Business Acumen at McDonald's: Where’s the (HR) Beef?

I read a recent story from Bloomberg BNA about plummeting revenues at McDonalds—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.




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