Gavin J. Shannon, president and CEO of McDonald’s USA, explains what the company’s core values, mission and company culture will look like in 2021. Mr. Shannon spoke with Jack London about the evolution of McDonald’s, its strengths and its strengths, its vision and its mission.
He also addressed what makes McDonald’s the best in its industry – in 21 days.
NEW YORK (CNNMoney) — The slowest restaurant in America? That would be the McDonald’s at the Freeway Freeway Hotel on the Paris road in Seattle. It hasn’t burned out. It’s a monument to McDonald’s obsession with efficiency.
McDonald’s Nation is founded on the idea that there is no such thing as a wasted dollar. And so the company has been obsessing over efficiency for years. It’s the technology it uses to run its stores. It’s the network of walk-in refrigerators in its restaurants that hold Big Macs that don’t take time to cook. And it’s the staff that serve them.
In June 1990, the company introduced a senior vice president who tasked her with figuring out how to turn McDonald’s America into a country that burned through money faster than its peers. Eventually, the company created a new word to identify those who might be up to the task: Rapid System.
Fast food restaurants are competitive spaces where even tiny differences in service and pricing can make a customer stop and say, “Hey, that’s not what I want to eat.” And so McDonald’s nimbly shifted its strategy to stop wasting customers’ money.
“When we were first talking about how we were going to be different, we talked about kind of our core brands and what we would call McLessons,” says CEO Gavin J. Shannon, “which is what we call a senior leader of the company.”
Shannon himself was hired to fix McDonald’s just before his first anniversary. He’s the longest-serving CEO of the $190 billion restaurant chain. And as the “Chief Reinvention Officer,” one of his earliest initiatives was to introduce “McLessons” to the company.
The initial plan was simple: Clarify what customers value, including their choices of products and locations. And to get to those ideas before the customer.
“We’ve done a lot of benchmarking. And what we found in some of our key markets was we weren’t having a conscious dialogue, which was what our [Chief Global Brand Officer] Steve Easterbrook had spent the better part of his time bringing to our organization. So, that was a big deal,” says Shannon.
It’s not only lunch that is a waste, but birthday cakes too. And, surprisingly, microwave ovens. And hand dryers.
Shannon says just about every restaurant in the country has either thrown away or nearly thrown away a piece of equipment over the years.
“A lot of that stuff is stuff that’s hardware or human capital. We needed to figure out a way to do a better job of making sure that it didn’t get down there,” says Shannon.
McDonald’s realized that they needed to be much more efficient. When it was looking for a new global chief brand officer, one of the first questions Easterbrook asked was, “What would we need to do differently to run a restaurant at a lower cost than the competition?”
McDonald’s builds very few restaurants in the United States. They get their products directly from Canada. Most of their distribution happens in the United States, but their restaurants are very much a reflection of the country itself.
And what they found was that it was essential to do more with less. Shannon explains that before he got on the job, they had been talking about how to get from the average number of employees in American restaurants to 1 million. They decided to do that in four years. That is fast for any business — especially a restaurant with nearly 25,000 locations.
McDonald’s plans to do the same with drive-thrus. Instead of eliminating drive-thrus, it plans to expand the number of drive-thrus, so they can get more customers in with fewer employees.
Shannon doesn’t want to wait until 2022 or 2022 to fully appreciate the change McDonald’s has made.
“My personal view is that this company can be more efficient than any other restaurant, any other