Saturday, March 20, 2004
Data Blindness
The current issue of Forbes Magazine has an article on McDonald's restaurants (3.29.04, McDonald's: The Sizzle is Back.) that is an example of modern management failure.
The previous CEO of the company, Jack M. Greenberg, was let go after a performance that saw the chain plummet in nearly all categories. The current CEO of the company, James R. Cantalupo, is apparently putting things back together.
What struck me about the article is a story that shows how CEOs get derailed. Greenberg was in love with a proposed $1 billion network that would send real-time sales data from 31,000 restaurants to headquarters. His head of US operations tried to tell Greenberg this wasn't sufficient for getting customer feedback. One needed to visit stores and look at their conditions -- the pace of service, the appearance of facilities and food and the attitude of the employees. Greenberg persisted with his system until he was let go: Cantalupo cancelled the project. Cantalupo went to store vistitations with mystery shoppers who check on service, food and attitude. The turnaround, according to the story, was quickly apparent.
The story was not about measurement but data blindness. It is an issue PR deals with constantly. Executives fall in love with numbers but fail to look under them to reality below. One of the finest CEOs I have met spends a large part of his time visiting locales and talking to employees. He understands the limitations of numbers. Unfortunately, other CEOs don't: They get hung up with measurements such as stock price (It must go up.) to the exclusion of operations. Or they build information cockpits in lieu of plant and store visitation.
Long ago it was understood that only the human brain with its multiple sensory capabilities is sufficient to capture the totality of an experience. It is an old lesson easily forgotten in a data-driven age.
PR practitioners, because they deal with relationships, should never be fooled by numbers. Regrettably, they are.
The previous CEO of the company, Jack M. Greenberg, was let go after a performance that saw the chain plummet in nearly all categories. The current CEO of the company, James R. Cantalupo, is apparently putting things back together.
What struck me about the article is a story that shows how CEOs get derailed. Greenberg was in love with a proposed $1 billion network that would send real-time sales data from 31,000 restaurants to headquarters. His head of US operations tried to tell Greenberg this wasn't sufficient for getting customer feedback. One needed to visit stores and look at their conditions -- the pace of service, the appearance of facilities and food and the attitude of the employees. Greenberg persisted with his system until he was let go: Cantalupo cancelled the project. Cantalupo went to store vistitations with mystery shoppers who check on service, food and attitude. The turnaround, according to the story, was quickly apparent.
The story was not about measurement but data blindness. It is an issue PR deals with constantly. Executives fall in love with numbers but fail to look under them to reality below. One of the finest CEOs I have met spends a large part of his time visiting locales and talking to employees. He understands the limitations of numbers. Unfortunately, other CEOs don't: They get hung up with measurements such as stock price (It must go up.) to the exclusion of operations. Or they build information cockpits in lieu of plant and store visitation.
Long ago it was understood that only the human brain with its multiple sensory capabilities is sufficient to capture the totality of an experience. It is an old lesson easily forgotten in a data-driven age.
PR practitioners, because they deal with relationships, should never be fooled by numbers. Regrettably, they are.
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