McDonald’s Listening Campaign

[Headnote] At the end of 2002, the world's largest quick service retailer made its first ever quarterly

loss and faced a number of challenges. It responded by launching its Plan to Win

program, part of a global strategy to modernize the business, followed by the Listening

Campaign in the UK. Here, Ali Carruthers explains how the two initiatives were linked in

the UK, and the impact The Listening Campaign has had on communication, culture,

image and media perception.

In 2003, things were looking bleak for McDonald's. Its share price was the lowest it had

been in a decade and it faced a series of seemingly insurmountable problems: It was

demonized by the UK media in the fierce debate raging over obesity; it faced huge

competition on the high street; and it was suffering under a wave of Anti-Americanism in

the wake of the wars in Afghanistan and Iraq.

Added to this was the fact that the restaurants themselves were beginning to look dated

and UK health lobbyists were determined to push home the message that McDonald's

food was bad for people.

Speaking earlier this year to the BBC, the UK CEO Peter Beresford said: "We had taken

our eye off the customer, we were not customer focused, we were not customer driven.

And so we reorganized and regrouped. We decided we had to stop and take stock of

where we were. We had to be better, but we had to change the way we were running this

business."

The Plan to Win

The senior management put their heads together and devised the Plan to Win program,

which went public in the last quarter of 2003. A key part of its focus was a shift to more

choice and variety foods, with salads appearing permanently on the menu for the first

time in the organization's history. Key restaurants began to receive make overs and a

supporting advertising campaign with international stars was planned, all of which were

intended to turn the food chain's image around.

But just as things were beginning to look up for the oganization, trouble raised its head

again in the shape of the documentary film "Supersize me," which in turn re-ignited the

obesity debate in the media. It was then discovered that one of the salads McDonald's

was marketing contained more calories than one of its hamburgers. The UK press reacted

with predictable glee and once again McDonald's was in the spotlight for all the wrong

reasons.

The Listening Campaign

The company responded promptly. Working with agency Blue Rubicon, the in-house

communication and media relations team devised the Listening Campaign. It made the

most of the arrival of new UK CEO Peter Beresford in July 2004, building on his

personal credibility and that of McDonald's with the Listening Tour. Beresford spoke

directly to customers in focus groups, met with franchise holders and with employees in

12 UK cities over the space of six weeks, starting at the end of October.

The key ingredient was listening to customers and staff and then showing the results of

this. "Part of the reason [for doing it] was that we had to introduce Peter very quickly to

employees, customers and stakeholders," says head of internal communications AIi

Carruthers. "It was also signaling that he'd continue to work to change our culture and

lead the drive for a real transparency of approach. We've been building on that work ever

since."

Focus groups for stakeholders

The communication team made the most of Beresford's time by booking ahead so that

local franchisees could meet him when he travelled to regional centers for customer focus

groups. Next, Listening Groups were created for the company's regional offices with

corporate rather than restaurant-based employees taking part. Initial meetings were

centered around three classic focus group questions:

* What works?

* What would you change?

* How would you change it?

In each session, six to 10 employees took part and the sessions lasted around two hours.

After the first session, an action plan was drawn up and fed back to the employees in a

second round of focus groups. Then the agreed proposed changes were put in place by the

organization.

Proposed changes put in place

A range of short, medium and longerterm actions have been instigated as a result of the

focus groups. These include a firm commitment to hold monthly town-hall sessions to

regularly address key issues within the organization. "We've agreed to use these sessions

to feature various departmental heads," says Carruthers.

"That's so people can put names to faces, understand the organizational structure better

and get an understanding of what goes on outside their own departments." The company

has also committed itself to involving a new group of employees every six months, and to

being more transparent about its promotion process and how people are assessed for

promotion. It now holds regular Plan to Win meetings, which are related to the global

strategy. "We're using the town-hall sessions to communicate the global strategy to the

broader office group rather than just senior management so there's a wider understanding

of what we're doing," says Carruthers.

The company has also committed to a peer-nominated quarterly recognition scheme for

the regional and head offices. It's planned that the town halls will also be used in the

recognition scheme. "People need to say well done to each other and be acknowledged by

the senior team," says Carruthers.

A change in company culture

According to Carruthers, the strategy has been recognized globally - a drive for greater

face-to-face communication, more transparency, a growth in leadership behavior and

accountability. "Basically we've been trying to make people feel they're able to ask

questions," she says. "There's nothing wrong with challenging the status quo as long as

it's done in a constructive and respectful way. If we can use some of those ideas we can

probably make it a more enjoyable place for everyone to work."

There's no doubt that the Listening Campaign has had an impact on the senior team and

general employees alike. Carruthers has had feedback from both groups and believes the

exercise has been an eye-opener for the senior team: "They frequently mention

experiences they've had in those groups. There's nothing quite like hearing issues for

yourself; the good ones and the more awkward ones."

The feedback from focus-group participants has been very good; employees say they feel

listened to and think their feedback is being taken on board. "They feel confident to ask

questions or send e-mails directly to people they thought wouldn't have listened to their

suggestions previously. It's changing the culture. Anything that builds trust and

transparency is good. Now it's about delivering on the changes that we said we'd make."

A hotline to the CEO

A hotline to the CEO has made the company's drive for transparency and commitment to

employees even more credible. The "Ask Peter" e-mail address was established when

Beresford took up his post and has seen a fair amount of traffic. "It's word of mouth -

people see that it's well responded to," says Carruthers. She sees it as important to be

straight with employees about how e-mails are dealt with and who sees them. "We're very

up-front about the fact that I see all e-mails as well as Peter, but if we forward them to

other departments, they'll be anonymous."

A combination of high and lowtechnology adds to the feeling of personal contact:

Beresford will often answer e-mails with a hand-written reply. In one famous instance he

replied to nearly 100 in one week. "It doesn't always happen that way, but it's these things

that make a difference. People see it's coming from him and it's quite a personal touch."

Committing to communication

A new round of Listening focus groups with fresh employees is due to kick off in

October. The whole cycle of questions, action-planning and feedback will be replayed.

"We're working with a new group of employees because we want to keep changing and

avoid having a formalized council of volunteers," says Carruthers. "They'll look at what

they think has happened so far, whether anything could have been done differently and

then we'll hold a review of the proposals."

It's a genuine commitment to keep the focus groups running on an ongoing basis.

Carruthers is also expecting that the flexibility and fresh new faces will ensure that new

topics arise: "They're things that inevitably come up along the way and get added to the

agenda for change. We just need to follow them through and then tell people the results."

The results

Since Beresford's Listening Tour there's been a turnaround in the media coverage of

McDonald's, which has been much more positive. The Listening Campaign is changing

the internal culture of the company and its focus group cycles are becoming permanent

two-way communication channels.

Results back in August this year from the last employee survey showed that internal

communication is now ranked by employees as number four out of 25 departments. "The

communications strategy has helped people become aware of who we are and what we

do," says Carruthers. The Listening Campaign has also helped McDonald's raise its

profile externally, as it was nominated in this year's UK Chartered Institute of Public

Relations Excellence Awards and short-listed for Best Use of Media Relations in the PR

Week Awards.

Question

1. Based on this case, develop guidelines for improving communication with each of

different stakeholders, through better listening.