Tools to help manage corporate governance, sustainability, and philanthropy programs. So says Chris Kempczinski, President and CEO of McDonald's Corporation, in this interview with Dr. Lori Esposito Murray, President of the Committee for Economic Development, the public policy center of The Conference Board (CED). The CED discussion series, Leadership in Challenging Times, interviews business leaders about the unprecedented challenges facing the nation and how they are helping chart a path forward for both their companies and communities in which they operate. I think for us, to be honest, we just had to catch up. In our top markets, our drive-thru service times are now about 30 seconds faster than they were two years ago. Hopefully, positive social interactions between management and junior employees are a key part of their value system. If you think you have reached this message in error, please contact membership@tcb.org, Our records show you are not a Member, and this webcast is only available to Members. McKinsey: In delivery, youre currently partnering with third-party providers, which means you dont have full access to the customer data or full control of the customer experience in delivery. Nothing about Mr. Kempczinski's ascent surprised Greg Kelly, a Senior Partner at McKinsey & Company and a friend of Mr. Kempczinski's dating back to university. I dont have all the answers, and if I pretended I did have all the answers, people wouldnt believe me. Mr. Kempczinski had barely warmed his chair in the job when the pandemic struck, closing restaurants around the world seemingly overnight. Chris Kempczinski: This is the fun part of the jobto imagine the what ifs. I think about it this way: in the markets that we serve, about 80 percent of the population will go to a McDonalds at least once a year. Opinions expressed by Forbes Contributors are their own. We also put the onions actually on the grill as opposed to putting the onions on at the dressing table. For more information on how to manage cookies, please read our cookie policy. Of course, when its no longer a one-way communication, that comes with an added level of risk. What Im most impressed with are the people who are servant leaders the people who prioritize others.What decisions did you make during the pandemic that proved critical? Its a leaders job to keep the workforce engaged and motivated, and one of the best ways to engage the workforce is through informal interactions between executives and junior employees. In an email to employees, Pichai attributed the cancellation to meeting leaks and dwindling attendance. The report also clarified the leadership style of Chris Kempczinski, and analyzing the strengths and weaknesses of the two leadership styles. The Conference Board is the global, nonprofit think tank and business membership organization that delivers Trusted Insights for What's Ahead. By Philip Delves Broughton Our franchisees were under significant financial stress; there was a lot of anxiety. Customers are seeking brands that reflect their values and the line between the corporate brand and the consumer-facing brand is blurring. 'https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f); McDonald's CEO Chris Kempczinski lays out the fast food giant's new strategy to emerge from COVID-19 a winner. Data is a real-time snapshot *Data is delayed at least 15 minutes. Prior to becoming CEO, Chris served as President of McDonalds USA, leading the business operations of approximately 14,000 McDonalds restaurants throughout the United States. As for digital, I think everybody, not just in our industry, recognizes that digital is transforming how consumers are interacting with brands, how theyre experiencing things. That was the direction that I gave to the system. How do you decide which issues youll address? Some people feel that McDonalds ought to take a stance on other issues as well, such as fighting obesity and raising the minimum wage. Where weve launched it, in markets like Canada and Australia, weve seen great success with meaningful lifts in both sales and traffic, and were excited about what it can do in the rest of the world as well. In this role, he worked closely with our business leaders and franchisees to identify innovative new ideas and best practices to accelerate system growth. Its been important to me that were always connecting the decisions that we make back to what we stand for as a company. I am proud of our success in 2019. We call them the three Ds: Drive Thru, delivery, digital. Kempczinski has every reason to shut this behavior downits exclusionary, its degrading to women, and its just unprofessional. But then you do have the flexibility locally to add items that you think appeal to local tastes. Chris is responsible for driving McDonald's growth strategy, Accelerating the Arches, and ensuring that the company's values are embedded throughout the system as the filter through which all our business decisions are made, bringing its corporate purpose-to feed and foster community-to life. Councils are invitation-only, peer-led communities of senior executives that come together to exchange knowledge, accelerate career development, and advance their function. Chris Kempczinski is CEO of McDonalds. Have events or experiences of the last year in any way altered or broadened your perspective on leadership?Definitely one of the things thats gained focus is the need for communication. One thing weve learned during the pandemic is that if we simplify our business and focus on what were great atlike drive-thru and our core menu itemstheres a fantastic benefit for our customers. During this first year, Mr. Kempczinski has proven agile in his role and is firmly focused on the path ahead, having refreshed the companys values over the summer and recently launching McDonalds new growth strategy, Accelerating the Arches. Everybody recognizes the golden arches. I dont think we did enough to embrace how we are a part of culture, Mr. Kempczinski said in explaining the launch of the Travis Scott Meal, a wildly successful venture between McDonalds and the celebrated rapper. Thats why in China, you find things like bubble tea, which has little tapioca droplets in it. Greg Kelly, a senior partner in McKinseys Atlanta office, conducted this interview. As for anything outside of those topics, we want to be helpful, but its important to recognize that were in the business of selling burgers and fries. You cant be in a situation where you say, Ive made it to this level or Ive made it to this role. For me, whether it was back as a brand assistant at P&G or now in my role here at McDonalds as CEO, there is a recognition that you constantly have to prove yourself thats something that has carried with me throughout my career.What do you do to stand out? Michael Hsu, Mr. Kempczinskis former boss at Kraft Foods, now Chairman and CEO of Kimberly-Clark, saw the way in which these character traits, coupled with his deep understanding of consumer behavior, drove strong business performance. Weve seen our customer service scores go up across the globe. They wantand expectMcDonalds to be a force for good. And under Mr. Kempczinskis leadership, McDonalds is committed to delivering on that expectationbeing defined not just by what they do, but how they do it. About Us; Staff; Camps; Scuba. [Many] decisions were left to the field and I think ultimately that proved to be quite successful for us.What is one misconception about retail that you would love to debunk for everyone? I dont think we did enough to embrace how we are a part of culture, Mr. Amid all else thats going on, you recently launched a purpose to feed and foster communities? Mr. Kempczinski wasnt new to the company but unlike previous chief executives, he hadnt joined the restaurant giant decades earlier, either. When you travel abroad, do you have any favorite international menu items? P.S. (19972000), Serves as a trustee of Ronald McDonald House Charities, Eats McDonalds food five days a week; favorite menu items are Filet-O-Fish and the Vanilla Cone. My answer is: ensuring the relevance of the brand. Easterbrook and McDonald's Chief People Officer David Fairhurst often partied with staffers after work hours, according to the Journal. In November 2019, Mr. Kempczinski became President and Chief Executive Officer of McDonald's, the world's largest restaurant company. Everybody has a clear sense of it. I wouldnt be a Duke fan if I didnt take some lessons from Coach K. His ability to forge a sense of comradery among his players holds lessons for any leader. What were your priorities in your first year as CEO? Weve been in the Drive Thru business for decades, so I dont want to say that we had any foresight in that. Quite simply, we commit to use our Scale for Good. The thing about drive-thru is that no matter how good you are, you can always get better. Because were McDonalds and our reach is so great, were in so many different countries, we touch so many different things, we were getting pulled into lots of efforts where either we didnt have inherent credibility or our ability to make a difference was limited. In his first town hall as CEO, Chris was clear with his expectation that everyone personify the values of the company, recalls Kevin Ozan, CFO at McDonalds. Are we making the right trade-offs between keeping our restaurants open, keeping communities served, keeping employees employedbetween all of that and keeping people safe? I have a rotation of lunch items. Human Capital Benchmarking & Data Analytics. COVID-19 has raised the stakes for boards, argues Brunswicks Paddy McGuinness, former UK Deputy National Security Adviser. Its got to be about the company and the organization. When you took on the role, quickly establishing values as a central theme of your leadership, was there a sense that McDonalds needed its values updated? We have resolved to cultivating a firm where everyone is valued for who they are and what they bring. Put simply, he is a leader who at his core "cares a lot." Ray Kroc left a legacy. Your investments in Drive Thru and digital in restaurants have proven to be fortuitous, even prescient, amid the pandemic. During their undergraduate days at Duke, Mr. Kempczinski made no secret of admiring Coach K, aka Mike Krzyzewski, whose teams have won five national titles. So what do you do? McKinsey: Looking back on your tenure so far, is there anything you wish youd done differently? On occasion I will do a Quarter Pounder. The biggest decision that I was most proud of, that was also most critical, was not trying to make all the decisions here at headquarters, but pushing those decisions out into the markets, while giving our leaders in the restaurants who were closest to the situation the flexibility to make the decisions. One of the things that has defined McDonalds over the decades has been our emphasis on diversity, making sure we have a franchisee population that reflects the US population or the global population. Its probably unlike any other industry out there. We collaborate on SOLUTIONS. https://www.conference-board.org/events/CED-Distinguished-Leadership-Awards-DinnerFor more than a quarter century, the CED Distinguished Leadership Awards ha. In the meantime, you'll continue to see and hear from me across the System. As we hit the ground running in 2020, I want to congratulate you, the McDonald's System, on a job well done. First, we have the four pillars of what we call our Corporate Leadership Platform: supporting local farmers and local sourcing, protecting our planet, serving our communities in times of need, and providing jobs and opportunity. I am excited to share that, starting today, you can follow me on Instagram @chrisk_mcd. Essentially, its a new cooking procedure in the restaurants that allows us to cook a hotter, juicier burger every time. Tools to understand human capital management and corporate performance. Soon after Chris Kempczinski became CEO, the COVID-19 pandemic hit, and the restaurant chain suffered the worst quarter in its history. Listen as Kempczinski talks to Dr. Murray about human-centric leadership, how to keep stakeholders resilient in times of crisis, the importance of defining your company purpose, engaging in the public square, and more. If you're willing to work hard, and live our values, McDonald's can change your life. Our executives preserve it. Right now, if you look at where our franchisees are, I feel very good about their health. "When I started in this role, my commitment to you was to listen and learn across the System," Kempczinski said in a message to employees obtained by CNBC. Full Bio Lori Esposito Murray President CED I think everybody has recognized were going to a world thats going to be more contactless, thats going to have more dine-away as opposed to dine-in. Our research and analysis have helped the world's leading companies navigate challenges and seize opportunities for over 100 years. Given your particular focus on those factors, even before you became CEO, its almost as if you saw the pandemic coming. Im hoping its going to stick around. Hopefully reeducating the executives on how to appropriately socialize with employees will be part of Kempczinskis agenda. When something in the public discourse is relevant to who we are as McDonalds, and frankly where we would be expected to say something, we should lend our voice. Given your particular focus on those factors, even before you became CEO, its almost as if you saw the pandemic coming. The McDonalds brand is well known around the world. The CED discussion series, Leadership in Challenging Times, interviews business leaders about the unprecedented . Within one year and one month of joining McDonalds, Kempczinski was promoted to president of McDonalds USA in October 2016. We had the worst quarter in the history of McDonalds in the second quarter of last year. Its been helpful for us just to keep people in the loop, informed, focused forward. Leadership McDonald's CEO Chris Kempczinski apologizes for his text to Chicago's mayor "Those comments were wrong," he said in a video to the system amid a furor over the message, which appeared to blame parents for shooting deaths of two kids. Nike's new CEO, John Donahoe, has a potentially mission . Google founders Larry Page and Sergey Brin started TGIFs and were regular attendees, but the pair stopped attending regularly in 2019. We just have an incredible footprint that lends itself to delivery. I wanted to step back and just think about where we could actually make a difference. He describes Mr. Kempczinski as a "business savant," someone who is able to "translate insight into action into results." He also was struck by Mr. Kempczinski's genuine commitment to personal growth and development, as well as his focus on building meaningful connections. Why Accountability Is At The Core Of Stewardship Delegation, 5 Ways To Grow Your Personal Brand As A Content Creator, Why We Need To Make Every Day Employee Appreciation Day, In A Competitive Job Market, Heres How To Win The Interview, 5 Tips To Recession-Proof Your Career And Bullet-Proof Your Security, How Leaders At Ultragenyx Balance The Duality Of Action And Connection, Companies Outside Of Big Tech Are Winning Top Talent. After a thorough investigation, the Board took decisive action, terminating Mr. Easterbrook and naming a new leader. When you travel abroad, do you have any favorite international menu items?When I travel abroad, I embrace the hospitality of the franchisee that Im visiting. Detailed information on the use of cookies on this site is provided in our, Detailed information on the use of cookies on this site is provided in our. When I travel abroad, I embrace the hospitality of the franchisee that Im visiting. You never know exactly what youre going to get back from customers. I stepped up my communication to make sure that our employees understood what our plan was to get through thisbut also to get a lot of feedback. We use the expressionIm sure other companies use it as welltheres freedom within the framework. Its a great flavor improvement on our product. Looking at your recent marketing initiatives, featuring cultural icons like Travis Scott and J Balvin, and the recent launch of Spicy Chicken McNuggets, I have to wonder how a brand as established as McDonalds continually reimagines marketing?I get asked sometimes, What exactly do you do as CEO of McDonalds? It can seem as though the system runs itself. As it turned out, the strong emphasis on our core values in early 2020 really hit home and helped us address the challenges we faced when COVID-19 came along. Some organizations have addressed the time issue by encouraging electronic interactions with employees, either by utilizing social media or in-house systems. Together, we served over 65 million customers, on average, every day, providing great tasting food faster with more convenience and better service than ever before. Kempczinski has an MBA from Harvard Business School. What does that mean exactly and how will your customers see this come to life? These events dont need to be frequent or long, but it is essential that the employees have some opportunity to interact with the senior executives. Pivot to lunch, I always get the fries. But what so impressed me about him was that he was firmly focused on the future, on moving forward. McDonald's CEO Christopher Kempczinski last year doubled his compensation, to $20 million, as the company reported record operating income and he dealt with an uproar over texts he sent to Mayor . Thats a good thought exercise to be going through at this time. That also opens up a whole bunch of other opportunities for us. They like to show me the latest thing that theyve got on the menu and Ill go with that. So I think our reticence to publicize those things early on was a missed opportunity. All of this is underpinned by our core values, which are the bedrock of our company. One thing weve learned during the pandemic is that if we simplify our business and focus on what were great atlike drive-thru and our core menu itemstheres a fantastic benefit for our customers. So you just have to accept the unpredictability and risk as part of the bargain to be a relevant brand today. 2023 The Conference Board Inc. All rights reserved. That new CEO is Chris Kempczinski, and here are five facts you need to know about him: In the press release announcing his promotion to CEO, Kempczinski said: Im thrilled to be leading this incredible company. How do you think youve improved the companys marketing since you became CEO? His next novel, the speculative fiction 'BEAUTIFUL SHINING PEOPLE', is out March 2023, Fast Company & Inc 2023 Mansueto Ventures, LLC, Who is Chris Kempczinski, McDonalds new CEO? (201415), Senior vice president, US grocery Assigning leaders to meet with entire teams for an occasional lunch or drinks can go a long way toward increasing employee engagement for all employees. Freedom within the framework gets back to this point of how the brand stays relevant. McKinsey: McDonalds has fared better than many other restaurant chains during the pandemic, thanks to your investments in what you call the 3 Ds: delivery, drive-thru, and digital. Membership in The Conference Board arms your team with an arsenal of knowledge, networks, and expertise that's unmatched in scope and depth. Photograph: Jerritt Clark/Getty Images for McDonalds. In Europe, dine-in was 65 percent of our business in some markets; it might be less postpandemic. Maybe there is a lane for our loyal customers that allows them to go through in a faster way. And were definitely doubling down on those. Additionally, weve been able to expand the number of restaurants offering delivery to more than 30,000. Chris Kempczinski: Prior to 2017, delivery was a $1 billion business for us, largely in Asia. fries? Essentially, its a new cooking procedure in the restaurants that allows us to cook a hotter, juicier burger every time. I think Nike does a great job of engaging customers and using pop culture to keep their brand relevant. Previous and current McDonald's employees also told the Journal that Easterbrook allegedly had a reputation for flirting with female employees. He began his career in brand management at Procter & Gamble, and also held senior positions at PepsiCo, and most recently at Kraft Foods where he was EVP, Growth Initiatives and President, International. The McDonalds brand is well known around the world. He builds great teams. Do you see your delivery model changing in the near future? Maria Figueroa Kp, who leads Brunswicks office in the city, recounts what its been like leading from the epicenter of the pandemic. It wasnt obvious where that complexity was, but now that weve discovered it, were committed to keeping our business simple. We must now champion and apply them more evenly across the three-legged stool to be even stronger. Google learned this lesson with their TGIF gatherings. Not a day goes by that I dont have a small order of fries. So, for example, if you are a customer using the app, maybe you have a dedicated drive-thru lane. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nations interest. We can think about our business beyond just the four walls of McDonaldsand perhaps even beyond what is McDonalds brandedbecause we have scale and a platform that we, and even others in our industry, could use to deliver important and sustained value to our customers. So, we put about $1 billion of liquidity into the system. Here are a few questions, along with Kempczinskis answers (watch the video above for all 20 Questions):What is the biggest risk you have taken in your career? McKinsey: Are there companies or thinkers that you look to for inspiration? Ive taken different lessons from all the leaders Ive worked for and admired. new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0], As a brand, you want people to discover you. Theres a whole bunch of other areas that arent as relevant to us where we shouldnt be lending our voice. More than 30,000 McDonalds locations around the world now offer delivery. When I started in this role, my commitment to you was to listen and learn across the System. To be effective, the teams or groups socializing with the executives need to be relatively small so that employees feel free to openly engage. I think weve done a pretty good job over the years of striking that balance. Any franchisee reading this is going to make sure they suggest a new item because they dont want to be calibrated. As part of the strategy launch, Mr. Kempczinski articulated a clear vision of where the company will make a greater impact in the world through its renewed purpose to feed and foster communities. Our cash flow went down about $2 billion in 2020.
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