Divorcee Mr Easterbrook was ousted from McDonald’s when the company revealed he had been having a consensual relationship with another employee. In an email to staff, he said: “Given the values of the company, I agree with the board that it’s time for me to move on.” Mr Easterbrook began working for the fast-food chain in 1993 as a branch manager in London. After a short stint at Pizza Express and then Wagamama between 2011 and 2013, he moved back to McDonald’s and was promoted to CEO in 2015.
In a 2018 interview with Entrepreneur, Mr Easterbrook explained how he managed to revive the burger giant at a time of great difficulty, when it struggled in the face of rising competition.
Reporter J.J. McCorvey explained the problems the chain was facing in 2015 – despite it being the “world’s most recognisable fast-food chain”.
He wrote: “Chipotle Mexican Grill and its fast-casual brethren were being hailed as the cooler, healthier dining option, with hormone-free meals and stores that resembled lounges and cafes more than utilitarian pit stops.”
Not only that, one of its suppliers – OSI – was discovered to have repackaged old meat for sale.
McDonald’s former CEO Steve Easterbrook
Mr Easterbrook when he was the new CEO in 2015
Then, as Mr McCorvey explained: “Months before Easterbrook’s first day on the job, McDonald’s posted its first annual drop in same-store sales in 12 years. According to Euromonitor, the chain’s market share of the US fast-food market slid from 17.4 percent in 2012 to 15.4 percent in 2016.”
Mr Easterbrook realised: “The pace of change outside McDonald’s had been quicker than the pace of change within.”
So, he began to restructure the organisation – a huge challenge to take on, considering McDonald’s is one of the largest employers in the world.
Mr McCorvey said: “Within three months, Easterbrook began stripping away layers of bureaucracy from global operations. He regrouped and consolidated each market segment by need, instead of by geographic region, which had become inefficient over time.”
He also made delivery “a global goal”, increasing efficiency through “fast action” by hiring executives with regional experience.
Mr Easterbrook has been fired after it was discovered he had a relationship with a McDonald’s employee
Mr Easterbrook also prioritised selling company-owned stores to franchises. The reporter explained: “When [Easterbrook] took over the goal was to sell 1,500 restaurants this way annually. Easterbrook shifted that to 4,000 and gave the company until 2019 to do it.
“His plan, as it turned out, was insufficiently ambitious. McDonald’s crossed the threshold nearly a year ahead of schedule.”
McDonald’s increased the percentage of its franchised store from 81 percent to 91 percent, a move which was predicted to save £387million ($500million) by the end of 2018.
The firm also established a deal last August to sell 2,740 restaurants in Hong Kong and mainland China, which it hoped would lead to 2,000 new restaurants opening in the country over the next five years.
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Yet, the former CEO is thought to have revolutionised the burger chain
He is stepping down after four years in the role
McDonald’s managed to increase the percentage of its franchised store from 81 percent to 91 percent.
Mr Easterbrook also explored how he discussed the company with his employees: “The rallying call ‘modern progressive burger company’ was about giving us the confidence around understanding who we are and being proud about who we are.”
He emphasised how he wanted to move away from the identity crisis of 2015, and focus on their strengths – all-day breakfasts and discounts. He said: “It’s not about being a different McDonald’s; it’s about being a better McDonald’s.”
Mr McCorvey referenced how the removal of the Dollar Menu in 2013 led to uproar from customers and a wave moving over to competitor like Wendy’s. So in 2017 the family favourite menu returned in a new form, with value offers such as $1 coffees. Mr McCorvey explained: “This struck a balance of thoughts: Customers could dine without splurging, and franchisees weren’t stuck with razor-thin margins.”
Mr Easterbrook with some McDonald’s employees
Mr Easterbrook commented: “The majority of reasonable folks will always feel warm towards an individual or company looking to improve itself.”
Most recently, McDonald’s has introduced technology. With app-based delivery and digital menu boards, although some still argue that makes it too slow.
It also faces resistance over worker wages.
But Mr McCorvey concluded: “If McDonald’s track record is any guide, it will evolve accordingly and close rifts with franchisees enough to boost its bottom line.”
Chris Kempczinski, the president of McDonald’s USA, will be replacing Mr Easterbrook.