Chris Kempczinski CEO of McDonald's

They are the biggest buyer of meat in the world, and they are also the biggest employer of any company we own. 1 of McDonald's, translating into 22 billion kroner, or 2 billion U.S. dollars, or if you translate it into big Macs, 400 million big Macs. How does McDonald's manage to be successful in so many countries? Tune in.

First of all, Chris, big thanks for taking the time. It's a pleasure to have you on. You run an amazing company and you are the biggest employer in the world.

You kind of churn out 4,500 burgers every minute and 6.

5 million burgers every day. So before we kick off properly, what is your favorite McDonald's meal?

Love the quarter pounder, but also a fan of the McChicken, so those would be my probably go-to items. And, of course, love our McDonald's French fries.

So you like sort of the outside of the fry to be crispy, and you love the sort of inside of the fry to be sort of nice and moist. That's our gold standard, McDonald's French Fry.

So there's global core menu, but that's probably 15 items or so that every restaurant around the world is required to carry. And then beyond that, every market has flexibility to add whatever they want to their own local menu. And I think it's been sort of that combination of these global favorites. But also allowing your menu to what the consumer in that particular geography is looking for. The balance of that has been, I think, the formula for our success.

We try to be very transparent about that so that people can make the right choices. Because on our menu there are a range of items, everything from indulgent products that you would really have as a treat to those that you can have more regularly. So, you know, we view our role as being fully transparent and making sure that people can make the right food choices for them. But ultimately, the education which I think you're getting to is something that, you know, the medical community, schools, all of those can play an important role in helping people make the right food choices.

Part because, think about this, the average sort of McDonald's user. So in markets where we operate, roughly 80 of the consumers in that market visit McDonald's at least once a year. Our sort of average users. So someone who is coming to McDonald's, they're visiting our restaurant three, maybe four times a month. So when you think about the number of other meal occasions that that consumer is having, you know we are getting a fraction of the total meal occasions there. And so, you know, for us to try to assume the mantle of we're going to change the way that somebody is eating when we're seeing, you know, a fraction of their consumption, I think, is beyond what even a brand like McDonald's is capable of doing.

Them on flexibility and flexibility, and providing flexibility in how and when people work is becoming increasingly important. And so as we try to bring that to life in our restaurants....

And you tend to see that there's stratification as well. So you might have a group of people who have worked in a restaurant for a longer period of time. They might be on their way to becoming a shift manager or restaurant general manager. They could, in many cases, be in the restaurants for 10 years. And then you have someone who's coming in, tries it for a few weeks and says, Ah, this isn't for me or something in my life changed, and I'm not going to be able to do it.

So the averages are deceiving because there's quite a wide spectrum of tenure in a restaurant.

Locally, we do training. And I think that's been one of the reasons why one out of eight people in the U.S have started their career at McDonald's. Because beside providing the flexibility, you do learn the basics of business, you learn about how to work as a team, you learn about production flows.

You learn about customer service, you learn about, you know, sort of how a P&L works, you learn a lot of the what I would call basics of business. That give you the ability to then either continue in McDonald's and continue working in the restaurants. Many people go on to become franchisees. Or, as you know, you know, we have a number of people who have spent time at McDonald's and then go graduate on to do different things.

But I think McDonald's provides some of those kind of foundational skills that can end up a lifelong career.

And I think it just, and part of it, is. They also go and talk about some of the skills that they learned at McDonald's. And that's why we're proud of our role as an employer.

They're licensing our core equities, and then they're also getting with it a whole suite of support services that we provide to help them run great restaurants. But ultimately, part of the reason that we are in a franchise model is we want local entrepreneurs. We want people who have that pride of ownership, who feel like this is a business that they own and they're driving. And so, yes, the people are their people.

They hire them, they determine the pay and salaries. Now we share all sorts of information, so they, of course, understand where they are relative to the market, they understand where they are relative to each other.

But the decision, ultimately on how they attract the people they need for the restaurant is up to the franchisee.

Plastic products and so on.

What are some of the challenges you are seeing now on the sustainability side?

We don't own the farms, we don't own the manufacturing facilities. All of that is done with us through a network of suppliers across the world, and we have a great group of suppliers. What we do is we make sure that we're clear about the expectations.

So what McDonald's does is we set standards, we set standards around. For example, all palm oil has to be responsibly sourced, none of it can come from deforestation. And we have audit procedures out there to make sure that anybody who is providing us with palm oil is complying with our standards. When it comes to beef, we have very strict standards around deforestation and making sure that none of the cattle is coming from land that was deforested.

And we have different ways that we oversee that, so we're setting the standards with that, and of course, part of how we set the standards is. We get to select who our suppliers are. I would say, in 99 of the cases, our suppliers are wanting to do the same things that we're doing, that we're wanting to do. They live on the same planet that we do.

They see the challenges that we see, and so what we work together on is how do we make sure that we're working together responsibly? But at the same time, there's, you know, seven, eight billion people in the world that need. And how do you do that in a responsible, sustainable manner?

And what we try to do is just do the very best job we can on each of those dimensions. And it might sound a little bit odd, but we don't actually spend a ton of time benchmarking ourselves to our competitors, we spend a lot more time benchmarking ourselves to our own internal standards and how we're doing. And the thing I love about this business is the amount of data that you can get in this business is unbelievable. We get data by restaurant, by hour, by customer.

And we get a lot of feedback, as you would imagine then, from our customers telling us either we're doing a great job or hey, I didn't have a great experience. And so when we're thinking about our performance, we're typically relying a lot on that own internal data to identify areas that we can get better. And, you know, our belief is that we have structural advantages in this business.

We are executing against our QSC and V that the structural advantages for us are going to be what protect us. And it's just about delighting the consumer.

The question you have to answer for yourself is, OK. I know lunchtime rush is about to come. How do I get prepared for that lunchtime rush? How many burgers do I think I'm going to sell? Am I going to be selling the quarter pounder? am I going to be selling the Big Mac?

How many chicken nuggets am I going to be selling? It's the whole range of items and you're trying to figure out how much am I going to be selling? And you're trying to get it all prepared in advance, so you're trying to stage it so that you're ready to go.

Well, all of that work in the past was really done sort of through the intuition and experience of the restaurant general manager. And now, because of something we have called e-production, essentially, we know, based on the history of that restaurant, exactly what they need to stage. Every 15 minute increment throughout the day. So you'll see a screen that will pop up in the restaurant, which will say, OK, it's 11.30. Time for you to now make eight hamburgers, do a basket of chicken nuggets and have a batch of fries. And oh, by the way, you're going to get these three other orders as well.

All of that is informed by what we have as just the historical data, so we take some of the guesswork out of it. And it's what you would in a manufacturing parlance, you would describe as a standard S&Op process, a sales and operations planning process. Where through data, we're much better able to predict what we need to be making. And ultimately, the benefit to the consumer means that they have a faster experience, so they don't have to wait. And if we don't have something ready, we typically then have to make it on demand, which requires the consumer to wait.

But also because we're making it in advance and it's syncing up with what the consumer is looking for. It means the product is going to be hot and fresh when they get it. And it's not going to be something that's been sitting around for 15 minutes or something like that.

Think about the training that goes on to train 2 million people on our procedures. Every time you launch a limited-time-only offer product, so something that maybe is only going to be in the restaurant for four weeks or so. You have to do training on that, so there's a vast amount of training that happens. And one of the things that happens with artificial intelligence is. You now have an ability to get to much more customized training in someone's local language. And they're able, through interaction, to be able to progress through the training at the pace that makes sense for them.

So, as opposed to a one-size-fits-all training experience, you'd be able to offer something that's much more customized. That would just be one example. Certainly, as you're also getting vast amounts of consumer data, we get about 65 million people a day visiting our restaurants, We're collecting data on. Roughly a third of those people are volunteering. To be self-identified, you can then start to customize.

Imagine driving up through the drive-thru and imagine that maybe the drive-thru menu board changes. Because we know that when you typically come to McDonald's, these are the items that you like to buy. And so now you have a menu board that maybe is customized to you, as opposed to just being a menu board that everybody sees. So you can go on and on and on with all the different potential use cases. I think our challenge, like every company, is going to be prioritizing and deciding. Which ones do we want to be sort of on the leading edge, of which ones do we want to be a fast follower? And then where do we want to be insourcing some of those capabilities versus what we would typically do is where are we outsourcing those capabilities?

There's no doubt that in our industry, over the next, call it five years, you're going to see a pretty significant impact from AI. As I think probably is going to happen across industries around the world.

So whether it's delivery, whether it's drive-through, whether it's using digital and having someone out. People are looking to eat on the go. And this restaurant that we have in Texas without a dining room is meant to see how far we can push the envelope on providing that sort of experience. But I think I get asked all the time, Do I see a day where there aren't going to be any people working in our restaurant? And the answer to that is no. I don't see that certainly in my career horizon, being something that's going to happen at McDonald's.

We're always going to need people to provide that great service, that great hospitality. But I do think that there are important things that we can do. Where you have technology, where you have AI as a co-pilot to make the job easier to take stress out of the restaurant. I think that's going to be where you see it over the next few years.

And that's something that I would say is an ongoing struggle. But we are very mindful of it. And we spend a lot of time here at a company about prioritization, so that's one thing that we do. I think another thing that we try to focus on is discuss and not present, so we don't want to be a powerpoint heavy presentation organization.

We want it to be about discussion, we want it to be about debating ideas, and so that's another thing that we try to make sure the way we run ourselves, the way we conduct ourselves, is. It's a place where we encourage debate, where we allow for debate, but it's done in, I think, a very constructive manner.

And that goes to, I think. Another one is about inclusion for us, and if you think about the fact that we serve roughly 80 of the population. If you go into McDonald's, you see everybody, you see young, old, different ethnicities, different races, rich, poor, et cetera. We wouldn't be able to do a great job of serving all of those different customers if we didn't have within our own organization. Diversity as well. That reflected all those different experiences and different wants and needs. So the final thing that I'd say is defining about our culture is just a focus on inclusion that we've been on for 40, some odd years.

Frankly, we were on it way before the whole notion of DEI came about, because it's so core to what we do.

There's a bunch of ways that you bring that to life, but it starts with setting the right tone at the top in the company. I think the other thing is to be able to speak with clarity. The organization needs to understand the vision, they need to understand where we're going, they need to understand how they can contribute to that, what their role is going to be.

So you have to be a very good communicator and do it a number of different ways. But make sure that everybody understands the direction, why we're going that way and what the potential benefits of all this is. And then, ultimately, you have to be a great listener, because the nature and scope of these jobs. I touch one fraction of a fraction of a fraction of the things that happen in McDonald's every single day. Everybody in the company is more of an expert in their area than I am in mine. My job is to synthesize sort of all their thinking and ideas and be able to stitch it together in a way that makes sense. And so creating an environment where people are willing to tell you sometimes the uncomfortable truths, where they're willing to challenge your ideas. All of that goes to, ultimately, I think, creating a great organization and one that can be successful in the long term.

And vertical thinking is when people tend to look at their job, or they look at their project through the lens of either their function. So if I'm supply chain, I'm only thinking about it as a supply chain leader, or they're thinking about it through their geographic lens? So if I'm in Canada, running the Canadian business, I'm only thinking about it from a Canadian perspective. As opposed to thinking about things horizontally, where you're thinking about, how might what I'm doing here, how does that connect to other people in the organization, and how am I bringing them along? Because the reality is, there isn't a single project that happens at McDonald's that can happen with only one function.

Everything that we do inherently is multifunctional, just it's the nature of everything. And if you think about our business as well, there's so much commonality in our business, there's so much opportunity to learn that. If you're only thinking about your geography, and you're not opening up your horizon, your aperture to think about, what are other markets doing? What can I learn? Back to the cultural norms? Another one I talk about is steal shamelessly.

And so, before you embark on something, the first question you should be asking is Okay, who else has done this before? And what can I learn from them? Because 90 of the time, I guarantee you the issue that you're facing we have faced somewhere else in McDonald's already. And so start with a horizontal mindset before you drop into a vertical mindset. That's one thing that I've been preaching quite a bit over the last six months in our organization.

That's a standout from a talent development, succession planning standpoint. I've tried to bring those ideas, those processes, those tools and bring them to McDonald's. Because I do think back to this point of we're a people business. It means that we're going to be only as good as the pipeline of talent that we have two, three layers down in the organization. And that's been something that I have unapologetically stolen from other organizations that I've been a part of, and that we're getting embedded here at McDonald's.

So it starts with having clarity about the experiences that are needed to be successful in that role. That's part one. I think. The second thing is having a very realistic but also aligned point of view with the employee about their strengths and opportunities. What are they good at?

Where do they have their development opportunities? And then it's the marrying of the two, it's the marrying of. When an opportunity comes up. Of all the people that I've got to choose from, how might this fit with someone's development opportunity? Do they bring to it also the critical experiences that they need? And, ideally, you're doing it multi-years out.

So you're not doing it just when the job comes open. You're actually for every single job, especially at the more senior levels, every single job. You're building a slate that says, in the next one to three years, here's what this looks like in the next four to six years. Here are people that we might consider for this role. So that you've got sort of a longer-term view and a strategy that you're executing against versus what I see. Sometimes that happens. If you don't have that kind of robust process is it tends to be much more reactive, much more reflexive.

Hey, somebody quit, somebody moved to a different job, OK, who do we have? And it's not a strategic decision, it's an availability decision.

And when you're thinking about it that way, you're ultimately not going to be building the bench of your organization in the future.

But also there's a lot of talented people. One thing that you learn when you go to Harvard Business School is, no matter how good you think you are, you're not that good. Because you meet a lot of other people that are pretty.

It's a humbling experience, for sure.

I would say I'm not the smartest person in the world, I'm not the most charismatic person in the world. When you go to Harvard Business School. And when you work at the companies that I've worked at, I've seen plenty of people who are better on some of those dimensions than I am. I think for me, what I've been able to do, I think in my career, is I've got a good balance of skills.

So I've got a good ability to take kind of risks, but also think through things, I've got good communication skills. So I think a balance of those abilities paired with a willingness to do the hard work. Because to get to be a CEO of a company like McDonald's. It doesn't happen in your first five years at a business school, it doesn't happen in your first 15 years at a business school.

In my case, it's 25 years after business school that you get into that sort of role. And so along the way, there's got to be a lot of learning, there's got to be a lot of experiences and hard work. And ultimately, as you well know Nikolai, you develop a reputation in your industry, you become a brand unto yourself, where Chris is known for being this type of person.

And I think over my years sort of developed a brand. Someone who's strategic, but also who's a good listener and is able to do the hard work and do it in the right way.

I love sports, I love being outdoors, those are all great things for me. And I've got a great family that I just. I love being around, and I've got a great group of friends that also I enjoy being around.

And you find you need to get the balance from that. Because at the end of the day, there will be a day that I'm no longer CEO of McDonald's.

And with that go, all the sort of trappings of the role. And what you're back to is your friends, your family, the things that you care about. And so I always try to keep that in mind as well and make sure that I don't over-index. Because in the long run, I think I have a pretty good idea of what really matters.

So it starts with one, don't settle. I think the second thing is surround yourself, be around good people. So much of the opportunities that I've gotten, the coaching that I've gotten over the years has been because of the relationships and just the people that I've been around. And when you're around, good people, people that you like, people that you trust.

That's going to be helpful for you in your career. If you're working in a place and you don't love the people. That should be a red light for you, that that maybe this isn't the right place for you. So you got to make sure that you're around people that that you like. And then the last thing I would say is make sure you're constantly learning, especially these days where the world, I think, is changing so quickly. If you're not, if you don't have a learner's mindset, if you are not inherently curious every single day trying to learn about something new, I think you can find yourself becoming quickly outdated in certain areas.

And so having that learner's mindset, being relentlessly curious about stuff and being willing to take action on it. You know, when you find something that maybe you discover through your investigation, that seems really interesting, it's one thing to say, hey, that seems really interesting, it's another to say. And you know what I'm going to go do x, y, z about it? And that goes back to the don't settle.