Without knowing the "Comprehensive Plan" Easterbrook has for the MCD system it is difficult to know how these moves fit the larger picture. It is clear the guy knows what it is going to take to make money which is what it is all about. Cutting out five hundred million dollars of cost tells us just how sloppy this company has been run in recent years. Many felt that the MCD bureaucracy was a huge drag on the system and apparently Easterbrook agreed. Streamlining the menu, selling stores, closing stores and other measures puts all of us in a better position to be more profitable. The same level of staffing in the regions will also need to be addressed. Easterbrook's early remarks pointed to the important role of technology in MCD future. I believe that all of these moves will shift a lot of responsibility and energy into technology throughout the system. Responsible operators will be getting themselves and their organizations prepared for this coming change, in my opinion. The "Experience of the Future" being implemented into some stores now is the first step in this direction. If it is successful things will start to move more quickly. However, like all past actions taken to move the system forward, like rebuilds, relocations, it will be risky and expensive. Operators will need to be smart about their debt levels. The MCD partnering programs address this but regardless good business decisions will be required by the operators. MCD will also need to be more aware of individual operator concerns to avoid so much debt that retirement must be pushed so far into the future that it doesn't make sense. The new "gung ho" operators should see debt for what it is and be careful. There are many co ops in the system with long term "mature" operators. These coming changes will give rise to questions and decisions about how much longer can one afford to stay in the system. If additional debt does not increase store value within a reasonable period of time retiring operators will have less to live on. The company knows this and it will be interesting how they address it. In operator reviews when they start asking "How long do you plan to stay in the system" there is a reason they are asking. My response has been to ask them the same question. Listen for it.
400 is a start, but it needs to be 3X more, and include Oak Brook (50%) AND the Regions
Most regions already released 10-15% of their staff last year. More to come as hr, finance and development will be folded into home office. There will also be a push for co-op consolidation. I know wahl is a big fan of this.
I hope "Development" includes Real Estate. Moving HR and Finance into Oak Brook is a good move. This could be done quickly. There is so much wasted space and time in the regions that there has got to be huge savings there. Consolidating co ops can be effective. However, strong local store marketing is a must with some company support.
Not sure about the regions probably a little more consolidation but for Oakbrook you could probably get rid of 50% more of those folks and not feel it. Just dumb keep busy restaurant programs come from them the only program you need is to follow the O&T manual.
Other than in government, I've never seen a company do more to justify their unnecessary jobs. This is particularly true in product development and training.
Wall Street wants to hear about "innovation" at all companies - drugs, automotive, tech, and restaurants. What are you doing to move the brand forward? is always the question. At McDonald's Corp. sponsored analyst conferences the guests expect to see a long line of new product ideas.The press needs to write about new product news at all chains.Neither analysts or reporters can connect with the concept that the reason McDonald's menu is so large and unmanageable is because of undisciplined new product development.
“New product development” it used to come from the entrepreneurship spirit of franchisees and smart operations corporate folks not some “Department”.
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