May 8, 2014
When Betting on a Turnaround Is a Great Career Move
This article is reprinted with permission from Bloomberg Businessweek.
In early 2003, McDonald’s looked, from the outside, like the kind of company an ambitious executive should avoid. The fast-food giant had just booked its first quarterly loss since the 1960s. Comparable store sales had declined for two years. Customer satisfaction was low. McDonald’s stock was tanking as the markets rallied.
If things were so bad, why did Eric Leininger take a job with McDonald’s rather than pursue one of the many opportunities regularly presented to him as a senior vice president at Kraft Foods?
Because the opportunity was exactly right.
Moving from an established organization to a struggling business is not an obvious career move. It may seem crazy—something your school’s career office would never advise. Newly minted MBAs and seasoned executives alike look for companies with stability and growth. It’s only logical.
But that bias may cause many job seekers to make the same mistake that individual investors make when choosing stocks—investing only in companies at their peak. More importantly, the view from the outside offers, at best, a fuzzy picture of a company’s real prospects. That was Leininger’s experience at McDonald’s.
After turning down the first corporate recruiter who called him about leading global consumer and business insights at McDonald’s, Leininger agreed to meet with the company’s chief marketing officer. One meeting led to others, culminating in a one-on-one meeting with then-Chief Executive Jim Cantalupo. The fast-food giant had historically been thought of as a place for middle-class families to get an affordable, consistent meal in a clean location. That reputation was under threat, Leininger learned from Cantalupo.
But Leininger found in Cantalupo a focused CEO supported by a group of executives who recognized that the business needed to change. That group developed what they called the Plan to Win, to address the major challenges hampering growth. In their plan, as he put it to me, Leininger saw vision, integrity, and passion to change for the better on behalf of the customer. “They were mad and determined to fix it,” he recalled.
McDonald’s offers an object lesson in what it takes for struggling companies to reinvent themselves. All businesses struggle and will need to reinvent themselves at some point. Some succeed, some continue to struggle, but most fail. Companies that successfully reinvent themselves have leaders obsessive about the need to change, who have a clear vision and a laser focus on the customer driving it all.
For those who manage the reinvention process well, like McDonald’s, the rewards can be spectacular. For those considering a job offer, spotting the difference between a business whose best days are truly behind it and one in the midst of resurgence can make the difference between jumping in at the top to suffer the ride down and the job experience of your dreams.
After joining McDonald’s, Leininger became a valued member of the senior leadership team. Guided by the new plan and led by the senior team, McDonald’s improved customer service, launched “fast healthy” products, developed the McDonald’s Café brand, and redesigned its restaurants to reflect a more modern, clean aesthetic. Customers loved it, sales growth resumed, and the price of a share of McDonald’s quadrupled over the next 10 years.
After seven highly successful years at McDonald’s, Leininger joined the faculty of Northwestern University’s Kellogg School of Management to share his perspective on leading a customer-focused, global organization.
Reflecting on Leininger’s years at McDonald’s, then-CEO Jim Skinner said, “connecting with our customers is the essence of what we do at McDonald’s, and Eric’s innovative work has proved invaluable in making that happen.”
Editor's Note: Greg Carpenter is James Farley/Booz Allen Hamilton Professor of Marketing Strategy, Kellogg School of Management, Northwestern University. He is co-author of Resurgence: The Four Stages of Market-Focused Reinvention. Photo credit belongs to Mike Mozart published under a Creative Commons license.