Training and development mcdonalds

For most of its fifty-four years of existence, McDonald’s has been quite successful growing its business while utilizing a decentralized approach to managing its global workforce. As the size, complexity, and global character of the business have continued to grow (to more than thirty-thousand restaurants in 118 countries serving fifty-five million customers per day), however, it became increasingly apparent that sustained success requires the development of more consistent and disciplined approaches to talent management and development. In response to this recognized need, McDonald’s has taken a number of steps, starting in 2001, that have enhanced its capabilities for developing local leadership talent and ensuring management continuity throughout its global system. This chapter will provide an overview of how McDonald’s system for developing its management talent throughout the world has evolved over the past eight years and will focus on describing the design, roll-out, initial impacts, and continued refinement of five major initiatives that have been introduced to enhance this system since 2001.

A number of factors led the organization to the conclusion that enhancements in its talent management and development system were needed. First, after many years of outstanding business results and growth, business performance began to falter. For the fourth quarter of 2002, in fact, the company declared the first loss in its history. In contrast to the significant problems surfacing in the company’s business results, however, the ratings of managers in McDonald’s performance management system were incredibly high and suggested that everyone was doing an outstanding job. More specifically, more than 90 percent of the managers were rated either “outstanding” or “excellent,” and over 75 percent were assessed as having the potential to advance to take on greater responsibilities. Senior management recognized that “something was wrong with this picture.” It was clear that the bias toward inflated ratings of both performance and potential did not align with the overall performance of the business. Furthermore, senior management noted that, despite the very high ratings of employees’ potential throughout the system, when key leadership positions actually needed to be filled, the company was frequently having difficulty finding individuals everyone could agree were truly ready for these roles.

These factors led senior management of the company to begin to take significant actions to upgrade the company’s talent management systems and processes on a global basis. (Note: While the initiatives to enhance talent development that are described in this paper were well under way at the time, the urgency for them was painfully validated when in April of 2004, McDonald’s CEO Jim Cantalupo died suddenly and unexpectedly. Fortunately, due to the heightened attention that was being given to talent management at this time, his successor, Charlie Bell, was quickly and smoothly named to step into the CEO role. Tragically, not long after Charlie Bell was named as CEO he was diagnosed with colon cancer and died within a year. Once again McDonald’s was challenged to address the succession issue at the very top of the organization and did so by naming Jim Skinner as CEO in January of 2005.)

Before launching into an in-depth description of McDonald’s talent management system, it is important to make clear how this system fits into McDonald’s overall business strategy and aligns with its key values. McDonald’s strategy to develop its global workforce is designed to be aligned with and support the execution of its over-arching strategic business goal, which is “to become everyone’s favorite place and way to eat.” McDonald’s has an overall “plan to win” that provides the global business with a common framework for developing tactics to reach this goal. The framework includes five key elements: (1) people, (2) place, (3) product, (4) promotion, and (5) price (see Table 9.1 ).

The five initiatives that have strengthened the company’s talent management system, and that will be described in this chapter, are key elements of the “people” component of the “plan to win.” They have been designed and implemented to enhance the organization’s global capability to develop and have “at the ready” the quantity and quality of leadership talent needed for effectively executing its “Plan to Win” and ensuring the company’s continued growth and success. Further, in order for these talent management initiatives to be successful, it was clear that they also needed to reflect the value that McDonald’s places on striking the right global/local balance and customer/employee focus.