McDonald’s Case Study
McDonald’s is a corporation that has more than 30,000 restaurants in 119 countries and serves an average of 55 million customers every day. The corporation has been in existence for about 50 years and it has successfully grown its business by using a decentralized approach to management of its global workforce. As the business continued to gain dominance throughout the world, there was a need to adopt consistent and disciplined approaches to developing and managing talent for the sustenance of the company’s success. Thus, since 2001 the company has taken a number of steps that have improved its competences for developing talent among local leaders and ensuring that the practice is continually adopted in its management practices in all the countries that they serve. This paper provides an insight into the talent management program that has led to the success of the McDonald’s company and discusses strengths of the program and how it has led to the accomplishment of the goal and given opportunities for improvement of the talent in the talent management planning process.
The talent management program that has led to the success of the corporation consists of five main strategies that have supported the corporation’s goal of satisfying leadership needs of the business on a global level. These include: redesigning of the Performance Development System (PDS) for all positions held by the staff in the institution, subjecting the staff that hold officer level positions to a talent review process, developing and rolling out the Leaders at McDonald’s program (LAMP) that provides a platform through which high potential individuals can be developed for office level positions, introducing the Global Leadership Development Program, and establishing the corporation’s leadership institute (Jenkins, 2008). All the strategies have been very successful since they all have led to the accomplishment of the company’s goal in different ways.
The talent management program that has been adopted has a number of strengths that have contributed to the accomplishment of the goals. Redesigning of the performance development system jas greatly contributed to the breaking of the culture of entitlement that had set in. This has helped the organization to be better equipped with relevant strategies needed to face the challenging realities of the competitive global market. Initially, the company had an unusual structure for rating performance, which significantly inflated the annual performance of 98 percent of managers as either excellent or outstanding and 78 percent of managers were rated as having a great potential to take the business to the next level. The ratings contributed to a drop in performance that could not compensate for the actual difference. The new system emphasizes the need to have accountable results and has increased the performance differentiation. The system has also encouraged innovation and embraced openness to change. The performance drivers have helped leaders to not only know their accomplishments, but also to realize how they have accomplished them, while a new four-point rating scale has helped to resolve the inflation problem (Jenkins, 2008). The new system has been made flexible so that it could be in line with the legal structures and foreign cultures in other countries. This has made it successfully adopted in all 119 countries.
The review of the process of talent management at the leadership level has made the process more transparent since the process has become rigorous. This has been achieved by preparing a talent management template and giving it to presidents of each region and corporate head staffs. This has contributed to the company’s success since it has formed a basis through which talent reviews could be carried out (“McDonald’s serves up HR success … in 91 countries around the world”, 2007). The in-depth discussions that followed later have helped to instill confidence in the system by making it more transparent.
Development of the LAMP program has greatly contributed to the enhancement of the managing system of the corporation’s global workforce. The program has made all managers consider talent management among their highest priorities. It was essential to start the program at the leadership level and the fact that it was embraced by all leaders made it easy to implement it across other levels of management in all of their organizations throughout the world. The program has also helped to build the depth of leadership, shape the leadership culture, and accelerate the process of building future leaders (Jenkins, 2008). Leaders have the needed platform to improve performance of the business from their current positions, while preparing themselves for success at the next level.
Establishment of the McDonald’s Leadership Institute has helped to support development of talent by attracting and retaining top leadership. Success of the institute can be credited to the community approach, which provides learning and development culture that can be accessed from various locations worldwide through the institute’s guide and leadership portal. The institute provides the needed exposure to leaders and enables them to take part in challenging development experiences (Groves, 2011). Leaders also get to network and interact with other leaders globally. All these things have contributed to the institution’s success globally.
Development of the global leadership program is also a great initiative that focuses exclusively on managing directors and officers from the corporation that have the highest potential. The program began in 2006 with 21 people drawn from 11 countries, including Japan, Asia/Pacific, Europe, Latin America, and North America. The program has been very successful in preparing leaders for greater leadership roles. The program has also helped to build a strong network that has provided leverage for these people as they move to top leadership positions.
Even though the initiatives have been successful, there are more opportunities for improvement in the talent management planning process. For instance, even though the new system of rating managers was quite successful in the beginning, it has already reached a point where a proportion of individuals will stay in a similar range of scores each passing year. This may contribute to the reintroduction of the culture of entitlement if people are not challenged to get out of their comfort zones (Williams-Lee, 2008). The system can be improved by altering the performance score system from time to time in order to ensure that individuals are equally distributed across performance rating categories and that distribution remains consistent. This will make it easy to compare performance from different years.
Besides, if a concept has to be introduced, it has to be given a reasonable time frame before it is fully implemented so as to ensure that everyone understands the importance of the change and reasons why their full cooperation is needed (Groves, 2011). For instance, it is good to put leaders from various parts of the globe through training at the talent management institute. However, it is important to follow up and assess whether the training has been successful based on changes that these people exhibit after some time once they leave the institution.
There are other effective approaches that can be used to meet talent management challenges in the future. One of this is the need to anticipate the factors that may make it difficult to adopt certain strategies before they are implemented so as to eliminate the need to go back to the drawing board once the concepts have been adopted. For instance, when the new performance development system was designed, it was clear that interests of the local leadership relating to workforce management took center stage and superseded interests of the global leadership (Williams-Lee, 2008). Thus, some elements had to be revised for them to be in line with foreign cultures and laws. In the future, it is important to receive input from leaders and company representatives in all regions of the world before the final program is developed. This will ensure that the final program is accepted and works well in all regions of the world.
Moreover, even though the leadership development institute has been quite successful in developing and preparing leaders for the anticipated set of challenges, I think the institute should also consider introducing a module for training junior employees for challenging roles. The institution can pick the most promising employees and take them through training sessions that would motivate and prepare them for future roles (Peiker, 2010). Junior employees interact with customers first hand and they know some of the issues that customers would want to be addressed or introduced. This will give them the platform through which they can be adequately prepared to challenge the management and give them reasons to introduce certain aspects of service delivery based on facts.
The McDonald’s corporation is an entity that has gone through a lot of changes over the years and has grown into a brand that is known all over the world. Success is attributed to their effective strategies of talent management, all of which have played important roles in ensuring success of the business. These strategies include redesigning of the performance development system and talent review processes, as well as establishment of a leadership training institute and the Lamp program. The strategies have been implemented amidst challenges and lessons learnt along the way that have helped to make them even better over the years.