Discover more from Gad’s Newsletter
McDonald’s (no longer) Loves to See you Smile
While Chipotle is announcing a significant hiring spree, McDonald’s is unveiling its first “fully automated” store (and I’ll explain the scare quotes soon).
First, the details:
“McDonald’s new test restaurant near Fort Worth, Texas could be the future of fast-food operators: Instead of human workers handing you a bag at the drive-thru, an automatic conveyer belt brings your order to the window. Ordering is done through kiosks or an app — no humans involved there, either.”
So many things to unpack here…
But first, why is this restaurant not truly, fully automated?
When asked whether the food is cooked by robots, the answer was “No.”
In fact, McDonald’s claims that:
“The test restaurant has a staff comparable to that of any other store. The difference is that crew members are all focused on making and packaging orders rather than taking or delivering them.”
I’m not sure if it’s to avoid the backlash associated with the “robot revolution” or the significant impact it may have had on their employees, but assuming this is not the case, the fact that the number of employees is similar, is not all that surprising: the rate at which McDonald’s can serve its customers depends on the slowest resources.
Let’s consider a restaurant’s operation as the following five steps:
The bottleneck is most likely created in the kitchen, which is primarily involved with cooking (step 3). In this case, the number of people needed to fry the burgers and fries, and prepare the sandwiches remains the same as before, so no savings expected there. I also don't expect any savings on packing (step 4), since at a traditional McDonald’s, orders are usually packed by the people at the counter. But this task still needs to be done at the same speed as before (if not faster). So even though McDonald’s won’t need people at the counter for order taking, since this isn’t where the holdup is, the lack of significant savings is not shocking.
I must say though, that over time, I expect some of the cooking to be done by robots as well.
At this point, the robot, which takes up a lot of space, only does one job (flips burgers), and is pretty slow at it. When we studied the fast-food drive-through industry, White Castle was the slowest chain by far. I’ve never been to one, so I don’t have new data to support or refute this, but I did watch the movie.
But let’s go back and focus on the stages where employees have actually been eliminated: the counter (order taking, or step two in the process above) and delivery (step 5, which is traditionally done either by people at the counter or the window).
The lack of employees in these two stages makes it hard to correct any mistakes made in orders (e.g., missing condiments, or too many pickles).
But there is one more aspect to consider: McDonald’s is becoming faceless, as everyone will now be tacked behind the scenes, in the kitchen.
And this is what I want to focus on today, not the existence of robots and kiosks, but the design of the entire experience where customers and workers are only interacting with machines (kiosks and conveyor belts, and friers and conveyor belts respectively).
Is this really where we want to go?
One of my all-time favorite podcast episodes is the Invisibilia episode about McDonald’s in Russia. It focuses on the fact that when McDonald’s expanded to Russia, apart from their burgers and fries, they also had to introduce their cheerful attitude.
Describing the training of the new employees:
“CHEKALIN: It was an American video, and it was just dubbed in Russian. How you’re supposed to smile, how you’re supposed to greet.”
“SPIEGEL: See, in Russia at the time, smiling had a very different meaning than it did in America. Smiling was seen as a very personal, intimate thing.
CHEKALIN: In Russia - yeah, we don’t smile at strangers. And, like, when you see your family or when you see your friends, that is when you smile. You don’t really smile to anybody outside of that.”
“CHEKALIN: It’s a long history. I mean, we have, like, a lot of proverbs that say, like (speaking Russian). If you smile without a reason, it’s a sign of idiocy.”
On the show, Alicia Grandey, an organizational psychologist at Penn State University, says:
“...there is clear evidence that forced smiling has a dark side. It’s associated with health problems, with mistakes - making performance based errors. The strongest link I would say is between the display requirements and exhaustion - job burnout.”
So the fact that there are no visible employees in the new McDonald’s restaurant (which is only a test, for now) is interesting because part of their job description is to smile. Smiling is not only part of the brand moto “We Love to See you Smile,” but also part of their operations. It’s part of the overall experience, and while it works well in some places, in others there are limitations (i.e., different cultures or mental health related issues).
If you think Russia was the only one to face challenges, take a look at the following sign, displayed in Japan:
“Thank you for your continued patronage of McDonald’s.
Between May 29 and June 30, as part of the employee development training associated with our Smile Improvement Declaration, during business hours we will be recording the facial expressions of employees using cameras and the like.
We will take great care that this does not negatively impact the service we provide to customers, and thank you for your kind understanding.
We hope you will continue to dine with us in the future.
– McDonald’s branch management”
So in this new-age McDonald’s, there’s no need to convince employees to smile.
But these employees won’t see customers’ smiles either. In fact, they won’t see any people at all, which brings me to my next (and final) point.
Until now, I’ve focused on the customers’ POV. Let’s discuss the fact that employees won’t be seeing customers either.
You may think this is great, but I would argue that the increased lack of transparency for both the people involved in the food-making process and those waiting in line, will not be all that beneficial in the long run.
Let me clarify what I mean by transparency. I admit that I eat at McDonald’s once in a while — rarely in the US, but I travel to countries where hygiene is not always highly valued, so I tend to pick up my meals there. I will also say that whichever country you may have in mind, it’s not it. I’m only writing this to say that I’ve been a close observer of the evolution of McDonald’s over the years.
Traditionally, when ordering at McDonald’s, you can see the people at the counter (even in places where there are Kiosks), and you can see the people working in the kitchen, preparing the food while you wait. In the new design, it seems that you can get a glimpse of the kitchen employees when you pick up your food, and maybe they’ll be able to see you too, but for a split second.
So there is much less transparency on how the food is being made (and how hard or fast employees are working), and workers don’t see the number of people standing in line.
“Two field and two laboratory experiments in food service settings suggest that transparency that 1) allows customers to observe operational processes (process transparency) and 2) allows employees to observe customers (customer transparency) not only improves customer perceptions, but also increases service quality and efficiency. The introduction of this transparency contributed to a 22.2% increase in customer-reported quality and reduced throughput times by 19.2%.”
What drives these improvements?
“Laboratory studies revealed that customers who observed process transparency perceived greater employee effort, and thus were more appreciative of the employees and valued the service more. Employees who observed customer transparency felt that their work was more appreciated and more impactful, and thus were more satisfied with their work and more willing to exert effort. We find that transparency, by visually revealing operating processes to consumers and beneficiaries to producers, generates a positive feedback loop through which value is created for both parties.”
In the experiment, customers watched real-time videos of the kitchen on an iPad, and the kitchen workers were shown real-time footage of the customers waiting for their food. It may seem simple, but it was quite impactful and resulted in better perception of quality and increased kitchen output.
But while I’m intrigued by the idea of a more efficient and “self-service”-like process in the new design, I want us to think about its downside —the lack of a more human/personal element.
Which brings me to my final observation —the decision to eliminate the seating/dine-in area (and, of course, the restrooms). While this is unrelated to operations, it reminds me of Chris Arnade’s book Dignity. In an interview, when asked about his takeaway, after visiting more than 800 McDonald’s locations, he mentioned the following:
“I began to see that all across the country, the McDonald’s restaurants were in fact community centers. In towns where things are really dysfunctional, where government services are failing and non-profits and the private sector are failing to help people, McDonald’s is one of the few places that still is open, still has a functional bathroom, and the lights are on…
… the reality is that McDonald’s is important in poor people’s lives. People really want a sense of community – they crave the social so much that they’ll form communities in places that are meant to be entirely transactional. McDonald’s, of course, is designed to get you in and get you out as quickly as possible. But what I found were old men’s groups, old women’s groups, Bible studies, chess games.”
I understand that we can’t ask a business to continue to operate in a way that may risk its long-term viability and commitment to shareholders just because it solves a social problem it didn’t create. However, if all these changes are indeed adopted, this may signal a significant change in the role that McDonald’s plays in our society, both locally and globally.
Thanks for reading Gad’s Newsletter! Subscribe for free to receive new posts and support my work.