Is your council Fast Food or Michelin starred?

In business there is a very basic rule that applies to all services. If demand is higher than supply, then prices go up. And alternatively, if supply is higher than demand prices go down. 

We’re actually seeing this happen right now in the car industry with second-hand cars increasing in price by up to 50% due to supply tensions of new cars. 

Listening to a talk this week by an informal mentor of mine, the conversation was about supply and demand in relation to restaurants. Fast food joints can pump out food very quickly and as such supply always outstrips demand and prices are kept low. Alternatively, a Michelin star restaurant firstly may make you wait weeks to get a table and then once you do there is a very limited number of other customers on any one night. Therefore, demand outstrips supply and prices are higher. 

But what has this got to do with Local Government?

Let's look at this from a slightly different angle. The fast-food store, and I’ll use the example of the best known one in the world, has streamlined all its processes. They have made themselves as efficient as possible. And if you've ever watched The Founder, you’ll know that this process improvement and efficiency of service is something they’ve done from day one. Even today they continue to improve these processes. They’ve reduced the number of people serving, reduced food waste, added touch screen ordering and now in-app ordering. All these changes mean that they can deliver food at speed with as few staff as possible. There are restaurants on every corner that work to the exact same processes and therefore in this case they are ensuring that supply will always outstrip demand and the pricing reflects this. 

Contrary to that, take a Michelin starred restaurant, and I’ll generalise a bit here as I know not every restaurant is the same. But you will probably have had to book a long way in advance. You are treated as an individual once you have arrived. You are probably greeted at the door. Shown to your table. You have attentive and knowledgeable waiting staff. Your food has been hand cooked. No corners are cut. The number of chefs cooking in some cases possibly matches the number of diners in the restaurant. It’s a very manual process to give you the best experience possible. Because of the quality of the experience the demand to eat there outstrips the supply and as such prices remain high. 

As a council though you are less concerned about keeping prices high, but you are concerned with costs of the service. And too many services that we offer are Michelin starred. They are very manual and person heavy. The move to digital and process efficiency has been implemented but only to a point. In most cases what the council has created is a fast-food front end, married with a Michelin starred back end. Residents can order and book online as they can at a fast-food restaurant. But once the order is passed into the kitchen, the offering is a Michelin starred manual process with more staff required than in the fast-food restaurant. 

Now of course there are some services where the Michelin starred approach is absolutely the right one. I’ve written previous blogs about understanding the breakdown of your residents. But for the vast majority of services, we can move to the fast-food model where we can match demand with supply through the automation of services and making the processes as efficient as possible in both the restaurant and the kitchen. If supply is limitless, i.e., fully automated, then demand goes down, or in this example cost of delivering the service goes down. 

But you can look at services such as Planning or Housing Benefit. In most cases we have already built the fast-food front end. It’s pretty much fully automated and there is no restriction on supply. It’s only when we get to the back office (or the kitchen in this example) that all that online effort now becomes very manual. We have a lot of chefs, re-keying data, manually processing claims and applications, and like good food cooked fresh, it takes a long time to get it to the table. Supply is now restricted and limited by how quick staff can manually process the work and as such the cost of providing this service increases. 

Demand vs Supply

So where fast-food restaurants have supply outweigh demand, and Michelin starred restaurants have demand outweighing supply, a lot of council services have fallen into the trap of finding themselves sitting in the middle of this. With supply at the front-end outweighing demand and reducing cost, but then demand outweighs supply in the back office and costs are too high. 

Unfortunately, the focus in most digital programmes has been around the front end and how simple we make it for residents to apply or submit applications. Too often digital is seen as the website, Myaccount or forms package. Perhaps even a CRM if you’re pushing the boat out. But to focus on just these areas is essentially no different to focusing on the front of house area of the restaurant and then doing nothing to improve the kitchen. And yet it's the kitchen where all the cost of the service lies. And as I’ve seen from LinkedIn polls, speed of service is often valued higher than having online forms.

If you are looking at improving your services or keeping them at the same level with less cost, then remember that a restaurant is made up of multiple services and all of these must work together to give the best experience. But you need to decide whether a service should be fast food or Michelin starred. Sitting in the middle is costing you vital money that could be spent better elsewhere.