“Bezos and Mandela Inspire Me”: McDonald’s CEO on Mentors
No sooner had Chris Kempchinski taken over as CEO of McDonald’s than the pandemic hit almost immediately. However, he managed to cope with unexpected challenges. On the anti-crisis strategy, the principles of successful marketing and role models - in a selection of his quotes.
About a difficult start
Chris Kempchinski took over McDonald’s at a difficult time. Former CEO Steve Easterbrook stepped down from his job due to an affair with female employees. Less than five months after Kempchinski’s appointment, the COVID-19 pandemic began, with McDonald’s having to temporarily close more than 36,000 restaurants around the world, causing revenue to plummet.
The head of McDonald’s is confident that during the crisis, you can focus on the short term. In his opinion, in a difficult period, it is necessary to keep people informed and adjust the company’s actions in accordance with external changes. “I kept my long-term plans in mind, but I also tried to be as honest with people as possible,” says Kempczynski. He asked himself questions: “What do we know? What do we not know? What are we not sure about? What are we sure of? Kempchinski saw that in recent years, the company has relaxed and is living on the knurled instead of truly attracting customers. Then he started developing a new strategy, Accelerating the Arches, which he presented in the fall of 2020.
Three components formed the basis of the new McDonald’s development plan: mastering modern and relevant marketing tools, finalizing the restaurant menu and investing in the development of the “three Ds” - digitalization, delivery, and the McAvto restaurant chain for motorists (digitalization, delivery, drive-through). The company has begun investing heavily in new technologies, including the MyMcDonald’s mobile app, where customers can find personalized offers and join a loyalty program. In addition, the chain has reduced the menu and concentrated on the most popular positions: Big Mac, Hamburger, Chicken McNuggets and French fries. The company also took on the development of the McCafe brand, a chain of restaurants and drinks in the style of coffee houses owned by McDonald’s.
The new strategy has paid off. The company’s net profit in 2021 amounted to $7.5 billion, which was 60% more than in the pandemic 2020. The company’s revenue in 2021 grew by 20.9%, to $23.2 billion. In almost three years, McDonald’s capitalization grew from $146.5 billion to $179 billion.
About role models
Kempczynski says that his first year as CEO taught him some important lessons because of the circumstances. First, he realized how important communication is. “It is very important to constantly keep in touch with all stakeholders – employees, franchisees, investors. It is necessary to ensure transparency and honestly communicate the available information,” he says. The leader in some cases needs to repeat the same thought over and over and over again.
The second lesson is to build the right team around you, because in a crisis it is impossible to solve all problems alone. “The ability to deal with all the difficulties largely depends on the fact that there are professionals in their field nearby. It depends on how the leader will show himself", Kempchinski believes.
According to the head of McDonald’s, several people and companies have always inspired him to achieve more. For example, Nelson Mandela had a great influence on him. Kempczynski graduated from university in 1991, around the time Mandela was released from prison, became president of the African National Congress (ANC) and began negotiations to end the apartheid regime. “I was struck by how firmly he is focused on the future, on moving forward. I always remember this", admits the head of McDonald’s. In addition, Duke University basketball head coach Mike Krzyszewski became Kempczynski’s inspiration. The head of McDonald’s took several lessons from him during his studies. “His ability to build camaraderie among the players is a great lesson for any leader. He builds great teams,” says Kempchinski.
His first mentor was a colleague from Procter & Gamble, who showed what real honesty and sincerity means. “Following his example, I try not to give out veiled corporate messages, but to simply, quite openly and honestly talk about how I see the situation,” says Kempchinski.
He also admires Amazon’s Day One strategy. This is the principle of the founder of the company Jeff Bezos, which boils down to the fact that in life and business there should always be a “day one” because “day two” is stagnation, followed by decline and death. “I think this mindset fits McDonald’s too,” Kempczynski says. He has great respect for how Walmart works with partners to support its brand. In his opinion, Nike is excellent at attracting customers and using pop culture to keep the brand relevant. “There is a rich collection of best practices to learn from. And when you bring together the lessons of different leaders, they ultimately determine the style of leadership", says the CEO.
Chris Kempchinski is President and CEO of McDonald’s.
Born in 1968 in Boston. Kempchinski received a bachelor’s degree from Duke University and an MBA from Harvard Business School in 1997.
Worked at Procter & Gamble, Boston Consulting Group, PepsiCo and Kraft Foods. At PepsiCo, he served as vice president of soft drink marketing for Pepsi-Cola North America Beverages. At Kraft Foods, Kempchinski has served as executive vice president of company development and president of Kraft International.
In 2015, he joined McDonald’s where he worked on global strategy issues. In the fall of 2016, he was appointed president of McDonald’s USA, and in November 2019, he assumed the position of CEO and president of the entire company.
About dialogue with the audience
Kempczynski believes that in recent years the role of marketing in the success of the product has increased significantly, and there are more and more new tools for promoting the product. When Kempchinski began his career 30 years ago, marketing was usually limited to developing an advertising campaign for a year. “But now it doesn’t work like that, because social networks have become the main marketing channel. We put forward ideas and constantly receive feedback from consumers - we are in constant interaction mode", says the head of McDonald’s.
He notes that marketing has ceased to be a one-way communication, has become a dialogue with the audience, which is associated with additional risk. “You never know exactly how customers will react. But there is also a downside - it has become more natural", says Kempchinski. He believes that now companies have no choice - if they try to control the reaction of consumers, then falseness will appear in brand communication, and there will be no resonance. Therefore, the CEO of McDonald’s advises to put up with unpredictability and risk in order to win the love of customers.
Kempchinski is confident that his main task as CEO of McDonald’s is to keep the audience interested in the brand. “There is nothing more important in my job than making sure McDonald’s is as relevant ten years from now as it is today,” says Kempczynski.
Sources: McKinsey & Company, NRF Foundation, Brunswick Group, Goldman Sachs.