The In-N-Out Test

Posted on Published by Eugene Eric Kim

Esther Snyder, the founder of In-N-Out Burger, passed away last Friday. (See the Los Angeles Times obit.) For those of you who haven’t heard of In-N-Out, it’s a legendary burger joint that originated in California, but that’s now all over the western United States. I’m from Los Angeles, so In-N-Out is part of my blood (literally — I’ve eaten tons of their burgers), but it also served as an interesting business thought experiment when I was founding Blue Oxen Associates.    (L1I)

On August 14, 2002, The New York Times published an article on In-N-Out, one that had me asking several colleagues, “Would you rather have founded In-N-Out or McDonald’s?”    (L1J)

Here’s the tale of the tape:    (L1K)

  • They were both founded in Los Angeles in 1948.    (L1L)
  • In-N-Out remains privately owned. McDonald’s is a public company with franchises world-wide.    (L1M)
  • In-N-Out did an estimated $160 million in sales in 2001, meaning it has grown in revenues 10 percent a year. McDonald’s did $40.6 billion in sales in 2001.    (L1N)
  • According to a Fast Company article last year, In-N-Out is now a $310 million company. In-N-Out does very little advertising. McDonald’s spent $1.5 billion on branding in 2004, yet its per-store revenues are only slightly higher than In-N-Out’s.    (L1O)
  • In-N-Out’s menu is largely unchanged over the past 50 years.    (L1P)
  • Even Eric Schlosser of Fast Food Nation fame endorses In-N-Out.    (L1Q)

I started asking a bunch of my colleagues this question, and the responses were interesting. The most interesting response in favor of McDonald’s was that McDonald’s has had a positive systemic effect on society by giving millions of people their first introduction to the working world and management skills.    (L1R)

Can you guess my answer to the question? What’s yours?    (L1S)

Ken Williams on Shared Understanding

Posted on Published by Eugene Eric Kim

Yet another lesson on collaboration from the world of sports. In yesterday’s Los Angeles Times Sports page, Ken Williams, GM of the Chicago White Sox, explained his working relationship with the team’s manager and the rest of the staff:    (JUR)

“While you want people to push in the same direction, not to the point where they’re acquiescing,” Williams said. “If you’ve got a situation where you’re waiting for Kenny to speak, that’s a dangerous situation.”    (JUS)

(The Los Angeles Times needs Purple Numbers, dammit!)    (JUT)

There’s a valuable lesson in Williams’s words that applies especially to large-scale collaboration. All too often, when folks in large communities want to rally around some concrete project, they say, “We should all agree,” when what they mean is, “You should all agree with me.” If the latter happens, more power to you. It generally won’t.    (JUU)

Effective collaboration happens when people push towards a common (and finite!) goal together. If they have to be pulled, it’s not effective.    (JUV)

Leadership and Collaboration Across Different Fields

Posted on Published by Eugene Eric Kim

Today’s Los Angeles Times sports page related a story from Houston Rockets coach Jeff Van Gundy about meeting Bill Clinton. Van Gundy said:    (I8P)

He [Clinton] said, “We should get together some time and talk about leadership.” I said, “That would be great.” He said, “Yeah, I got to go to Asia for an economic summit. Then I got to go to the Middle East.” I was thinking, “I got TNT Thursday.” This guy is talking about real things. I’m talking about the Pistons.    (I8Q)

On the one hand, it’s nice to see someone in professional sports keeping things in perspective. On the other hand, leadership in politics isn’t necessarily much different than leadership in sports.    (I8R)

I was on a conference call last week with some folks who were discussing case studies of great collaboration. The bias among the group was that examples of collaboration in business were “concrete” or “practical” and that collaboration in other fields were not. The implication is that if you’re interested in collaboration in business, you need to study collaboration in business. This is certainly true. Then there’s the corollary: Collaboration in other contexts isn’t relevant. I think this attitude is crap. Unfortunately, it’s widely held.    (I8S)

If people are serious about learning more about collaboration, they need to understand it in all contexts, not just their own. Collaboration ultimately boils down to dealing with people, which is not a domain-specific problem.    (I8T)