What is Context Analysis?

Context analysis is a method to analyze the environment in which a business operates. Environmental scanning mainly focuses on the macro environment of a business. But context analysis considers the entire environment of a business, its internal and external environment. This is an important aspect of business planning.

There was once a famous restaurant that had become a go-to destination not only for the neighborhood but they had patrons who traveled from far-flung parts of the city. The business was good and they enjoyed great repeat behavior from people who ate at the restaurants.

They started to get booked weeks out and it was difficult to get a seat if you just walked in. The backbone of the restaurant, the chefs, the waiters, and busboys all enjoyed their job. Slowly but steadily the restaurant turned into a landmark. The business was overall very good.

A few years into running it the owner of the restaurant started to notice they were serving fewer customers than they did in the previous years- though the patrons who came in spent more time in the restaurant than before. With the continuation of this trend and the continued decline in customers per day- the worries of the owner started to grow.

So she did what any owner with a sizable business with money to spare and looking for external validation does- she hired a consulting firm and for the sake of our conversation let’s call them MGMT Consulting.

So the ivy-educated consultants wearing sharp suits and skinny ties entered the restaurant determined to change its fortune and create another industry-defining case study. They spent countless hours interviewing everyone from chefs to customers. Very comprehensive time-motion studies were created. All processes from buying to the documentation of recipes were prepared. The team gave the owner a very flashy presentation every 2 weeks. They were slicing and dicing the whole operation in more dimensions than the owner could comprehend.

The presentations and consultant costs were piling up at a breakneck speed. Yet there was no solution in sight- the eloquent and highly educated consultant kept telling the owner that this was a process and they would soon arrive at a solution. Things showed no sign of changing, the number of time customers spent in the restaurant kept increasing, thereby reducing the number of customers served. One day the owner stepped out of the backdoor that opened in the back alley for a quick smoke during late hours just around the closing time of the restaurant. There she ran into a young girl who was interning with the restaurant for the summer.

A little conversation started between the two about the intern’s experience at the restaurant and what she was learning about the business. During the conversation, the exhausted and tired intern remarked- “I wish the customers spent more time enjoying the food than they spent taking pictures of the food”. This was the moment of epiphany- the reason customers spent more time dining and limited the restaurant’s ability to serve more customers was not a process flaw or process engineering requirement but simply the impact of new social behavior.

The next day a sign appeared at the entrance of the restaurant that gave any customer who deposited his/her phone at the check-in a 10% discount on the total bill. A week later a digital experience appeared in the check-in lobby that allowed the customers to take pictures and share the details of their meal on social without actually being at the table. The digital screen became a big hit- the phone check-in was branded as “Don’t eat with the camera- share your meal with someone you love” / “Phones out, forks in”.

Needless to say, the MGMT Consulting contract was terminated and without implementing a single recommendation from the consultant the number of customers served was up 30% within 3 months. The intern now is a shift manager and the business is growing steadily. This story should elucidate a very fundamental element of everything we do- Context. We can analyze enormous amounts of data, commission studies, and write white papers- but without context, this will all be futile. To read more please visit our – BLOG PAGE