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McFocus x McDistinctiveness x McAgility = McSuccess
Despite the economic doom and gloom at least one company continues to prosper. Last
week McDonalds posted quarterly results that beat market expectations.
This is the latest in a series of good results from the ubiquitous
burger chain, and is based on the company’s ‘Plan to Win’ strategy led
by CEO Jim Skinner.
McDonalds have achieved their success not only in the face of recent economic uncertainty but
also while the company continues to be at the forefront of campaigns
focused on food health issues (including Morgan Spurlock’s film,
Supersize Me), environmental concerns and anti-globalisation protests.
Many companies would have crumbled in the face of such hostility but
it seems to have spurred the company onto greater and greater success.
I believe there are three factors underpinning their impressive
performance:
- Focus. The
whole organisation, from the CEO down, is obsessed with the McDonalds
system (which integrates franchise owners, suppliers and employees) and
ensuring that the business continues to function efficiently and
effectively. They know what they want to achieve and what it requires
of them to achieve it. As the McDonalds insiders would say they “keep
their eyes on the fries!”
- Distinctiveness. It
is not enough simply to be focused – McDonalds are also distinctive.
They have huge brand awareness (it was the first brand that Louis, my
two-year old son, noticed) and a clear customer offer. They target
their offer and their communication on customer groups who will react
positively and are prepared to largely ignore those who aren’t
interested in the McDonalds proposition.
- Agility. As
the tastes and requirements of their core market have evolved
McDonalds’ managers have been willing and able to refine the
proposition. Eighty percent of their business may still come from their
core ranges – Big Macs, Quarter Pounders and fries – but McDonalds now
offer salads, higher-quality coffee and new types of sandwiches – all
of which are delivered within their value-focused system.
The critical aspect of their success is that all three factors – focus, distinctiveness and agility – are in evidence, which is why the formula at the top is multiplicative rather than additive.
- The performance of a company that is focused and distinctive
but is not agile will inevitably decline over time. Kodak, for example,
has struggled to make the transition to the digital photo market.
- Alternatively, a focused and agile
company that is insufficiently distinctive will be unable to generate
clear advantages or deliver superior profits. Somerfield, for instance,
has had no answer to the convenience food offer of Tesco or the Co-Op
and was eventually bought by the latter last week.
- Lastly, an agile company that has a distinctive
proposition, but which is not suitably focused, may be undone by poor
operational performance. Howard Schultz, who returned to lead Starbucks
last year, argued that the company had lost its way, noting, “I have
said for 20 years that our success is not an entitlement and now it's
proving to be a reality. Let's be smarter about how we are spending our
time, money and resources. Let's get back to the core.“
The bottom line
Do you deliver McSuccess?
Whether you lead a small team or a large corporation you need focus,
distinctiveness and agility if you are to achieve great results.
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