2017 - 2022McDonald's. The following is the unofficial transcript of a CNBC interview with McDonald's CEO Chris Kempczinski from the CNBC Evolve Global Summit, which took place today, Wednesday, June 16th. So, we put about $1 billion of liquidity into the system. McFamily Feud: Scandal, lawsuits, and cultural upheaval at McDonald's And one of the things that I tried to do in the very beginning was to just outline some principles of how we were going to look at it. Hed come to McDonalds in 2015 after holding top management positions at Kraft Foods and PepsiCo. When COVID-19 struck, the first thing that we wanted to do was put some immediate liquidity into the system. We build COMMUNITY. Put simply, he is a leader who at his core cares a lot., Inside McDonalds, Mr. Kempczinski wasted no time reminding employees, franchisees and suppliers that their pride in McDonalds was rooted in the values on which the company was founded-and reiterating his personal commitment to those values. Leadership in Challenging Times: Chris Kempczinski, President & CEO, McDonalds, The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. We did recognize three or four years ago that delivery was going to be a huge opportunity for us. 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. What were your priorities in your first year as CEO? Our ambition is to offer everyone an opportunity to fulfill their dreams, no matter where they're starting from. McDonald's CEO responds after report alleges sexual harassment - CNN A Division of NBCUniversal. So, credit to the team for getting on that one early. As the leader of McDonald's USA, Kempczinski participated in a lot of the decisions that fueled the company's turnaround. So I don't have all the answersBut I am going to outline for everybody some principles about how we're going to approach these issues. So says Chris Kempczinski, President and CEO of McDonalds 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). And at the time of Mr. Kempczinskis one-year anniversary in early November, McDonalds stock had spiked even above the year-earlier price when he took over as CEO. During an internal McDonald's town hall meeting, Kempczinski vowed that he will look at every senior executive and ask if they "personify the values of our company." However, shutting down all socialization between senior executives and the rank and file isnt the answer either. Nike's new CEO, John Donahoe, has a potentially mission . We would have a digital relationship with those customers. I think weve done a pretty good job over the years of striking that balance. Were going to make decisions with the long-term in mind. Evaluate and optimize the impact of corporate citizenship programs. Im very proud of having put our values front and center. The MyMcDonalds platform is essentially an ecosystem of all the things that you can do via digital touchpoints with McDonaldsthink mobile ordering, payments, delivery, rewards, or deals. Beyond our leadership platform, we have our five company values, one of which is inclusion. Leadership in Challenging Times: A Conversation with Dan Schulman, Leadership in Challenging Times: A Conversation with Marc Casper. Every time you go to a new organization, you take a risk with that. If they dont express a strong bias, I do the Quarter Pounder because thats a great product to calibrate around the world. Home. 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. 5 things you need to know. And Kempczinski had been in the role for less than five months when COVID-19 shut down many of McDonalds 36,000-plus dining rooms around the world, sending the companys revenues plunging and generating high anxiety among employees and franchisees. Jean Marc-GibouxAP Images for McDonald's. In a franchise . I have a rotation of lunch items. Its not about you. McDonald's CEO's comments outrages workers, activists - WBEZ So when events happen that strike at the heart of our core values, we want to speak out on those occasions as well. 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. When I started my career, 30 years ago, marketing was typically well develop a campaign and run it for a full year, then well think about it again in a year. But now were in an always-on marketing environment, driven largely by social media. Mr. Kempczinski had barely warmed his chair in the job when the pandemic struck, closing restaurants around the world seemingly overnight. Video. I didnt think that we had contemporized our approach to marketing. Kempczinski has an MBA from Harvard Business School. But we're only just getting started. If we further build out a hybrid delivery model, do we let others, perhaps, ride on our delivery platform? McKinsey: Youve had quite the baptism by fire. [5] Of course, when its no longer a one-way communication, that comes with an added level of risk. Regular chicken nugget or spicy?Ive always liked the regular. Photograph: Jerritt Clark/Getty Images for McDonalds. '&l='+l:'';j.async=true;j.src= But Im now a convert to the spicy. Jeffrey GreenbergEducation . Fairhurst departed the company the day after Easterbrook's firing became public knowledge. Hopefully reeducating the executives on how to appropriately socialize with employees will be part of Kempczinskis agenda. To manage that risk, though, you have to make sure your creative teams are nimble. As a brand, you want people to discover you. Definitely one of the things thats gained focus is the need for communication. The Wall Street Journal reported Sunday that under Kempczinski's predecessor, Steve Easterbrook, the company's culture tolerated late-night socializing between senior managers and rank-and-file employees. new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0], If its available, I like a blueberry muffin with that. We think we can get even fasterand were also thinking about ways that the digital experience might work in drive-thru. But under his leadership, recoveryand growthare once again on the horizon. Sign up for free newsletters and get more CNBC delivered to your inbox. We make a significant investment each year in marketing. Reports suggest that their outings included heavy drinking, flirting and physical contact with female employees. Covering all aspects of labor markets, from monthly development to long-term trends. Members of The Conference Board get exclusive access to the full range of products and services that deliver Trusted Insights for What's AheadTM including webcasts, publications, data and analysis, plus discounts to conferences and events. When Ray Kroc structured McDonalds as a franchise business, the founding idea was to have a franchisee who lives in the community and who is going to be way better at managing the restaurant than some corporate stiff, thousands of miles away. Joining as VP, Global Strategy, Business Development and Innovation, it took him only a year and a half to earn promotion to President of McDonalds USA, where he was responsible for the operations of about 14,000 restaurants. 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? chris kempczinski leadership style - ober.com.br 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. Executive vice president, growth initiatives We collaborate on SOLUTIONS. chris kempczinski leadership style - nautilusva.com It was a tough test for any new CEO. They like to show me the latest thing that theyve got on the menu and Ill go with that. Rather, this was a moment to double down on what we stand for and make it clear that it applies to all of us equally. 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? McDonald's adjusts to its new leadership - Restaurant Business I get asked sometimes, What exactly do you do as CEO of McDonalds? It can seem as though the system runs itself. On leading during COVID-19: as you would imagine, in a system like ours, where you have not just the company people, but you have a network of suppliers, you have a network of franchisees, you get bombarded with a lot of questions that come in from everybody around the world. Of Mr. Kempczinski, Mr. Kelly says, At college, we nicknamed him The Colonel given the similarity between his leadership qualities and those of Dukes legendary basketball coach. In the younger Mr. Kempczinski, Mr. Kelly also saw the tremendous energy and resilience that might have predicted his traveling the globe not only as a rising leader in business but as a serial runner of marathons far and wide. Weve seen our productivity and our restaurant-level margins improve. When you eat as much McDonalds as I do, you think in day parts. })(window,document,'script','dataLayer','GTM-MFNGH2P'); Brunswicks Digital Investor Survey is a comprehensive review that explores how institutional investors gain information and the impact those insights have on their investment decisions. Breakfast? McKinsey: Are there companies or thinkers that you look to for inspiration? How do you think youve improved the companys marketing since you became CEO? All Rights Reserved. In just four years, he had clearly made a mark. Yet by the fourth quarter of 2020, the companys global systemwide salesat $25.8 billionhad fully recovered to its 2019 fourth-quarter sales. He said he hoped to speak with the victims' parents. Please review the third-partys privacy policy, accessibility policy, and terms. Said Mr. Kempczinski in the companys recent Investor Update: People expect more from corporations todaya truth that has taken on additional resonance during a year in which climate change, social justice, diversity and inclusion have driven the public conversation . What are your values? I am excited to share that, starting today, you can follow me on Instagram @chrisk_mcd. In this role, he worked closely with our business leaders and franchisees to identify innovative new ideas and best practices to accelerate system growth. It goes back to credibility. In the meetings, employees could express concerns and discuss topics openly and freely. To lead, you have to be out there talking a lot and, in some cases, saying the same message over and over and over. We have resolved to cultivating a firm where everyone is valued for who they are and what they bring. When you had a leader that acted in a way that was incongruous with those values, it raised a question: Are we as good as we say we are? McDonalds new chief executive, Chris Kempczinski is trying to change what has been described as a macho, guys club corporate culture at McDonalds. That sense of community is what makes our System so special. And were definitely doubling down on those. Given your particular focus on those factors, even before you became CEO, its almost as if you saw the pandemic coming. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Collectively they represent 30+ industries, over a trillion dollars in revenue, and over 4 million employees. I graduated from college in 91right around the time Nelson Mandela had been released from prison, become President of the ANC, and started negotiations to end apartheid. Ive never forgotten that. He lives in Chicago, IL, with his wife and two kids. I wanted to step back and just think about where we could actually make a difference. At McDonald's, an abrupt change in leadership has investors - CNN Chris is a proud alumnus of both Duke University and Harvard Business School. If you have the golden arches outside your door, youre serving the core menu. Some organizations have addressed the time issue by encouraging electronic interactions with employees, either by utilizing social media or in-house systems. We have some exciting milestones ahead, including Worldwide Convention. Leadership in Challenging Times: Chris Kempczinski, President & CEO 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. By continuing to use this Site or by clicking "OK", you consent to the use of cookies.OK, On leading during COVID-19: as you would imagine, in a system like ours, where you have not just the company people, but you have a network of suppliers, you have a network of franchisees, you get bombarded with a lot of questions that come in from everybody around the world. Regardless of the delivery channel deployed, though, we always focus on our customers experiences because customer satisfaction is critical to us. McKinsey: Looking back on your tenure so far, is there anything you wish youd done differently? Diversity, Equity and Inclusion at Brunswick Group. So, are there things we can do to speed up the Drive Thru? But far more often, its a huge benefit because people just love to talk about McDonalds, and thats something we should lean into. Also, we could have done a better job demonstrating and articulating what McDonalds was doing to support communities. US consumers thoughts on the economy, jobs, finances and more. 2023 The Conference Board Inc. All rights reserved. This article was edited by Monica Toriello, an executive editor in the New York office. Human Capital Benchmarking & Data Analytics. Join us in New York City and be a part of the story of how retail builds extraordinary careers. In Kempczinski's message Monday, he said he was "impressed by the candid feedback.". Do you see your delivery model changing in the near future? Chris Kempczinski President and Chief Executive Officer at McDonald's Corporation Greater Chicago Area 62K followers 19 connections Join to follow McDonald's Duke University About As President. Steve Easterbrook Separates as President and CEO and as a Member of the . He also held in-person town halls with employees in the United Kingdom and Germany in late December. For more information on how to manage cookies, please read our cookie policy. Chris Kempczinski, McDonald's, speaks during a press conference in New York, November 17, 2016. You are leaving McDonalds to visit a site not hosted by McDonalds. 'Our Menu Is Very Darwinian.' Leading McDonald's in 2021. It calls for Kempczinski to meet with Black and brown employees and community leaders in Chicago in the coming days to "tell us what your plan is to address systemic racism at McDonald's and. "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. So says Chris Kempczinski, President and CEO of McDonalds 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). Chris Kempczinski on LinkedIn: #teamrmhc | 23 comments Robyn M. Bolton on LinkedIn: #innovation #leadership #idea #innovation There are social issues on which you havent hesitated to speak outfor example, you put out public statements after the killing of George Floyd and after the attack on the Capitol. 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. What are your plans in each of those areas? Chris Kempczinski: We have many options, including multiple global delivery partners, local delivery companies, and self-delivery. Chris Kempczinski - McDonald's The McDonalds brand is well known around the world. McDonald's CEO Chris Kempczinski is trying to restore a more professional culture, starting with feedback from key stakeholders and applying the chain's core values across the system of franchisees, suppliers and employees. Customers are seeking brands that reflect their values and the line between the corporate brand and the consumer-facing brand is blurring.. Your investments in Drive Thru and digital in restaurants have proven to be fortuitous, even prescient, amid the pandemic. In an email to employees, Pichai attributed the cancellation to meeting leaks and dwindling attendance. Weve seen our customer service scores go up across the globe. Chris Kempczinski was enjoying a quiet moment at his home in Chicago last autumn when he received a call from Chair of the Board of McDonalds Corporation, Rick Hernandez. The more delivery locations you have, and each of our restaurants is a delivery location, the better you can make that experience. What is leadership: A definition and way forward | McKinsey Are there particular mentors or heroes whose words or examples have helped guide you this past year?Theres not one person. 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. 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. Weve been in the Drive Thru business for decades, so I dont want to say that we had any foresight in that. Im excited about all the opportunities for us there. We can make a difference around being there for communities in crisis, from Ronald McDonalds House Charities to natural disasters. 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. If you think you have reached this message in error, please contact membership@tcb.org, Your Indispensable guide through the global recession. If we have that level of consumer engagement on our app, could we do even more for them? In following that example, Ive tried to not put a lot of corporate spin and polish on stuff, but to just speak in a pretty open, honest way about how I see things. We did recognize three or four years ago that delivery was going to be a huge opportunity for us. Chris is responsible for driving McDonalds growth strategy, Accelerating the Arches, and ensuring that the companys values are embedded throughout the system as the filter through which all our business decisions are made, bringing its corporate purposeto feed and foster communityto life. 'https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f); 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. In the meantime, you'll continue to see and hear from me across the System. Mr. Kempczinski had barely warmed his chair in the job when the pandemic struck, closing restaurants around the world seemingly overnight. 09 September 2020. McDonald's CEO Chris Kempczinski lays out the fast food giant's new strategy to emerge from COVID-19 a winner. Not a day goes by that I dont have a small order of fries. Chris Kempczinski: Prior to 2017, delivery was a $1 billion business for us, largely in Asia. 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. Much of it is done through third-party operators, like Uber Eats, DoorDash, Just Eat Takeaway, and Deliveroo, but in some marketslike parts of Asia, Australia, and Germanywere actually experimenting with hybrid models, including self-delivery. 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. Our executives preserve it. Opinions expressed by Forbes Contributors are their own. After taking over as CEO in mid-November, Kempczinski asked employees for feedback. But, broadly, our systems in great shape. Finally, I went to Duke and Im a big Duke basketball fan. Theres the promise of potentially what youre going to learn but theres also the risk of starting all over. We recognize our responsibilities as one of the world's leading companies, and we're committed to being part of the solution wherever we can make a difference. We want to hear from you. Track the status of job markets across the US through online job listings. He has been the "heir apparent" to Easterbrook since joining the company. In a press release, McDonalds said Easterbrook, who had been CEO since 2015, violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.. McDonald's CEO Chris Kempczinski is trying to change the company's culture after taking the reins in November. New York CNN Business . McDonald's new CEO aims to 'sharpen' plans in 2020 in memo This button displays the currently selected search type. We have our core menu: hamburger, cheeseburger, Big Mac, Quarter Pounder. In most major markets, they were at or near record cash flow, which essentially is how much money theyre able to take out of the business. Chris Kempczinski, CEO of McDonald's "Leaders of other enterprises often define themselves as captains of the ship, but I think I'm more the ship's architect or designer. All Rights Reserved. And we were constantly pulse-checking our organization. Yet Lightfoot hasn't done much to help. What are your 2021 priorities for staying ahead and nimble?We call them the three Ds: Drive Thru, delivery, digital. Ive taken different lessons from all the leaders Ive worked for and admired. The Committee for Economic Development of The Conference Board (CED)uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nations interest. A big learning for me was realizing that there is no such thing as overcommunicating. Senior Partner, Consumer Industries Group Global Lead, Head of Office, Chicago. For more information on howCEDcollects and uses personal data, please visit ourprivacy policy. We also put the onions actually on the grill as opposed to putting the onions on at the dressing table. I could never have anticipated how much those messages would resonate. In November 2019, Mr. Kempczinski became President and Chief Executive Officer of McDonalds, the worlds largest restaurant company. Kempczinskis predecessor, Steve Easterbrook had a reputation for partying with other employees and was ultimately fired in November for violating the companys rules that prohibit dating coworkers. 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. Not any of the other sauces; just straight-up ketchup. When I came to McDonalds, that was probably one of the biggest risks for me. Married, with 2 children, Holds an MBA from Harvard Business School and a bachelors degree from Duke University, McDonalds Food is such a local experience that you have to give people some latitude to adapt to local tastes. Our records show that you are a Member of The Conference Board, but you do not have access to this webcast based on your Membership level. P.S. I am energized by this challenge and look forward to guiding McDonalds continued success. But this year has definitely been a team effort, and Ive certainly been fortunate in that I have a very experienced team around me. In this current environment, all companies are being asked to define their mission, their higher purpose. I like the Nuggets with ketchup. 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. Customers are seeking brands that reflect their values and the line between the corporate brand and the consumer-facing brand is blurring. chris kempczinski leadership style. On occasion I will do a Quarter Pounder. Definitely the Egg McMuffin with no Canadian Bacon. Google learned this lesson with their TGIF gatherings. Voice recognition could be one area to do that. Councils are invitation-only, peer-led communities of senior executives that come together to exchange knowledge, accelerate career development, and advance their function.