Apr
05

Turnaround Innovation: Putting Consumer Experience at the Core

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Reboot Stories with McDonalds CEO, Steve Easterbrook and Dean DeBiase

When a Fortune 100 is faced with the harsh reality of record sales declines, and investors and analysts asking about the T-word…it is time for a Reboot. Whether spelled with a lowercase or capital “T”, turnarounds can make for rousing headlines and offer great opportunities for well-timed investments. But all-access passes to the actual plan and philosophy behind the Reboot are very rare, especially as it is just getting underway.

I recently conducted a Reboot Stories interview with Steve Easterbrook, McDonald’s then Senior EVP and Chief Brand Officer, at the AKTA Innovation Series in front of a live Chicago audience. Easterbrook was named McDonald’s President CEO soon after this interview. The video offers a rare glimpse into his approach to dynamic innovation, cultural transformation, digital engagement, in-store experience, and his turnaround blueprint now in motion. 

It's one of my favorite Reboot Stories interviews since my first one with Sir Martin Sorrell – CEO of WPP, because of Easterbrook's open/honest answers to hard questions about everything from consumer shifts to secrets and rumors happening in and around McDonald’s key initiatives. Watch how Easterbrook covers the three pivotal ingredients that I believe are the bedrock of an effective Reboot—People, Platform & Passion—in this exclusive no-holds-barred interview.

Some insights and takeaways:

Go Large
When you’re in a turnaround situation, “you can’t incrementalize your way out of it,” said Easterbrook. At McDonald’s, substantial resources are being invested, especially on the human resources side, with top talent being brought aboard to support all aspects of the new initiatives, like Chief Digital Officer, Atif Rafiq, the first member of the new digital experience team. Rafig is a digital pioneer/innovator that brings a refreshing level of “get it done” business mojo to McD’s, and by the end of 2015 his digital team will have over 200 people. “You can’t tip toe around the fringes of this,” says Easterbrook. More importantly, consumers must see a quicker “cadence of activity and energy across the business.” Unless customers care, it won’t resonate. 

Consumer Experience is Everything
Consumer interactions with authority figures have fundamentally changed. Government, corporations and media all enjoy much less trust than at any time in history. Consumers now see family and friends as their frame of reference. Companies that have lost some consumer trust have to win it back by adapting the way they organize and interact with people. How?

Transparency
“Be more humble,” says Easterbrook. McDonald’s no longer only communicates top down or in advertising speak. They launched Your Questions – Our Food that lets people directly ask any question they want and McD’s goes on the record with a response. And consumers are engaged. One video response showing how food gets from farm to restaurant has 10 million YouTube views. Push the envelope. Be honest and responsive.

Transfer Power
Consumers expect to be in charge of a customized experience. Easterbrook has partnered with various groups from 1871, where I am a founding board member, to the Innovation and New Ventures course that I teach with Paul Earle at Kellogg School of Management, to collaborate on improving the McD’s ideation and innovation pipeline. He says the future may offer 3, 4 or 5 more ways to have the McDonald’s experience with technology doing the heavy lifting. The best ideas may be crowdsourced. Order a customized burger from a kiosk. Or, place an order on the mobile app, tracked by GPS, and have it run out to your car fresh and hot as you arrive. McDonald’s has a track record of scaling these types of ideas, having led the innovation in cashless transactions. They were an Apple Pay launch partner, another intriguing Apple secrecy story you can watch in this video.

Be Curious
Most of all, Easterbrook believes in being curious. Learn from your customers, partners and competitors—the good, bad and hard lessons. Look outside your sector for inspiration. As we have discovered in this series, cross-vertical, B2B and consumer sectors can learn a lot from each other. Encourage this curiosity from top to the bottom of the org chart, says Easterbrook. Organizations whose culture evolves from “yes, but” to “yes, and” will also attract the kind of curious people that can transform even the most established corporate structure.

For an entertaining and informative look into insights about McDonald’s Reboot, including their new downtown Chicago and Silicon Valley tech teams, secret “innovation labs,” and partnerships with Kellogg School of Management, Apple and Kraft,  watch this revealing episode of Reboot Stories with me and Steve Easterbrook, McDonald’s new President and CEO.

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