McDonald’s Corp. has changed its domestic organizational structure to give its regional leaders more autonomy in menu and marketing decisions, company officials said Thursday.
The Chicago-based burger giant is moving from three regional divisions – East, West and Central – to four zones: Northeast, South, Central and West. Each zone will be overseen by a designated president and will have its own identity and can suggest its own promotions and programs.
“We are experiencing transformational times in our industry and with consumers, and this current business environment requires change,” McDonald’s USA President Mike Andres wrote this week, in an email to franchisees, obtained by NRN. “What has worked for McDonald’s U.S. for the past decade is not sufficient to propel the business forward in the future. We need to focus on the customer and make decisions based on what they want — and we can’t just say that; we must actually do it.”
The move comes one week after the company reported a same-store sales decline in the U.S. of 3.3 percent for the third quarter. The chain’s 4.1-percent decline in September was its worst monthly performance in more than a decade. CEO Don Thompson hinted at organizational changes in the company’s third quarter conference call, saying the company was planning to have a “flatter, more nimble organization.”
The restructure also comes just two months after Andres, former CEO at Logan’s Roadhouse, was named president of McDonald’s USA.
The new organizational structure will replace a regional structure that was first put in place by former chair and chief executive Fred Turner decades ago, Andres said. Yet the country has grown more diverse in recent years. “We must evolve our culture and organizational structure to put decision-making closer to our customers,” he wrote.
Under the prior structure, restaurants in Minnesota were operating with the Central division under the same menu and marketing strategy as those in Louisiana, with promotions for menu items like sweet tea, which is popular in the South, but less so in northern states.
The goal is to more directly align restaurants with the varying regional tastes of consumers, said Lisa McComb, director of media relations for McDonald’s USA.
McDonald’s four new zones will support the existing 22 regions, and their boundaries will “better align with consumer tastes and preferences,” Andres said.
Andres said zone presidents will play an integral role in shaping the U.S. strategy.” “They will work to understand the regional plans and needs, and help secure resources and support from the home office to fuel local efforts,” he said.
News roles, restructuring
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According to the Andres email, Debbie Roberts will lead the Northeast zone as president, which includes places like Boston and New York. Rick Colón becomes president of the South, which includes much of the Southeast. Roberts was senior vice president, restaurant support officer for the chain, and Colón had been the eastern division president.
Charlie Strong will head the Central Zone as president, which includes Chicago and the Midwest, while Kevin Newell was named president of the West zone, which includes states west of the Rocky Mountains. Strong was the president of McOpCo, which operates company-owned restaurants, and Newell was previously chief brand and strategy officer.
Steve Plotkin is the current president of the West division, and Lee Renz is president of the Central division. It is unclear what will happen with their roles in the restructure.
Andres suggested that some positions could be eliminated during the restructuring, but McComb said it’s not clear whether jobs will be impacted because staffing within the new zones has not yet been determined.
The migration to the zone structure started Thursday, and division offices will be open through January, Andres wrote.
“The reality is that our current U.S. structure is not optimized for the customer,” he said. “You told us that there are too many layers, redundancies in planning and communication, competing priorities, barriers to efficient decision making, and too much talking to ourselves instead of to and about our customers. We need to evolve beyond our current model.”
McDonald’s has been looking for ways to make the menu more relevant to the changing tastes of consumers. The chain, for example, is testing the option of more customized burgers in Southern California and plans to expand that effort to three markets next year.
The chain is also reportedly planning a new marketing push in January that will shift to a new slogan: “Lovin’ Beats Hatin’,” which would replace the longtime tagline, “I’m Lovin’ It.”
Earlier this month, McDonald’s also launched a campaign to address consumer concerns about food quality head on by offering more transparency about its ingredients.
Contact Lisa Jennings at [email protected].
Follow her on Twitter @livetodineout
Contact Jonathan Maze at [email protected].
Follow him on Twitter at @jonathanmaze
