Profile
May 01 2003
by Briefing teamWhether it's business students reading up on 'McDonaldisation theory' or activists harping on about the McLibel trial, a consistent theme runs through much of what you read about McDonald's - it's big, American, uniform, and downright powerful. In short, far removed from the community-focused company that founder Ray Kroc often spoke about.
Operating as it does in 122 countries worldwide, the charge of globalism is not one McDonald's can easily shy away from. But all is not plain sailing under the Golden Arches (or "Fallen Arches" as Fortune recently quipped), with a first ever loss ($343m) in the final quarter of last year.
Move the focus to the UK and the picture is even more competitive. McDonald's UK still represents the largest fast food retailer in the UK (with about 1,200 restaurants, it has twice the number of Burger King, its nearest competitor), but competition on the high-street from sandwich shops, coffee bars and local supermarket outlets is hotting up. As to the charge of Americanisation, while its essential products (the fries, Big Macs and milkshakes etc.) are intimately bound up with the Stars and Stripes, McDonald's UK only has one American on its board and in terms of day-to-day management is more or less autonomous from its US sister.
Shift to the individual restaurant and the image of McDonald's as a homogenous, all-powerful monolith is even harder to stack up. For starters, roughly one in three McDonald's UK restaurants are owned and operated by franchisees. Each restaurant's 'localised' feel is enhanced by an increasing sympathy in architectural design and an active policy of hiring locally.
The case for corporate community involvement (CCI) becomes more apparent when one sees every McDonald's UK restaurant as a local entity in its own right - be it in its role as a local employer, local service provider or local citizen. Indeed, unlike restaurant layout or product development, CCI is one of the areas where individual restaurant managers and franchisees have the opportunity to reflect and respond to local needs, whether it's London's Oxford Street or the Elgin industrial estate in Morayshire.
Local managers have not been slow to see how CCI can differentiate their restaurant from being "just another McDonald's". Stephen Hall, Head of community affairs for McDonald's UK, is ready with anecdote after anecdote, ranging from coffee mornings for the elderly to playground-building days with GroundWork.
The role of Stephen and his team of three is to maximise the effectiveness of all these local initiatives, both in terms of their impact in the community, and their benefit to the individual restaurants and McDonald's UK.
Much of this effectiveness derives from adequate guidance and communication. CCI is built into the initial training for every McDonald's UK manager and franchisee. In addition, Stephen works with his three regional communications officers to run regular debriefing and feedback sessions so that managers can keep up-to-date on national programmes as well as share experience locally.
Stephen's team also looks to make use of the standard array of internal communications tools, such as internal magazines and a community section on the company intranet, which every restaurant has access to.
There are currently three main strands to McDonald's UK community programme, which the company's employees and franchisees are encouraged - not mandated - to support through their voluntary community activities. Matched giving, product donations and other incentives are available to company employees and franchisees that choose to support one of the corporate programmes.
Ronald McDonald Children's Charity (RMCC): this independent children's charity, set up by McDonald's in the UK in 1989, forms the primary focus of McDonald's UK fundraising activities, as it does for the remainder of McDonald's global operations. Last November, for example, McDonald's worked with UNICEF on World Children's Day to support RMCC through its restaurants worldwide raising over $15 million.
Football: dating back to 1995, when McDonald's UK entered a sponsorship programme with the Football Association to make football grounds more appealing to families, the company has invested £12m in community football. A year ago, the company announced a new four-year partnership with the FA which aims to create 10,000 new community-based coaches for young players and spearhead a drive to increase the number of adults volunteering to support grassroots football. The choice of community football dovetails naturally with company's decision to sponsor high-profile football initiatives, such as the 2002 World Cup.
Education: little known to those outside McDonald's or the education profession, but roughly half of the company's community budget is ringfenced for the low profile work of teacher placements, work experience, school governor support and the like. As part of its education programme, McDonald's UK annually presents Scholarship Awards of £1,000 to 100 student employees. On average, 2,000 secondary school pupils also use McDonald's UK restaurants and offices as places for work experience, typically lasting between five and ten days.
1. The 'McJob'
Pay: No-one is going to become a millionaire working for McDonald's UK, but the company maintains that its national hourly payment s as good or better than its competitors. Average rate (Feb. 2002): £4.88.
training: Admittedly the vast majority of McDonald's UK employees are young (two-thirds are under 20 years old), but restaurant employees are provided with continuous on-the-job training, supplemented by computer based training and other training materials.
diversity: McDonald's UK is a member of just about every diversity organisation available (Employers' Forum on Age, a founder Champion of Race for Opportunity, a Gold Card member of the Employers' Forum on Disability, Opportunity Now etc), and has had a full-time diversity development manager since 1997.
2. Food health
McDonald's policy of food safety is impressively thorough, with extensive regulations on both the sourcing and service of all its food products. Tap into its website and users can search through the nutritional value of all McDonald's products. As of April, McDonald's UK introduced sliced fruit as part of its New Tastes Menu, which also includes Chicken Salsa Flatbread and drinks with no added sugar. Recent years has seen McDonald's respond to customer demands by banning all genetically modified products from its menu items and adding free-range eggs and organic milk. The feel good factor of McDonald's new health drive is even branded - Mmm.
3. environment
McDonald's green credo reads: Reduce, Reuse, Recycle. Its Environmental programme concentrates on restaurant operations, purchasing, new restaurants, employees, communication and administration. Is its green policy having any impact? In 2000, McDonald's UK reduced the usage of paper by over 1,500 tonnes and its usage of plastic by over 12.5 tonnes. McDonald's was also the first high street restaurant company to introduce 'Litter Patrols' to the UK, and has supported Tidy Britain Group's annual 'National Spring Clean' activities since 1988.
Evidence that the company's CCI strategy in the UK makes business sense is seen in the active engagement of the company's franchises, which number about one in three of McDonald's UK restaurants (compared with eight in ten globally). "Franchisees are there for twenty years. They know everyone, and you find that they're the first to get involved in crime prevention initiatives or other civic partnerships with local retailers. The reason is simple: they have a long-term interest in the local community - more so than managers who might be in a restaurant for just a year or two before moving on", Stephen says.
Over the last few years in particular, the energies at McDonald's UK have been poured into expanding their mainstream business: selling more food and opening more restaurants (almost 450 since 1997). Community involvement has formed part of that story, as the myriad of examples turned up by a recent internal community audit reveals.
The audit marks an important step in Stephen's attempt to build on McDonald's UK's current data collection systems - a step that should enable him to move forward from a plethora of anecdotal evidence to a more cogent picture of the company's overall community impact.
At present, key players in the local community, such as councillors, the police and other retailers, are generally well-informed about the CCI activities of individual McDonald's UK restaurants. Extending this message more widely presents perhaps the biggest single challenge for the future.
Traditionally, McDonald's UK has been reluctant to 'go public' with its community programme. Things are slowly changing though. Links to 'football' and 'community' are upfront on the company's new website, and information on RMCC and other initiatives is increasingly appearing on in-store publicity.
However, at a time when Jim Cantalupo, the new global head of McDonald's, is announcing that the company must become "more relevant to the lives of today's customers", the stage seems set for CCI to emerge from the shadows.
How McDonald's chooses to manage its communications will be all important. A sceptical public simply won't buy glitzy feel-good propaganda or one-way marketing. To become "relevant", McDonald's UK must find creative ways of connecting with its stakeholders. Presenting CCI as a means of engaging with, and responding to, local concerns represents one very obvious means of achieving this.
When news about hospitalized young people worldwide benefiting to the tune of $300m is heard from the voice of third parties - and not McDonald's UK marketing machine - then the company will know that CCI is helping to change perceptions about the company.
Internally McDonald's UK is confident that its business epitomises both the 'global' and the 'local'. Few outside the company see it this way. Mindful not to over-egg the McMuffin, community involvement surely marks an invaluable opportunity for this global player to measurably demonstrate its alignment with the lives of its customers.
- 1,184 = restaurants
- 47,735 = McDonald's UK employees
- 25,000 = franchisee employees
- 57:43 = male/female ratio
- £283m = total payroll budget
- £416m = supply chain expenditure
- £1.6m = charitable contribution
Stephen took on the role of Community Affairs Manager at the end of 2001. Two of his main responsibilities are managing McDonald's education service and its national community football programme in the UK.
In 1999, he was heavily involved in McDonald's Our Town Story at the Dome, for which he won a Presidents Award in 2001. Stephen first joined McDonald's in 1980 as a crew member, before leaving to do a HND in food at Leeds Polytechnic. He then went to work in the USA for a year, coming back as a trainee manager in 1989. He worked in restaurants until 1996 at which time he became Communications Officer for the North and Scotland. Stephen was born in 1964 and is married with two children.
Key contact details
www.mcdonalds.co.uk/community
020 8700 7000