Food for Thought

By Huw Thomas, Editor

Dead end job or career opportunity? With its Hamburger University, McDonald’s aims to make it the latter. HRM’s Huw Thomas gets schooled.

“Before you can run a restaurant, whether you're an owner or you're a restaurant manager, you have to have come through HU”
-Diana Thomas, McDonald's USA

Being a globally recognized brand like McDonald’s does occasionally have its downsides. The Oxford English Dictionary defines a McJob as “an unstimulating, low-paid job with few prospects.” The term was coined by the novelist Douglas Coupland in his book Generation X and over the years has become shorthand for any kind of employment that requires little training and that is usually carried out by unskilled and largely temporary workers. It might then come as a surprise to learn that since 1961 (coincidentally the year of Coupland’s birth) the fast food giant has been actively involved with the training and development of its people, largely through its Hamburger University program.

Starting out in the basement of a McDonald’s restaurant in Elk Grove Village, IL, Hamburger U has since grown to a 130,000 square foot facility at McDonald’s HQ in Oak Brook, IL that welcomes an intake of over 5000 students a year. It is the central hub of a network of 139 training centers ranged around the world. For Diana Thomas, Vice President of Training, Learning and Development for McDonald’s USA, the image of the company as provider of dead-end jobs is both inaccurate and outdated. “It goes back to our early history with Ray Kroc our founder,” she tells us when we catch up with her in early 2009. “His philosophy was, ‘I'm going to put money in talent.’ Our competitors can replicate products or processes, but they can't replicate our people. This was understood as early as 1961 when he created the first HU in the basement of a restaurant. It's something that we do continually at every level, whether it's a new crew person starting that's learning the register, the training that they go through to feel comfortable, interact with the customers or to run a shift in the restaurant, to run a restaurant, to be a business consultant and to work with our franchisees or at any level in the company. Training and talent management is one of our CEO Jim Skinner's top three priorities. So from the top down, it's a priority that everybody dedicates a minimum of 40 hours to improve themselves on a yearly basis.”

This sentiment is echoed by Rich Floersch, McDonald’s EVP of Human Resources when we sit down with him a few weeks later. “If you think about some of the aspects of what makes McDonald's successful, it really does start with having people ready to take on new assignments,” he says. “We have to provide the kind of environment where people can feel like they can continue to aspire to great things within the organization.” Floersch highlights the company’s preference for promoting from within as one of the cornerstones of McDonald’s focus on training and development. In addition to Hamburger U, the McDonald’s Leadership Institute, a global community that helps drive McDonald's business by guiding leaders to reach their potential, offers a variety of accelerated development programs for promising middle management and officers. “We've got almost 300 people now who have gone through these programs,” he says. “Our promotion rate since we put the program in place is somewhere around 40 to 50 percent, and the great thing about it also is that it's enabled us to retain the talent. Our retention rate in that community is 98 percent.”

It’s hardly surprising that Floersch and Thomas are keen to talk up the potential for development in a career at McDonald’s, and it would be easy to be cynical were there not so much real world evidence for it. On this front, Thomas is a particularly good example, having risen through the ranks of the restaurant chain from lowly beginnings. “I was a crew person many years ago,” she tells us. “I started off in high school, went to college. My dad was adamant about it, ‘You need to get a good education. I don't want you to just stay with McDonald’s.’ But I was able to go get a four-year degree, and then I went back and got a masters and an MBA that McDonald’s helped pay for.” According to Thomas, even the very early stages of her career were preparing her to take on more and more responsibility. “I think about starting as a shy 16 year-old, and I didn't want to be up front,” she continues. “I wanted to be on fries or do something where I didn't interact, but the manager told me from the start that they were going to work with me. I think about how what I do today was impacted early on by McDonalds giving me the training and the confidence to interact with customers and then to continue to grow throughout the system by always training and teaching me new things.” Thomas is far from being an aberration. Some forty percent of the company’s top 50 worldwide leaders came up through the crew ranks.

The benefits that students of Hamburger U can reap aren’t restricted to life within McDonald’s. The company is the only restaurant organization to be accredited by the American Council on Education. What this means in practice is that Hamburger U training can count to up to 46 credits towards a two to four year degree course. “I think it validates the quality of the training that we offer,” says Thomas. “We're teaching the same kind of things and putting in that experiential level of learning that maybe even some colleges aren't able to do, because we show and teach, and then they role play. We actually have a working restaurant, McDonald’s restaurant that's set up in this building so they can go down in the restaurant and actually apply what they're learning.”

Hamburger U’s growth has mirrored that of its parent company and is a vital contributor in preserving and promoting a culture that extends across the globe. “As we've grown the number of restaurants, our attendance has gone up,” Thomas confirms. “Before you can run a restaurant, whether you're an owner or you're a restaurant manager, you have to have come through HU. According to Thomas, this has the effect of enshrining the idea that ongoing development is an essential component of working life. “I think that creates the standard that training is important, and that the consistency of the training is critical to ensure that the customers get the consistency at the restaurant level,” she continues. “We have people that come back to classes because they want to recycle and learn about things that have changed or just take a week for themselves to get even more reinvigorated about what's happening and to learn how to do their job at the next level.”

It’s a point that Floersch reinforces. “As an individual, you need to own your development,” he says. Not that the company can't provide a good support system but at the end of the day, we need to have people feel like they own their development, and then we need to provide the tools.” Floersch believes that about 70 percent of development takes place on the job, when staff assume new responsibilities and move outside their comfort zones. The remainder is taken care of in the more structured programs provided by the company. Floersch sees this support and potential for growth as a key player in minimizing the turnover levels that have traditionally been very high in the restaurant industry. “The number one reason why people stay with an organization is typically how they feel about their growth prospects,” he continues. “It's not necessarily what attracts them to a company because that tends to be the company's reputation or the compensation package. But the one thing that binds people to an organization and drives high levels of engagement is how they feel about their growth prospects.  If you're not delivering on that as a company, you're either not getting highly engaged employees, or you're not being able to hold onto talent.”

Floersch clearly believes that this is something that McDonald’s is coping well with, as turnover levels in most major markets are declining. But perhaps there are other factors? After all, we are in a downturn and such difficult times make changing jobs a fairly risky move. Not only that, but McDonald’s is one of the few companies that is bucking the global trend and still growing. Might these be the key reasons for the reduction in employee churn? “I think it is a combination of the work that we're doing on delivering a strong employment value proposition and strong training and development programs as well as the fact that we're doing well,” he says. “People want to be with winning organizations.”

Floersch tells us of a recent employee survey that asked the question ‘What are the top three reasons why you love working at McDonald's?’ Leaving aside the somewhat leading nature of the enquiry, the response was telling: “One of the top reasons that they said was the career development opportunities that McDonald's offers,” he continues. “That's from our crew and our managers at the store level.” What is certain is that reducing employee churn has definite benefits from both a cost and efficiency perspective. “We know that when you have lower turnover rates, you actually can run better stores,” he confirms.

But it remains to be seen whether all this can effectively put an end to the lingering curse of the McJob. “There are a handful of our markets where that stereotype is very negative right now,” confirms Floersch. “But I suspect, as we're seeing some of the data come in from our customers and from our employees, who can be the strongest brand ambassadors, that people will start to understand that we do have this strong training and development.” In fact, the approach seems to be to reclaim the term and retool the McJob as something to aspire to.  “I look it as a positive and I'm so happy I have a McJob,” says Thomas. “I've grown, and I've learned, and McDonald’s has provided so many opportunities. It is a misnomer; people don’t understand the possibilities that are offered within the company.” Thomas mentions her father once again and his initial reluctance about his daughter joining the organization. Starting from this position, he has slowly come around. “He learned about the company as I learned about the company,” Thomas continues. “His paradigm shifted and he's now one of the biggest fans of McDonalds.”

If one man can be brought round, maybe there is a hope for a wider realignment of the overall attitude to a career at McDonald’s. Floersch certainly thinks so. “I think we're at it, and I think over time we are going to lose some of those stereotypes,” he says. “It is one of our goals to be able to talk about McJob in a way that the general public sees it as a great entry point for people to be able to get strong development and gain life skills.”

The human touch
Diana Thomas on why getting up close and personal is the best way to learn

Well, I think we’re not only teaching the business skills, but what we've found is we're able to teach people a little bit more about the company’s culture and the heritage by their coming here. In our university we've got flags flying the welcome students and represent all of the different nationalities and languages all of the languages of the people that are in the building that week. We're able to show more about the diversity and the value of bringing people together. We've also got a heritage museum that goes through a chronological listing of McDonald’s history, for those people that weren't around. I don't think you'll ever be able to replace the face-to-face interaction and the relationship building that happens when people get together that do similar jobs. You see that people from around the world can come together, and within days, they're acting as if they're best friends or family because it's the brand that brings people together. So even though we leverage other means of delivering training, we truly use a blended approach to delivering training.

You can see that there is a critical need to bring people together for that face-to-face interaction and the application of what they've learned through these other means, whether it's self-study or e-learning or virtual training, that it can't be replaced.

Glocal heroes
Rich Floersch explains the importance of local knowledge in a global organization

It is important for a global company to have a well-defined culture and set of values.  And we've done that.  We've articulated our values over the last couple of years, which resonate globally. 

We also know that when we operate in 118 markets, our management teams in those markets, whether it's France or China or Canada, need to feel like and they have ownership. They're in the best position to be able to understand what the customers or prospective employees in those markets are going to be interested in. So we need to provide them with a lot of accountability at that local level.

I call it glocal.  Organizations that can figure out the global piece but then allow a lot of room for the local organization to customize some things – for example, on menu – is absolutely important in a global organization. It combines the best of both. Training, learning and development have to be one of the pathways for people to understand our values and what our culture is.  Because at the end of the day, you want to reward people, you want to select people, you want to develop people, you want to fill jobs based on those cultural aspects and values that you hold as important to McDonald's.