Posted on May 01, 2017
There would be few who were not aware of the PR disaster recently that saw United Airlines at one stage lose $800 million in sharemarket value. Thanks to a cellphone camera and the internet, millions were able to see a passenger dragged kicking and screaming from a United flight.
There has been significant condemnation of United’s business practises with regard to staff transportation, and how security staff handled the incident.
But to see this incident in it’s proper context, we go back to Ray Kroc and the basis for the original success of McDonalds.
In 1954 Ray Kroc partnered with the McDonald brothers in their San Bernadino California fast food restaurant. Kroc’s key contributions to the restaurant were automation, standardization and discipline. The discipline of creating a standard system, and then rolling it out to be followed consistently in the same way as “paint by numbers” has been the basis of success for not only McDonalds, but countless enterprises ever since. It’s been the answer to the holy grail of scaling businesses that are reliant on people. By having a standard system to be followed, any business could ensure a standard and consistent product or service. That system could then be duplicated many times over. And it has been. With great success.
But there is a negative side to systemised operations. Having a playbook which must be followed ensures that processes are done the same way, to the same recipe, every time. Which ensures consistency. But the real world is not always like that. There are times when ingredients, or circumstance, or even customers, don’t conform. And with an entirely standardised and automated system, we have removed the ability and necessity for many workers to think, analyse, and make decisions in both their worklife, and personal lives.
Take the humble bank manager. Once held in high esteem in every community, the local bank manager has ceased to exist in the space of a generation. The local bank manager would in times past analyse risk based on community reputation, background, quality of assets plus a dozen other factors known to him (and he was almost always a him) from his interactions in the community. With standardisation and systems in place in every bank, the new bank manager, now called a customer relationship manager, simply ticks boxes. If the result of that box ticking exercise co-incides with the formulas decided upon on the thirty-fifth floor in Melbourne, the business is done. Or not. The customer relationship manager doesn’t have to exercise any judgement, or skill, in the process.
That is a great recipe for consistency, and for ensuring every transaction fits within guidelines. Presuming of course that the guidelines emanating from the thirty-fifth floor in Melbourne are accurate.
And it’s the same in dozens of other occupations. There is a book of rules and guidelines, and all is right with the world when we follow the guidelines.
Yet what we have done in the process, and as a by- product of pushing decision making up the chain of command, is to take away from so many the skill of being able to make decisions. It’s not something we are born with – the ability to weigh and assess facts and intuitions and thereby come to conclusion. It’s a learned process. But if we don’t learn it, and don’t have experience in our daily lives, then we won’t be able to assess and come to meaningful conclusions when it counts.
And perhaps that is a major part of the problem – with people who make perennially wayward financial decisions with credit cards, and with United Airlines personnel. Because so often decision making, and the processes that go to make it up, are not part of our daily functions, when we have to make decisions that are not in the manual (such as how to throw a passenger off a plane) we cannot get it right.
United’s problem was not so much that they had a full flight, and realised too later they needed to also transport staff, but that by taking all decision making out of the hands of the personnel in the front line, they never had the training to make the calls correctly when they had to.