There’s a brand risk for McDonald’s in firing its CEO
Steve Easterbrook was in the middle of a brand turnaround when he was fired on Sunday for a “consensual relationship” with an employee.
The news that McDonald’s had shockingly fired its celebrated CEO Steve Easterbrook sent shockwaves around the business world when it broke late on Sunday night.
Even more surprising to some was the reason for his sacking. His crime? Having a “consensual relationship” with a colleague.
In its explanation for the decision, the company’s board said Easterbrook had “demonstrated poor judgement” and violated the brand’s rules on relationships between and indirect or direct manager and employee. Easterbrook also wrote an email to employees acknowledging “this was a mistake.”
Navigating the nuanced world of work relationships is best left to HR departments and there should certainly be policies in places to workers from people who might abuse their power. However, it is worth noting that work is the second most common place to meet a partner, after meeting through friends.
And while it isn’t uncommon for US companies in particular to have rules around work relationships, sacking someone that has doubled a company’s share price and is successfully turning around its business for a consensual relationship seems at best harsh and at worst out-of-touch and preachy.
Comments on the Marketing Week article alone suggest people aren’t really taking his sacking seriously, with people questioning if McDonald’s should be the gatekeeper of love and suggesting he had “got his Happy Meal”.
But is there a greater risk for the brand both to its employer branding and its global strategy. Or does it position McDonald’s as a modern business for the post #MeToo world?
On strategy, no one person should be bigger than a company and the iconic fast-food chain is certainly more than one guy who has headed it up for four years. But that being said, Easterbrook was heralded for his tenure and turning the company’s results around.
The UK-born Easterbrook has worked at McDonald’s since 1993, leaving only for a short stint as boss of Pizza Express and Wagamama between 2011 and 2013. He took on the McDonald’s CEO role in March 2015 after a drastically poor set of results that saw a 15% fall in profits prompt a change of leadership.
Within his first nine months he made an impact, with the company’s profit margin growing by more than 12%. During his tenure, the company’s share price has doubled.
McDonald’s is also in the midst of Easterbrook’s brand-rejuvenating strategy – The Velocity Growth Plan – which sets out how the company will invest in tech and marketing to drive relevancy and take on mounting competition.
The strategy is a sound one and looks unlikely to change. Easterbrook is being replaced by Chris Kempczinski, most recently president of McDonald’s USA, who says he is not planning to rock the boat. Not only was he brought in by Easterbrook, working closely with the former CEO on the strategy, he has confirmed he won’t be ushering in a new era.
Speaking to the Wall Street Journal, Kempczinski said: “There isn’t going to be some radical, strategic shift. The plan is working.”
However, some analysts have noted that changes of this kind can be disruptive. Given how closely Easterbrook is aligned with the plan, it’s unsurprising that when news of his departure broke it wiped £3.4bn off its market value.
Easterbrook’s departure is unlikely to stop ambitious marketers, or people in other central departments, from working for the fast-food chain. But his firing looks like a heavy-handed approach, particularly when there are much bigger staff issues McDonald’s should be worrying about.
There have been multiple accusations of workplace sexual harassment, particularly in the US. So much so that, in August, McDonald’s began offering online and in-person training programmes to employees in the US after multiple accusations of workplace sexual harassment.
In the UK, there are allegations from at least 1,000 women claiming managers were repeatedly inappropriately touching and messaging them.
Perhaps McDonald’s wanted to set an example by firing Easterbrook, showing that anyone who violates its rules will face the consequences. But conflating sexual harassment and consensual relationships is wrong.
Ultimately, we can’t and shouldn’t know the details behind Easterbrook’s firing. It may well have been entirely justified. But it raises questions about the corporate image McDonald’s wants to portray, as well as a risk to the continuity of its strategy.
