Alistair Macrow | The Future of McDonald's UK & Ireland

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0:45Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required, compatibility and availability varies 18+. Hello and welcome back to Jimmy's Jobs of the Future. A few weeks ago, I was lucky enough to spend the day at a McDonald's, going behind the scenes to see how it all operates and trying out lots of the different jobs. McDonald's has been in the UK for 50 years now, and by my calculations has employed more than a million Brits in that time, including some quite big political names, Health Secretary Wes Streeting and Tory leader Kemi Badenok.

1:23And 40 % of their workforce is made up of teenagers. when we spoke to Dan Priestley earlier this year I asked him what working at McDonald's had taught him his response really stuck with me he said it taught me 15 year olds that cannot keep their room clean can run multi-million pound businesses this is just the interview with Alistair McRow the CEO of McDonald's UK and Ireland who previously had been head of marketing and prior to that had worked at Blockbuster. In this special excerpt from our full video episode, I sit down with him to talk about the future of leadership, innovation and what the future of food looks like.

2:04This episode was made in partnership with McDonald's UK and Ireland and if you want to see me in my Mackie's apron and hat and watch my hilarious attempt to make a big arch, head over to our YouTube and social channels to see it. needless to say it is unlikely that i'll be leaving the podcast scene anytime soon

2:26well alistair welcome to jimmy's jobs the future but i feel you should be welcoming me really as we're sat in one of your restaurants yeah well it's lovely to host you here actually tell me what what is the job of chief exec of mcdonald's ultimately i think of as being about helping people reach their potential. We employ nearly 160 ,000 people under the McDonald's brand in this country. And if every one of those feels able to reach their potential and maybe stretch it a little bit, everything else will fall into place. We will offer our customers the best service. We'll be able to deliver the food that they want, the great taste that they crave in a better way than anybody else.

3:07We'll be able to serve them quickly as they want. we will have the confidence to innovate and continue to be ahead of the competition but it all starts with leading people our business is first and foremost a people business what surprised you about being chief executive because you've had quite an unusual route like normally it's the cfo that becomes ceo whereas you've got a marketing background so what what's taken you by surprise of being ceo well i have to say probably the thing that surprised me shouldn't surprise me most because it's always been the same way but i've always imagined the next job that next senior job is going to be the one where it gets easier to manage my time and have more control over it.

3:41And, of course, what you learn is actually it becomes more difficult but even more important with each step you take along the way. And what takes up your time that you hadn't been anticipating? I think it's less about what takes up the time that I hadn't been anticipating. It's more about understanding that you need to be continually flexible, that the business is so large and so multifaceted that there's always going to be something else that requires attention. And trying to spread it between the proactive thinking and reacting to what's happening is always a challenge. Undoubtedly, the biggest thing is people, one way or another, whether it's how are we going to motivate, train and develop the people who are leading our business, whether it's reacting to issues that might occur in a restaurant.

4:31but it's also understanding that it's not just ourselves that control our time it could be pandemic clearly coming from nowhere that suddenly dictates you doing business differently it could be the media driving a particular agenda at any point in time it could be a trend it could be a fashion it could be competitor activity but always being able to understand what's important and the best way to invest that critical resource of time is the most important set of decisions you make now i imagine that one of the things that's taken a huge amount of time that you hadn't been expected is the sort of various allegations that have taken place over the last few years right um what steps have you put in place to alter that and to stop that from happening that's right the there's essentially there's nothing more important to me than the well-being of our people and that led to putting in place an immediate and extensive program of change and big change project that for me leads the way in industry.

5:32Really there's five big areas to it that we drove through. First and foremost, making sure that we improve our hiring and initial training program for everybody when they come into the business. Then it was about upskilling all of our managers. Then it was about introducing the biggest AI-enhanced speak-up channel that exists in this country to ensure that everyone's able to speak up in the way they want to, when they want to, in the way that suits them. Backed up by enhanced investigation process to make sure that's as strong as it can be, and then critically ensuring that we're able to swiftly take the right action whenever it's required, if any allegations are upheld.

6:10That gives us what I believe is industry leading in terms of the way we look after our people. It leads us with a culture that I think we can be incredibly proud of. But critically for me, it's not a one-off thing. It's a forever focus now to ensure that our people are able to enjoy the environment they should. And how does somebody blow the whistle now? How does somebody have that sort of process? What have you put in place? Because ultimately, you're never going to be able to stop all bad behaviour, right? So there's five different ways that they can speak up in our business, from texting to email to phone calls.

6:41But the new channel we've launched, we call Red Flags, and Red Flag becomes the promotional aspect as well, so everyone knows what they're talking about. It becomes a language that people can use to say, I want to raise a red flag. But the Speak Up channel is enhanced by AI, so it means that as soon as somebody speaks up, they're very quickly able to understand what type of issue it is, make sure that it's directed in the right way, make sure that person gets the support they need really, really quickly and we're able to react quicker than we would have done historically. So that now sort of almost skips out all the middle management.

7:11So somebody can kind of report something in and it goes straight to the kind of central HRC. Yeah, we have what we call an investigation handling unit. And we have a people services help desk. Those people are able to collect any of those sort of concerns that people have. Of course, we always like people to be able to speak directly to a manager or somebody in the restaurant and get an immediate response. But also realistic, not everyone's comfortable doing that. So this gives them a route to be able to escalate it very quickly and that's to ensure that every single contact is dealt with in the way that we would hope they would be.

7:44How much has that system been used so far? It's used every day to some extent. From everything from I haven't got the shifts I want to have to people being concerned about a manager's behaviour or something. People use it widely and that's a good healthy thing. It gives me confidence that people know that when they've got an issue, they're able to speak up about it. OK, all right. And you have kids around the age that might be working at McDonald's. You know, 40 percent of your workforce is teenagers. Would you be happy for them to work here? I'm more than happy. They wouldn't ever work in a place run by dad because it wouldn't be a normal experience.

8:24But I absolutely would. And certainly a number of my close friends, their teenagers have and do work in our restaurants. and I fully encourage that. The experience that young people get is really good. It's my ambition that we become known as the best employer of young people in the country. Of course, there's one element in that, which is just about being the best first job because we're giving all sorts of people the opportunity to learn what it's like to be at work, to interact with other people, to have to be part of a team, to have to work with the commitments there are of being in work at a certain time and doing that however many days you're committed to doing.

8:59but it's also developing lots of soft skills in people the way that they're able to handle customers all the demands that's coming so that's a great first first job but it's a lot more than just a first job yeah I've got two of my current board started out restaurant started out their careers in restaurants and today leading the UK and Ireland business and I've just heard that we've now had over 500 applications for our school leaver degree program so that allows people to finish their A levels and then come to McDonald's and do their degree as they work through the management training so by the age of 23 or 24 we're seeing people running their own restaurant as a business manager now that might be a five or six million pound business yeah leading 120 plus people earning a good salary of maybe 40 ,000 pound with a degree and no debt because they've not had to go through that.

9:52I think that's a really powerful model of education for the future. And of course, not only are those people now at the same age as other people's degree, they've got a degree and five years of leadership experience that you just cannot replace. Who's got the best job at McDonald's? What's the best title out there? I'd have to say the chief marketing officer title is the best title. It's the route you came from. It's the route I came from, so I can talk with general knowledge. But at the end of the day, there are very, very few brands more famous than McDonald's in the world. The resources we have are superb.

10:26And we're an organization that believes in the power of marketing. We know that we're only as good as our knowledge and our service of our customers. And if you have a truly customer-centric business, then it makes the role of a marketeer really exciting and really free. Because you know that what you want to do is always going to be right for the business. So I think that's the single best job, but mine's not far behind, I have to say. And how do you keep up with those kind of cultural trends, right? Because I'm fascinated how McDonald's has managed to, over the 50 years it's been in Britain, stay kind of at the cutting edge when so much change has happened to the high street, but culturally as well, and a lot more competition, right?

11:06Like, you know, you forget now that there are, you know, when the drive-thru was first introduced 30 years ago, it was the only place you could do it. But now you've got lots more competitors. So how do you stay culturally relevant? Listening, listening, and then really listening is what I would say. We spend a lot of time with our customers. We, of course, carry out lots of research. But we can learn even more by spending time in our restaurants, watching our customers, talking to our crew. One of the advantages of having 40 % of crew in the teenage years is we get to understand the new generations before other businesses do.

11:43It's no good saying, well, that generation doesn't behave like my generation and they just need to learn. That generation behaves in that way. That's what the future looks like. What does it mean for us? How do we become the right employer? How do we become the right brand for those people? What's going to make a difference to them? So that continued listening, thinking about what that means for our strategy and putting it at the heart of what we do is absolutely critical. It's allowed us to continue to evolve over the years. When I joined the business, there was only two ways of transaction with McDonald's.

12:12you could go through the drive-thru or you could go to the front counter and queue up with other people and if you're on the high street you could only go to the front counter today we've got 12 different ways of ordering paying and getting your food from mcdonald's that's hugely increased the complexity of our business but it means that we're where people want us to be when they want us to be in the way they want them to that's always going to be a really compelling proposition and what how are the young generation different like what do you think stands gen z out a little bit i mean i think about this in terms of like every generation is different from the last because they come in and reject previously what the the last people put on the status pedestal so yeah how do you think gen z as the biggest employer of them in the country are different i think you start at the right place i think it's very easy to put labels on and go oh they're different and actually forget that everybody's they grow up go through to go through different stages so i think that's a really important context to have to start with and understand that there's also where people are at that point in their life.

13:08But there are some certain things I think stand out in Generations Z in particular. The flexibility they expect. The fact that they're more demanding. They expect more from their employer. They expect their jobs to be on their terms to a large extent. They expect you to stand for something. They want to know. It's not good enough just to tell somebody what you want them to do. They need to know why. And they need to know your motivations are good motivations for them to buy into what you do. both at a total level of the company and actually each individual task you're asking for them to do in time but beyond that um they're a very ambitious generation um and yeah that's something that we can we can really work with and help fuel but generally speaking i think it's just listening adapting a little bit for them and actually helping ourselves to become a better better business of the future because the demands that they have will only make us stronger and talk to us a little bit about the big arts right because that's part of your new innovation and so on and i read so many articles about how this is kind of a move towards the premium end there are lots of different interpretations about why it had been done and i just wanted to hear it from the from the from the cow's mouth as it were about why it came about yeah look we're always looking at our menu and understanding where does it serve our customers really well and where are the opportunities and one of the things we learned through all of our research is there's an opportunity for a bigger mcdonald's burger that um there are times when you're really hungry and And we didn't always have the burger that was perfect for that occasion.

14:38Other people who had a really large burger didn't have the unique McDonald's taste. So there was an opportunity to bring together something which was uniquely McDonald's and larger in size, something that's particularly good for dinner time when perhaps people want to eat a bigger meal. So that was what led us to develop the Big Arch Burger. And, yeah, it's proved incredibly popular for the first few weeks. Incredibly popular. Has it surpassed your expectations? It has. particularly for something positioned in that part of the menu. The volumes have been incredible. And we had launched in a couple of other countries first and people in the UK and Ireland seem to like it even more.

15:16People here are really warm to it. Brits are on. And your previous job, as you mentioned, was Chief Marketing Officer at McDonald's. And what were the... I'll start again. Previously, Chief Marketing Officer. and with that role you were kind of overseeing more countries like what are those kind of like country comparisons like where does britain compare on these different scales to other countries that's it's a good it's a good question um it's it's really interesting to take on a global role like that because the first thing you know is that every country thinks they're unique yeah and they are all unique but but uh they start off assuming that they're defined by being so different in reality what we find is our mcdonald's business is largely the same all around the world, but it is the nuances that allow you to go from being good to being great in each territory.

16:05So I think there's some fundamental differences about the way the business works. So in this particular market, we're one of the highest volume markets. We sell more customers per restaurant than any other McDonald's market, and our restaurants happen to be 25 % smaller. So there's just less land in the UK. So that drives a whole load of challenges around how do you make sure we're offering the service we want and the range we want with less space and more people. Somewhere like France, they serve less than half as many people as we do, but they sell much bigger, much bigger orders. It's a really big family occasion.

16:40It's still culturally a much bigger moment based around mealtimes, whereas we will be busy all day long. That particular market has to be absolutely ready for two hours at lunchtime and two hours at dinner because that's when that nation will eat. It's also, again, a nation where they embrace gastronomy so much more than we do. So that would be the first place that may offer a burger with foie gras on, for instance. But those type of moves, certainly we were selling a goat's cheeseburger there very successfully a few years ago. You can't quite imagine the UK being ready for that just yet. Yeah, yeah.

17:16You certainly see those sort of nuances as you go around the world. And customers love them. So if we launch a New York stack here, people will want to come and try it. Our Philly cheese stack, people are like, I've heard of that. That sounds really properly American. I want to come and try that burger. In India, we offer the Makarajamak. That sounds good. These things, they capture a hint of the local culture and bring it together with McDonald's and create something special. And previously, you were, I mean, I know this is a long time ago, knocking on for 20 years now, but you were the lead marketing for Blockbuster.

17:54That's right. How do you sort of like, obviously kind of very kind of like famous business collapse. Like how does that sort of impact the way that you think about things now? It taught me an awful lot, actually. The biggest thing it taught me actually was understanding the totality of your business. You know, I think the easy to write narrative would be Blockbuster wasn't successful because it was too slow to innovate and get into streaming. Now, the reality was Blockbuster was streaming movies when I joined them in 2002, when Netflix wasn't barely dreamed of. They were already streaming them to Hull.

18:29The issue was how do you scale that and how do you get the whole business supported? In that particular business, the film studios and suppliers are critically important, and they need to be as interested in what you want to do for the future. It certainly taught me that if you want to be really successful, it's not enough just to think about what you want to do. you need to think how is your model going to work for your suppliers, how is your model going to work for your customers, and ensure you bring that together in a way that is really successful. It's kind of what McDonald's is based on.

18:58We talk about the three-legged stool, the three legs of our stool being our suppliers, our company people and our franchisees. And when it works for all three legs of those stools, we're unstoppable. It's in everybody's interest for the business to grow, and our customers are the benefactors of that. It's a really important model, and certainly what I learned from my time at Blockbuster has really helped fuel my belief in why this model we operate here is exactly the right one. What's a British change that we could see to the menu? What's one thing that you would like to change? Ultimately, as long as I don't mess around with the Big Mac and some of our core items, we can change whatever we like and we do like to rotate in some promotional products to help us with that.

19:42There is a space for Britishness. previously we've run a burger more dedicated to Britain so with real mature cheddar cheese on of course on the usual 100 % British and Irish patty made entirely with British ingredients that is always incredibly well received people like that touch of local to it so I wouldn't rule out doing something like that again in the future Stilton cheese maybe seeing as I'm from Derbyshire I feel I've got to ask I would be with you enjoying I think at the minute it's probably a little too polarising to work for quite as many people as we might like it to. I'm with you.

20:20It makes a great burger. And what do you think you would be doing now if you were at the start of your career? Because you've always been very business-focused. You've worked for some really big brands, Marks & Spencer, Blockbuster, McDonald's. What advice would you have for a young 20-something Alistair now making their way in the world? So I think there's a few things I think are really important. First of all, be really clear about who you are, what's important to you and what you enjoy doing. That should orientate where you're going. I come across an awful lot of people whose biggest focus is in what's the next job.

20:53I want to be an assistant manager. I want to take on this role. But when you ask them why, it's just because, well, I want to be promoted. The most important thing, I think, is to understand what are the things that motivate you, where can you make most difference, and then based on that, understand what the right steps are for you. It means keeping a really open mind. You've got many, many years of career ahead of you. And quite often, it will be the moves that you weren't expecting that develop you most and take you somewhere different. I feel there's a personal thing about it. No, there is.

21:26I mean, in reality, I've probably only predicted my next role once or twice. It's not been what I expected it to be. And certainly there's been interventions when I wasn't expecting to do. This is a particular job I did hope to do for quite a long while. I think probably 2014, 2015, I thought, personally, I really want to put my hand up for that and tell people what I'd like to do. And I thought I would carry on doing the chief marketing officer role, maybe keep extending my portfolio, and eventually I'd be able to take it on. And then I had a phone call the week before Christmas saying, actually, you've got your next role for you.

21:55We want you to take on chief marketing officer of our developing markets, completely outside of what I expect to do. I didn't really understand how that was going to help prepare me for chief executive. Surely what I need to do is to spend more time with the chief finance officer and learn a bit more about real estate from our chief development officer. And I was wrong. That experience of working in markets like China and Korea, some of our faster growing markets in Europe, that helped me see the world through a different lens. Probably the first thing it helped me understand was there's more than one way of doing things.

22:31We were a very successful market. We've always been very successful here. and I was like, why don't everyone just do it the way we do it? And of course, then you start having your eyes opened up. There's many ways of tackling this and actually some are better than what we were doing. There's different contexts and there's a requirement to be able to have the right solution for the right context. And of course, then you start to appreciate the different cultures that are operating in our business and how much more can be achieved if you can understand how to tap into what's right for different cultures, help people to be the best version of themselves.

23:01And you can bring all of that back into a role like this and lead in a very different way. I don't need to be the finance expert. I have a chief finance officer for that. But what I do need to be able to do is understand how to motivate the most diverse workforce in the UK, how to serve 4 million customers a day that come from all walks of life. Those are actually the skills that help you be a really good leader in a business like ours. And what do you admire about Greg's? Because Greg's have had a phenomenal story over the last sort of 15 years or so. like you know and probably become quite a big competitor now like what do you look at and admire about their brands and their products i was i try not to spend too much time thinking about any one competitor i prefer to think about our business particularly about our customers but what i do like to do is to understand where competitors are being successful and look at what it is they're doing for customers and why to see what i can learn from that uh an example you talk about you know their um focus on affordable food um that's available quickly is impressive and is allowing them to connect with a certain customer really well.

24:03So it's really important to me that no matter what pressures we might find ourselves in from food inflation and things like that, that we never lose our own focus on value for money and how we have to be able to package our products in a way that makes them accessible for everybody. It's why our£5 meal deal gives people an opportunity to eat a decent amount of food for a very attractive price point. It was really, really important. It tapped into a need that people had. So those are the sort of things I try and learn from looking at our competitors. But ultimately, I have to remember that we have a scale that nobody else has.

24:36And so getting obsessed by one competitor doesn't work. In the last five years, our growth alone in this market is bigger than our biggest competitors total business today. And so it's really important that the focus is the customer rather than the competitor. See what I can learn from a competitor and how they appeal to customers, but ultimately make sure we're shaping our business to be right for customers at McDonald's. I, um, it made me smile about a meal deal because I had exactly that last week and it was, came up on the, on the screen and I just thought, oh yeah, I like a meal deal. And then it was like pretty, I was like, but McDonald's is always kind of like a meal deal.

25:11In fact, you're probably the pioneers of the meal deal, but just calling it a meal deal had this weird kind of branding effect on me where I was like, yes, I'd like to try that please. but um and yeah and what do you think um yeah what would you like to do with the rest of your career you've worked for some fascinating companies and brands what would you be interested in doing next yeah i as i was saying really the first thing i wouldn't ever do and do is predict what my next role will be because i'd get it wrong i always have done so far but no like i'm at the stage of my career where the most important thing to me is to be clear about what are the things i enjoy doing what are the things i think i'm good at and where do i think i can add most value so I know that I will be able to offer most of the business and most if I continue to be close to our customers um continue to be working with a big team of people and be able to focus on helping people be the best version of themselves that they can be those are those are the things I really enjoy those are things I think I've got a strong track record of and they open up lots of opportunities for me and if I structure a role around those then then I kind of know that there's always going to be opportunities for me.

26:13At the same time, I'm very commercial. I enjoy the number side of our business. So being able to be close to the sharp edge of what our business is and does will always be important to me. Franchisees, been fascinating spending the day here and seeing how it all works. What do you think, how is the future going to look for franchisees? Because you're planning a bit of an expansion of that over the next few years. We are. I talked about the three legs of our stool. The franchisees is, yeah. critical leg of the store. It's what makes us as strong as we are. 90 % of our restaurants today are franchised.