The McDonald's Project

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At least after our Turn to the World in 1972--if not before--I recall many lively (sometimes heated) conversations about where our methods for social change should now be applied. Having begun with a focus on the local church and grass roots community development, we expanded our search for leverage points to include, among others, the corporate world. With the help of some of our "Guardians"--committed colleagues with established leadership positions in society--we developed first the NINS and then the LENS programs, with an eye especially to impacting the business world. LENS Treks used gatherings of business leaders around the world as, in effect, focus groups for refining the ICA strategic planning processes and finding language and style appropriate to the corporate environment.

One of our major early ventures into the corporate arena, which began in 1977, was our work with a Chicago enterprise called McDonald's. It was unique in that one of our senior staff actually assumed a position inside this corporation and applied ICA methods over a period of time to specific business processes. Especially noteable was the work done in developing McDonald's Total Market Approach or TMA. The story of this experience has been passed on by word of mouth ever since, but no real documentation of it has existed--up to now. In 2003, I asked my friend, Marilyn Crocker, the person from our staff at that time who had been at the center of this venture, if she would be so good as to write something about the events and, if possible, the impact our methods had on the corporation. What Marilyn did far exceeded my expectations, and I think stands as something of a model for how to document the results of our work with organizations.

A personal side note to what follows: I think it was 1985 or 1986, and I had a development (fund raising) appointment with the Taiwanese manager of the recently opened McDonald's operation in Taipei (which had broken all corporate sales records on its opening day). In the course of introducing ICA, I told him the story of our earlier work with the corporation in Chicago and ICA's role in the development of the TMA. Of course I had no evidence of any of this to put before him, and he listened with a decidedly skeptical look on his face. Then he shocked me by saying, "Well, we have someone from Chicago here today leading a TMA seminar for our staff. Why don't I invite him over to meet you?"

I recall trying to look enthusiastic about that prospect, while thinking to myself that this was not going to turn out well at all. I'd been in Asia for a number of years, and had heard nothing about any contact with McDonald's since 1977. Surely, this person would have no recollection of events nearly ten years earlier. Indeed, all memory of ICA must have long since disappeared from the corporate memory banks. I could see myself getting worked over by both these guys for an obviously fabricated story. The Taiwanese manager gave me a broad smile and left to get his man.

He returned with an American who looked remarkably anxious as he approached me. As he extended his hand and before I could say anything, he said, "I just want you to know that we've only modified the TMA process very slightly over the years. It's still basically the same as what you taught us!"

Now it was my turn to smile broadly. I assured him that I was not there on any kind of inspection tour--that it was just by chance that our paths crossed that day. He looked immensely relieved and soon respectfully excused himself to get back to his seminar. The Taiwanese manager sat down, and we started our conversation again on a very different note. McDonald's became and continued for several years to be a major donor to ICA's work in Taiwan.

Marilyn wrote the following letter to me with an eye to its being useful to ICA's work in the corporate world. She's given me permission to post it here, and I look forward to her expanding and emending this introduction to it at a later point in time.

-- GordonHarper - 22 Aug 2006

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CROCKER & ASSOCIATES, INC. 123 Sanborn Road West Newfield, ME 04095 Telephone & FAX: (207) 793-3711 Email: mrcrocker@psouth.net

December 2, 2003

Mr. Gordon Harper Institute of Cultural Affairs NW 205 NE 40th Street Suite C-2 Seattle, WA 98105

Dear Gordon:

It is my pleasure to review for you the application and impact of the ICA’s collaborative strategic planning methods--now called the Technology of Participation (ToP) -- that were introduced to McDonald’s Corporation in 1977. At that time a number of competitors in the fast-service segment of the restaurant industry were aggressively challenging McDonald’s pre-eminent position. Senior management identified signs of eroding sales and market share in approximately one-third of its US markets, many of these major, heavily penetrated markets such as New York, Chicago and Atlanta.

After a pilot application of the ICA methods, corporate leaders and ICA staff fine-tuned the approach for systematic use as a turnaround strategy for challenged markets. The program became known as TMA (or Total Market Approach) because it allowed all levels of McDonald’s – licensees representing the local market, regional department heads and corporate personnel from the home office to scrutinize every facet of a market, and informed by data, to develop creative action plans for improved market growth and vitality. McDonald’s hired me as an ICA staff person to serve as full time Senior Manager of Internal Consulting to guide the program as it was rolled out in selected US markets. The position included training internal staff from all departments to help facilitate the process; working with marketing and operations leadership to identify markets that could best benefit from the process; arranging for the preparation, conduct and follow-up of the week-long planning process; ensuring quality control; and holding accountability for ongoing monitoring of implementation and evaluation of outcomes.

The TMA process depended upon system-wide consensus and commitment from start to finish. Permission from the region and operators put set-up and planning in motion. Commitment by management and licensees on the recommended action plan initiated implementation. A monitoring team guided activities until the follow-up evaluation when results were documented and new directions were determined.

In early 1982 a sales impact analysis was prepared by McDonald’s Marketing Research Department on the 12 markets that had completed at least six months of implementation to date. Certainly many factors interplay to result in sales impact within a market. Measuring positive or negative sales results attributable to one intervention such as the TMA process is subject to error. However, McDonald’s Market Research analysts’ best estimate of traceable dollar impact attributable to a TMA effort was impressive. In 8 of the 12 markets the impact per market ranged from $ 200,000 to $12.6 million and the impact per unit ranged from $6,500 to $62,100.

At the same time intensive qualitative research was conducted via interviews with 65 participants in the TMA process. Interviewees included owner-operators, regional staff persons and management from McDonald’s home and zone offices. They noted the following qualitative outcomes from the TMA:

• Opened channels of communication across all levels of the corporation
• Unified the local Co-op (the organization of owner-operators in a given market that cooperatively plan market promotions and purchase advertising)
• Changed attitudes: gave participants courage to work as a team and commitment to work toward excellence
• Strengthened owner-operators’ confidence in themselves and trust in the corporation (A note here: 75% of the McDonald’s restaurants in the US at that time were owned-and operated by individual licensees; 25% were run by the corporation)
• Speeded up the implementation of many programs already in progress
• Specific tactics improved aspects of operations, local store marketing, public relations, advertising and field marketing, training, personnel practices and facilities.
• Demonstrated the corporation’s seriousness and decision to care for “down” markets
• Exposed departments to a management process many now apply in their daily work
• Provided a way for all departments actively to interface resources and support each other
• Informed operators and home office to issues blocking market progress
• Authenticated McDonald’s commitment to “bottoms up” management style
• Helped to dispel rumors, unfounded “folk-lore,” animosity and pettiness

Increasingly as McDonald’s personnel were trained to facilitate in the TMA process, they began to apply the methods to specific issues and projects within their own areas of work. Additionally the process was used with unit managers in selected markets and was subsequently adopted by joint-venture partners for use by McDonald’s in other nations, among them Germany, Australia and Taiwan.

The Institute of Cultural Affairs’ Technology of Participation (ToP) Methods allowed a multinational corporation to recapture the small business benefits of market-focused, informed analysis, dialogue, problem-solving and strategic planning. As one licensee commented to me, “we have always had the will, and now we have the way.”

I applaud the ICA’s plans for continued application of these effective methods in additional venues and segments of society and expect such efforts will result in enhanced value in many arenas.

Sincerely,

Marilyn R. Crocker, Ed.D. President