I read a recent story from Bloomberg BNA about plummeting revenues at McDonald’s—and the company's proposal to fix the problem with "toasted buns" and "grilled burger patties"—and had two immediate reactions. First, Burger King has been saying this for years. Char-grilled flavors arebetter (granted, I'm biased). Second—and more important—is there another cause? Is a toasty bun really the answer to a decade of dwindling revenues?
Market research plays a key role in improving products, but there are other leading indicators of decline at McDonald’s: increased operational costs, greater voluntary turnover from management staff, lowest-ever customer service scores. These are people problems, not product problems.
Three trends have required change from the entire industry—globalization, the growing healthy-eating movement, and consumer demand for more choices—and have eroded McDonald's competitive advantage over the last ten years.
As to globalization, Yum!Brands has conquered the international market so well that the Colonel is the most popular fried chicken purveyor in Africa, Asia, and the Middle East. As to healthy eating, the local sandwich artist Subway (assisted by Jared) has torn into the North American market by focusing on weight loss and good-for-you fast foods. As to the wide-array-of-options market, Chipotle, Taco Bell, Starbucks, and, yes, Burger King, have all cornered it.
Like all other industries, restaurants build competitive advantage through people and innovation. For many organizations, the "people advantage" is what’s missing! This is where HR steps in. Organizations turn to competent workforce planners, who will focus not just on the strategy for filling jobs, but also on the necessary changes for turning strategy into success.
In sum, the key to polishing up the Golden Arches might not be a better burger, it’s a leaner, meaner operation fueled by fresh thinking. The drive-thru order for McDonald’s might be top-notch HR, with a side of business acumen and a garnish of critical evaluation.
Alexander Alonso, PhD, SHRM-SCP is the Society for Human Resource Management's (SHRM's) Chief Knowledge Officer leading operations for SHRM's Certified Professional and Senior Certified Professional certifications, research functions, and the SHRM Knowledge Advisor service. He is responsible for all research activities, including the development of the SHRM Competency Model and SHRM credentials.
During his career, he has worked with numerous subject matter experts worldwide with the aim of identifying performance standards, developing competency models, designing organizational assessments, and conducting job analyses. He was also responsible for working on contract task orders involving the development of measurement tools for content areas such as job knowledge (like teacher knowledge of instructional processes) and organizational climates (like organizational climate forecasting in military health care).
Dr. Alonso received his doctorate in Industrial-Organizational Psychology from Florida International University in 2003. His works have been recognized for their contribution to real-world issues. They include being recognized by the Society for Industrial Organizational Psychology (Division 14 of the APA; SIOP) with the 2007 M. Scott Myers Award for Applied Research in the Workplace for the development of the federal standard for medical team training, TeamSTEPPS; being awarded a 2009 Presidential Citation for Innovative Practice by the American Psychological Association for supporting the development of competency model for team triage in emergency medicine; and receiving the 2013 SIOP Distinguished Early Career Contributions for Practice Award.
Throughout his career, he has published works in peer-reviewed journals such as Industrial and Organizational Psychology: Perspectives on Science and Practice, Journal of Applied Psychology, International Journal of Selection and Assessment, People and Strategy, Personality and Individual Differences, Quality and Safety in Health Care, and Human Resources Management Review. He has also authored several chapters on community-based change initiatives in workforce readiness, as well as co-authoring Defining HR Success: A Guide to the SHRM Competency Model in Practice.
Dr. Alonso also served as a columnist analyzing major trends in the workforce for The Industrial Psychologist and HR Magazine. In addition, he has served on several professional society boards including the SIOP and the Personnel Testing Council of Metropolitan Washington.
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