Page 172 - Everything I Know About Business I Learned

Everything I Know About Business I Learned at McDonald’s

McDonald’s ability to recognize the importance of communi-
cations steered the company through both good times, when com-
pany stakeholders had cause to celebrate over some great gain,
and bad times, when the executive team strove to keep spirits high.

Decentralization
In McDonald’s pervasive “never be satisfied” spirit, the company
always sought improvements, and that included communications.
There may be no greater example of this striving than in the
period between 1967 and 1973 when Fred Turner decentralized
the system during a massive expansion. Under decentralization,
the regional offices—as opposed to the Oak Brook home office—
supported the operators and company stores within each geo-
graphical area. For operators, this meant streamlining the
communication cycle by providing immediate access to the local
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officers, the regional managers, who over time knew their terri-
tories more intimately than anyone else in management.
Decentralization, with its streamlined communications, sped
up the decision making, as Rick McCoy, a one-time 90-store oper-
ator, mentioned to me. Prior to decentralization, owner/operators
posed concerns directly to the main office in Oak Brook, skipping
over the local regional office, basically jumping the chain of com-
mand. And that action would not always be met with an embrace.
As Rick reminded me: “Fred, first thing would say to you is that
he will get back to you. And then he would call the regional man-
ager and ask two questions, ‘What do the stores look like?’ and
‘How do they run?’ And if they looked good and ran well, the
conversation with Fred would continue, but if they didn’t look
good or ran poorly, that was the end of the conversation and you
had to straighten it out with the regional manager first.”
And as current executive vice president and chief restaurant
officer, Jeff Stratton told me, “In the past it got too centralized.
Centralized doesn’t give you a good connection with what’s