I love coming across stories of pioneering people on the front line of businesses. Today’s example comes from one of the biggest organisations in the world, McDonald’s.
Back in the early 1960s McDonald’s executives were celebrating opening their 500th restaurant and their success in spreading across the US. But in Pittsburgh, franchise owner Jim Delligatti was getting increasingly fed up of losing trade to the Big Boy fast food chain which served more generous adult-sized meals. Spotting an opportunity, he set to work designing a burger that could compete with what Big Boy had to offer. Using friends, family and employees as taste testers he created a ‘secret sauce’ to go with a double decker burger. He called it the Big Mac.
By the mid-60s, McDonald’s was a chain that had grown so successfully because of its ability to replicate standardised processes, menu and service in all its restaurants. Deviating from what had made McDonald’s successful to date did not sit easy with executives and as a lowly franchise manager, Delligatti wasn’t in a position to do anything different without express permission. Executives were nervous that, at twice the price of a regular McDonald’s burger, the Big Mac would drive customers away. They also feared the complex assembly of the Big Mac would upset the finely tuned and smooth running operation of a McDonald’s restaurant.
After two years pursuing his idea, McDonald’s executives finally allowed Delligatti to trial the Big Mac in his Pittsburgh store in 1967. The results were conclusive as Delligatti’s sales went up by 12%. In 1968 Big Macs were rolled out to all US McDonald’s and by 1969 the Big Mac accounted for 19% of national sales (several US$100 million).
One pioneer’s idea had a significant financial impact on the business performance of McDonald’s but it took McDonald’s executives two years to be persuaded to test it. How much did these two years cost McDonald’s in terms of missed opportunity? Like many other large organisations, McDonald’s is successful because of its ability to provide the same experience, service and burger taste in its stores around the world. This requires company-wide standardisation and control of processes with very limited opportunities for any deviation. But as this story demonstrates, without making space for new ideas there is a risk a company can stagnate or fail to make the most of opportunities that exist. Has McDonald’s got the balance right between control and consistency and testing new ideas? Or, as I suspect, are there many more Jim Delligattis out there who have failed to get their ideas off the ground because they’re ‘waiting for permission‘?
We love hearing about pioneering stories from the front line of businesses. If you come across any, please send them our way and we’ll showcase them here on our blog. Examples of other stories we’ve shared include:
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