Monday, September 11, 2006

McDonald's Exclusive - McD's hunts for marketing chief

Good morning.

Board of Directors. Who should McDonald's select as the new marketing chief? Someone with organizational restructuring and cost cutting experience? Someone adroit at new restaurant design and menu planning? Someone sophisticated at testing new ideas like taking employees out of the loop, developing kiosks and other real estate points of distribution? An insider? An outsider? A technician? Or a visionary? A business architect? And for how long should their input have an impact?

Dick and Maurice McDonald were great restauranteurs - but lousy business men. They never sold more than 15 franchises and only 10 became restaurants. One owner asked to call his restaurant McDonalds in Arizona and was told "no" because "McDonald's doesn't mean anything in Arizona."

Then along came a visionary named Ray Kroc who made ice cream equipment for the two brothers. He was also a real estate visionary who could foresee a nation, a world of McDonald's restaurants. So he hired his real estate buddies at significant discounts and promised them a piece of the company. Today, McDonald's is the largest real estate owner on the planet, aren't they?

So who to hire next? Not another real estate guru. Donald Trump isn't available. Not another cost cutting management and organizational titan. Not an adman or marketer adroit at 30 day promos and new products.

McDonald's needs a transportation authority to take it the next hundred years because roads are obsolete. The problem is not in generating an incremental usage occasion for a BigMac or QuarterPounder (which by the way I invented for the firm while at Leo Burnett in Chicago). I can do that. The problem is how to get more people to McDonald's faster. Think "increase frequency and velocity" globally. Boston can finish their Big Tunnel Project to alleviate traffic congestion, but anyway you slice it, a human behind the wheel will create a bottleneck, even if Southern California's famed 405 became 20 lanes each way, there would still be road rage and traffic snarls. The problem isn't the road, it's the people.

So McDonald's needs to find a heavy hitter with government transportation and auto industry ties. An infrastructure hardscaper. Someone to take the company accross the next century's goal line. Someone who can do with roadways and cars what Ray Kroc did with real estate. He hardscaped the landscape. So are you looking for a hardscaper, or a cosmetic landscaper? Because a Wall Street darling won't cut the mustard.

While I was at Burnett I was asked by the company Chairman what I thought about client Philip Morris' acquisition of Kraft. Since I structured the deal (it was my concept) I said that Phlip Morris was making the deal to reduce profit dependency on tobacco. He looked at me as if I was a crack pot - or on crack - but as a pragmatic futurist I know intuitively how to read trends and the writing on the wall. Tobacco was ten years from going down. The Kraft acquisition (before tobacco became a target) reduced Philip Morris tobacco profit dependency from 96% to 46%, set the stage for young execs such as Betsy Holden and Roger Deromedi to lead the firm and craft (no pun intended) Kraft's IPO and PM to continue to flourish. Thanks Hamish Maxwell! Growth and creating opportunity for others is my ambition.

1 comment:

H. Martin Calle said...


Thanks for the e-mail.

Companies such as McDonald's and Wendy's constantly upgrade and transform their facilities sniffing out and following consumer trends and preferences...but that's what they hire young and ambitious MBAs for. The real rich, robust and proprietary insights deal with underpinnings of the business. Ray Kroc was a real estate guy, consequently, there is a McDonald's on nearly every available street corner, and then some. Now that the real estate is saturated, and as you said, constantly on the mend, the next move is to make it easier to get people to the restaurants. Hence the focus on transportation. McDonald's arteries are blocked (no Super Size Me pun intended - but funny/ironic) because the nation's highways are obsolete. So the CMO question becomes, "Who will be the next Ray Kroc?" I for one wouldn't want to spend my time as marketing chief at McDonald's a a property, media and menu landlord. It's too cut and paste.