Another look at organizational centralization - this time at the infamous Amy's Baking Company

Lately the Empoprise-BI business blog has been looking at organizational centralization vs. decentralization - which, to my mind, is more fun than looking at computing centralization vs. decentralization.

The last time that I looked at this topic was in connection to the Department of Homeland Security and the Richard Spires "departure." But earlier today, I ran across organizational centralization again - this time in the context of a nationally-televised bad restaurant review.

There was a lot that happened before, and a lot that happened after. For purposes of this post, however, I will concentrate on what happened last December.

There is a business in Scottsdale, Arizona called Amy's Baking Company Bakery Boutique & Bistro. Because of the current brouhaha its website is unavailable, but the business' Facebook page is (for the moment) here. This is a small business, co-owned by the husband and wife team of Samy and Amy Bouzaglo. Amy, the person who gave her name to Amy's Baking Company, works in the kitchen, while her husband Samy manages the front of the restaurant.

Now many family-owned businesses have centralized organizations, and Amy's Baking Company certainly fits in that category. Amy, and only Amy, is responsible for what goes on in the kitchen. Each patron's dish is prepared, one at a time, by Amy herself. During Gordon Ramsay's Kitchen Nightmares show, the couple mentioned that if Amy is not available, the restaurant is not open. This is borne out by a February 2012 post on the business Facebook page:

Due to Amy's Medical Emergency, we will be closed until further notice.Please continue to follow us for updates.Amy & Samy

Now this is not unusual in a small business, and even a large business such as Apple can have issues because of a medical emergency with its CEO. However, the lack of delegation in the kitchen has its consequences. Even positive reviews of the business, such as a March 2013 review at TripAdvisor, take the time to mention that the food was "worth the wait." And if you've seen the negative reviews of the restaurant, you know that some unhappy patrons complain that it takes forever for the food to be served.

Now there are also complaints that the food is not prepared that well. Since my family will agree that I myself am not a cooking expert, I am not willing to say that this is a problem here. Yes, I know that there is video evidence of Gordon Ramsay complaining about the food, but despite Ramsay's reputation as a chef, I'm not quite willing to say that his meal was 100% bad. After all, he was on a show called Kitchen Nightmares, and you can't have a show if there isn't a nightmare. And while the Bouzaglos may complain a little too loudly and imply that every other meal that they have served is perfect, the fact remains that there are people who DO enjoy their cooking, and who have rated it highly. But let's suffice it to say that there have been multiple examples of food from the kitchen that did not meet a high quality standard - something that is likely to happen if the kitchen staff is overloaded.

Now there are two solutions to this problem. Either you improve the processes in the kitchen so that multiple dishes can be prepared at once, or you limit service at the tables by reducing the number of tables, requiring reservations, or doing something else to make sure that the demand for food can match the kitchen's ability to supply the food. All of the evidence suggests that Amy may not feel comfortable delegating the kitchen duties, so perhaps the latter is the solution.

But organizational centralization isn't only a problem in Amy's part of the business. Take a look at the front of the business - Samy's domain.

Now for this part of the story I'm primarily relying on the Kitchen Nightmares video. And yes, "reality" shows often are not reality, but in this case there are statements from Samy himself about the centralization of the "front office" operation at Amy's Baking Company. Not that Samy does EVERYTHING up front - the restaurant does have waitresses. Well, maybe not. They do have food runners or food servers or whatever you want to call them, but they're not waitresses. Because, you see, there are two important differences between waitresses and whatever the Amy's Baking Company people are.

First, waitresses are actually responsible for taking the order and conveying it to the kitchen. That isn't what happens at Amy's Baking Company. The people take the orders...and then give the paper to Samy, who then inputs it into the computer system. During their brief time at the restaurant, the Kitchen Nightmare folks were able to capture one on-camera incident where someone ordered something and Samy entered the order incorrectly - something that was proven when the food server fished her original order sheet out of the trash and showed Samy his mistake.

In this case, the problems from organizational centralization are obvious. Whenever you implement a process, it's best to use the easiest method to implement it. In this case, you would want the food server to convey the order directly to the kitchen, to ensure that no mistakes were made.

But there's another huge difference between regular waitresses and the people who work at Amy's Baking Company. Regular waitresses receive tips. And despite the restaurant's protestations to the contrary, the Kitchen Nightmares people captured Samy on camera saying that the tips go to him.

Is it any wonder that Amy's Baking Company has, by its own on-camera admission, gone through over 100 employees? Granted the lack of tips is only part of the reason for employee turnover - one person was fired on the spot for asking "Are you sure?" when she was told a particular table number. (In my view, she DID ask the question in a less-than-reverential manner, but that often happens in high-pressure situations, and people usually don't get fired for a small outburst like that.) But if you're not going to be compensated for putting up with an admittedly stressful situation, you're not going to be that inclined to stick around - and if you do stick around, you're not going to perform well.

Now again, let me emphasize that Amy's Baking Company is not unusual in its level of organizational centralization - many family-owned businesses are run the same way. But if you're going to centralize your operation, you have to realize that you will not be able to do that many things.

If you try to do too much, you may find that you've bitten off more than you can chew.