McDonald’s CEO, A Refreshing Straight Shooter

In this age of deception, it’s refreshing to hear a CEO that’s a straight shooter. Last evening, I had the pleasure of attending the Economic Club of Chicago’s dinner. ($MCD) McDonald’s CEO Jim Skinner was speaking.

The news is full of stories when CEO’s try and deceive the public. Think back to one of the all time great fraud’s, Enron. America wound up with a lot of unintended consequences in the form of Sarbanes-Oxley because of it.

That’s why it was a breath of fresh air to hear what Mr. Skinner had to say, and the way he presented it.

As he began speaking I thought to myself, “This guy is a CEO?”. One of the number one jobs of a CEO is to be able to sell. Mr. Skinner is no huckster, but as he continued to speak, his appeal became very apparent. I believe his attitude is the reason behind McDonald’s success as a company since he took the helm in 2004.
McDonald's Corporation Price Stock Chart

McDonald’s Corporation Price Stock Chart by YCharts

Mr. Skinner understood the rules of social media before the rules were written.

I expected to listen to a McDonald’s CEO speak about operations. Shaving seconds off drive through time, and ordering time. Supply chain management. Cutting costs of product in a time when food prices are rising. We got some of that.

During Skinner’s tenure, they shaved half a second off every visit. Customers, or guests in Mr. Skinner’s parlance, go to McDonald’s on average four times a month.

I expected a McDonald’s CEO to talk about how good their food was. We listened to a little of that. “Eyes on the fries”, was the slogan he used. But that slogan really isn’t about the food.

McDonald’s forgot who their customer was pre 2004. Instead of listening, they went with central planning and pushed out ideas into the marketplace. Post 2004, and Mr. Skinner taking command, McDonald’s decentralized and began listening to their customers. It was ground up marketing rather than top down. McDonald’s embraced the entrepreneurial culture of their restaurant owners. One of the benefits of the change in focus was McCafe. McCafe was started in Australia. The version we see in the US is slightly different than the Aussie version, because it’s tailored to the US market. The move into coffee allowed McDonald’s to take a share of the premium coffee market, and added to the value of their overall brand. Great marketing. Great management.

In this age of Twitter and Facebook, we sometimes think customer focused companies are a new phenomena. Every marketing major learns about the four P’s, product life cycles, and target markets. But, it was always sketchy to executives because there wasn’t a sure way to know you were hitting your market. Social media allows us to precisely target and measure the effect marketing efforts are having. Good users of social media don’t push out, instead they put an ear to the ground and listen. Then they can anticipate and react to fickle consumer behavior faster.

For a behemoth like McDonald’s it’s absolutely crucial to listen. Imagine trying to change the direction of that corporate battleship. From the looks of their stock price, and from the speech Jim Skinner gave last night, it looks like to me they have been perceiving what their customer wants really well.


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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