July 25th, 2012
McDonalds declared its first profit lost in the history of its outstanding performance in the fourth quarter of 2002. This led the company to investigate the key components which caused this to happen. Upon review the company realized there was a need to improve its Talent Management to align with the company’s business goals and strategies. This process was needed to achieve long term growth and success for the company. This case study gives an overview of the initiatives that McDonalds implemented to strengthen the company. It discusses how and why the changes were made; how they were implemented; and the impact it had on the business future success.
Outline the Talent Management program that led to success for the company. McDonald’s first step to achieve success was to redesign their performance development system for all their positions within the company. The current system based performance against annual objectives without evaluating how these results were achieved. This caused a fallacious measure of the employees success all having excellent or above average reviews while the company was becoming insolvent. Performance drivers were introduced to determine how their accomplishments were achieved and to also change the culture of “entitlement” that McDonald’s organization was facing. It introduced the four point rating and a new compensation incentive. A revised assessment of the candidates’ potential was also introduced that were based on specific abilities which then allowed no more than 25% of their managers in a year to be eligible to be “ready now” or “ready for the future.” This new design was introduced into all the countries allowing each country to make changes to fit their market as long as these changes stayed within the “plan to win” framework (Carter, 2010).
McDonalds then introduced a stringent and transparent Talent Review Process for all officer level positions. This developed their leadership talents to align with new global business challenges. Presidents from each division around the world met to discuss their leadership capabilities, diversity in their divisions, and the extent of their talents. A template of questions was created based on their answers and then compiled into a review. The purpose of these reviews was to make sure the executives execute their organizational strategies over the next three years and how they were accomplished. A development system was to be put in place in their organizations to promote advancement of executive talent and create development for new employees emphasizing on diversity and talent (Intagliata, 2001).
McDonald designed The Leadership at McDonalds Program to create new and innovative ideas changing the participants’ thought process to incorporate a global approach and to become more effective at retaining top talent. The program focused on developing high potential talent to become future leaders and with their progression improve performance to acquire an accelerated business result. Group and individual sessions were held which focused on their assessments and driving results as individuals and leaders. Lamp online was introduced as a support tool to track their accomplishments towards the business goals. Due to such success McDonald’s created “Americas Lamp” which included their other global regions (Intagliata, 2001).
The McDonalds’ Leadership Institute was created in 2006 is an online resource center that focused on Director level employees, which provided special development support, learning seminars and training for their development. Developmental programs for non-high potential leaders such as executive coaching, leadership curriculum were also created and held in this resource center (Carter, 2010).
Lastly, the Global Leadership Development Program was also created in 2006 to focus on the company’s...