – save the food and serve it to the next diner?

This made me ponder the business model of this establishment, which has been so successful for so long.  And here is what Dick and I discovered.  There are several management principals in play here, which are directly transferrable to banking.

1. Menu simplicity.  Essentially there is a predetermined set of appetizers that comes with every main course.  This standardization offers meaningful scale opportunities which do not conflict with the freshness of the food.
    
2. Opulence.  Countless waiters circulate among the tables, observing what dishes people eat.  They ask whether you want more of the salads you finished, and continue serving until you say Uncle.  So you get as much of what you like as you can eat.
   
   
3. Main course options also simple.  You can get whatever fresh fish is available, either fried or grilled.  Same with the meat dishes.  The preparation is also standardized and simple (and delicious to boot!)
   
   
4. Everyone does everything.  Unlike most restaurants I know, all waiters are also bus boys, greeters and servers for all tables.  No server is dedicated to a single table, so server capacity is fully utilized across the dining population.
   
   
5. The customer is always right.  They will serve you whatever you want within the predetermined menu, customized to your needs – more lemon juice, no salt, well done etc.  No argument.
   
   
6. One maître d’.  One person supervises the entire group, seats people if servers are busy and handles folks in the line if they have to wait.
    
7. Extremely fast service and, with it, table turnover.  Throwing away good food may seem wasteful, but it saves on labor costs.  It appears as if there are waiters everywhere all the time, but it’s because the salad trays are pre-prepared for the expected traffic and no one wastes time on cleaning up the table.  They simply throw everything – dishes, food and all – into a plastic tub which is then handled in the kitchen for washing and cleaning.

The main principles guiding this restaurant are, therefore:  simple menu and production line; tasty food; fully cross-trained staff; and high speed of service.  Consequently, this place is packed day in and day out.

Yank Sing, my absolute favorite dim sum restaurant in San Francisco, operates on similar principles.  Servers push carts pre-stocked with various delicious dumplings and other food-stuffs around the tables while diners point to the dishes they want.  The server puts the selected food on the table and stamps a bill with a stamp connoting this specific food item price.  No one wastes any time on ordering, selecting food etc.  If you want a dish you haven’t seen (there IS a menu on each table), just tell your server.  They are all connected by ear pieces to the kitchen and they will order it for you.  The food flows quickly and easily, and is prepared with care but no individuality.  It’s a highly effective business model.

What does all this have to do with banking?  A lot!  Both these business models are based on efficiency and product standardization, coupled with mass-customized service and billing efficiency.  This model can be used by us to offer perceived excellent service to customers using fewer people.  How?

• Cross train everyone (universal banker concept) but measure results of both banker and teller activities by person
• Simplify the product line to make it easy for both customers and bankers to understand
• Build a product line where the profitability is assured by the “main dish” and everything it “comes with” is paid through that main service (checking, money market etc.).  Give away (or replenish beyond a minimal number of transactions per month) only what the customer values based on their behavior.
• Price your services effectively – to allow sufficient profit for the shareholders and yet create value for customers.  This is not nearly as difficult as it seems, especially if you use marginal profitability analysis.

I realize we are not selling food at our branches (but that’s another great idea J) Even so, there are lessons to be learned from the above examples; in particular, that standardization is a basic principle of efficiency and so is a single point of contact. As we work on upgrading our retail networks from order takers to consultative sales people, using some of the principles underlying the success of the Old Man and the Sea can help you execute the concept profitably.  When implemented effectively, these strategies can increase the well-being of customers, shareholders and team members alike.