McDonald’s chicago region strategic planning case
“Back To the Basics”
Description of the Organization:
In 2001, Chicago was one of McDonald’s highest performing regions. Under the leadership of Regional Manager, Phil Gray, the Chicago Region achieved an unprecedented four consecutive years of cash flow increases. The region received much attention from corporate staff as a key business to benchmark. While other regions continued to struggle to achieve plan, the Chicago Region achieved its plan all four years.
Focus of the Inquiry:
Not satisfied with status quo, Phil Gray wanted to discover and define the Region’s strategic competitive advantage. How could these restaurants take a “quantum leap” forward in attracting more customers and extending market leadership? Phil made the comment, “Everyone knows the 80/20 principle. We get 80% of our results from 20% of our activity. Well let’s stop running around like chickens with our heads cut off. Let’s clarify what can set us apart in the marketplace – our strategic competitive advantage.”
Organizational Objectives:
1.Building on the strengths and success of the Chicago Region
- Envision and Clarify a strategic competitive advantage for the Chicago Region
- Align and focus all regional team plans (strategies and tactics) on sustaining this strategic competitive advantage through 2002 and beyond.
What Was Done:
Working with Jim Ludema and Chicago Region Director of OD, Bob Roberts, a diverse team was assembled to design and implement a 3-day AI Summit with McDonald’s corporate staff and owner-operators in the Chicago area.
The topic of the Summit was “Defining Our Competitive Strategic Advantage.”
The outcomes for the August Strategic Planning Steering Committee Agenda included:
- Understanding the critical nature of Strategic Planning as a key business process needed to ensure the Region’s success.
- Develop a definitive internal business competency regarding their ability to strategically plan an ability to and execute this plan.
- Understand the importance of creating a definitive strategic competitive advantage.
- Closely align human, financial, and physical resources with the strategic plan.
- Demonstrate the need to aligning the strategic planning process with a successful methodology – AI.
- Identify Strategic Topics for September Meeting.
- Discuss the application of the AI process by which plan is formed and execution is accomplished.
- Align Strategic Plan to internal meetings, systems, and processes.
The outcomes for the SeptemberSummit:
- A close to “final” strategic plan created by the system.
- A plan for execution.
- Plan to continue AI application – integrate into the culture.
- Aligning Strategic Plan to internal meetings, systems, processes, and structures (Department head meetings; Executive Leadership Team; Regional Strategic Team Meetings; RLC Board Meetings; MOCNI meetings; Individual Department update meetings; Creating Work Plans and IDP’s; Mid Year and Year End Performance Reviews; Leadership behaviors; Align with training/development workshops;used conference calls on a regular basis to gather input for executive decision making.
Outcomes of the Initiative:
As a result of the Summit, the Chicago Region established its competitive strategic advantage as “Back to the Basics – Quality, Service, and Cleanliness.”
Four regional teams were formed to focus on four business result areas: People, operations, market share, and profit. Each team was charged with developing a set of high-leverage strategies, tactics, and targets to provide an integrated plan for the Region.
What Was Learned:
Appreciative Interviews were used throughout the AI Summit. Beginning with questions around what initially attracted that person to McDonald’s, their high point, and what circumstances needed to be there to enable their success, they discovered personal strengths and the principles to preserve as the group moved forward.
From there the Summit participants moved into looking at the Chicago Region from a perspective of strengths and imaging new possibilities for a Competitive Advantage. The groups envisioned what the Region would look like if it were perfectly aligned with this Competitive Advantage.
Finally the group designed a strategy that would both “preserve the core” of what they do best while letting go of things that are no longer needed. This was essential to the success of the Strategic Competitive Advantage Plan. Each team decided on the highest-impact measures, strategies, and tactics they could do to advance the overall strategic competitive advantage vision.
The group learned their strategic competitive advantage on all levels focused around the basics – Quality, Service and Cleanliness.
Next Steps:
Building on the success of the Summit, the Chicago Region has initiated a culture shift. Stakeholders are paying more attention to their successes and learning from what they are doing right. They are working at creating those “bests” over and over again until they have a culture of “instinctive excellence.”
Quotable Quotes:
“Everyone knows the 80/20 principle. We get 80% of our results from 20% of our activity. Well let’s stop running around like chickens with our heads cut off. Let’s clarify what can set us apart in the marketplace – our strategic competitive advantage.” Phil Gray, McDonald’s Chicago Regional Manager