Excellence doesn’t always beat consistency in customers’ priorities. Business Technology’s resident U.S. blogger Keil Hubert explores what a fast food chain can teach other industry sectors about quality assurance and perceived value.
Whether you love it or loathe it, McDonald’s is a highly-successful international brand. With over 36,000 locations across a hundred countries, it made a healthy $28 billion in revenue worldwide in 2014. Not too shabby for a company selling products from a one-pound ‘value menu’. McDonald’s is currently ranked number 110 on the FORTUNE 500 listing of publicly-traded US corporations, and number 433 in the FORTUNE’s Global 500 list. I submit that you don’t have to enjoy eating their products to respect the company’s accomplishments. They’re arguably the largest burger-based fast food company in the world. That stands to reason given that they’ve been peddling cheap hamburgers since 1940. They’ve been successful enough over the decades to have spawned a terrifying number of imitators even though a lot of profitable competitors had a head start on them.
That being said, a business student can learn a lot from the McDonald’s story. One core element of their success came from enforced standardization. Here in the US, a lot of people favour eating at a McDonald’s when they’re traveling because of its familiarity. You know exactly what you’re going to get when you eat at one, whether you’re in Sussex, Singapore, Sydney, or South Dakota. [1] The same product will be prepared the same way, resulting in the same dining experience. Not glorious, perhaps, but guaranteed to something you’re already decided that you’re okay with. There are times—for example, when you’ve had a bloody terrible day traveling – that a familiar experience is more to be craved than a thrilling experience.
That ‘reliability’ factor is a very strong draw, and it applies to a lot more than just food. Knowing what you’re going to get from a vendor, a supplier, or a service provider can often prove to be the winning attribute that ultimately secures a long-term contract. Other suppliers may be faster, better, or cheaper, but predictability often wins out over excellence in the end. The more complicated a product is, the more things can go wrong with it. The more that skill is required to perform a service, the greater the likelihood is that some or all deliveries will be botched by unskilled workers. A result that’s definitely going to be good enough usually beats a result that might be great.
I know I’m not making a strong case for dining at your local McD’s; that’s not my intent. They really don’t need my help convincing anyone to eat there. Most people have strong opinions about fast food in general and about the Golden Arches in particular. For the purposes of this column, I’m much more interested in their regimentation programme and what we can learn from it.
Bryan Gruley and Leslie Patton wrote an interesting piece on McDonald’s operational, logistical, and profitability concerns in this last week’s edition of Bloomberg Businessweek. [2] In it, they examined and discussed several of the factors that seem to be straining relationships between McDonald’s corporate headquarters and its franchise owners, including difficult-to-prepare food products, mandatory capital investment, unacceptable wait times, strained profit margins, et al. I loved the article, but I think that it may have missed a crucial factor: enforcement of standards.
Presented as evidence, consider lunch. Specifically: my lunch. About one day a week, my schedule gets compressed with events such that I wind up with a very small window to grab some sort of lunch before I have to join a call or appear in a meeting. I’m always looking for ways to secure a hot meal swiftly, and (being a nerd) I like to experiment. There are three McDonald’s locations near enough to my office to be suitable subjects, so I recently put all three to the test to see which one would be my best option. I timed my visits to each one. I also started from the same space in the car park and ended with me sitting at my desk with a paper bag. I made sure to place the exact same order each time so that food processing variations wouldn’t be a factor.
I started with my local neighbourhood store as my baseline. [3] It’s the closest location to my house, which is why I have years of experience with it. The staff at this location are consistently quick, friendly, and accurate. The food is usually as good as any other store I’ve ever eaten at. They’re located 6.5 miles from my car park, so it takes me about ten minutes each way to make the trip (not counting time wasted idling behind other customers). Let’s call this Location A.
Next, I tried out a free-standing location in a strip mall just west of the office. [2] That one’s 4.1 miles each way from the car park, and lies on a route with half as many traffic lights. It’s only about eight minutes each way – a potential driving time savings of 20 per cent. Let’s call that Location B.
Finally, there’s a store built into to a service station just off the highway directly across from the airport. That one’s just 3.9 miles away along a slightly faster route. Despite Google Maps telling me that I needed nine minutes to reach it, I did it in seven without breaching the speed limit. So, Location C.
In theory, each location should give me the exact same experience. That’s what Ray Kroc wanted when he started expanding the McDonald’s brand across the USA: a consistent, repeatable, and dependable experience. I should have received identical products, prepared in an identical fashion, with exactly the same taste from each store. After all, all three locations used the same ingredients, cooked them on the same equipment according to the same recipe. Obviously that didn’t happen.
Location A was my baseline. It took longer to get there than to the other two test stores, but I was out of the drive through nearly instantly. Location B’s people were more ambivalent towards me, kept me waiting in line the longest, and gave me mediocre-tasting food. Location C was dreadful – they were fast, but the bread was stale, the food was barely lukewarm, and their assembly of the product was sloppy. End result: the place furthest from me turned out to be my best overall option.
Here’s why I think that Locations B and C were failing me as a customer – and why McDonald’s franchisees may be failing the corporation overall by discouraging customers: they all have the exact same standards to meet, but those standards are bloody useless if the people running some of the local operations aren’t enforcing those standards. A fast food place can have the best menu in the industry and use the best ingredients, but if their workers half-arse the cooking and ignore the customer experience, then people are going to turn against them. I can tell you that if I’d only ever experienced the food from Locations B and C, I’d never go back to any McDonald’s anywhere.
It’s tempting to argue that these observations are all very well and good if you own or operate a burger joint, but that they don’t necessarily apply to different industry sectors. I counter that darned near everyone needs consistent qualify control. Here’s the thing…
One of my primary areas of focus in IT is in policy, process, and procedure development and optimization. I spend a lot of my time figuring out how to allocate, balance, and monitor people’s and organisations’ performance. I’ve found that there’s one critical truth that keeps us process people awake at night: you can design the best protocol in the world, but it won’t accomplish its business objectives if the people entrusted to execute it don’t bother to follow your instructions. Worse, when left to their own devices, some people are pretty darned consistent at ignoring published standards.
That’s why I glommed on to the Air Force’s new ‘Quality Assurance’ doctrine when it rolled out Technical Order 00-33A-1001. The new rulebook required every IT department to set up a special QA section that reported directly the commander (me!) and wouldn’t be beholden to any of the production departments. The QA team’s remit included validating all new processes, inspecting all personnel for faithful adherence to official processes, and coming up with solutions to mitigate any perceived training or execution shortfalls. I saw the value of the new idea immediately and put the entire weight of my authority behind spinning up our capability. Within a year, our unit had been recognized by Air Mobility Command for excellence in QA activities, and we were sending our QA experts all around the country to teach other units how to implement the doctrine. Good times.
Ever since then, I’ve been inclined to factor the active participation of some sort of QA capability into every regimented IT service delivery effort that I’ve been involved in. I believe in it. I’ve seen for myself how much efficiency and effectiveness can improve when you add QA to the mix.
To be clear, I’m not talking about using QA to train or to otherwise ‘qualify’ new employees. Lots of organizations have formal standards for ‘qualifying’ techs to perform work – everything from performance-based testing to the attainment and maintenance of commercial certifications – but those standards don’t carry with them any guarantee that the ‘qualified’ employee will actually cleave to the required performance standards for a given task. Will they execute their duties exactly according to the checklist each and every time? Or will they take unauthorized shortcuts when they’re hurried, tired, or distracted? The only way to know for sure that your techs are performing according to the required standard is to deploy neutral QA techs to overtly and covertly observe your techs in the execution of their actual duties. If your techs perform their tasks by the book, you’ll then gain objective confidence in their discipline, reliability, and fidelity. If, instead, they deviate from your standards, then you’ll have objective proof that the offenders require remedial training – and evidence that they might need some management attention to get them back in line.
That last aspect is absolutely critical: you can have a thoroughly-invasive and inescapable QA programme to watch your workers, but your programme won’t be worth anything if your managers refuse to take corrective action to enforce compliance with standards when QA discovers and reports deviations. I’ve found that this is where policy initiatives, quality assurance efforts, and audits all completely fall apart: when managers have all of the evidence that they need to correct problems in their organizations, and flat-out refuse to take meaningful action.
Lack of enforcement corrodes good order and discipline throughout companies: once employees observe that management is unwilling or unable to enforce a ‘mandatory’ rule, they come to the (entirely logical) conclusion that obedience is strictly optional. Whether management’s reluctance is due to favouritism, a fear of conflict, compromised loyalties, distraction, or simple indifference, the net effect is always the same: people stop taking orders seriously, and comply with rules only when it’s both personally advantageous and convenient to do so.
I’ve interviewed lots of leaders (at all levels of authority) about why they’d chosen to abandon their management responsibilities when it came to enforcing their and/or their company’s policies. In most cases, the answers I received weren’t logical justifications so much as they were ego-preserving rationalizations. Most of the time, the manager didn’t want to be perceived by his or her employees as draconian because he or she was afraid of being forced by regulations to take disciplinary action against a valued team member.
That’s an absurd position to try and defend. The entire reason that companies have a management caste is to ensure that work gets done on time, in the right order, and in the right way. If employees were all predisposed to follow best practices and executive direction of their own accord, there’d be no reason to waste payroll funds on managers. Depending on the organization, anywhere from some to most employees are loyal like that… but never all. There are always going to be a few people disinclined to toe the company line.
To make matters worse, even a team that’s 100 per cent in favour of playing by the company rulebook can wreak havoc if they don’t fully understand how to properly comply with the rules. Writing things down is great; it’s also not enough to guarantee proper performance. Someone has to first teach people the proper way to do things, and then patiently work with trainees until they’re assured that each student is as capable – and as reliable – as the trainer is at every required task. Education is not experience.
That’s where training, QA, and management come together as the company’s infantry, cavalry, and artillery (respectively). It takes all three elements to make the workplace fully functional. The joint leadership team has to work together seamlessly to ensure that all team members know the company’s performance standards, are capable of meeting said standards, and will continue to perform to each standard. If any of those three leadership pillars isn’t present – or if one fails in its assigned mission – then the whole effort is compromised.
I suspect that’s where the two nonviable McDonald’s locations managed to screw up my lunches: they had a standard to follow and were perfectly capable of delivering on that standard, but failed because of ineffective training, weak leadership, and/or a lack of attentive qualify assurance. Having known a couple of McDonald’s managers over the years, I’m highly doubtful that it was a lack of good training materials.
Despite this, McDonald’s still made billions of dollars last year and makes up nearly 10 per cent of the fast food market in the USA. Imagine, though, how much more profitable they’d be if all their stores were routinely performing to the same quality standard that my neighbourhood location has managed to meet for over a decade.
In a similar vein, imagine how much happier your customers would be if you could eliminate unauthorized deviations from standard business practices in your service delivery groups. Once you took inconstant employee performance out of the equation, your products could actually succeed and fail on their own merits. And your customer… well, they might just choose your solution over yours over your flashier competitors’ offerings once they learned that you’re thoroughly reliable in meeting their basic needs.
Try it some time. You might just find that you like the experience.
[1] When I went to Sydney as part of the internet broadcast crew for the 2000 Paralympic Games, the only place we had to get food for the first few days that we were in operation was a McDonald’s kiosk located at our hotel.
[2] ‘McRevolt: The Frustrating Life of the McDonald’s Franchisee,’ 16th September 2015, pages 64-69.
[3] 3300 Harwood Road, Bedford, Texas, 76021-3904, USA.
[4] 5435 William D Tate, Grapevine, Texas, 76054, USA
[5] Chevron Grapevine, 101 Texas 114, Grapevine, TX 76051, USA
POC is Keil Hubert, keil.hubert@gmail.com
Follow him on twitter at @keilhubert.
You can buy his books on IT leadership and IT interviewing at the Amazon Kindle Store.
Keil Hubert is a retired U.S. Air Force ‘Cyberspace Operations’ officer, with over ten years of military command experience. He currently consults on business, security and technology issues in Texas. He’s built dot-com start-ups for KPMG Consulting, created an in-house consulting practice for Yahoo!, and helped to launch four small businesses (including his own).
Keil’s experience creating and leading IT teams in the defense, healthcare, media, government and non-profit sectors has afforded him an eclectic perspective on the integration of business needs, technical services and creative employee development… This serves him well as Business Technology’s resident U.S. blogger.
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