In this edition of Life-Changing Concepts:

Systems Thinking

​Ray Kroc was a milkshake mixer salesman.

One day, he received an order of 8 mixers from an unknown restaurant.

He didn’t believe it at first.

8 mixers could make 48 milkshakes at once.

Why would a single restaurant need that many milkshakes?

So he decided to visit the restaurant to see what was going on.

And when he went there, he was shocked.

The place worked like a factory.

The McDonald brothers turned burger preparation into an assembly line that’d make Henry Ford envious.

They had a few employees. But each employee handled a specific task. And a manager coordinated them.

The result was identical, delicious, and quickly served burgers.

They called it the Speedee Service System.

That day, Ray Kroc convinced the McDonald brothers to hire him as a franchise agent.

Thinking in Systems

Now, preparing one burger is easy.

But serving thousands of burgers a day with the same quality and speed is not.

It requires a system.

The McDonald brothers created it by thinking about different parts of burger preparation.

How customers ordered the food, how employees stored the ingredients, how they assembled a burger…

Each detail mattered. Because each detail affected the quality and speed of the other steps.

So they optimized everything to achieve their desired outcome.

That’s what system thinking is.

To think beyond the individual parts and see how they interact to create an outcome as a whole.
​

​

Now, let’s see how to think in systems in four steps.

And the rest of the McDonald’s story.

1. Have a clear goal

The first step is obvious.

Without a goal, you can’t know what to optimize for.

The McDonald brothers had it clear. Consistent and cheap burgers delivered quickly.

Many people (and companies) don’t think enough about the goal.

What should your system optimize for?

Growth or profit?

Or if you think personally, is it money, fame, or freedom?

Define the goal, so you can optimize the system for it.

2. Map the system

The second step is to map the elements of the system.

For McDonald’s, it was suppliers, order taking, preparation, and service.

And each element had details like menu, storage, and cooking times.

When you map everything, it’s easy to see how they interact with each other.

So you can solve underlying problems to improve.

Even one person can think of his or her work as a system.

If you write a newsletter, the main elements are research, writing, editing, and publishing.

After you map it that way, you can take different actions to improve — like outsourcing research to write more or editing with an AI tool to save time.

3. Experiment

Now you have the goal.

And you mapped the system.

Great.

The next step is to experiment to find what delivers the best result.

The McDonald brothers tried many ways.

One example.

They tried putting more employees at the counter.

This allowed customers to order with no waiting time.

Sounds good, right?

But turns out it’s not.

When dozens of customers ordered as quickly as possible, the kitchen became a bottleneck.

Employees made mistakes while preparing the orders. Customers started complaining. And they waited more after they ordered the food.

That’s how the McDonald brothers learned a valuable lesson.

It’s not about overoptimizing each part.

It’s achieving the desired outcome as a whole.

So experiment until you find the best way.

4. When the goal changes, adjust the system

Ray Kroc and the McDonald brothers worked well together for a few years.

But then disagreements started.

Ray Kroc wanted to expand the business.

The brothers had no interest in further growth.

So 12 years after he stepped into the restaurant, Ray Kroc bought McDonald’s from the brothers for $2.7 million.

The price was deliberate.

Each brother got $1 million after taxes and realized their dreams of becoming a millionaire.

Ray Kroc had to take a huge debt for the deal.

But he had a clear plan in his mind.

He knew McDonald’s system was more valuable than its burgers.

So he decided to expand without spending his own money.

How?

Yes, with franchising.

But until that time, franchise models were merely for using a brand’s name.

Ray Kroc wanted each McDonald’s branch to operate the same way.

So the goal became: consistent and cheap burgers delivered quickly in as many locations as possible.

But how can you keep the experience consistent when you are dealing with franchisees in new regions?

Ray Kroc found a creative answer to that question: Hamburger University.

He started it to train all managers to operate their branches with the same standards.

It was mandatory.

Managers received training on details of burger preparation. And how to manage a business.

The problems McDonald’s had already solved became lessons at Hamburger University. So the new managers didn’t repeat them.

More than 350,000 McDonald’s employees have been through its training programs.

And that’s how we eat the same Big Mac on a busy street in New York, in a remote town in China, or with views of the Giza Pyramid in Cairo.

Today the “system” serves 6 million+ burgers every day.

A quote from Ray Kroc summarizes the importance of system thinking:

“None of us is as good as all of us.”
​

One recommendation:

Stacked Marketer: If you are an entrepreneur, you know it's hard to catch up with all the changes in SEO, influencer marketing, or advertising platforms. Stacked Marketer is a newsletter that summarizes all important marketing news every weekday. I'm surprised that it has 40,000 subscribers and I just discovered it last week. Check it out here or join in one-click (free).

One quote:

​

Get the Decision-Making Checklist Have friends or colleagues who'd enjoy Life-Changing Concepts? Great. Send them your unique link below. When only ONE of your friends joins, I'll send you my Decision-Making Checklist. It has 35 questions to make important decisions right. And when you have THREE referrals, you'll receive four secret articles that only Frontera Premium members receive. Your unique link: https://join.fronterablog.com/d7ec67d8/ facebook twitter whatsapp linkedin email Share

​

You can reply to this mail with your thoughts and feedback. I'd be happy to hear from you — I read and reply to all messages.
​
Have a great day.

Ozan
Founder - Frontera
​