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February 6, 2010

McDonald’s Continues Resurgence and Provides a Number of Valuable Leadership Lessons

Filed under: General HR Buzz9:15 am

McDonald’s continued resurgence offers credible support to the notion that the Oak Brook, Ill.-based company has performed arguably the most impressive business turnaround this decade. The resurgence of an American icon provides a number of valuable leadership lessons for corporate America.

Those lessons include:

Lesson 1- Have a clear and compelling vision.In 2002, at his first conference call, Chairman Jim Cantalupo told his audience, “Clean restrooms and hot, fresh food served in our restaurants would be a change.” McDonald’s had forgotten the basic vision that customers wanted clean restrooms and hot food. Few would suggest it was a new or dramatic vision, but it was clear and it was compelling. Cantalupo energized the giant corporation around that vision and demanded improvement in standards across all aspects of the business.

Lesson 2: Make restroom marketing critical.Restroom marketing relates to the “non-negotiables” that businesses must get right. Failure to do so will result in customers boycotting your business.

Lesson 3: Realizing innovation does not have to be innovative. Innovation that drives growth does not have to be complex, just new and relevant.

Lesson 4: Staying focused. McDonald’s brand was not always center-stage as management endeavored to create a multibrand corporation by investing in Boston Market, Chipotle Mexican Grill, Donatos Pizza and the United Kingdom-based sandwich chain Pret A Manger. As management appreciated that McDonald’s could legitimately offer healthier options and compete comfortably against the fast-casual sector, these other concepts were no longer deemed relevant to a growth strategy.

Lesson 5: Executing a relevant strategy that drives corporate health. Cantalupo also changed strategy. Primary growth in the future, he said, would come through “adding customers to restaurants” rather than adding “restaurants to customers.” The corporation went back to basics to make this happen. Indeed, it is a lesson in Marketing 101.

Lesson 6: Maintaining good bench strength. Few companies could move through three chief executives–Cantalupo, Bell and Skinner–within a seven-month period and do it seamlessly. McDonald’s USA president Ralph Alvarez replaced Mike Roberts in 2006 when he unexpectedly resigned, and just recently the corporation announced that corporate controller Peter Bensen would replace the retiring Matt Paull. In “Good to Great,” author Jim Collins wrote about the importance of having the right people on the bus. McDonald’s has a big bus!



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