McDonald's Serves up Reputation With Fries

When Steve Easterbrook took the reins as the new CEO of McDonald's last month, he already had a plan in place.

Hardly a month after he was named CEO and in full page ads, he announced that the company would be raising the hourly wages of the more than 90,000 employees at the company-owned restaurants by $1 and would offer those who had been with the company for one year "paid personal time off."

Clearly, Easterbrook had heard the wake-up call, taking serious note of the recent troubles, the escalating push for salary increases and the increasing competition from other burger quick-serve restaurants.

It looks like he made a good first move. This salvo hit directly at the core of any successful business: its employees. If they aren't motivated and rewarded, no business will fare well over the long haul. If anyone wanted more evidence, just look at the steps announced a few months earlier to raise salaries at the world's largest retailer, Walmart, quickly followed by Target.

I suspect that, when Easterbrook met with the McDonald's board of directors as they interviewed candidates to take over the top job, they zeroed in on strategy and grilled him on plans to proactively address the challenges to the storied reputation of McDonald's and the decline of its business. After all, that's the role of the board and clearly it didn't limit its probe to the future of the Big Mac and those famous fries.

It's safe to say that the board would have focused on the reputation of McDonald's and how it is viewed by those who its determine its success, whether they be employees, customers, partners, suppliers, the media, investors, or the many who may not even go to McDonald's but influence the choices of others.

It appears that Easterbrook is serious about addressing the problems. He was very public in his round of morning talk show appearances, accompanied by those ads and a social media initiative. You sensed he was genuine and there was more to come.

Of course, as is to be expected, sceptics asked whether his was just a "publicity stunt" during a new CEO's honeymoon period. But the numbers speak loudly. You don't have to be a genius to do the math and realize that the $1 per hour represents quite an investment, now and well into the future.

However, if Easterbrook doesn't lay out the rest of his plan in short order, his first shot will be short lived.

Those of us in business and communications know full well that any plan to build or restore reputation needs to be proactive on a range of fronts. That is no simple or quick task. Surely, Easterbrook knows this. After all, his previous job was as chief marketing officer. So he knows brands.

But his challenge now is to do much more than he has before. Corporate culture is a critical part of it. The rest is to meet expectations for every aspect of the McDonald's brand and deliver on the promise.

This is an effort that needs to be tackled with specific plans and measurable results on five fronts.

  • Strong leadership, behavior and business/financial fundamentals
  • Vitality of the consumer-facing brand
  • Depth of talent and resources
  • Commitment to sustainability
  • Smart innovation in products and systems

So, Easterbrook has started with talent and his $1 initiative will gain traction.

But, what's to come next and when?

After all, excitement about change comes in waves. Momentum and results mean everything.