Industry News | May 19, 2008

From the Floor: Jim Skinner Calls for Industry Collaboration

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Recalling the homey wisdom of McDonald’s Corp. founder Ray Kroc, the chief executive of the world’s largest restaurant chain on Saturday called for members of the restaurant industry large and small to unite in the face of global challenges like employee retention and food safety.

Jim Skinner “Ray used to say, if you never figure out anything else, know this one thing because it will set you down the right path every time. None of us is as good as all of us,” said the CEO, Jim Skinner.

“We see the value of coming together to work for common goals and speaking with a unified voice,” said Skinner, delivering the keynote address at the NRA Show in Chicago. “We’re all just restaurants, whether we feed the neighborhood or every neighborhood around the world.”

Skinner identified a host of headwinds working against the U.S. restaurant industry: difficulties attracting and retaining qualified workers in a tight labor pool, worries about the global food supply, food safety, and sustainability, among others.

“In many ways it’s a perfect storm that’s gathering,” he said.

Pointing to McDonald’s own transformation in recent years, he illustrated how collaboration could lead to beneficial change. McDonald’s, he said, is marking its fifth year of consecutive sales growth, due largely to increased communication among its employees, suppliers, and franchisees.

The No. 1 quick-serve in the world has become more focused on consumer needs and it has pushed to deliver healthier and more sophisticated menu choices to meet changing consumer demand. In addition to staples such as Big Macs and fries, the company now offers salads with ingredients like soybeans, mandarin orange slices, and snow peas; premium sandwiches on whole-wheat rolls; and fresh fruit.

“Who would have thought just a few years ago that McDonald’s would sell millions of salads a day or we’d be the nation’s largest seller of apples,” he said.

Changes are also taking place in the way McDonald’s treats employees at the store level, said Skinner, noting that the recent addition of the derogatory term “McJob” to the Oxford English Dictionary underscored that need for the company to be more proactive about how it attracts, develops, and retains its workers.

“Few companies have had a tougher time than us when it comes to employment image,” he said.

McDonald’s is now investing more than it ever has in employee training and retention, he said. In addition, it is now offering a 401K retirement plan and health insurance to many of its U.S. workers.

“Some of our problems are our own doing and we know that,” he said, adding that in the '80s and '90s the company “paid lip service to the notion of hiring, training, and retaining the best people.”

With respect to the worker pool on a broader level, Skinner stressed the need for national immigration reform.

“Immigration reform is sorely needed at the federal level,” he said, adding that “different employee-related mandates from state to state are making it difficult to do business on a national level.”

At the same time, he also derided the growing list of state-level initiatives calling for nutrition labeling mandates, calling them “redundant and flawed.”

Food safety and sustainability are additional challenges bringing the restaurant community together, Skinner said. He applauded the National Restaurant Association for its recent partnership with the Global Food Safety Initiative.

“We need safety standards that are in harmony with each other, from Bolivia to Beijing to Boise,” he said. “A safe and quality food supply is paramount in our industry. It’s another example of how leveraging our collective might will help us get the very best systems in place.”

By Deborah L. Cohen

Deborah Cohen is QSR's monthly Finance columnist and is reporting straight from the floor of this year's NRA Show in Chicago.