One of my coauthors recently wrote about the wisdom of crowds vs the knowledge of experts.  I’d like to expand on that topic just a bit. Too often “experts” will overrule the wisdom of the crowds and push forward with plans they think are best. Usually these plans end in failure because of the shortsighted or often blind intentions of the those who think they know best.

One example of this are some of the poor business choices made by McDonald’s.  For years McDonald’s was the leader (and still is) in the mass production of repeatable, quick hamburgers and fries. You knew what you were getting regardless of where you bought you Big Mac and fries. You may have occasionally received an off burger – but for the most part from Bangor, Maine, to San Diego, California, a Big Mac was a Big Mac. When I worked at McDonald’s, the biggest complaint I heard from customers was that McDonald’s stopped breakfast too early, and I was often asked when McDonald’s was going to offer all day breakfast. The management of my McDonald’s passed this information and even asked permission to offer extended times for breakfast but was told that part of the franchise agreement was offering menus at times set by McDonald’s corporation.

Later, when McDonald’s sales numbers were being squeezed by other fast food franchises such as Burger King and Wendy’s, they looked for ways to maximize their market share.  McDonald’s conducted consumer polls and the result (as I read in my MBA classes) was that offering an all-day breakfast menu – the same suggestion I heard when worked there – was what customers wanted. Offering all-day breakfast was not much of a logistical stretch for most stores and did not require new equipment or training.  The answer was obvious. Wrong.

McDonald’s decided instead to experiment with pizza, fried chicken, and even burritos. The corporate staff were ignoring their base strengths (fast, cheap burgers and fries) and their customers, and chasing a market share they would never win.  All of these new menu items required more equipment, training, and expense for the franchise holders. None were popular.  Later, when McDonald’s changed senior management they finally got the hint and started offering all-day breakfast on the menu but not before losing a large market share to other fast food franchises.

The story was repeated with Coca Cola corporation’s failed roll out of “New Coke.” Coke’s executives were worried about Pepsi’s popularity in the 1980s, despite Coke having most of the market share, and changed the recipe to be more like Pepsi.  This is still taught as one of the largest management failures of all time in business schools.  The lesson learned? Listen to crowds, listen to your customers, and play to your strengths.