In a company nearing its 70th year, there will eventually come a point where the board of directors and management have only second-hand and third-hand knowledge of the company's history. That’s where McDonald’s is today.
It’s easy to make use of icons such as animated McNuggets and Shamrock Shakes, but a new management team will ignore historical events that do not fit into their contemporary agenda.
There are major things happening today, echos from the late 1990s, that management is either ignorant of or chooses to ignore:
New store growth: We’ve discussed this many times. In the 1990s, management sought to convince investors that McDonald’s was still a growth company. New store growth was “accelerated”. Cannibalization became the word of the decade. McDonald’s Owner/Operators shared in the blame because, being starved for new stores, they eagerly opened any new location corporate came up with.
Major new sandwich introduction: Convinced that “consumer tastes have changed,” management bet the farm on the Arch Deluxe. Not only was the product uninteresting, but a complete change in McDonald’s advertising style was a flop with the American consumer.
Chairman and CEO combo: McDonald’s veterans know that some of the roughest years in McDonald’s history were when the board chair and the CEO were the same person. Denying common sense and history, it’s happening all over again.
"Overall, independent chairs are becoming more common, a trend supported by a significant number of investors over the last 10 years."
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4 comments:
Thank you for this story so spot on!
Has anyone in the investment community, investigative media, or franchisee advocacy groups bothered to weigh in on the biggest travesty in Corporate Governance malfeasance in recent history?
At this week's McDonald's Annual Meeting, we will see the final nail in the coffin of the former, magical culture of McDonald's created by Ray Kroc and Co-Founder Fred Turner. The former Chairman of the BOD, Rick Hernandez have cleverly and deftly ended transparency, the three-legged stool, or any semblance of the real secret sauce of McDonald's that being collaboration at all levels.
Without last-minute intervention, an unlikely Hail Mary from investors, shareholders, Owners, or the hidden FTC, the control of McDonald's future is left to the same leader or team that has devastated the future path of the company!
Few externally realize it. The internal advocacy structure is impotent, given the heavy-handed, disingenuous, and tone-deaf leadership of Chris Kempczinski and his rag-tag minions who have no concept that they are simply a "holding company" for the 95% of restaurants owned by the real leadership of McD's, that being the Owners. They silently and subtly make in-the-market corrections that come out of the rules and regulations promulgated by HQ, like our broken government their only intention is maintaining power. The suits are obsolete. They have bravado, bark, and betrayal but no real bite in the marketplace.
Hernandez dodged a bullet as did Chris and others from the scandals of the past by consolidating this power in an "accidental CEO" soon to be an "accidental Chair/CEO". Never has so much power been turned over to such an undeserving and unprepared executive in the QSR industry. The truth is buried forever when this transition takes place this week.
If ever THE often-rumored investigation was to drop another leg we can only pray it happens this week.
Where are the checks and balances in industry these days?
Hmm, who would have thunk it?
Has this been a reported issue?
Shouldn't the shareholders have to approve such a radical, new transference of power from
presumed external oversight to be centralized internally?
Are Sarbanes/Oxley rules/regs alive?
Hmm, who would have thunk it?
Has this been a reported issue?
Shouldn't the shareholders have to approve such a radical, new transference of power from
presumed external oversight to be centralized internally?
Are Sarbanes/Oxley rules/regs alive?
Anyone? Anything WE can do?
Advocacy Groups?
Dick Adams can you help? Release a statement?
Too serious to be ignored
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