In 2003 McDonald’s was a global corporation in decline.
A brand that had built it’s reputation on the simple slogan that it was a happy place to be; which had democratised eating out, had forgotten what it was about.
Its restaurants were scruffy and tired. Its staff poorly trained and demoralised, its food produced with an eye to economy, not quality. That food had become anachronistic at a time when consciousness about good diet and health were growing rapidly. What was worse, its senior management didn’t see a problem.
In a BusinessWeek article (1), Michael Quinlan, then chairman and CEO, said, “Do we have to change? No, we don’t have to change. We have the most successful brand in the world”.
As sales in each restaurant fell, McDonald’s responded not by improving those restaurants, and what it sold in them, but by opening more and more new ones.
When regular evaluations showed the brand experience was declining, McDonald’s dropped the evaluations.
Instead of making the brand better, it just made it bigger.
In March 2003, BusinessWeek wrote about these problems, under the headline ‘Hamburger Hell’. There were plenty more reports like it. As Larry Light, then McDonald's chief marketing officer, recalls in his book Six Rules for Brand Revitalisation (2): “Article after article described the unfortunate conditions of McDonald’s. Reporters, analysts, observers, activists, franchisees, employees, marketing consultants, everyone had something negative to say: McDonald’s was ‘out of date’; ‘too large to be turned around’; ‘its time is passed’.”
A year later everything had changed.
When Larry Light spoke at an Economist conference in 2004 he was able to quote headlines such as: “‘The Sizzle is Back’; ‘Eye Popping Performance’; and ‘McDonald’s Leaves Analysts Upbeat on Prospects’. And after another year, McDonald’s was being described as an incredible turnaround business case.”
What had happened in the meantime?
Light had initiated a transformation of the company. Just about everything had changed – from staff training to restaurant refurbishment; the food that was sold and the way McDonald’s was advertised and marketed. That marketing now followed what Light said was something very new: a brand journalism approach.