Kotters 8-Step Approach

Introduction

When Eric Schlossers (2001) Fast Food Nation: The Dark Side of the All-American Meal hit the stands at the start of the 21st century, it sparked a new need for the fast food industry to reassess itself and make itself more appealing in the wake of the fallout of the books claims. One company that failed to take the publics newfound aversion for the baby-boomer industry was McDonaldsthe restaurant that received most of the books criticism and the restaurant that served as the focal point of the 2004 documentary Super Size Me. Other restaurants like Wendys revamped their menu, their look, and their strategy by introducing a fresher, more wholesome approach to food and food service, offering home style fries, more organic options and more variety in their meals. McDonalds on the other hand doubled down with its commitment to the status quo of fast food. Its stock, which hovered near $50 a share in 1999 fell to $12.82 a share by 2003. Since then, the stock price has staked a tremendous recovery, soaring well over $150 a sharebut so too has the rest of the market, a phenomenon better explained by a stock market bubble fueled in part by easy credit and central banking intervention than by McDonalds commitment to change. As the organic foods industry continues to grow and more and more fast food establishments like Panera Bread and Chipotle advertise a fresher, more all-natural ingredients menu, companies like McDonalds serve as a kind of dinosaur in an industry that may be heading for extinctionat least in terms of what it used to be and what the 21st century of consumers, weight watchers, and health gurus now want it to be.

Company Overview

McDonalds was founded in 1940 and quickly became the premier fast food restaurant of the latter half of the 20th century. It was the iconic baby boomer drive-thru restaurant where prosperous American families could take their kids for a burger and fries without having to get out of the car. It was quick, convenient, always the same no matter which franchise one visited, and always tasty. The underbelly of the McDonalds secret was exposed, however, by Schlosser (2001) in his grueling takedown of the many ways in which the fast food industryand McDonalds in particularnot only cheats its customers with corner-cutting, cost-saving ways to get the most of their meat and potatoes, but also endangers their health.

In response to the bad press that came McDonalds way in the first decade of the 21st century, the company set about trying to change its image (Choi, 2014). Instead of being seen as fast food restaurant selling junk food on the fly, the company sought to change consumers perception of the brand and be seen rather as good food served fast (Associated Press, 2014). It introduced new menu items such as egg-white McMuffins and the option of choosing a salad over fries with ones burgerbut these patchwork solutions failed to do the trick (Sutton, 2015). As Baerlein (2014) reported, Chief Executive Officer Don Thompson owned up to some corporate image problems on Tuesday after it posted a nearly one-third drop in quarterly profit and warned that its global restaurant sales would fall again this month. The image problem was affecting sales and McDonalds brand was in decline among consumers all over the world. McDonalds tried to step up its inventiveness: it saw the allure that the organic, all-natural diet was having for consumers, so it introduced the kale salad to its Canadian franchise menu and the breakfast bowl made with kale in Southern California (Sutton, 2015). But these solutions also failed to connect with consumers and make McDonalds into the kind of hit it had once been.

Diagnosis

The problem was not the menu items, however: the problem was McDonalds itself and the way it had embedded the golden arches into the consciousness of America (and the world) over the past few decades. Those arches did not represent anything wholesome to the new generation...

They represented everything ugly and tainted about the artificial, commercialistic pasteverything that Millennials wanted to reject: the brand has a reputation for unhealthy, processed and sugary foods that it cant quite shake, especially among millennials, no matter how much they improve the quality of their products, Boston University professor Chris Muller explained (Sutton, 2015). McDonalds had to stop being McDonalds in order to be great once more. It had to become something else: it had to undergo a dramatic, cultural change.

The other problem that McDonalds has encountered is that, aware of its image issue and instead of boldly pursuing one marketing path, McDonalds has tried to do everything at once (Sutton, 2015). In other words, McDonalds has not approached its brand crisis slowly or with caution. Instead, it has thrown everything at the wall including the kitchen sink, all at once, in an effort to see what sticks. In short, it has panickedand in the process of trying to be appealing to the new generation of consumers, it has basically alienated them even more with what comes across as an inauthentic appeal to being, ironically, authentic. Even positive steps like no longer using hormone-infused chicken in its meals have come up short with consumers: the brand simply does not register as wholesomeonly as cheap and fasta place where on can get junk food on the fly.

In order to compete in 21st century world eager to turn its back on the fast food phase of the latter half of the 20th century, McDonalds has to re-brand itself for the 21st century consumer. It has to transform into...

…employees to accept the vision will help the change process to move forward. Obstacles to change have to be dealt with directly by managementand that means they have to be anticipated and solutions developed to help neutralize resistance to change.

Create Short-Term Wins

Success is the best motivator. McDonalds must, therefore, create ways for workers to obtain a sense of success early on. Goals should include points like: 1) promoting the new vision and culture at the workplace on a daily basis by engaging with customers using the talking points developed by managers; 2) decorating the store so that it reflects appropriately the values of the new vision; 3) applying the vision to new marketing concepts; 4) using social media to spread the vision in a favorable and positive manner. These methods can help the company to produce short-term wins, build momentum and enthusiasm for the change, and spread positive energy among the workers.

Consolidate Improvements

McDonalds must be careful not to declare victory too soonthat is what caused problems in the past. It tried to do too many changes at once. Change is not an overnight processit happens in stages, over timeespecially when the culture is the main focus of change. Short-term wins are just to help build morale. The long-term change is the real goal. That means, the company must be focused on making improvements where they are most neededand that has to be with the chains image: its look, its symbols, its colors, its style, its menu, its everythingit all has to be reassessed little by little.

Anchor the Changes

Change will only be truly effected when the culture itself has embraced the change. The culture of McDonalds is what ultimately needs to transform and that means the values, principles and vision must all be in alignment. Once they all agree, then McDonalds will be successful again. The way to make sure they align is to conduct routine assessments and evaluations. Monitoring the change process is essential over the short and long-term so that challenges can be addressed in an ongoing manner.

Conclusion

McDonalds faces an uphill battle in the fight to stay relevant among consumers of the 21st century. Its image and brand have been tarnished by journalists and activists, and the company now needs to reinvent itself by appealing to consumers sense of nostalgia and presenting a vision to workers and the public of a restaurant that values old-time principles and sentiment. That is the vision that McDonalds needs to promote because that is the prevailing vision of America todayone where value and authenticity are counted as essential. In order to become united with the public once more, McDonalds has to shed its Machiavellian image and become a restaurant that embraces that old-time America feeling once again: that is the only way to help bring the company back into the hearts…