Almost two years ago I published a case study comparing McDonald’s and Motorola (download paper here). As a reader of this blog you know the former I don’t care for, while the latter is doing all the right things.
This week, the #2 fellow at McDonald’s abruptly left. Why? Because he was considered to radical, and too quick to try and change things. As you know, McDonald’s dramatically cut back its number of stores 4 years ago. Since then, the company has sold off all it’s growth businesses, and has made minor changes to the existing stores which has helped them to improve sales and profits – although the company still does not support the number of stores it once did. And McDonald’s still is not winning the battle for growth against Starbucks and other less Locked-in competitors.
The thing McDonald’s most needs is someone willing to Disrupt the organization, install White Space and get the company on a growth path for the future. Unfortunately, the current CEO, Chairman and Board members are more interested in historical consistency. Content to Defend & Extend a Success Formula that is no longer leading the marketplace, they have pushed out their best hope for rejuvenating the organization.
Meanwhile Motorola last week again announced it is taking market share from competitors. Its phones simply keep attracting new customes, as unit volumes are up 46% versus a year ago. As you know, Motorola’s Board took the opposite set of actions that McDonald’s took, putting in place a CEO who has Disrupted the company and installed White Space in multiple locations.
While McDonald’s has shown signs of reviving the last couple of years, it is important to remember that it still is smaller than at its peak, it has sold off its growth businesses (such as Chipotles) and it is not the dominant market leader it once was. This most recent action simply demonstrates that the Board is more interested in Consistency than Success. Too bad for all those employees and shareholders.