In a company nearing its 70th year, there will eventually come a point where the board of directors and management have only second-hand and third-hand knowledge of the company's history. That’s where McDonald’s is today.
It’s easy to make use of icons such as animated McNuggets and Shamrock Shakes, but a new management team will ignore historical events that do not fit into their contemporary agenda.
There are major things happening today, echos from the late 1990s, that management is either ignorant of or chooses to ignore:
New store growth: We’ve discussed this many times. In the 1990s, management sought to convince investors that McDonald’s was still a growth company. New store growth was “accelerated”. Canbibiliaztion became the word of the decade. McDonald’s Owner/Operators shared in the blame because, being starved for new stores, they eagerly opened any new location corporate came up with.
Major new sandwich introduction: Convinced that “consumer tastes have changed,” management bet the farm on the Arch Deluxe. Not only was the product uninteresting, but a complete change in McDonald’s advertising style was a flop with the American consumer.
Chairman and CEO combo: McDonald’s veterans know that some of the roughest years in McDonald’s history were when the board chair and the CEO were the same person. Denying common sense and history, it’s happening all over again.
"Overall, independent chairs are becoming more common, a trend supported by a significant number of investors over the last 10 years."
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