How Can You Use The Malcolm McLean Strategy To Disrupt An Industry

Chances are you’ve not heard of Malcolm McLean. But he single handedly changed the world.

McLean was one of seven children born in 1913 to farming parents in North Carolina, USA. He was entrepreneurial from the very beginning and earned his first dollar selling eggs while still in school. After high school, he worked at a gas station until he had saved enough money to buy a second hand lorry to start his own trucking business. He steadily grew his trucking business from one truck to thirty.

One day, he was transporting cotton bales to the port of Hoboken to be shipped abroad. And he had to spend almost an entire day waiting till dockworkers could load the crates full of cotton to the ships. Dockworkers and longshoreman would load and unload crates and barrels by hand. It was a slow slow process.

So out of frustration, McLean asked himself: why can’t they load entire trucks on to the ships itself? And he realized why. Because it was impractical for a truck owner to lose his truck for weeks at a time while the ship was sailing the seas. Because the trucks are heavy and would lead to unnecessary weight being added to the ships. It was a lot of wastage.

But McLean didn’t let the spark go. And he came up with a solution. Divide the truck. Break the container from the wheels. Yes McLean invented the big shipping containers that changed the face of world trade.

Containers standardized the process of loading and unloading. No special care was needed for different kinds of goods. And things speeded up considerably. BeforeMcLean invented shipping containers, loading and unloading would cost $5.86 per ton. With containers, the cost came down to $0.16 per ton.

Design Standardization

Steve Jobs used the standardization strategy to disrupt a market too. In 2007, bucking market trends, he came out with only one model of the iPhone. While Nokia – the market leader at that time – launched 39 different cell phone models only in 2007, Apple had only one.

This helped Apple make their manufacturing and supply chain processes super efficient. They could reduce the type of raw material they had to procure. And because they could buy the things they required in huge volumes, they could negotiate further on price. Saved them a lot of time and money.

Price Standardization

Neil, Andrew, David, and Jeffrey are four friends who have an idea for a business in the world of fashion. But they know that they can’t do what Steve Jobs did and offer only one style of their product. So what they did was instead standardize the price.

You could buy any sunglasses from them and it would cost $95. Warby Parker took the eyewear industry by storm selling 100,000 units of sunglasses in their first year in business.

They realized that fashion industry is ripe with confusion because there are so many choices and options. A lot of consumers have buyer’s remorse because they are never sure if the product they purchased is worthy or not. So Warby Parker took away the choice of price. People no longer have to decide if the style as well as the price is right. They just have to focus on style and go with the one they like.

Action Summary:

  • What aspect of your business and offerings can you standardize? Reduce choices people have to make. Reduce options to make your business run more efficiently.
  • Pay attention to inefficiencies. What wastes your time and money right now? Solving those problems could be disruptive.