Recently, McDonald’s customers haven’t been lovin’ the brand. Now, the CEO is taking the fall.
On Tuesday, the fast-food giant announced that Don Thompson is retiring as president and CEO, after 25 years at McDonald’s. His replacement originates from within the business: Steve Easterbrook, who ahead of his promotion was senior executive vice president and chief brand officer, and previously served as president of McDonald’s Europe.
“It’s tough to state goodbye to the McFamily, but there exists a time and season for everything,” said Thompson in a statement.
Despite the fact that Thompson only became CEO in 2012, the departure is hardly out of nowhere. McDonald’s same-store sales were down a complete 1 percent in 2014, because of a variety of factors including legal battles, customers’ growing distaste for traditional junk food, difficulty streamlining the menu and international supplier issues.
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Thompson probably couldn’t have directly prevented most of these problems. For instance, it’s unlikely that the CEO of a 36,000-location chain will be privy to any understanding of supplier hygiene in Asia. However, Thompson did allow issues like a lax auditing system and an oversized yet stagnant menu to keep under his leadership.
As CEO, Easterbrook can be the facial skin of a “new” McDonald’s, as several changes Thompson helped set in place will be getting into fruition in 2015.
Easterbrook began working at McDonald’s in 1993 and held various leadership positions in Europe ahead of his current role. While he has deep roots in McDonald’s, Easterbrook also brings fast-casual leadership experience to the table. From 2011 to 2013, Easterbrook left McDonald’s to serve as CEO to begin casual pizza chain PizzaExpress and the fast-casual chain Wagamama, serving Asian food.
Easterbrook’s fast-casual experiences have uniquely prepared him to dominate McDonald’s as the business attempts to defend myself against fast-casual competitors. Thompson said within an investors call earlier in January that in 2015, McDonald’s will be centered on “adapting to the changing marketplace.” This season, Easterbrook will lead the business in rolling out the fast-casual friendly “Create Your Taste” platform and wanting to simplify recipes when using higher-quality and localized ingredients.
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Still, the question for McDonald’s remains: Will Easterbrook be adequate of a change to reboot the business’s sales? McDonald’s includes a long tradition of hiring internally. However, an external hire for CEO may be the shock to the machine that brings necessary changes to the brand and changes external perceptions of the business.
For good or for bad, the “shock to the system” method isn’t in McDonald’s playbook, likely partly because the company is indeed vast that creating purposeful change in every locations takes months or years in planning and execution. Plus, McDonald’s still has probably the most recognizable and famous (or, sometimes infamous) brands in restaurant history. Currently, the business is pushing to revitalize its image and sales, while still clinging to the universal recognition the golden arches inspire.
For instance, McDonald’s latest advertising campaign doubles down on what defines McDonalds: the annals of the business, the famous logo and the unapologetically anti-foodie meals. None of the things are new and neither is Steve Easterbrook. It’s only a matter of reframing these key ingredients of the brand and finding ways to convince customers they are indeed what they need.
If the moderate method of rebranding fails, it may be time for McDonald’s to get rid of the playbook — and discover a CEO from beyond your company. Easterbrook better start executing changes quickly and successfully, or he’ll be following Thompson out of your “McFamily.”
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