Please welcome Dennis Wile.
Good morning, I don't know if the program the conference organizers did on purpose that
McDonald's is speaking after physical exercise, but I hope you're not too starving based on the coasting and
Then when I just heard about the track bikes being out there, which I think is great and David
We didn't we weren't asked to present food
But I last night I noticed that there were some hamburgers and if you've seen them those mini hamburgers that were served
So they were not from McDonald's, but I still appreciate the the gesture
And I would like to talk about Patrick has asked me to talk about what we do have McDonald's regarding design thinking as well as design
practice as it relates to service innovation and I'm labeling my talk and update because one of the key messages
I'm going to share with you is that we are still on a journey
We have kind of started this journey to really
apply HCI about two little bit over two years ago and
We have discovered some things that work well and we've discovered some things that don't work well, and I'm I'm here to share both
The other thing is I'm kind of giving away my talk at the beginning
I will have three main messages one is obviously the one about learning I just covered
The second one is that service design more than any other design
Goes right away to system design and it goes to system design in two areas
Organizational because in order to bring service to life you have to go cross-organizational
But also from an offer the offer is actually a system. You're not offering a specific product
So those are to certain extent the things we are challenged with and struggling with is how do you design a whole system?
33,000 times around the world and then the third one is really from a design thinking point of view
Where we believe the really wonderful contribution design thinking can make is in visualizing because of the challenge of being more of an experience
Visualizing is really key part in planning because it's very hard to plan
Something that's a whole restaurant with every all the activities that goes on with a restaurant
It's very hard to have a vision you can have a vision for training and you can have a vision for product and menu
But how does it all come together? So that's kind of the premise and those are the kind of things I'm going to share
The menu for today is going to be I'm sharing three things one is
Just give you a quick overview about innovation at McDonald's and then picking up on the theme of the conference
Actually, I was very excited about to see that
Where to play in how to win was integrated and because we actually used it last year for our planning for
2007 and Roger and obviously here needs to do some
Better marketing job because we picked it up on a business 2.0 article article about P&G using using that method for strategic planning
And it just resonated with us because of its simplicity and being very much an operations driven company
Simplicity anything that you can qualify is good. It goes with the culture
So I'm going to give you an update on some experiments
We have done in the where to play and then in the how to win area. I'm not going to go in on the work
We actually did on a strategic planning which was more about what we are going to do
I'm going to cover more about what we have learned on the methods to use to how to how to develop
Winning services so how to win from a how point of view not from a what point of view
Just a quick background on McDonald's you probably all know McDonald's but
Some key things is we are 33,000 restaurants 13,000 in the u.s
So roughly there is one McDonald's for 10 libraries and actually we believe that's a good thing. So I agree with this Dale
the
We are we are in 119 countries
Very importantly. We are a community-based business and I think what's happening have a theory on this
I think in the 80s and 90s that whole aspect of being community owner operator based got a little bit lost and it somehow
Lost its relevance with consumers and I think we're seeing a comeback of that
And so it was got a little bit forgotten that we are actually based in the community
And it's a key part as you will see when I present some of our challenges
It's a key part of how our business now works
So and we have 5,000 owner operators 80% of our restaurants worldwide are owned by owner operators
We own only 20% of them and then if you look at everybody who works it's 1.5 million system
and we say system we mean both corporate owned and
franchise so the total system employees
by the way with a
Very high turnover rate over a hundred percent actually over 150 percent in some markets
If you look at alumni, we have a huge network of McDonald's alumni
I'm sure there are probably some in this room right now. I won't ask you to raise your hand
One of the when I joined McDonald's one of the key challenges
We discovered is the nature of our business and the nature of our business is a little bit schizophrenic
We are both in certain goods company. We both a services company if you look at the back of our restaurants
We are a mini manufacturing plant. We produce products if you look at the front of our restaurants
We are a service business and here is a kind of a continuum developed by
Think it's from University of Michigan
That kind of categorizes different industries along a continuum of being pure goods to pure services
And as you can see fast food service restaurants are right right in the center
The reason why this is relevant is that there are some key differences between goods and services
and again, I think this is also from from the same source and
Those differences are leading towards that system challenge that they alluded to at the beginning
Services by definition are an ends per se
We are not producing a product that the user takes somewhere and does something with it. We are actually giving you the real thing
it's by definition as a result much more heterogeneous and
If you are have a footprint of McDonald's which basically means we have over close to 50 million customers a day around the world
We we have many many different segments using McDonald's in a very very different ways
So it's very hard. You can't it's very hard that persona
We always suddenly should we have personas to kind of develop against we would have a lot of personas
So we have made some progress in kind of focusing in on young adults
Moms and kids as being as our main focus, but in reality we just discovered now in Europe for example that
With this new focus on those segments that we're leaving out adult workday lunch, which is also a huge segment
So so so that's why I think it's a very we are very heterogeneous and we're very used very heterogeneously
What we produce is more intangible on the service side. Obviously our products are quite tangible and
And very importantly and I think quite exciting is the fact that we are every day
co-producing the experience with our customers and
That obviously leads you right to the area of participatory design and that's one of the areas. We are very interesting in exploring
our
Unfortunately our our products are perishable
So your your experience with McDonald's is only as good as your last experience
But for 50 million interactions a day, we can't guarantee that every single one of them is going to be a good one because there are
Many variables in it as the cloning presentation from yesterday and then lastly is the use of technology
technology is obviously used
Really in a way the opportunity for us in technology is to provide customers control
So this goes in the area of self-ordering
Like kiosk at airports that you see in airlines obviously with cell phones and a lot of transactions to cell phones
one of the questions we are dealing with is how
How does that apply our Japanese organization has just done a joint venture with stock or more on on cell phones
Initially for payment, but obviously later also for ordering. So so technology is is a very exciting innovation area for us
and
Talk a little bit about the organization
We historically have always been a network the power at McDonald's is at the periphery. It's not at the center
To my chagrin. I work at the center
the
We have a very lean center and we have kind of job-sharing. So
The markets and the areas of the world that have most of the resources
tend to tend to do all the development most of the development and tend to be focused on
Innovations that are kind of in a zero to three-year range
We at the center are more focused on the longer term three years plus
So our role is more around discovery and inspiration
With one exceptions, which is the restaurant platform because we are obviously a franchise or and at the core of what we franchise
Is our restaurant platform our operating platform?
So that's probably the only thing that's more even that is not we have different operating platforms around the world now
But that is kind of the most common element
So how is innovation at the center organized via the yellow is the what's at the center the global group and the white
Is what's at the market level and at the bottom you see the timeline?
And we have a small another key thing to know is that we are lean and hopefully mean a little bit too
Because we we are retailer and we are service company a
Professor in Germany on service design has done some research on average R&D spending in service companies versus product companies
And it's actually in the multiple. It's about a fifth to a tenth of the spending. So
While we are a big company and our R&D spending is actually quite low
Because first of all the decentralized nature I talked about but also because service companies traditionally
Rely on their suppliers to do the R&D. They pay for R&D based on the product's device
So we would rely on our equipment suppliers to do the R&D
So it's a little bit a new thing. We would rely on our food suppliers to do a new food product
So this is a little bit new that we actually do a true innovation ourselves. So our innovation planning group is two people
We do
Orchestrate so because of all the development activities going on around the world. We are trying to bring some
Transparency into it by sharing by actually creating a pipeline documenting what our pipeline is because it's very bottoms up
And then try to bring some portfolio management. So try to bring some top down
At least view again. The power is not at the center. So we can't dictate it
But at least bring some view about how how does it look from a portfolio point of view?
What everybody is doing and they are potential gaps
The second thing is we are we try to inspire by bringing by having the luxury of time
We are not responsible for a specific P&L. So we have the opportunity to look a little bit further out
So we do the trends research and bring it to the markets and we do some discovery work and key concept developments
As we move into the development side as I mentioned before
We do the development on the restaurant platform initiatives
It is the new production methods or new service methods
We really just inspire on the menu and the customer experience
We do knowledge sharing and we do again some of that discovery work
Actually what has been happening over the last two years is that even this thing?
That's a solid yellow historically is also becoming now a more shared
So we are actually moving more. It just heard the David talk about being the Intel of
Bicycles we actually believe that our solution on the restaurant platform has to become more like the Intel chip
So we call it the operating plan on next-generation operating platform
We are working on we come what we call the detent inside
Because what we already realize is that the market conditions are so different that one solid
Operating platform or service system doesn't work anymore
What we need to provide is provide a platform that allows
Individual markets to pursue growth and customize it to their area
So in order to do that we kind of do the discovery ourselves
Determine the principles and right now we involved in partnering and from key pilot stores in Europe and the US
And I can't share those at this stage, but I can tell you that they look quite different
But at the core they have the same chip inside that actually on how they look and what they have in them
Is is quite different?
So I want to now with the bottom introduction talk a little bit about where we play and I want to cover
And this is the experimental part things that we are still learning and
Wish I could report success, but it's not there yet
We tried it for the first time in our
2007 planning at the enterprise level and since those learnings we are now in the middle of trying to use it actually more at the
restaurant level
at the enterprise level
What where we are doing quite well right now. We are
Having good success and the main driver of our success has been a reframing and the refocus of our business five years ago
We five years ago. We've been actually joined. I joined McDonald's on a new business development group
We had a strategy of saying we need to love large numbers
There's only so big one single business can get therefore. We need to look at our competencies and figure out very kind of new venturing
And and it was fun
But it basically we are being a retail business
It turned out to be quite dangerous because it actually it was the sexiest stuff was to work on our partner brands
Which was Chipotle and Boston market or work on the new business area that I helped lead and
It really took away the focus from our core business to a certain extent
We had lost confidence in our core business and that then instantly translated in in poor execution at the restaurant level
so our turnerites at a turn around started when we got the new CEO or an old CEO back and
Decided to focus on two things one
getting instead of building more stores getting more customers to our existing stores and
Second really reframing a little bit to a bunch. We talked about
Reframing our space. We were very focused on competing with Wendy's Burger King and really in the bird in the little burger category
And where the big growth was happening was outside the burger category
So we really reframed our challenge in our business to be
Informally eating out of convenience food and those two things were kind of helped us to regain focus number one
As well as to focus our innovation efforts
So the reason I'm giving you the background is that the challenge we had last year as we enter 2007 planning
Was now that we've had this success. Where do we go next?
So we wanted to kind of frame
What where are the growth opportunities? What is that gross universe we could play in and we did this kind of
Simplistic growth compass where in the middle we kind of identified the greens fees
This is something we have to any any restaurant that wants to grow
So this is all about growth if you want to grow in the convenience food space
You have to do those four things not not not there's no discussion
But then when we looked at the market, we realized that there were different strategies on the place or the experience side
There's a lot of success and concepts that are just very simple and a lot of success and concepts that really stage and actually
Prescribed an experience and the same to be on the menu side, which is the red
So if you look at kind of examples in there, we kind of defined the different directions
So under the southwest is ease and Predamanger, which actually we still have an interest in
It's a UK based mostly London a based sandwich company
Incredibly successful. It's all ready sandwiches freshly made in the store, but then pre-packaged and you choose it yourself
A 7-eleven in Japan in Asia is having incredible success with the food
The day have three times a day fresh food delivery different day parts
They are being used basically like QSR is big quick service restaurants are being used in the US
And it's all about ease. It's very simple and it's quite limited from a menu point of view
On the experience for you
I think Starbucks is obviously the key example a Starbucks has such a strong experience that when you do
As no god ethnography, you will notice that people adjust the hair and change their voice and change their walk when they go into Starbucks
They don't believe me. They don't do that when they come into McDonald's
So so the experience is so strong that it actually certain extent scripts the behavior of the customer on
The on the right side when we go to food of choice
There are concepts all around the world
We have food life here in Chicago that really go sorry go to deep experiences
With a food of choice the only way to do that is to really recreate the marketplace
Because you need to have a narrative behind each of your food offering if you want to offer deep experience
So more than pick them are shares a concept. That's quite strong in Europe and Canada
And basically it has like a pasta station and the salad station and you kind of it's like food life here in Chicago
And then on the bottom right another key growth area, which is really more in the grocery store
And we heard before about convergence in the telecommunications industry. There is convergence in the food industry as well
It's in this area of convenient food
And as you look at grocery stores that have very limited growth very low margins
their area of opportunity of growth is prepared foods and
They are excited UK is the key leading in that by far
But in the US there are some pockets
There is you crops enrichment, which is actually this pictures from
And there is a recommend so there's some some local retailers and they tend to sell over
150 to 300 SKUs of prepared food
So it's an incredible choice. It's all fresh
Obviously they have they offer you microwaves there to heat it up
But most of the businesses is to take away which is also the case at McDonald's most most of our business is being taken away outside as well
so so those are the four areas and
The the purpose what we wanted to do and this was a little bit self-interest on the innovation side
We partnered with the corporate strategy group and basically as part of the planning process and told them
We we have we have innovations going on here
We have innovations going on here and here and we are very very very disparate and the question is
What do we really want to be when we grow up? Where do we think we really want to play in and so we very quickly
Eliminated this one over here because it's just not not not on our business. We are not our business model doesn't doesn't provide it
But in order to figure out what would it actually look like so we had some ideas about innovation
We could take our pipeline and basically
Categorize our project into which fall under here which fall under here and here most most projects obviously fell under here
But not quite a bit over here. We weren't I think only about 40% of our projects fell in this the rest was pretty distributed
So we we thought that in order to just have a strategy session with
With the executive team. We had a one day with them
We needed to visualize a little bit what that future could look like so on very short notice with like two weeks time
We called our friends and idea and said can you help us to actually?
Visualize what would the McDonald's look like if we would pursue any of those three directions and
Here is kind of a quick a quick shot at that
So at the bottom left, it would be like a food bar concept
So there would actually be no menu board all the food would be here to see it's a complete point and go
So very very simple and it's more of a bar thing on the on the top left. It would be more
Service-oriented so you could either self order at the kiosk, which is on the left
This guy is just self ordering on a kiosk
Here's a family has a friendly hostess hostess that takes the service the same will be on the on the dining area
You would have a young adult zone
You would have an adult so it's a little bit what we already do
I mean play places to a certain extent are are in that area and then on this side
It's basically a creating a food market within McDonald's
So you would have our classic menu. You would have our promotional feature this month
It's Mexican and they have kind of our salad side
So we thought that and we had a whole story behind it. We had like lists of innovation that we would do and I was very excited
about going into this
executive team planning session and saying look what design can do to actually help you make decisions in strategy and
It didn't play very well
So so what worked is that it worked for us
I mean the innovation community around the world got quite excited because it helped us to provide some focus
It was a cool communication tool to actually bring strategy to life. What kind of was our initial premise?
It failed with our senior leadership group. It's it was too conceptual for them
It was like so what so it's it's like, okay
This sounds interesting, but it doesn't it's not specific enough for me to really understand what what we're going to do
And and and that's so we took we said, okay good learning
So we took it now to the next level which is saying
So perhaps we were targeting too high a level because of the issue as the more you go high the less specific you can be and
Being an operations company. It's all about tactics. It's all about being very specific
So we said what if we take it the level down and we take it to the level of the restaurant and we target instead of
Executive team we target the market leadership. So the innovation people in France and in Germany and in the US and
basically develop a tool that allows them to
Compliment our very bottoms-up approach with a little bit top-down
operation because of our job partition of labor
Most of our planning tends to be very bottoms up. We have the markets who have all the money
They put in the three years plan. They say we are here today
This is what we're doing next year and then I guess the following years we will do that
And what we are trying to do at the center is to kind of we believe more in backcasting
So we we kind of create exciting futures like you just saw before
Which doesn't mean a lot to our operations people and then we try to connect it back to where we are today and saying if we
Want to go into this exciting future?
This is kind of the things we should invest in today
So we think that perhaps we can use a similar tool to actually help our innovation people at the market level
To supplement their bottoms-up planning with looking at at the future
And we call this kind of line of sight if we know where we're trying to go
It will be easier for us all around the world to kind of just make sure that what we're doing in the short term
Also will bring us to where we want to go one key constituent there is actually also our own operators
Actually, our own operators
To a certain extent are paying the price for us not doing the long-term planning because we asked them we tell them next year
This is the greatest thing you should invest twenty thousand dollars in sandwiches and then two years later
We come back and said oops actually sandwiches wasn't the right way. You actually should put this in now
So we need what will help us if we have a path that we can show them it is what you investing today
Is also good for the future
So so the question is how to do this so and we're not there ever just in the middle of it
What we have done is we basically actually let me go back. We we we took this
Kind of system approach identifying all the starting is the customer experience
identifying all the platforms in the restaurant and did idea hosted ideation sessions with people around the world and
Key leaders to basically saying in your discussions in your conversations. What are some of the ideas you're talking about and
Basically when we put everything together, we ended up with six hundred and eighty-three
initiatives so Victor six hundred eighty-three things we could do and
the and the people think about doing that's the the scarier part the the
We then kind of we clustered it and we did since we actually worked with Vijay a little bit on doing structuring
But at the end of the day we used in economics
We used a value screen and said which of those six hundred three are really good ideas and we were hoping that most of them would be bad ideas
And we'll be left with a small palette. We ended up with a hundred and thirty six actually good ideas
And we then took those hundred thirty six ideas and gave it a capital estimate
How much capital does it cost and how much operating cost and then tried to figure out?
How much can we afford and we can afford probably ten to twenty of those one hundred thirty six things
So the solution then is to we said, okay, we can't make the decision
We are bottoms up driven company. There will be no credibility if we at the center make the decision
Let's give a tool to our markets to actually start playing around
And that's when the idea of game and sim city came in and that's what we're working on right now
So we're going to give the palette of those one hundred thirty six to our markets and say go and play and you can put in
How much capital a year you or you believe you can spend in a restaurant and then you can kind of build your own
Your own restaurant and by playing through games figure out what the right answer is
Hopefully in a year's time. I'll come back and report if that worked
So I'm running out of time. So the second part is the how to win part
This is probably a little bit more standard. It will be things that you are familiar with that be all practice
But I tend to use this presentation for
Groups of people in service industry innovators that don't come from the design field. So I will go through it relatively quickly
We kind of define it as for five service design tools
The first one is focus on the customer journey
And I think the emphasis and the unique part from the service business is the journey aspect
And the journey aspect is driven by the fact that services obviously
Have multiple touch points and are distributed over time
A tool that we have started to use and that we quite like is it was developed by a marriage or a bit
Narita University of Arizona and it's called a service blueprint and basically what it allows you to do is you start with the
Customer journey in the center and then you identify above the line
What are all the physical evidence be it product menu that the customer actually comes in touch with and then below?
You're saying what are the activity that the contact person does?
Do out to bring that experience to life and then at the bottom
What are the support processes and then there are some important lines here? So this line here is really the line of interaction
Between the contact person and the customer so by identifying that it kind of allows you to quickly say what are the moments of truth?
Then it kind of the line of visibility makes you more conscious about what actually is the customer seeing about what you do
What are they not seeing and then obviously what's the line of internal interaction you need to focus on for McDonald's
this looks a little bit like this and
As you can see there are
Two main interactions taking order and getting the food
There's also the annoying cleaning that happens when you're sitting at the table and they're wiping the floor right next to you
So that's obviously another interaction
I think the most obvious one that kind of helped us was this line of visibility regarding cooking food
one of the things you all know is that when you there is no
No standard thing that you can see about the McDonald's production process if you go into a restaurant every restaurant is different
So we are not very clear if we actually want you to see it or if you don't want you to see it
And that's you probably shouldn't have things online
You need to be very conscious things that are above the line of visibility
You want to have choreographed and actually make it quite attractive and things that are below you want to make sure that they are below
And so so that's a key learning. I'll show you in a second what we did with it
The second important one is telling a story and and telling a story in a retail environment every time you're there and
Again
If we this is some work with it with idea again, it's actually an ideal slide the
Our story today is you see you all know it's unclear food delivery. It's quite industrial. It's quite hygiene oriented
I call this machine our heart lung machine. It's actually our soft ice machine and I get a lot of success with that so
Bad storytelling and so so the kitchen is obscured. We have noises that are much more industrial not commercial
One of the insights we gained is that our our noises which are mostly beeping
Customers the only only you appliance that beeps in your home is the microwave
So customers automatically assume it's a microwave. We actually don't have microwaves anymore in our McDonald's
So it is not the microwave
But it's an interesting how the auditory symbols are signs are also sending messages and if you contrast that to the original McDonald's
This is a picture of the original McDonald's in this place. You can visit it in these planes
It was a complete theater. It was very open purposefully open
They've actually Ray Kroc called it the fishbowl and there was theater you where else do you see 20 hamburgers being made at the same
Time it was actually quite entertaining. So what happened is that over time?
We any new my belief is that any new concept has a very intentional design
Any new concept has found some synergy between what they need from an operational point of view and what works from a customer experience
Point of view think of Starbucks. You order your beverage. They call it over to the barista works operationally very well
Then they have you actually do the work and you walk over there
So they don't have to do walk the walk and you actually pick it up from the race
So you get the benefit of the craftsman giving you the beverage
So that's an example of where the operational concept and the customer experience concept work really synergistically
We had that in the beginning. We lost it over time
We are trying to regain it and the reason we need to regain it because most many of our new competition
Albeit there are still niche players, but they set the expectation from a customer point of view
Are more newer concepts that still have that very clear story and that integration
This is an example of our pilot store rendering, but it's actually live
You can come and see it in Romeoville where we are trying to bring in again some food theater
What's in the middle here is actually the grill and a nice hood. So you can see there's no big menu boards anymore
There's still POP material. These are self-order kiosks and we are trying to really move away from I might have called a post office
Experience which if you think about our current McDonald's experience, it's like a post office
You're walking up to a counter. You're giving money ordering something behind it is kind of the forbidden view
Which is the sorting room in the mail that signed to move away from that transactional experience to more of a food event
and
part of storytelling is actually and that's some work that
Margaret the Birgit Margar out of University of Cologne who is a professor of service design
Does is the importance of ritual and it doesn't have to be a sacrifice?
so
the
We actually I discovered that we actually have a ritual and McDonald's that started all the way at the beginning
And it's called double folding the bag and handing the back to you with the logo in front
This started at our our original sales were all through a window the original McDonald's was a drive-in
Drive up. So you park your car and you would walk up to a window and you would hand it out
so the emphasis one of us on this moment of truth of this product ritual and
Double folding the bag and handing it out and guess what we still have it today in our operating procedures
Nobody knows why we're doing it, but we are still doing it
So and I'm very encouraged by that because I think it might not be the right ritual anymore for today
but the fact that we have a ritual and being a are being able to actually
Duplicate it and replicated in
119 countries in 33,000 restaurants says that perhaps is an opportunity to find a ritual that works even better for today
The third one is the system stupid. I've talked about this. We at the we have where I'm based is partially
At the innovation our innovation center, which is in the suburb of Chicago and I'll see some pictures after it there
We do component design. We try to improve a better grill
We try to do a better service system, but at the same time
We also obviously have to do system design and we are
Continuously going back and forth because we can design the best toaster
But it's not going to work with it won't the timing won't be right
So the the size of it won't be right to fit in our production line
so we have to continuously go back and forth and I
We are struggling with this
I'd be quite honest. We have we are looking for good system designers if you know any
So what we're doing right now is the way we are struggling what we're doing with it is we're doing very much iterative design integration
so we make we design a great thing and then we put it right back into the whole restaurant and see how it works we do some
We do structure planning
So go from ends to means and then figuring out if those are all the means we want to do what what what ends
Based on ends what are they going to do to focus on and then lastly we have over the last two years also in parallel to
The practice I lead which is the customer experience design one. We have developed quite a strong operations research
practice as well and
so the combination of the two actually works quite well and
The first one is experiment which you all know we do four four level of experiments with we start with modeling
So operations research we then do operations testing. We have a customer experience lab and we do the pilot store
Here is a picture of our innovation center. I talked about where we do the operations testing. It's a big warehouse
It's quite secretive. You won't find the McDonald's logo anywhere and in there
We have three kitchens and these kitchens we can change within hours actually even minutes and we can reconfigure
Where where we put the equipment we can try new layouts. We can test different kitchens
This is a resource for the whole McDonald's system
So we would have Germany coming for a week rent out the space and actually reconfigure
Their kitchen the way we simulate is that we can pick up orders from any restaurant close to any restaurants around the world
And then we similar we do the so in order to make to test the non-linear
Bases of our business
We actually have retired people sitting in a row and then the computers pews out the exact two minutes before the order was placed
It's pews out the order and then we actually
The fake customer goes through the process and we scan every time so so we can simulate completely
What happens in a restaurant and we can test how well the new experience is doing from a service time point of view from a food
Waste point of view so so it's quite sophisticated this we started this nine years ago
Actually was also developed together with IDO when I
Actually one one cyber and I'm no more over time
one
The best thing that happened to design at McDonald's and there's some learning perhaps for all of us is two years ago
When we integrated with the operations development group in the past design innovation
Concept was a separate group and wasn't there was separate from operations development in an operations driven company
It is good to be part of the main force and that's really what helped so
Two years ago
We've merged these bunch of engineers and operations people and I was instantly jealous about their prototyping ability
Which I called being able to prototype the back end
So I said what if wouldn't it be great if we could prototype the front end the same way and
And we have done that so we started a year and a half ago
We have a customer experience lab in the front where basically we use that design to simulate different restaurant environments
And here is our very very first test we run a year and a half ago
We tested so this is set design actually these are just pictures
The ceiling is in this this is all in this warehouse
This was actually a real counter. It's not made out of foam core
But since then we've moved to foam core
This was what we're going to put in our pilot restaurant and we weren't sure on how much kitchen view to provide
So this one was all closed you couldn't see anything and this one you could see the person preparing salads
And you could see a little bit of the prep line
We brought in just simple thinking
behavioral prototyping 10 people and
Got their reactions and very quickly learned that this was preferred this one was way too high-end
then at the end of last year we had some money left and
and I
Wanted to stretch our capabilities a little bit and I said what drive-through is a big part of our business
How can we prototype drive-through so golf cart instantly came up?
So here we actually prototyped the drive-through we put our customers into a golf cart here our customers
And we had them in the world go around go around this fake kitchen with the walls being identified for curtains
And so here was the menu board then they went to the cash window then they went here to the present window
And we tested it was really more capability testing, but we also got some learnings out of it
What we learned very quickly is that we are blessed
We are McDonald's is such a ritualistic experience that we don't need a high-level of fidelity to actually get quite good learnings
And even this which might look ridiculous from a fidelity point of view actually customers got
Got into it. We could see how we actually tested on we know that eating in the car
which we by the way do not encourage is
is
Is very difficult so so this is and this is the biggest so then we take it out of the custom experience
We're taking a pilot store V run that pilot store. It's right next to our lab, but it's a regular store
It's in route 53 in Romeoville
And we change that every six months the last thing is a matching farm plan near and nothing
That dramatically different basically again. I've mentioned before about back casting
But also figuring out what is the right approach?
What are the potential different scenarios and I just want to talk a little bit about coffee?
I I brought our coffee by the way
I was thinking of putting it here to make it more of a true coffee table experience
the
One of our our destiny one of our challenges was how can we compete in the coffee market and
We have seen obviously we've seen the rise of Starbucks the whole coffee destination and the initial strategy
And it was very challenging for us because initially coffee was driven by whole experience and we struggled with it
So the initial approach we took led by Australia and Latin America was a quite expensive approach
It was basically doing a McAfee. We have over a thousand McAfee's now around the world
What they are is a store within the store. They're its own little counter
Gives a whole coffee house experience the crew is a little bit
Our experience level crew and there's also in some cases a separate seating area with more comfortable seating
It's it works. Well, it's a very expensive investment
Well, so what Australia has done Australia is now at 80% of McDonald's if you go to Australia 80% of McDonald's
There are 700 of them have a McAfee. It's the biggest branded coffee chain in Australia and also in some Asian markets
So they started with this McAfee and once we had that brand established
They said we can also improve our coffee on our front counter means we can sell it throughout right through and they launched
The brand espresso pronto and now sell a lot of lattes and cappuccino throughout drive-thru
For the US this this was not our volumes in Europe and Australia the stores have much the last stores less penetration
So a store has much higher volume. Therefore can afford more in the US. That was not an option
It was to be tested. It was just too expensive
So in the US we took more of a premium roast coffee approach and we started with this much better
Coffee and and and there's a whole strategy behind that but as you can see we have now just launched our iced coffee
And there are some markets that are testing also specialty coffee
So I think there is an opportunity it is going back to this back casting if you know where the destination also make sure particularly
When you have when you run the system figure out their multiple paths and find out which path is most appropriate for the market
so these are the five principles and
I hope it was worth your while. Thank you and event wheel time
