Everyone is looking for a scapegoat for the current financial crisis.  A couple have been floated nationally.  Greedy bankers.  Stupid bankers.  Banking bankers.  Minorities.  Fannie Mae and Freddy Mac.  Phil Gramm.  The Future Commoditizations Act.  Alan Greenspan.  Speculators.  Countrywide Mortgage.  George W. Bush.  I’d like to add a new name to this list, and it’s not one that I’ve heard mentioned anywhere else: McDonald’s.  Yeah, the restaurant with the red-headed clown and golden arches.

It’s not McDonald’s cheap burger sales or piping hot coffee that helped set the stage for the current problems the global economy if facing.  Rather, it’s the innovation in their business model and process management techniques that ended up screwing everyone.  Way back in the dinosaur days McDonald’s began to simplify their franchises’ operations.  Eventually they got to the turn key franchise point.  This meant that they had so perfected the processes and procedures needed to successfully run a McDonald’s franchise restaurant that anyone could walk in and turn a profit.

This mastering of systems to such a degree that employee ability was eliminated as a success variable had a profound effect on every aspect of global business.  Process management became extremely popular as companies, managers, and executives attempted to set up procedures that precluded employee skill as a determinate factor in success.  This concept was and is particularly attractive to management because it presents them with the illusion of it being possible for them to be smart enough to reduct the worker into a non-entity.  Successes would now be attributable to the manager alone and no one else.  No longer would “bad workers” hold back the brilliant leaders plan.

America and the world launched into a new era of process centric business that promised a final solution to every problem, no matter how complex if only the organization could be set up to deal with it correctly.  Consulting firms boomed as they promised to provide “process expertise” on demand to any company willing to pay.  The enthusiasm for this new philosophy was so great that it began to be applied to non-process applications.  Including things like risk management.

Unfortunately for this wave of corporate enthusiasm, most jobs are a lot more complex than putting frozen burgers in a microwave and then handing them to a customer.  Unfortunately for the world economy, nobody really picked up on this because all the smart guys that are supposed to be wary of cure-all solutions to everything were busy writing books and giving lectures to cash in on why their particular process system was the best.  The spread of process-think to non process applications was more insidious and was (and still is) largely ignored because process-think has come to so completely dominate business theory that it’s just assumed to be the default mode.

Hiring smart people to direct complex tasks became passe, the new thing was to hire smart people to design processes to direct the complex task then let some random moron run it.  More than anything else, these trends contributed to the culture that allowed businesses worldwide to think they had conquered risk.  Right up until the point where risk woke up and ate them like Hamburgler going to town on a plate of McNuggets.  So if you want someone to blame for the current financial mess and are tired of the usual suspects, blame McDonald’s.  Their exportation of process think is at the bottom of the five-whys* of the financial crisis.  Maybe.

*The five whys is a process developed by Toyota to figure out how to improve production processes.  If a part fails, you go back at least five steps in production to find out why and fix each step along the way that led to the failure.  The double use of the word “process” at the start of this paragraph illustrates just how deeply it has become embedded in modern business theory.

Tags: mcdonalds, process management, turn key setup