Trying to do everything (or at least too much) is one of the great, potentially fatal mistakes that early stage business owners make. It’s hardly surprising because everything, and I mean EVERYTHING, does fall on the business owner’s plate. The challenge is, well, to challenge this commonality. Here we use McDonald’s to illustrate an idea accessible to all business owners, regardless of their industry or profession.
The McDonald’s Effect is a phenomenon made possible by the vision of Ray Kroc who saw that a well-oiled business, such as the one run by the McDonald brothers in San Bernardino, California, could be expanded into a viable franchise with thousands of different owners. Kroc perfected every detail of the McDonald’s procedure in a prototype store. Taken to its ultimate conclusion, a perfect system and set of procedures has the ability to replicate itself thousands of times – exemplified by tens of thousands of Mickey D’s worldwide.
For business people who are planning to grow beyond their personal management style or limitations, this concept is well worth appreciating and understanding.
Ray Kroc understood that, in order to make money out of McDonald’s, there had to be systems and procedures in place to allow replication of the proven operation. Neither Ray Kroc nor the McDonald brothers could become the key workers; there had to be a prototype, acting as a model for replication and expansion. For the business to thrive, Ray Kroc had to put in place not just systems and procedures, but employees and an organisational structure around them. Ray Kroc had to find other people to do the work, but once the prototype was effective and he had employees doing the technical work – both manual and managerial – the owners could be left to do the strategic thinking.
Of course, the Kroc approach is not restricted to a food retail store – it can be applied to virtually any business case. An effective prototype is not just a well-oiled machine; it is a business that finds and keeps customers – profitably – better than any of its competitors, and then grows within the context of a larger, expanding business. From the book The 7 Biggest “Costly” Mistakes Business Owners Make (And How to Survive & Thrive) by Richard Cooper – Continued in Part 2…….