McDonald’s: IT Must Be Comfortable Failing, But “Fail Really Small”

Written by Evan Schuman
January 14th, 2010

The retail senior management edict of “Innovate” is so shop-worn that it’s become almost clichéd. But in all of those innovation memos from all of those CEOs and COOs, what’s often missing is encouragement to fail. After all, if IT leaders are so scared of failing that they never try anything truly new or creative, they may fail less but they’ll succeed in leapfrogging their competition almost never.

That was a key point made during a National Retail Federation (NRF) conference panel discussion with three of the most influential retail CIOs: David Grooms from McDonald’s, Rollin Ford from Wal-Mart and Neville Roberts from Best Buy. Grooms agreed when Roberts said that IT leaders must today “be prepared to fail” and to get comfortable with failing. “CIOs must foster the right culture so [IT staffers] don’t have a fear of trying new things. There’s always a new shiny toy out there,” Roberts said.

But Grooms added: “You should try and fail really small.” By failing small, he described lots of focused trials. “You test, take some risks, adjust and go back. But you really can’t take that long. You can’t take three years to develop an app. You must launch and learn.”

Roberts took the opportunity to tweak his own wording. “Fail is such a strong word,” he said. “I prefer to think of it as a sub-optimal business case outcome.”

Wal-Mart’s Ford also harmonized with the group intellectually, suggesting that multiple trials of non-traditional approaches are also bound to hit a winner, deliberately or accidentally. “Every once in a while, a blind squirrel finds an acorn,” he said.

At the same time, CIOs must lead the team and make some decisions about what’s worth pursuing from a customer perspective. Programmers and developers can become mesmerized with how cool a technology is, losing sight of the minimal—or perhaps non-existent—real value to the customer and to boosting sales and/or profits. “You get enough wireheads in the room and they’ll get hellbent on a technology,” Ford said.

The Wal-Mart chief told the audience to look for small ways to make a difference, whether in IT or corporate-wide. He cited as an example an employee suggestion that the light bulbs in company soda machines might not be necessary because employees generally know where the buttons are. That one change saved significant power and, by the way, more than a million dollars in cash. “Look for the small things that make a difference,” Ford said.

The light bulb example was interesting—and, indeed, Wal-Mart people touted it at more than one panel at NRF—but it became such a savings tool literally because Wal-Mart is so huge. The panel also weighed in on the implications of having to scale all projects so high.

Best Buy’s Roberts said it’s a constant concern. When his team is evaluating some approach, he has to consider speed of scalability and, indeed, whether the technology will even still work at that level and whether the costs would quickly spiral far too high. “We must consider that [when evaluating trial results]. Will it work 4,000 times larger?”


5 Comments | Read McDonald’s: IT Must Be Comfortable Failing, But “Fail Really Small”

  1. Lee Says:

    “sub-optimal business case outcome” is definitely preferable to ‘failure’! Seriously, I’m pleased Roberts in conscious of language. Brain research is finding that, contrary to the adage ‘sticks and stone may break my bones, words will never hurt me’, words can hurt. You are up against millennia of conditioning if you try to get people to accept ‘failure’ as ok.

  2. Fabien Tiburce Says:

    What a refreshing and forward-looking perspective! Of course retailers should accept the possibility of failure if it helps fosters innovation. And what is the best way to fail small and fail fast? a) Rapid prototyping, b) pilots and c) software-as-as-service. Combine all three and you have the ability to try out new ideas, at no or a nominal cost, get feedback quickly, adjust and iterate until you can improve or reject the methodology. Rapid prototyping and “agile” methodologies have become the de-facto standards in software development and it’s nice to see these ideas extend to the retail marketplace.
    The underlying message is that when selecting a vendor, chose one that embraces prototyping, can produce a pilots in days not months and has internal processes and an architecture than can embrace change, not fight it.

  3. Terrell Jones Says:

    I really agree with failing small and fast. But I can’t agree with the PC designation of ‘sub optimal business case outcome” Baseball players don’t have sub optimal batting experiences, they ‘strike out’. Teams don’t have a sub optimal game experience, they LOSE the game. Sports is actually a good analogy. Managers coach players who are producing ‘sub optimal performance’ to do better by looking at what went wrong. They improve team performance by reviewing films of the game. Failure is a strong word, but by getting people to look at why and how the project failed and to kill the project while coaching the person is the path to success.

  4. Tom Dillon Says:

    “Sub Optimal Business Case Outcome”, what a wonderful waste of words! No wonder our country is in so much trouble. It’s better to be PC than face reality or bruise someone’s delicate ego.

  5. Evan Schuman Says:

    Editor’s Note: If I may, I think some readers may be misinterpreting the Best Buy CIO’s quote about sub-optimal. Three thoughts:
    1) It was a joke, gosh darn it! It got a laugh and it was a deserved laugh. He was poking fun at PC efforts as much as anything else.
    2) But every good joke is generally based on at least a little truth and that’s the case here. If you’re trying to convince a large number of employees to do something, why go out of your way to make it more difficult? There is a natural resistance to accepting failure and if calling it something else will advance your objectives more–at no cost–why would you NOT do it? Clearly, Roberts was humorously reaching for an extreme phrasing, but the point is valid: Get the message across without necessarily rubbing people’s face in the word “failure.”
    3) My only take–which or may not have been in Roberts’ thinking–is that “failure” may actually go beyond “insensitive” into “inaccurate and wrong.” The word “failure” means not accomplishing one’s objective. What if the objective is to be a leading-edge retailer? And what if it’s agreed that a critical element of that is trying lots of things, most of which won’t be customer hits? In that case, let’s assume that a couple of those efforts are monstrously successful. Were those other efforts failures or were they critical part of enabling those two home runs? I’m reminded of a federal probe to establish if a particular government official had engaged in wrongdoing. If that official had in fact NOT been engaged in wrongdoing and the probe concluded that the official had in fact not been engaged in wrongdoing, was that a successful probe? Yes, I’d argue, as it went through the process and established the truth. Sometimes, the best way for a retailer to establish if a particular technology will work is to just try it. In short, let’s not be too quick to use the word failure.


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