Leading Organizational Change: McDonalds
When a company is going through a transformation there are many aspects that are adjusted or changed. Organizational change occurs when there is change to the business strategies or major sections of the company. McDonalds has altered changes to their structure in the United States in order to improve the way home office and field employees work with owner-operators. This essay will review the organization changes made, the steps that I would personally take and the order in which I would take them. I will also evaluate both individual and leadership actions.
As part of McDonald’s organizational change, is eliminating its region structure in favor of field offices and they are removing layers from the field organization while increasing resources in key strategic areas. These areas include technology and field consulting and are intended to increase the efficiency of the organization as well as aid the franchisees success. This change impacts the livelihood of an unknown about of employees due to the layoffs and the closing of some field offices. According to the Wall Street Journal, McDonald’s has also cut an undisclosed number of corporate jobs in the last two years.
The changes will help the company reach a savings target goal of $500 million and goals of the restructuring include the following :
These moves are intended to increase efficiency and the structural change will create a single point of contact to help each franchisee build business plans and obtain the corporate resources they need. The President of McDonalds made these changes known to the organization through a video for employees and management to view. McDonalds has stated that they are making more of a conscious effort to help franchisees improve their businesses and will reduce the amount of time they spend on tasks such as the cleanliness of restaurants. They are also creating a new position which is titled the chief transformation officer, to help lead the changes.
- More consulting and support for franchisees
- Better communication between the Field and Home Office
- Aligned incentives with Owner-Operators
- Improved speed to market by managing complexity and improving decision-making
- Deliberate capability building and faster career progression for McDonalds employees
Organizational change is necessary for businesses to evolve and remain competitive in today’s fast pace society. When making changes in McDonalds organization, I would investigate a few key steps to assure the transition is smooth for the company as well as for the employees and leaders. McDonalds organizational goals are to increase sales and savings. These steps include the following:
In my opinion, I would change the focus of the organization change and instead of making changes in corporate, I would make them in product. There is a decline in sales and that has sparked the need for restructuring. The decline in sales may be from McDonalds not creating products that their clients are wanting to consume. Changes I would take would be to improve the quality of the products served throughout all restaurants without increasing prices drastically. The quality of their products may not meet the trends of clients wanting to eat more all-natural foods when they choose fast food. I would start there and then change the way employees interact with the customers. Mandating smiles and first-class service would be another immediate change I would require. Once these have taken effect, I would then look at restructuring the areas that are not improving their sales. If these sales are in specific demographics, these would need to have a microscope evaluation on the all areas.
- Define the change and make sure it aligns with the business goal
- McDonalds change should start with the quality of food served to customers to increase sales nationwide.
- Sale goals should be made and set for the regional areas that have the lowest sales.
- I would determine who is affected and impacted by the change
- Determining who will be affected is based on the areas that have still not made the gains necessary should be evaluated and determine if the lack of success can make survive and extended amount of time. If it cannot, condensing stores in those regions should take place.
- Communicating the change and goals of the change is vital
- Set up and provide training
- Support must be implemented
- Having a project manager or a transitioning chief in charge of supporting and monitoring the organizational change is essential. This is a position I too, would create and hire one for in order to make certain progress is being made.
- Measuring and evaluating the change process is a must
Organizational change is inevitable but should be done in a way that allows organizational leaders and individual employees a chance to be apart of the change. Drastically changing the structure to where it affects jobs being severed should never be a surprise to workers. This makes the organization seem unstable for the remaining employees. According to Harvard Business Law Review, empathetic communication is a technique that business leaders should always rely on in order to motivate and lead effectively. Involving individuals at all levels as well as remaining as transparent as can be will ensure credibility and trust among workers and help create an organizational change that can run smooth for everyone.