As your business grows, one of the most important things for ensuring you can scale is the way in which your organization creates and manages processes.
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.
So, I have an unhealthy obsession with processes. It’s probably been one of the biggest contributing factors to the growth of Kogan. Whenever we do anything new, we spend considerable time analyzing every industry dynamic at play, and creating a processes to ensure that many people in our team could perform the task with minimum deviation from quality requirements.
However, I witnessed something a few years back that made me realize 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.
Seeing all this unfold made me think about process driven organizations and the pros and cons of having everything run through a process.
I understand the benefits exclusivity can bring to a business, particularly the Emirates brand, but they missed out on a huge opportunity. An inflexible process damaged their event.
When you are implementing a process, you need to think about how it would work if your business was 10 times bigger than it is today. You can’t design processes that work today—you must design them to work one year from now. But, you must also ensure your team is empowered to swim upstream and make tough decisions. It’s important that whenever you have a process-driven business that you also have the appropriate measures to escalate issues and to empower your frontline staff to act appropriately where they see fit.
It reminded me of a time about six years ago when a customer called Kogan.com with a problem they were having with a GPS unit they had purchased from us. The support staff member ran them through the usual troubleshooting steps and determined that the GPS unit was faulty. The usual steps from there was to issue a returns form to the customer and have them send the unit back to us to replace for them. This particular case was a little different. The customer was calling us from the car in the middle of the Variety Bash, which means they were racing through the middle of the Australian outback and were lost in one of the towns they were transiting through. Because their GPS had broken they were lost. Our customer support agent could have just followed the prescribed process and told them to return the unit for a replacement and that was that. However, he spent an hour on the phone with them while looking at Google Maps and helping them navigate to their next checkpoint. That customer then sent us a huge thank you letter when they completed the race and they have been a frequent customer of ours ever since.
Early last year I was walking through Hong Kong on a business trip, and someone approached me on the street. They told me they were a Kogan.com customer, and their phone was having some issues. The correct process would have been to direct them to our online help center. Instead, I took the customer to a cafe around the corner, sat down with them, and inspected the phone. Thankfully, the solution to the problem was one that fixes 99% of problems with phones. It was fixed by just taking the battery out and resetting the phone :). Nevertheless, the customer was extremely grateful and has shopped with us many times since and wrote on our Facebook page their pleasant experience.
While a scientific approach to processes is important to grow an organization and maintain efficiency, it’s just as important to ensure that your staff know when to not follow a process and start to use their intuition. Don’t let a great process ruin your business!