Calling the confluence of problems now facing the restaurant industry "a perfect storm," Jim Skinner, CEO of McDonald's, the largest restaurant operation in the world, said the key to weathering it is to work together.
Skinner delivered the keynote address May 18 at the National Restaurant Association Restaurant, Hotel-Motel Show at McCormick Place in Chicago.
Quoting Ray Kroc, the legendary franchisee of the original McDonald's concept who later owned the company, "None of us is as good as all of us," Skinner said.
"There is more that unites us than separates us," he said. "We all know the energy and poetry of a busy kitchen."
Among the onslaught of threats are rising commodities costs, an uncertain economy, food safety concerns, and more and differing mandates from states.
Another challenge is personnel, one Skinner said was of their own making.
"For too long, we paid lip-service to hiring, training and retaining, and accepted 100 percent turnover," Skinner said. Neglect of the workforce led to the coining of the term "McJob," which even gained entry to dictionaries to describe a low-skill, poorly paying position with little opportunity for advancement.
"Fewer companies have had more to overcome in their hiring image than we have," he said. To confront the problem, Skinner said, the company has made health insurance available to employees of 9,000 stores. Not everyone in those stores can take advantage of it, though, because the cost still is too high. The same retirement-savings program available to Skinner is available to everyone, he said.
Skinner, whose first job was at a McDonald's, showed videos of commercials designed to restore the image of the company as one where long, profitable careers are available. He also told the story of a young employee who won a lottery, quit his job, only to return later. Working at McDonald's was more fun than not working, the man said in a newspaper interview.
Skinner also called for immigration reform at the federal level to ease the burden of varying state laws that make management of national businesses more difficult and costly.
In a question-and-answer session after the speech, Skinner discussed the first half of the decade, where the company's stock sunk to an all time low. Then, as turn-around efforts were taking hold, the company suffered the tragic deaths of two CEOs, putting three men into the spot within seven months. Skinner said the period was very difficult for him personally, and that while he never thought he would be CEO, "I always knew I could be."
During the session, a man approached the microphone and identified himself as "Ronald L. McDonald." He asked Skinner why McDonald's had not done more to honor founders Dick and Mac McDonald, his uncles, but instead has focused on Kroc. Skinner said he believed the company had sufficiently recognized the brothers, but said, "It's been 57 years. We all move on."
Later, McDonald did not seem placated. "I don't know of any other corporations bought by an employee who is then credited as a founder. If he was the founder, we'd all be eating Big Krocs now instead of Big Macs."