Big Mac’s McGlobal HR Secrets

It’s no small potatoes. McDonald’s International, that is. Cooking up its first international revenues in 1967 with restaurants in Canada and Puerto Rico, McDonald’s now serves up a fast-food extravaganza ranging from soup to nuts (or nuggets, in this case) in 18,380 restaurants in 91 countries. Total revenue for 1995 was more than $10 billion, and total sales outside the United States contributed 54% to the firm’s consolidated operating income for the year.

This is an organization that knows how to grow globally. Each day, more than 33 million people around the world are gobbling down McNuggets and Big Macs faster than you can say: “two all-beef patties special sauce lettuce cheese pickles onions on a sesame seed bun.” And they’re served by more than one million employees, with estimates that the number will double by the year 2000.

It’s a company that reveres flexibility and sensitivity to local cultural mores. You may think that translates into flavoring the burgers a little differently from country to country, but the company’s global astuteness is much more far-reaching and profound. For a business, in the minds of Americans, that’s synonymous with all-beef hamburgers, McDonald’s will open its first restaurant in India this year without any beef products at all. Vegiburgers, or burgers made with mutton or lamb, may take their place. And, as an organization that holds distinction for actively promoting diversity in the United States, it has a restaurant in Saudi Arabia with two dining rooms—one for men, the other for women and children. These are lessons in profitable cultural sensitivity.

This cultural sensitivity spills over to the company’s HR practices. “One of our guiding principles is that our restaurants should always be a reflection of the communities they serve—not only the individuals we employ and the culture and ethnicity of those communities, but also the employment practices,” says Rita Johnson, staff director in international human resources with responsibility for Central Europe.

That means not stuffing the American way down their throats, but rather taking the company’s best practices from around the world and working with local staff to blend those into local practices. McDonald’s then comes up with the most effective way of doing things in a particular location.

“While there may be some specific differences worldwide in local labor laws or employment practices, our philosophical approach to employment is the same whether we’re in Beijing or Budapest,” says Robert Wilner, home office director, international human resources.

Adds Johnson: “Our global perspective is that whatever market or country we’re going into, we always employ the most positive people practices and exceed the expectations of our employees.”

McDonald’s vision is just the beginning.
Exceeding expectations is something McDonald’s does well. Try to remember life before drive-thrus and you get a taste of the influence this corporation has had on our lives. It’s not just vision. Good ideas wilt like week-old lettuce if there’s no business acumen to propel them. And, while McDonald’s may convince its customers that they “deserve a break today,” the company is relentless in its pursuit of expansion based on solid business goals. All you have to do is look at the organization’s selection, hiring and training procedures to know instantly that it works very hard to align HR systems with business objectives. And the planning required before entering a new country is anything but fast-food casual.

“When we open in a country [that’s] new to us, we do exploratory visits—sometimes several years in advance of building the first restaurant,” Johnson explains. “We collect information so we can approach it from a fact-based, decision-making standpoint. We need to be sure the market is going to be profitable for us so we take a look at the demographics.” The company asks itself: Would this particular market support a restaurant? What other food-service industries are currently in this country? Would we be the first food-service company or are our competitors currently established in the country? What kind of success are they having?

In addition, the company benchmarks with other companies already in the country to find out what their problems and issues are. What would they do differently, and what are their HR issues? What kind of business infrastructure already has been established?

As those questions are answered, HR rolls up its proverbial sleeves and steps up to the front of the line. It has a new-country outline that contains a list of employment-practice questions that must be answered as part of the fact-gathering stage. What are the labor laws? Would the company be able to establish part-time and flexible work schedules? Are there a specific number of hours employees are allowed to work? Can the company employ youth under the age of 18? What other services must the company provide?

In many countries in Central Europe, for example, employers must provide showers and lockers. This may be from a lack of shower facilities where individuals live, an inadequate supply of hot water or simply the high cost of using standard utilities. So the employer is expected to provide some of the services that may not be easy to get at home. McDonald’s already does this in many of the countries in which it operates, including Rumania, Slovakia, Latvia and Poland.

In many locations, just building the golden arches and locating food that will meet company standards requires hiring an entire network of support services such as engineers, construction workers and agricultural experts. It’s a tall order for HR professionals to fill. But one they have had lots of practice doing.

Entering a new country requires extensive planning and flexibility.
To enable McDonald’s to open restaurants in new countries, the new local HR managers, as well as the local restaurant managers, must receive training. So they can observe real operations, the training often takes place in a country where there’s already an established restaurant. A sparkling-clean, stainless-steel counter with quiet cash registers and no customers is quite a different work scene than one with bustling crew members reaching over each other to scoop fries into paper bags, fill beverages and scurry to get the requisite Filets-O-Fish and Quarter Pounders on trays or in take-out bags while people are lined up 10-deep.

Consequently, training new managers often requires that they cross borders regularly—to train Monday through Friday and then travel home on the weekends. This means visas and work permits have to be in order for each employee, which can be a tricky balancing act. HR must ensure all paperwork is prepared accurately well in advance, but not too far in advance—because these individuals can’t be employed too far ahead of the training period.

“We currently have managers training in New Zealand who live in South Africa,” says Johnson. “When we interviewed in South Africa, one of the questions we asked was if the person had a passport. That’s a question we wouldn’t ask in the United States.”

And, early on, local attorneys well-versed in labor laws coordinate with the HR director for the country to establish what the policies are going to be. “We have a responsibility to ensure that all the local employment practices, policies and regulations are met. We do a lot of research to ensure that happens. We understand as a global company that we can’t simply take the employment practices as they are in the United States and transplant them,” says Johnson.

However, there are times when McDonald’s introduces American ways to other countries—for everyone’s benefit. “Typically, when we go into a new country, there are lots of times when the quick-service restaurant industry is either nonexistent or very new. As a result, the culture, laws and customs don’t accommodate the things we need to operate our business properly. It becomes an opportunity for McDonald’s to bring some of these things into a country and to put some folks into the workforce who wouldn’t normally be in the workforce, particularly homemakers and university students who are working for the first time,” says Dan Laino, home office director, international human resources.

“We often introduce the concept of flexible scheduling or part-time scheduling. It’s quite a common occurrence for us to go into a market and have our practices of flexible and part-time schedules be the first that have ever been introduced. Sometimes we have to be very adaptable and patient in trying to establish these practices,” says Laino.

For instance, it isn’t something the company can implement immediately in some cases, especially if the common employment practice is to hire individuals full time. It may require a lot of time talking to labor ministries as well as other local business people to explain the advantages of having flexible or part-time scheduling as an employment practice. Full-time employment precludes young people and students in some cases from holding a job. “We provide the fact-based rationale that you can actually employ more individuals if you have a practice of part-time employment because some of those people have children at home or are students and aren’t able to be employed full time,” says Johnson.

Selecting the best from a menu of talent.
Whether hiring full-time managers or part-time cooks, recruitment is easy for McDonald’s. When it began hiring for its restaurant in Moscow’s Pushkin Square, 27,000 applicants tried out for the opportunity to don Ronald McDonald’s colors. This initial rush of applicants is typical because of the company’s immediate brand recognition. “We put the arches in a newspaper [ad] and we get an onslaught,” says Laino. “The trick is to maintain that employer image and enhance that image so we’re the employer of choice in a country.”

McDonald’s establishes itself as an employer of choice by paying top wages for high-quality employees and providing a benefits package that exceeds the minimum. “If you want to employ the highest caliber of individuals, you need to pay them a wage that draws [them in],” says Johnson.

What does that high-caliber individual look like? The most common trait McDonald’s employees share is an attitude that customer service is most important. “The employee’s ability to be customer-service oriented is just as important whether [he or she is] serving the customer directly or whether [he or she is] serving someone who’s serving the customer directly,” says Wilner.

Selection, therefore, focuses on identifying employees—whether entry-level or management—who are customer- focused. It begins with recruitment advertising that emphasizes customer service and continues with preliminary screening that restates this theme: The right attitude is equally as important as—or more important than—technical competency. Then, as the company moves into its selection systems, it looks at specific skills, general knowledge and customer service. “Finding, developing and retaining the best people is one of our most important functions in HR, and we see it as an integral part of our success as a company,” says Wilner.

Some naysayers don’t believe the McDonald’s attitude translates into every language. Before opening Russia’s Pushkin Square restaurant, now the busiest one in the world serving 40,000 to 50,000 customers daily (for a total of 50 million since 1990), many people on the sidelines expected it wouldn’t be easy to motivate employees: that this crew of 1,560 individuals weren’t going to want to wait on customers, smile and have a good time doing it.

“I think back when we first opened in Moscow and people said they weren’t going to be the type of employees who were going to get turned on,” says Laino. “When we opened the first restaurant, worldwide video coverage showed that customers would walk in and they thought they’d landed on another planet. They faced a highly enthusiastic, high-spirited crew at the front counter [with arms extended, and with] smiles on their faces, asking if they could be of help. That’s what we call ‘ketchup in the veins.'”

How does McDonald’s ensure it hires these kinds of individuals? Already in the hopper is research about successful McDonald’s managers and the knowledge, skills and abilities they possess. A success profile includes leadership skills, ability to manage people in the restaurant environment and high work standards. For store management positions, after the initial screening and before the final decision, people are invited to work for three to five days in one of the restaurants. “It gives the applicants a chance to try out the job and screen themselves out. It also gives us an opportunity to see how the people actually function in the environment they actually are going to be working in,” says Wilner.

With a strong commitment to staffing locally and promoting from within—even when opening locations in new countries—McDonald’s HR finds good talent efficiently. The commitment initially is to find good people and be able to turn over the operation to local employees who will run and manage it.

Take Beijing, for example. The Tieneman Square McDonald’s opened with approximately 100 managers for a large, 26-cash-register restaurant. After they were hired, workers began training in Senzhen, which is approximately 1,000 miles away. “We have them work in a restaurant working typical shifts, working shoulder-to-shoulder with an existing manager learning some of the basics of the management job, and at the same time we get a chance to try them out,” says Wilner. The manager fills out an evaluation, and the individual fills out one to determine whether or not a job offer should be made.

“Our belief in promoting people from within, throughout all levels of the company, is a major way we source our management people in China, as well as in other markets around the world,” Wilner says. With a large percentage of store managers who have come up through the ranks, it helps attract people because they know they can work hard and move up. “It also fills our recruiting needs. When we have someone who understands our corporate culture, understands our way of doing business and understands the local culture, it’s a successful part of the way we develop our global talent.”

Comprehensive training assures uniformity.
Having the right employees in place is just the first step. Then, there’s training. And, if the company serves up anything well, it’s certainly training. Hamburger University may be headquartered in Oak Brook, Illinois, but it’s set up to provide training in 22 different languages, to provide simultaneous translation and even to teach in two languages at the same time. There are also training centers in Munich, Germany; Tokyo; Sydney, Australia and London. The training centers get it down to such details as being sure crew members know at what temperature hamburgers are supposed to be cooked and how to inspect restaurant facilities to ensure quality standards are met.

There’s a complete training department in mainland China as well. Managers are taught to give performance reviews, including how to give feedback, how to listen and what to do if a person becomes defensive. And, similar to other locations around the world, the China facility trains managers on every facet of the operation. They, in turn, train their crew employees.

Little things such as logistics may get in the way, but McDonald’s managers consider them only hurdles to overcome. For example, when the company was opening new locations in South America, some pieces of equipment were available, but managers learned that the hamburger grill and the deep-fat fryers wouldn’t arrive in time to train employees before the store opened. So, what did they do? They created mock-ups of the equipment out of cardboard. Crew members practiced cooking burgers on a cardboard grill and worked dummy fryers to perfect their skill in cooking McNuggets and fries. Indeed, by being able to simulate the training it needed for the crew, the restaurant opened on time with a trained staff.

McDonald’s sees its biggest challenge today as trying to set itself apart from its competitors. In its 1994 annual report, McDonald’s says: “In a copycat world, the best way to stand out from the crowd is through customer satisfaction—100% of the customers, 100% of the time…. It’s no longer enough to measure restaurant performance by our internal standards, no matter how exacting. Success has to be measured through the eyes of the customer and the people who serve them.”

While many businesses may not need to approach their operations with this level of exactness and attention to detail, McDonald’s way of careful planning is a lesson for every business. It’s a multinational company that’s able to deploy its HR talent globally to painstakingly address local concerns. It requires flexibility and creativity—and some of those special ingredients—that all companies can create if they desire.