A reminder about the limits (and strengths) of systems

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systems at mcdonalds
McDonad’s systems

Ruslan Kogan makes a strong point about the limits of systems-thinking in his blog post: Why I applied (unsuccessfully) for a job at McDonald’s to learn how to run my business.

His point: Systems and processes are truly essential to make a business run smoothly, but human interpretation and choice need to be part of the picture if you are to truly succeed in your enterprise.

The systems approach, marketed extensively for the construction sector through Michael Gerber’s E-Myth concept, bases its reasoning on the franchise model: If you boil everything down to clear processes, you can ensure consistency, reliability and service quality. Kogan writes:

A scientific approach to processes is what enables McDonald’s to be able to deliver a Big Mac that tastes identical whether you order it in New York, Melbourne, Paris or Baghdad. No matter where you order your Big Mac, the process undertaken to source all the ingredients all the way through to how it’s cooked, prepared, served and marketed is identical. What’s even more amazing is that the process may involve significant input from staff that have spent less than three hours being employed by McDonald’s. That’s right — thanks to the processes created by McDonald’s — a staff member can be trained to perform some critical tasks and start being productive within three hours on their first day of work.

I’m sure any entrepreneur would love to be able to train new staff to a point where they can add value to your business within hours of starting. I’m sure we’d all love the ability to create such scalable processes that the quality of service received by any of our billions of customers around the globe would be identical. But it’s not easy, which is why a few years ago I applied for a full-time job at McDonald’s to learn more about the science behind their processes.

But problems occur when systems are administered without flexibility, human respect, and creativity. Kogan describes a systems failure here:

However, I witnessed something a few years back that made me realise that a great process can also ruin a business. I was at one of the greatest horse races in the world – The Melbourne Cup. In Australia, we refer to it as “the race that stops the nation.”

The major sponsor of the event is Emirates Airline, and as such they have the showpiece marquee of the event. It’s where you’ll find all the celebrities, politicians and business leaders rubbing shoulders. I’d imagine that throughout the day the Emirates marquee would experience a lot of people trying to get in on the action without being invited or on the guest list. I’m sure they come up with all sorts of reasons for why they should be let in. As such, the people at the door controlling entry need to be very firm.

So I was walking past the marquee with my friends when I saw a group of about eight people approaching the Emirates marquee. They were very jovial, and when they got closer to the marquee I realised they were holding the Melbourne Cup itself. They were the group of owners of Fiorente, the horse which had just won the big race (along with $3.3 million in prize money). They were all wearing Emirates baseball caps (because Emirates is the principal sponsor of the Melbourne Cup) and they approached the door of the marquee. The conversation went something like this:

Girl at door: “Are you on the guest list?”
Owners of Fiorente: “No.”
Girl: “Unfortunately you can’t come in, sorry.”
Owners: “Are you sure? Our horse just won the cup” (said while holding the trophy itself)
Girl: “Sorry, you can’t come in. I can only allow people to enter if their name is on the list”

At which point the owners of Fiorente turned around and began walking away. I’m sure the people at the door were just following a process. They would have been instructed to, under no circumstances, let anyone in to the marquee unless they were on the list. Regardless, this was the biggest PR fail I had ever witnessed.

I’m guessing the person who gave them those instructions did not consider what happens when the owners of the horse that just won the Melbourne Cup try to get into the marquee to celebrate. It would have been a great opportunity for them all to be photographed celebrating inside the Emirates marquee with the cup.

As the group of owners holding the trophy turned away to leave after they were denied entry, one of the senior managers caught onto what was going on and chased them down the street to ask them to come back. They replied saying they weren’t interested in going somewhere that turned them away, and proceeded to celebrate in a more understanding, accommodating marquee.

Obviously the guards were following the rules, the “book” — to such a degree that they didn’t see the obvious: This situation demanded an exceptional response.

(Systems-believers will argue that you can build systems for this sort of innovation and responsiveness.  Some argue that successful businesses such as Google have resolved these issues, and even I believed that to be the case, until I read this Quora.com thread about the less-than-perfect aspects in working for Google.)

Inherently, I think the systems/free-will options in business are much like Yin and Yang. Too much of one with too little of the other generally causes real problems. Excessively rigid processes lead to bureaucracy, burn-out and stagnation. Chaotic, seat-of-the-pants processes might inspire creativity, but rarely support sustainability.

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