When McDonald’s UK CEO Paul Pomroy last spoke to Management Today in September 2019 he said that the fast food giant was operating in the toughest trading period it had seen - a perilous triumvirate of slowing high street footfall, shrinking consumer confidence and the looming prospect of a hard Brexit.
Like many leaders, he now looks back on those conditions like a walk in the park. Nothing he’d faced before came close to the economic and physical impact of the COVID-19 pandemic.
On March 22, Pomroy took the decision to shut all of its 1,450 plus restaurants, which are operated by over 200 franchisees, despite having the option to remain open to serve takeaways.
“It was probably the toughest call I’ve had to make in my five years as CEO. We’d had 14 years of consecutive quarterly sales growth and didn’t legally need to close,” Pomroy told Management Today’s Kate Bassett at our Leadership Lessons Live digital conference.
But, he concedes, keeping them open even just for drive through or delivery purposes (and expecting staff to keep travelling in to run them) was “morally the wrong thing to do.”
Pomroy admits that closing shops hardly solved his problems. “We have a £1.2 billion pound supply chain of farmers, suppliers and franchisees across the UK and Ireland. It became very clear that navigating our way through the closure period, while still trying to keep people afloat as much as we could, was critical.”
Coping with the change of routine brought on by working from home has also been a significant challenge. Pomroy’s wife Nathalie is CMO at McArthurGlen, and they both had to balance their professional responsibilities with home-schooling their two boys, aged 5 and 8. It was a balancing act made all the harder because both parents fell ill with coronavirus.
“The darkest moments were just feeling really bad that you’re not a great dad, not a great husband and not a great leader because you spread yourself so thinly.”
His personal coping mechanism has been to lean on the network of confidants and executive mentors he’s built up throughout his career. Having a team he could trust has also been vital.
“You find out a lot about your leadership teams when you get into a crisis like COVID-19,” says Pomroy. “The delegation of decision-making becomes even more important.”
When the pandemic struck, a crisis team was established under the firm’s vice president legal, franchising & compliance, Tina Dekker. Pomroy’s role as CEO was to set the guiding principles and wider strategy, while leaving much of the detailed day-to-day decision making and government liaison to the crisis team.
The grand re-opening
The firm made the decision to reopen 50 of its shops for delivery and drive through in April. There are now over 1,000 operating on that basis. High street stores started reopening from June 24 and from July 22, the first 700 will reopen fully, enabling customers to eat in.
“Our biggest mistake was not getting onto the reopening strategy as quickly as we should,” admits Pomroy.
It was never going to be easy though. McDonald’s kitchens are designed for “minimum steps” (there should be no more than two steps between colleagues at any time) and multitasking, meaning there’s a lot of shoulder-to-shoulder work - hardly ideal for social distancing.
“I think we all underestimated how much effort and energy was going to be required to reopen,” Pomroy adds.
McDonald’s response has included ordering three million face masks, six million pairs of gloves and 10,000 perspex screens, plus limiting opening hours, maximum spend and menu options.
“We had to get the toast time on our burger buns down to less than 20 seconds in order to prevent a queue forming in the drive through. That’s purely because of social distancing in the kitchens creating a bottleneck.”
“Trying to keep a small steady flow of orders has been the critical thing we have learnt from some of our other markets that have reopened in China and France,” says Pomroy, who describes the process as “fine-tuning at speed” rather than as some sweeping change to the restaurant’s well-honed processes.
Beyond the immediate reopening of high street stores Pomroy is moving cautiously. It’s clear to him that the problems that existed pre-COVID will not have gone away, whatever a post-pandemic UK economy looks like. “The high street is a real concern for me.”
Is a major change to McDonald’s strategy or model on the cards, for example going all-in on delivery and drive through?
“I’m firmly in the camp that we need to understand what the new normal is first before making rash decisions,” says Pomroy.
Diversity, inclusion and Black Lives Matter
Since George Floyd’s murder, business leaders around the world had to confront the inequalities that exist within society and the companies they run.
Pomroy believes that McDonald’s has done a “really good job” when it comes to diversity and inclusion across its franchisees - especially gender equality. The company has a 53/47 per cent gender split between women and men according to its latest gender pay report from 2018, with a median pay gap of 0 per cent.
However, when it comes to inclusivity around race “we're not as good as we need to be,” admits Pomroy. “My Mum taught me very young that you should treat people as you want to be treated yourself, so by behaving that way it sets a culture. It’s important for me to talk very openly about the fact that I want everyone to be treated fairly. Those conversations come from the top.”
Pomroy’s one crisis leadership tip: “Set out your principles with your team, and stick to them.”
Image credit: Courtesy of McDonald's