Harvard's Waffle Case

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A few minutes before 10 a.m. Nearly 100 second-year students file into the amphitheater at the Harvard Business School. The desk tops are soon covered with notebooks, calculators, coffee cups, half-pint cartons of orange juice. This morning's object of study is Waffle House, Inc., a chain of 425 fast-food restaurants, roughly half of them franchised, that began in Georgia and spread across much of the Southeast. Like most examples in Harvard's celebrated case-study method, Waffle House does not simply present some problem to be solved. Instead, the goal here is to assess the critical details in what makes a business a success—or a failure. TIME Correspondent Jeff Melvoin reports:

"Okay, what's the Waffle House concept?" asks Assistant Professor David Maister, 33, an Englishman. He has already warned a European woman that he will call on her to open the discussion.

"What they try to do is handle people who come in and out as fast as they can," she says a bit nervously. "People don't have to stand in line. They're there to take your order and then also . . . "

As she goes on, Maister writes key points on the blackboard. Waffle House is open 24 hours a day, for example. "Why would people say, 'Whoopee, let's go to Waffle House'?" he asks. "Downhome atmosphere," she answers. "Casual," he writes. And then "Table and counter service. Cook to order. No advertising. Rule books. G.A.F. (Good American Food). Target mkt: travelers, truckers." "Okay, let's step back a minute," Maister says. "How would you characterize the operation?"

"It's like the military."

"What is the place itself really like?"

"I would say a greasy spoon."

"This is a case on how to run a greasy spoon?" Maister asks, writing.

"And make a lot of money," the woman says as the class laughs. "And how to squeeze the most from your employees."

He writes the details that she offers: "10-hr, shifts, $1.25/hr., 70-hr, wk."

"Okay, what do the numbers look like?"

She quickly recites the figures for the costs and the profits, and adds: "They're doing excellent."

"Okay, has anyone been to one of these places?"

A Southerner is called on and agrees that they are "greasy spoon, cheap."

"Cheap!" Maister emphatically scribbles. "Is this a classy greasy spoon or a run-of-the-mill greasy spoon?"

"I've been in worse." The Southerner also reports that a Waffle House is small. Maister suggests that this may be significant. "What does smallness mean here?" Another student reports that a Waffle House has plate-glass walls, so a driver can look in. "You're driving along at six in the morning, and you see the place is open."

"What does that say about the lack of advertising?"

"I don't think you need advertising."

"The smallness is part of the low labor costs," another student suggests. "One guy can handle all the cooking."

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