Men. If you are paid multiple millions of dollars a year, you should be able to control your dick. Period. This blog is not a morality tale, at least with regards to personal sexual or marital morality. Instead, it is a tale about a CEO who was indifferent to the potential risks that his sexual and emotional behavior posed to others. I am writing to express anger at leaders who think they are above the law, be it the real law or a workplace code-of-conduct. Former McDonald’s CEO Stephen Easterbrook left his role after the company’s Board of Directors learned of Easterbrook’s consensual relationship with a staff member. In exchange for leaving, he is getting six months of severance and favorable treatment on options. Easterbrook is divorced. We do not know the marital status or reporting relationship of the staff member. Those facts…
Retaining brand relevancy through business model evolution
McDonald’s new CEO, Steve Easterbrook, accepted a huge problem as his to solve. The former darling of the fast food industry is losing customers. First quarter revenues fell 11 percent. And unlike IBM, which uses share buybacks to maintain earnings per share (EPS) growth in the face of declining revenue, McDonald’s EPS plunged over 25%. Meanwhile, McDonald’s ingredient costs, wages, and healthcare expenses are rising, thus making a quick turn-around challenging. As worrisome, franchise owners are rightfully upset. So what happened? McDonald’s failed to stay relevant to consumers, forcing the behemoth into catch-up mode. But being late to the party extracts a price. Former customers who had ruled the chain out as it fell behind might consider McDonald’s as a meal option again. But winning new customers’ will require more than closing gaps. McDonald’s is curbing antibiotic use in chickens, for example. It’s…
The role of Value Propositions in Business Model Strategy
A prospect recently asked, “What is the difference between strategy and value proposition work?” Since “strategy” is used to describe everything from how to stop a 2-year old’s tantrum to how to grow a Fortune 500 business, the question is best posed differently: “What is the role of the value proposition in a company’s strategy work?” A value proposition articulates: a promise of value being delivered to a defined target market, where value is the tangible and intangible benefits less the price the target pays to receive them; why this promise is to be believed; and, the offering that gives rise to the benefits. A value proposition should be defined and regularly reviewed at every level where you also develop a strategy. Remembering to do so will make you a better strategist. At the customer level, great sales reps know how to pitch…
More is less in McDonalds’ business model innovation
Burger King has struggled for years to capture market share from McDonalds. Let me propose a winning new business model for Burger King. While driving to Door County, Wisconsin for a short holiday, Nick and I stopped at a McDonalds to quench our thirst. I love McDonalds iced tea as the chain provides real lemons and the drink is always cold. Or so it used to be. Unfortunately, McDonalds replaced my usual 12-ounce plastic cup with a behemoth disposable cup containing more iced tea than I can drink in a day. The first sip confirmed my worst fears – there was so much iced tea in the container that I tasted no lemon, and the drink was on the warm side. In this case, more product provided less consumer value. Far more important, the “32-ounce drinks for $1” promotion also reduces societal value,…