We often wonder why startups consistently out-innovate large, established companies. And while McDonald’s announcement this week that it’s testing round-the-clock breakfast is somewhat innovative and encouraging, it’s yet another reminder why innovation most often comes from startups, not big companies.
In this case, terrific customer discovery uncovered significant customer enthusiasm for “breakfast 7×24” just about a decade ago, when a discovery-oriented market researcher probed individual customers’ reactions to a bunch of new menu items the chain was considering. Stamford CT-based discovery expert O B Gray of graymattersmarketing.com, conducted dozens of face-to-face conversations with heavy, light, and occasional Mac attackers just about a decade ago. His findings found lukewarm enthusiasm—or less–for the proposed new items, yet a notable roar of customer enthusiasm for round-the-clock breakfast service.
“I thought it was a loud, clear signal from customers,” says the ex-P&G brand marketer who now takes most of his cues from customers directly, rather than from quantitative research studies. “I put the idea forward as ambitiously as I could, and pushed it hard.” Voila, a decade later…
Nobody will ever know how many folks have been in lead marketing roles at McD’s since Gray delivered his report—or in the CEO seat for that matter. Typically, that’s one of many big company challenges. Second, courage, most likely drove the delayed decisionmaking. It’s even harder where every decision first has to travel through many management layers and only then does it go to the toughest judges of all, the thousands of McD franchisees. That, too, demands management courage since franchisees are often conservative and brutal, particularly when topline growth is slow or declining, as it’s been for a while at Mickey D’s.
The human factor adds even greater challenge. It’s awfully hard for a career-minded marketer to go out on a limb and turn a “new hamburger” research project into breakfast, and harder still for a series of committees, strategic planners, directors and bigshots to coalesce and agree to all invest “career capital” in this bold, different menu move, especially when the job at hand was “new entrees.”
According to McDonald’s press releases on the breakfast test, “it’s hard to cook McMuffins and burgers on the same grill(don’t they have two??),” and they’ve only just now noticed the increased consumer enthusiasm. Had legendary McD founder Ray Kroc been at the grill—in the “startup” days of long ago—no doubt that test would’ve been launched in ten days, not ten years.
That’s why most of the disruptive innovation comes from startups these days. They have no choice but to take chances, make bold moves, and innovate, since without meaningful innovation and customer-driven, agile pivots, startups simply die. And while “breakfast 7×24” is hardly disruptive innovation, it’s great to see the new Mickey D’s CEO making so many bold, game-changing attempts in his first few weeks on the job. Personally, I prefer a burger after noon, but the “jury” will decide whether this innovation is disruptive—defined here as turning the McDonald’s average unit sales up instead of down for a change. And I hope somebody at HQ buys O B Gray an Egg McMuffin!