Tuesday, August 26, 2008

McDonalds in LaVerne - why systems alone cannot solve problems

McDonalds is well-known for its superior organization, and its establishment of processes that are reputed to ensure that a properly-trained employee can be plugged into the system, and that the system will work, dispensing French fries and other foods of a consistent high quality at a low cost.

Obviously, McDonalds isn't the only corporation that has implemented this philosophy. Chances are that your organization has instituted a set of procedures, and (especially if you work in a large organization) there is an underlying assumption that you can put someone into the procedural mix, and the right stuff will come out.

This assumes, of course, that the person is sufficiently trained, sufficiently able to understand the training, and sufficiently willing to work by the book.

As documented earlier in this blog and on Flickr, I ran across an error at the McDonalds in LaVerne this morning, and as part of this, I noticed three failures in McDonalds' system:

  1. An inconsistently applied price change. Based upon subsequent conversations, I suspect that the LaVerne McDonalds chose to raise the price of its Extra Value Meal #2 from $3.79 to $3.89. While this change was recorded at the register, it was not recorded at the drive-thru board outside of the restaurant.

  2. A misunderstanding of the problem, and the inherent business environment. After receiving a $4.21 charge for a $3.79 meal, I suspected that something was wrong, drove through the drive-thru, and confirmed that I was charged $3.89 for a $3.79 meal. When I got up to the register, the cashier's first statement was that the difference was due to tax. (If so, LaVerne has a wonderful tax rate; $0.10 tax on a $3.79 item? 2%?) The cashier's second statement was that I obviously ordered something beyond the regular Extra Value Meal. After I pointed out that I had ordered a small coffee as my drink, the cashier went to get a supervisor.

  3. A second misunderstanding of the problem, and the inherent business environment. When I spoke to the second person that came up, she said that...the difference was due to tax. (Again, the 2% tax rate.) At that point I gave up and said that I'd call the number on the receipt.
Incidentally, when I called the number an hour later, the person that I spoke to - who may or may not have been the second person that I spoke to in the restaurant - confirmed that they were going to go outside and change the posted price today.

Now I'll grant that the Extra Value Meal price is a show price, one which the regular McDonalds employee never sees. When they punch an item in the register, they don't enter a single $3.79 or $3.89 item. In my case, the cashier entered a $2.60 item ("1 SAU EGG MCMUFFIN ML") along with a $1.29 small coffee - JUST LIKE SHE HAD BEEN PROGRAMMED TO DO.

Because the people that I spoke to were well-versed in the procedures, they were initially unable to realize that there was a problem. Not only were they unfamiliar with the price that they were advertising for their food (again, to them the price was $2.60 + $1.29, not $3.79 or $3.89), but they were also unfamiliar with the tax rates in their jurisdiction. Any consumer living in southern California has an inherent understanding that the tax rates out here are much higher than 2% - however, this concept was apparently not taught as part of McDonalds procedures.

In his book The Macintosh Way, Guy Kawasaki documented a similar issue on a trade show floor. He had a particular question that was outside of the realm of the booth staff, so the booth staff members repeatedly issued the canned response that they were supposed to use - a response that did not answer Kawasaki's question.

One solution to this problem is to broaden the procedures and the training, and make sure that, for example, McDonalds' training covers the error use case which I have documented above. However, I submit that it is impossible to write a procedure manual which covers every possibility, no matter how hard one may try. I have been a product manager for nearly nine years now, with responsibility for writing product requirements, and it is a truism that once I write a requirement that assumes that a customer will NEVER do action X, I will run into a customer who INSISTS on doing action X.

A better solution to this problem is to hire people that are able to think, are able to see a bigger picture, and are able to solve problems rather than retreating to paragraph 3.25.b of a procedure manual. But this introduces uncertainty into the system, and results in a loss of predictability and control for headquarters. More importantly, it introduces significant additional costs, since such people would probably not be the minimum wage people upon which McDonalds depends as part of its strategy.

So what's the solution?

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