The Effectiveness Files: Alistair Macrow

Alistair Macrow, former CEO of McDonald's UK & Ireland, joins the IPA Effectiveness Files podcast to discuss his journey from CMO to CEO, the value that marketing brings to a business, his advice for agencies and much more.

Transcript

SPEAKER_00 0:15

Welcome back to the effects of festival with me on the screen. Let's like to join today by Let's Code. UK and Alan. You are that rare breed of CMO turned CEO and whatever you're about to turn into again as part of the latest metamorphosis. So it'd probably helpful for our listeners just to hear a sort of brief snapshot of your whole career journey because I think it's quite interesting.

SPEAKER_01 0:57

Yeah, well, I guess when I think about my career, uh the thing that always stands out for me uh is realizing that I always saw myself as a general manager first and foremost and a marketeer second. Uh, and that's despite having taken a business degree specializing in marketing. Uh, I guess it's probably only when I became global CMO of one of the world's biggest brands that I started to feel I'd actually qualified and could really call myself a marketeer. And that's probably um it's probably because I saw myself as a retailer, first and foremost. Um that came from growing up in a little village shop in Norfolk, uh from selling football stickers to people at school, to sat day jobs as a supervisor in good old woolies, uh, and then on to being a graduate at Marks and Spencer, uh, running shops for them and for Debanham's as well. And it was only then, you know, at the age of 30 when I was at MS that I then actually stepped into the first peer marketing, peer marketing role. So that led me for quite a long while to think I wasn't quite quite a proper marketer in the same way that some of my friends from university had gone straight into FMCG were. Um I guess when I was in MS now, that's how I took that shift. And um, I first of all started off running their local marketing plan, uh, and then that led me to manage the national marketing plan for MS. Uh a really exciting time uh within that business as that was changing, and then that gave me the opportunity to move into the American um video rental retailer, Blockbuster, uh, where I became the CMO, I established their online rental business, and then became the MD of that digital business. Uh, and those are what kind of put me on the radar and gave me the opportunity for what's been an amazing uh 18 plus years with McDonald's. Um, I stepped into McDonald's back in early 2007 as the UK marketing director, uh, part of uh us really reinvigorating the brand and its reputation, and then was able to be UK CMO during the exciting time of being a top uh sponsor of the 2012 Olympics. And then that expanded to allow me to cover food development and menu innovation, consumer insight, uh digital transformation, and ultimately corporate affairs as well. And that kind of rounded opportunity and all the things that come from being part of one of the most uh well-known brands in the country, that then allowed me to take on some really exciting international opportunities with McDonald's. Uh, the CMO of our high growth markets, which all sorts of fun from Russia to Korea and China and rapid expansion closer to home in places like Italy, onto being international CMO to cover all of uh the markets outside of the US and ultimately that fantastic opportunity to become the global CMO of one of the most iconic brands in the world. And yeah, I had to pinch myself at that point, really, as I as I said, I didn't really see myself as being a marketeer. And now I'm doing this, and you know how did this Norfolk country boy with a Leicester poly education get such an opportunity? And it speaks it speaks volumes for McDonald's and the business that they are and the way that they create opportunities for people if if you pursue them with all your energy. And then finally I got the role that I I'd coveted for probably 10 years, which was the opportunity to be the CEO of the UK and Ireland business, which is what I've been doing for the last four years and until I stepped out last month.

SPEAKER_00 4:17

Retailing, of course, predated marketing in a way, didn't it? I uh marketing was retailing, you know. Uh I'm I'm just thinking out loud here. Shops shops predated media, didn't they? So maybe maybe retailing is actually the kind of core hidden skill of the marketeer. I hadn't I hadn't quite thought about that.

SPEAKER_01 4:37

No, it's interesting. Yeah, back in the back in 1991, when I did took my first role at MS in my placement year, and some of my friends went into you know the hallow grounds of FMCG businesses, whether some are in cigarettes, in in you know, food and drink and all the rest of it. The way I justified them is I I kept saying I'm I'm involved in the purest form of marketing. You know, when you talk about the four Ps we used to talk about back then of place, product, price, and promotion, you control all of those to some extent within uh within a retail environment. So I think there's there's a lot to be said for that. Although what I realized over my time at MS as MS was kind of coming up against challenges, having been this brand that everybody knew and knew itself really clearly without really having established marketing in the business. It then found life quite difficult in the early 2000s. Uh and I think part of it was I what I recognized was it was a business of buyers and sellers, and the power shifted from buyers to sellers at a different time when the business was doing particularly well, buyers were all powerful. If business was a little more tricky, the sellers had a lot more power. But really, the the sellers were people in shops, the buyers were people who bought stuff. And where I'd thought of marketing in those early days as being very much like retailing and being the ultimate um ultimate definition of it almost, I realized it actually sat a little bit in the middle. When marketing worked really, really well, it was able to be the voice of the customer and the conscience of the business and could actually help both buyer and seller behave in a way that was uh directed around the people you really needed in your business, the customer. And it allowed your people to understand what role they had to play. And so I I suddenly found that marketing could be a very much an elevator position that actually not didn't just create tension, but actually helped manage the tension in the business for the good of the customer, and ultimately, I I still believe today that if you manage that tension in the business for the good of the customer, you're you're you're bound to have a successful business, it gives you much greater chance than other people.

SPEAKER_00 6:37

So, what what was the shift that MS was going through at that point? There's been a few, obviously. Everyone has to shape shift, not least recently. But what when you were there, what was the big from and to?

SPEAKER_01 6:48

So the 90s had been incredibly successful for the business. They had the first year of billion pound operating income, um, and they just bought the Littlewoods estate on the high street, which actually gave them, I think, retrospectively, too much retail space at a time when when the internet was about to take off and actually you needed you needed less. Um, and so you had you had this world that was that was exploding. Internet hadn't hadn't caught hold at that point in time. It wasn't a big retail force, but it was it was on the horizon. Um, but you were certainly seeing a lot more proliferation on the high street, seeing brands coming in from other countries, seeing the lights of Primark coming in. And so they were being challenged on on all sides, uh, and yet were continuing to follow the model that they that they'd always had, and and going through the same going through the same um motions in in terms of how they responded to things. I think what what happened there was when business got difficult, because there was no real clear sense of what was right for the customer future, and thinking back then, MS was almost like three different brands. MS Food, MS Home, MS Clothing all had quite different consumer propositions and to some extent different different customers. Um, so that there were there wasn't this clear sense of this is what we are going to do for the customer across our entire business. And so you know, buyers would decide what they thought was important, and you might find uh a ladies' wear department which was more fashion forward than a menswear department. Perhaps you had a homeware department which was going very high, high-end food doing something similar. Uh, it it and it lacked that cohesion uh at a point in time in which other people were coming in and saying, Well, we're gonna have a little piece of it there, we'll have a little piece of it here. No one brand was able to take a huge amount, but it's that that challenge of being the biggest in the market by far, and lots of people just taking a little bit becomes difficult to defend against unless you're you're really, really clear. So at that point in time, uh MS had to get clear, certainly within the clothing part of their business, as to what did they stand for. And the the part that I went through there was getting really clear about what we call perfect. Um, and it was about it came up with the idea of perfect basics, and that that actually uh MS was deeply rooted in having certain items of clothing that anybody would be very happy to have in their wardrobe, you know, whether it's a staple, Lampsville jumper, uh yeah, the pencil skirt in in that in those days, uh the the the the body for ladies were etc etc. You know, there were certain staples that actually MS could always have. They didn't need to carry a big brand or flashy logo or anything like that, they just needed to be really good quality that fitted really well, and and uh was it were timeless classics, and helping helping them understand that the uh the edge of fashion had a role to play, but actually, if it wasn't supported by that great quality, great fit, timeless stylist classic, then then MS had lost its way. So that was that was kind of what we were doing in from a clothing point of view at that point in time.

SPEAKER_00 9:48

So you pick up your sort of general management and retailer um briefcase and you and you go to Blockbuster. Um I I'm always interested by the failure of Blockbuster, not because it's at your door, but because it was a huge brand. It's often listed alongside people like Kodak as classic businesses that just missed what was happening, I I I guess in tech, but more generally amongst their consumer base. What what was your version of it from the inside?

SPEAKER_01 10:21

Yeah, it was like it was it was fascinating. Uh you know, we're stepping into an absolute giant in a changing world. Um the extent to which Blockbuster dwarfed everybody else in that industry was was incredible. You know, they had found this model of uh revenue share agreement with with a lot of their studios, which meant they could have hundreds and hundreds of videos on the shelves. And they were the first people who said, if you want to watch that video on the first night it's released, you'll be able to. And if you don't, you get it free next time. That was a huge promise. So that was that was a groundbreaking promise that just hadn't been possible in that industry. So they'd become so big on the back of it. But their existing business model was going out of fashion. Yeah, it first of all, out of fashion is people are able to buy DVDs on the same day as they were, which you couldn't do before. You had to rent a video because you couldn't buy it for at least six months. So it started with the with DVDs being sold, and then of course, what everyone then talked about would be about this shift that's going to happen to streaming. Now, in reality, um, yeah, that's where the market has ended up, but it ended there much more slowly than anybody was ever talking about. Um, yeah, demand was there, customers, everything about streaming, the idea would work for customers 20 odd years ago because they wanted immediate consumption, uh, and you know, they hated the fact of renting a video, they had to leave the house to get it and then had to leave the house to take it back again. So per perfect, perfect idea. But of course, at that point in time, there was neither an infrastructure in terms of brand bandwidth speeds in this country or really a product, a spring product that was available to offer at that point in time. Of course, the lazy story is exactly that one. Well, they're just like just like Kodak, um, the technology changed and and they didn't invest in it. My take's a little bit different. Um Blockbuster had in invested in the future really early. By the time I joined them in 2002, they were already coding and streaming movies, and they were doing it to Hull. Uh Hull had its own Telstra uh Kingston Telecommunications, a closed loop network, and that allowed them to stream to that. So they were already providing that service. Um, I think there were three other things that undermined it. It wasn't investment in technology or the ability to do it. The first of all, of course, is that that slow speed of infrastructure development. And what that meant was that uh the operating costs were very, very high without being able to do without having sufficient demand to change quickly enough. And so that for an established business to take on an operating cost was really difficult. You could see a capital cost, that was fine, you could invest in that, but but having a drag on profitability was something that an established business found difficult to deal with. The second thing for me um was about a costly real estate portfolio. A business has been bought on real estate with long-term commitments, with properties in uh locations that were suited to the old old nature of the business. That that that again is a big drag on a on a on a shifting PL. But the thing that sticks with me most and and I you know continues to motivate me today in the way that I go about business was a failure to develop a business model and relationship with a supply base that would make them the first choice partner for an emerging new business model. Streaming was so different, uh you know, that not needing a retailer, not needing um space on the high streets, that it was always going to be a completely different business model, and that needed to be developed with in a trusted way with suppliers so that they understood the value that you bought and you understood the value that they bought, and critically, all partners were happy with how that worked together. And I don't think that there was ever a strong enough bond and understanding of just how important each were to each other. And I think when I now look at the success of the McDonald's business model and the importance of uh our relationship with our suppliers, it really helps me understand the need for everything you do to work for everyone across the whole of your business. If everyone is in is invested in you being successful because it makes them successful, it becomes a virtuous model. And I think there was just uh there wasn't quite that in place at that point in time, and so suppliers were happy to explore partnerships with other people. Blockbuster should have won that battle. In this country alone, they had five million customer accounts. It was you know, it was it was as big a database as Tesco had at that point in time. They had five million customer accounts, and they knew that all five million of those people liked watching movies. Nobody else could give could could give customers, uh sorry, sorry, could give a supplier that access to customers, and yet they didn't manage to make that work.

SPEAKER_00 14:57

I'm I'm super interested hearing you speak, Alistair, because um I've always worked in advertising. Most of our listeners have only worked in advertising or marketing, and I think we often overstate our importance or or dare I say, even the importance of brand sometimes. Whereas you've just described a situation where there were actually macro business forces, real business forces at work. Um and I and perhaps before we before we chat McDonald's, which constitutes what half of your career or over half?

SPEAKER_01 15:35

Yes, that's right, yeah, it does, yeah.

SPEAKER_00 15:37

I'm just interested to get your take generally on that. Uh as what it Martin Glenn, the old um was he chief, he was CMO and then chief exec at Walker's and then chief exec at the Football Association. He always he always described any business failure as a failure of marketing, because the whole premise of business is market orientation. Um that that's a very generous interpretation of marketing. Others think of it as campaigns uh at the other extreme. Well, what yeah, where where have you I mean perhaps we'll embellish on this after we've chatted about McDonald's, but what you went in as a general manager? It seems to me that like you always looked at the world through a general lens rather than a specific kind of brand or comms lens.

SPEAKER_01 16:27

Yeah, I think that's true. Uh yes, I I would think that I looked at it in that way. And it was uh it was for me always understanding the role of marketing within that. I I guess I always saw marketing as having um long tentacles, yeah. The ability to to reach into many parts of the business and and offer value. Um and actually to be destructive if you got it wrong as well. You know, if you brought the wrong understanding of the customer, if you brought the wrong bias into where strategy went or to execution, it could be destructive. That statement about uh any failure of a business is is ultimately a marking failure. I don't know that I would go that far, but I think it's a really healthy, a really healthy lens to have as a marketeer. Because I think you should at least consider that could be the case, because you you do see some marketeers who separate themselves from overall business success, separate themselves from so many different parts of the business, and just just want to wrap up in one little bit at the end. And if you if you if you do that, you fail to understand how important those tentacles across the business are, you fail to understand how many levers you can affect and you can pull. Uh so I think it's a I think it's a really healthy lens to have. Of course, there are things beyond marketing that can cause a business to fail. Um but I think you know any time a business doesn't work, if you're a marketer, you you have to be brave enough and honest enough to take some accountability for that.

SPEAKER_00 17:53

So let's um shuffle further along the high street. We've we've we've left MS, we've we've um flipped the sign on Blockbuster from open to closed, metaphorically, uh, and you get to McDonald's. Um now 18 years is a long time in any organization, um, not least one as fast moving as McDonald's. Can you can you paint a picture of the business and the brand when you joined it and perhaps top and tail that with what it looks like uh as you exit?

SPEAKER_01 18:27

Yeah, absolutely. It was an amazing business to join. But um, I guess the best way of describing where I was at that point of time was that the phone call from my mother that said, What are you doing? Yeah, you know, you you you you left university and went to MS. Fantastic. We we weren't showing you went to Blockbuster, and now you're going to McDonald's. We do kind of trust your judgment about what you're doing. And yeah, that was just uh that was just uh a reaction to the way people were talking about the brand or had been talking about the brand in the in in the immediate preceding period. I joined early in 2007, and it in all truth, the business had taken its first steps to both a brand and business turnaround after a pretty tricky period. You know, it had this period where it had been attacked on all sides, the reputation of the brand, um behaviors in in legal battles, uh uh people making movies about the food and what happened if you ate it all the time. The restaurants in this country were out of date, uh, the menu was a bit out of date, the brand had become a bit outdated in the in the early and mid-2000s. So early 2000s, I haven't seen the first steps on improving that. You know, the killer stat for me when I came into the business that explained everything was that fewer than 20% of our own customers at that time trusted us. And there were very similar stats around the people who loved the brand as well. That was pretty damning. So the turnaround then started with real change. You know, this wasn't something you could solve with a bit of marketing loss, it was real change. It started with listening, really listening to our customers, listening to our stakeholders. It then went on to turning up at the debate, making sure that we were involved in that listening uh was you know led to constructive contribution from from the company. And then, of course, it led to changing menus, it led to changing the formulations of the product, removing fat, salt, and sugar, uh, and it led to significant investment and upgrading of the restaurants. That was followed by real transparency, inviting people in into the supply chain, into the kitchens to see what McDonald's was really all about so people could see firsthand. And then and only then came the mass communication from a huge marketing organization. Communication of who we are and what we really stand for. Accompanied, of course, by all the exciting news of what was what was going on. And yeah, that's led to a business that's grown six, maybe sevenfold in that 18 years that I've been involved in it. Incredible growth here in the UK. Uh, and yeah, I'm really proud to leave a brand that's uh now at record high levels of brand trust, record levels uh of scores for things like um loving the brand and a brand for me, and exceptional uh most recent trading performance. So yeah, it's it certainly has has been on an incredible journey. It's been amazing to be part of it. It's a business that um is fuelled by the people involved in it, fuelled by the people who work on our restaurants, fuelled by the franchisees who invest in it, fuelled by the suppliers that I mentioned earlier, who all have this same um ambition for the overall organization to grow. We talk about the McDowell system, and that's all it is. That three legs of a stool. Uh the three legs of the stool are suppliers, our franchisees, and company people working together with one collective uh ambition, which is to just to serve our customers in the best way we possibly can do. And it's it's worked incredibly well and has allowed a business to to to move from not being trusted to being trusted, from being seen as being dated to being recognized as one of the most progressive brands out there, and with uh an incredible growth trajectory.

SPEAKER_00 22:00

Tell me about the role that advertising has played, particularly perhaps through that prism of brand love and brand trust. Where's that interven intervention been most helpful, most notable? And how does the company appraise its advertising investments? Because it looks to me like they pretty much either track that growth or predate that growth. But yeah, help me understand the role of advertising and communication.

SPEAKER_01 22:32

Yeah, I think it's been really, really significant. Um in my first year, I wanted to get to understand um how it all became more effective. I remember a very early conversation with the ad agency at the time, and they take them just take me through the reel. You know, it's probably my thing must have been my first meeting with them, probably when I first joined as UK marketing director. I saw lots of really good, effective individual ads, but nothing connected them. And each time I'd ask, so what we're trying to achieve with that, and it was we're going to launch really tasty with launching select so many. And I was like, Yeah, but what are we trying to say about the brand? And it was clear at that point in time that we didn't have a joined up narrative about the brand. What we had was a joined up framework, we had a whistle, a five-notes sting, a phrase, I'm loving it, um, that everybody knew, but they didn't quite know what the what the it in I'm loving it was. And uh and so we we we set out to really understand our customers and came to a conclusion that effectively, uh having interviewed thousands and thousands of customers of ourselves and our competitors, that the this simple summary was that uh even our best customers didn't love us, and and that we believed that what we had was an advocacy problem. No one was advocating for us. So when there were stories about the brand that weren't true, no one was prepared to step in and say, Hang on a minute, and that's where we realized there was a really strong role for advertising and communication to play. Around that same time, a chief executive there said to me that in the past, our marketing had been too good for our stores. You know, when we hadn't invested in the restaurants, we were doing glossy marketing and we had a restaurant state that just didn't affect it and it wasn't real. And he felt we got to a point then where now our marketing didn't deserve our restaurants. Our restaurants were we'd invested and they looked great. And and so that that was a real call to me to about getting involved in brand communication for the first time in many, many years. A brand that you know grew up with some of the most famous brand commercials that people can think back from the 80s, uh, but hadn't really done a lot for several years. And we and we started with trust. We knew that we had to we had to rebuild trust and lift the lid. And it had to be a really gentle communication because if we just went out there and said you know, we've changed our food, people just wouldn't even listen to that. It wasn't something they were that interested in, they didn't really care about the brand that much and wouldn't believe us. And so we had to create really emotionally resonant work that just gently carried messages on the back of it about about the provenance of our food. The uh the fantastic thing was at the same time uh I'd really started committing McDonald's marketing teams to accountability. I I'd learnt about econometrics and the way that we could understand the return for our investment when I was a blockbuster, and we brought that into McDonald's, and it was so important because that shift to make this gentle advertising about trust wasn't necessarily universally um uh expected up front. But what we learned very quickly is we were seeing a significantly greater return on investment for that trust advertising than we saw from uh our typical value advertising, saying get this great product at this great price. Having established a platform of trust working, a year later we were able to come back and then start investing in in what I would call pure brand, just reasons to love McDonald's, and it was all about really exploring the reasons that people fell in McDonald's, fell in love with McDonald's in the first place, in my language. And we talked about there being a McDonald's for everyone and just showcased the role that we played in so many different people's lives. Uh, again, it had to be quite gentle because people weren't in this at this at that point about really advocating for McDonald's. So it it had to be fun, it had to be it had to be gentle, but it had to be really real. And again, we saw those huge returns on investment that we saw with trust advertising as well. You know, three, four times of what we were seeing with value or with pure product product advertising. So that that shift from a mix that would have been 95% value and new product news to initially 10% trust, then 20% trust and brand to 30% trust and brand. And by the time I'd finished being as global CMO, we were up to nearly 60% of our spend on those longer term things of trust and brand, and more like 40% on the shorter term uh initiatives because that worked. You still needed the you still needed the two running together. Um, as Les would talk about the short that the long and the short, um, but getting that mix made all the difference to the returns we were enjoying. And it you know, it didn't just move the sales number, you could see the brand scores moving, you could see the trust scores moving, you saw the value for money scores moving, and ultimately uh people beginning to love McDonald's again.

SPEAKER_00 27:11

It's um one of the reasons I like that give given my role, Alistair, is it it's that's that's IPA textbook, you know, in terms of uh shifting from a promotional spike model to uh best of both, or long and short, call it call it what you will, depending on your marketing uh commentator. Um and I and I remember, I mean, I I I began to advocate for McDonald's as an advertiser, actually, because I think you did a commercial, was it called just passing by?

SPEAKER_01 27:43

That's right. That was that that was that first brand communication community I was talking about.

SPEAKER_00 27:47

It was a stunning piece of sort of low-key, local, insightful. It just felt like you'd absolutely nailed your place in people's lives. That for me felt like the um it if the John Lewis waypaver was the long way, it felt like that commercial to me was where you went, hold on, this is this has ushered in a a decade of self-aware brand advertising, as well as all the other stuff.

SPEAKER_01 28:20

Um it was it it was a point we knew it knew we needed to get to, but we didn't know what it looked like. And I still remember going through the briefing process and creative presentation after creative presentation, creative partnership after creative partnership coming in, and nothing feeling quite right, it all just still stuck in away. And and then I'll never forget the meeting at Urbanet with uh Tony Malcolm and Guy Moore, and it's the first time they'd worked on our brand, and they'd they'd they'd written that spot and they've got we've looked, we've got this other, they've got this other way in. And I remember hearing those, just hearing those words, uh, and it was like, no, this is this is something different. It's so clever, it's so close to how people feel about it. And even that line at the end, just passing by, that captured where we were at that point in time because the people who used us didn't want to almost admit to using us because they were in this stage felt I don't love you, and it was yeah, we're just a little bit shame, a little bit shame attached to it in those days. Um, that it just captured it perfectly, and effectively what it said is that you're all really coming to McDonald's. Um, why don't we feel good about it?

SPEAKER_00 29:23

Yeah. The um the unspoken bit about that, so I can get excited about it as someone who's worked in good agencies and likes great ads. You you get excited about it because suddenly your brief and your thinking and your hopes kind of come to come to life. Um but there's some important actors uh in your system, known as franchisees, often forgotten by by customers because what why why should they care in a way about you know the business model? But very material A to the business and B to advertising choices. So tell me about navigating that.

SPEAKER_01 30:00

Uh our franchisees are yeah, if we use the phrase secret source in our business, we secret source is really attached to the Big Mac and we've got, but actually, we think the franchisees are our secret source. It not makes the business as strong as it is. I mean, it starts with the fact that you've got local business people who really understand um their local customer, their people in their restaurants, their local community, who are invested financially, most importantly, invested emotionally in doing a great job. So that yeah, that makes us a you know, you combine that with one of the world's most renowned brands and the scale of the system, you've got a pretty powerful combination. From a marketing point of view, franchisees have made me a much, much better marketeer than I was. And I would encourage every marketeer to work in that type of environment. Why? Well, first of all, it's their money you're spending, not yours. The way McDonald's worked is a straight percentage of sales goes into marketing, it goes into a separate company with a group of directors who are franchisees, and and we're really the marketeers are then doing their job, recognizing how they spend it and developing it. So the idea of accountability is fundamental to that because before they spend the huge sums of money that we were lucky enough to invest in as a McDonald's marketeer, they needed to understand what was going to happen. You need to commit to the change we're trying to generate, both in terms of attitude and behavior as well as sales movement. You needed to commit to how that was going to happen, and you need to commit to what the what the return was going to look like. And then, of course, you needed to come back a few months later and demonstrate whether or not you'd achieved it. And sometimes you did, sometimes you didn't, sometimes you blew the doors off. Um, and you always learnt from it. That I'd never had that sort of accountability as a marketer before, but it turned you from just being somebody who's known for doing the nice pictures and stuff to somebody who's actually a true business person who um understands that marketing spend not as a spend but as a genuine investment in growing the business. And I think that's the place that I'd want every marketeer and every CEO in the business to go to is thinking about this is the investment I'm making. Now, what's the return I'm getting on it? Let's let's spend as much time measuring that and believing in that as I do when I invest in opening a new a new store, as I do in spending money on buying a different business. Let's just think about our marketing investment in that way, and it starts taking to a different place. And as a markier, um your capability and your credibility uh grow significantly.

SPEAKER_00 32:26

Talking of blowing the doors off, I I um right now I'm really enjoying the is it is it the world menu heist? That's right, yes. Again, I think it's brilliant and brave stuff that kind of talks to the confidence of the organization. Um but but you, of course, one of your big step changes was going from a UK role to global CMO. You probably know a lot of those products, maybe you introduce some of them. What's the big step change for a marketeer as you go from local to global? What what did you learn from that chapter?

SPEAKER_01 33:03

Yeah, for me it was a really interesting move. If I'm honest at the time, you know, I wasn't sure about it. You know, I I took the role because I was asked to by people I really trusted. Um but I always had this concern in my head that you know, these people outside of the market, what do they really know? And they just got in the way, created bureaucracy. Uh, and so I didn't value those roles in the way that I should have done. Uh, and of course, then you step into it, and the first thought process then has to be, well, what am I going to do? There isn't any job description. So, how do I make a positive difference? Uh, and the thing you realize is it's not by doing all the work yourself. You've got hundreds of marketeers around the world, you and you're one person. Um, you realize that the job is about harnessing the power of a global scale with the benefit of being the most local business in the world. You know, that those franchisees make it so local, and yet they've got this global scale to work with. And so for me, it was thinking about how do I help create the right frameworks and direction and give people real clarity, but understanding that it shouldn't be a load of instructions to people, it needed to be inspiring people to do what I felt was right. Secondly, for me, it was about creating community. You've got all these marketeers around the world, you're one of the world's biggest marketing organizations. How do you create a connection between them to make sure that they're sharing and learning from each other? There's still more in common from country to country than there is different. The differences and the nuances are really, really important. For me, that's where you get the hundred percent connection with customers, but there's still more in common. And so helping people learn from each other, which for me went beyond that suitcase of best practice that I used to refer to. I used to get really fed about people turning up and saying, right, here we go, this is what's happening around the world, take one from the top shelf, one from the bottom shelf, and you'll be successful. For me, it was about understanding context, and it was about making sure that people connected in a way to understand who else was going through or gone through a similar set of circumstances customer, market, business cycle, and what were the solutions they'd found that worked to that and connecting those people. And so then you ended up with really well-directed solutions within within that framework. And thirdly, uh, and most importantly, is about talent. I could only be as good as the people in the market. So my efforts around that had to be twofold. First of all, making sure we'd got the very best and right person in the CMO role in each of the markets around the world, and then having done that, make sure that we had got um uh a system that supported their development and the creation of a pipeline of talent that that ultimately I wanted to get to a point where we wouldn't have to go outside of the McDonald's system to recruit a marketer in the future. Yeah, we'd had a period in time when most CMOs are coming from outside the business. That for me was crazy in an organization as big as ours, particularly where there's quite a nuance to the marketing because of that franchisee piece. Yeah, I I value being able to bring in the external expertise, but it really shouldn't be more than maybe one in four, something like that, to keep it fresh. Uh, and so it was setting up an approach to do that. So for me, that's that's where all the all the work came from. There's frameworks, direction, and clarity, the community connection and sharing, and talent development. That is the the blueprint that I uh developed from for all of my roles outside of market from those initial international roles through to global CMO.

SPEAKER_00 36:20

So so for finally, or perhaps not finally, but most recently, um you you step up to CEO. Um did you see that coming, or were you had you been angling for it? Is it was it a traditional route to the top for McDonald's?

SPEAKER_01 36:36

Uh so yeah, I don't I don't think there is a traditional route, and and actually that's not a believe for all career paths, and I I get very frustrated when people just want the next promotion rather than understanding what it is they're looking to get from in a role. So I I I believe if you take the opportunities available to you, you look look to broaden yourself, you stay very interested in a business, then opportunities will open up. I'd been clear, I guess, for probably the best part of 10 years that I really would like to the opportunity to be uh UK and Ireland CEO. Uh, and with each each step of the way, as I was asked to take on these roles I hadn't quite envisaged, particularly internationally, the conversation was it won't get in the way of where you're going. In fact, it will help you. And if you'd asked me, it was a global, sorry, as UK CMO with this broad portfolio of corporate comms and digital transformation and food and insight. I just thought I needed to do a bit of finance and add some real estate, and then I'm nearly there. Um, and and of course, you know what was introduced to me was the idea is no, you need something different. Yeah, you you'll have a CFO, you'll have a chief development officer. Um, you need to see a different perspective, and taking those steps outside of the market, um, yeah, they developed me just uh yeah beyond what I would have thought was possible as a leader. Seeing things a different way, realizing there's more than one way of doing things. I thought we've been so successful in the UK, why doesn't everyone just do it like us? And suddenly realizing that there are there are multiple ways of being successful, there's different types of context that you need to understand, different types of people you need to be able to lead successfully, and actually that learning, particularly around talent, yeah, that that's a game what the CEO or CEO role is so much about is the right people in the right places and ensuring they're able to perform to the best of their capability. So it what it certainly wasn't it wasn't traditional root, but it made an awful lot of sense when I look back at it now and understand what each step of the way added to helping me um ultimately step into that role that I you know longed to have the opportunity for for so long.

SPEAKER_00 38:34

Was it hard to let go of your your sort of marketing responsibility rather than marketing instincts? Or was there anything you particularly had to sort of prove to the organization uh either or either on your way into the role or once you're in role?

SPEAKER_01 38:50

Yeah, and a good question. Um in role, it was something I was really conscious of and actually went out of my way to step away from marketing. Uh, I I felt that people would just expect me to do the marketing piece. I didn't want to be in the way of a good CMO from her being able to reach her own capability by just having me breathing down her neck. And I felt I needed to demonstrate to the rest of the business that I was just as interested in operations, in finance, in supply chain, uh, etc. etc. So certainly I lean away from marketing an awful lot, um, uh while still taking great pride in it and maybe having a sneaky look at this, that, or the other, as the as the CMO would let me um be behind closed doors without without having too much of an impact. So I think that was really important. In the stages before becoming CEO, yeah, I did feel that there was a need to um to demonstrate certain things. You know, I thought to become uh a credible candidate, I think I needed to first of all be able to demonstrate that I understood the business was a lot more than marketing. Because I do think many many of us as marketers do have a reputation that we think it's all about marketing and that's it. You know, if you if you take that comment around all business failures are a marketing failure the other way around, and you go, well, business is only successful with marketing doing that, it it kind of overplays a role a little bit. Um, so first of all, I I felt that that was important, but then you I think you have to be able to demonstrate financial literacy, and gets in the way of so many people if you're unable to do that, whether that's pure commerciality or what makes a PL work. Operational capability in a business like ours is really, really important. At the end of the day, our brand isn't something that marketing creates, our brand is what happens in the UK when something like four million people every single day interact with our food or our staff or our restaurants or our delivery order. And so being able to appreciate and understand the importance of that is a second area that without being in place, I don't think you become CEO. And the third was having an absolute people focus. We are a people business, whether those people are those that we employ. And yeah, in this country, at times we've had as many as 180,000 people working in our restaurants, all the millions of customers walking through the door, or our franchisees, or our suppliers, it's all about people and understanding what it takes to support people, to motivate people, and ultimately for me to enable people to reach their true potential because that's the single most exciting thing in a business. If if if you've got everybody believing that they can reach their potential and maybe even stretching it a bit beyond what they thought was capable, that's unstoppable. And and that ultimately for me is the biggest role of a CEO is how do you create that culture and that environment where everyone achieves a bit more than even they thought was possible? Because that's that's a great place to work, and and it just creates unbelievable results.

SPEAKER_00 41:45

Before we start to wrap up, what um to what degree do advertising decisions, probably not creative ones, but certainly investment decisions, reach reach the boardroom, reach that quarterly meeting or whatever you're doing above and beyond your ops?

SPEAKER_01 42:01

Yeah, um in a McDonald's environment, not much. So the CMO, they they will sit with the MO CMO and ultimately with this, what we call our co-op, which is the people who own that budget. Now there will be an annual an annual approval of the spend and what that what that contribution will be, so how much of it of the sales will be reinvested. And that's ultimately uh that will go through the boardroom and is ultimately voted from on by all the franchisees in the in the business. They they will all have a vote depending on how many restaurants they've got as to whether or not they sign up to that contribution, and they will sign up to the plan for the following year. Once into the executional cycle, um that once that plan is agreed, then that sits with the CMO and sits with uh the co-op directors to um spend that money in the right way. Now clearly the CMO will consult and will you know typically draw in the CEO, the CFO, uh probably the the COO as well, um, to help make sure that we're making the right decisions along the way. And you know, I I would uh yeah, as a CEO, I would expect to have a boardroom conversation about once a quarter about how marketing's going, about what what the what the next um six months looks like, and uh everyone would have the opportunity to discuss progress of the brand. You know, that was a monthly conversation would be brand performance as well as sales performance, um, but understanding that it's not marketing alone that drives those things, that everybody around the table has a role to play in driving the progress of the brand in the business.

SPEAKER_00 43:35

So brand performance in that context, that is that the soft stuff that I would presume, like the stuff of tracking studies and NPS and Yeah, absolutely.

SPEAKER_01 43:46

Absolutely, you know, we like many businesses, we would run kind of balanced scorecard to to track our performance. Um, brand trust, brand from someone like me, a brand I love, uh, value for money, um uh A modern uh a brand that's changing for a better. Yeah, those those are all things that we would look at every month as a board. Um, because we know that that underpins, if not this month's success, and certainly next year's success.

SPEAKER_00 44:13

Yeah, well that that stuff warms my heart because um it's been shelved in a lot of companies in the you know in the modern era of ROI and rapid payback and in incremental but guaranteed returns rather than transformational returns. I've I feel like when we make the case for that without proper brand tracking and and to your point, and understanding that that's tomorrow's performance or or future demand as as um it's been called, which I think is a really helpful um phrase to have coined. Um it's really reassuring to hear that one of the one of the best advertisers uh has that brand dashboard, not just the business dashboard, um, and make sense of what it sees.

SPEAKER_01 45:03

So it's so critical. I mean, it's you know, people talk about leading and lagging indicators, and that's what it is. Return on investment, really, really important to keep because it builds credibility, allows you to adjust plans for the future and all sorts, but it is looking back. Uh, and it's very hard to build a really good, effective marketing strategy just looking back, you know. Having a view on how the brand is currently performing at the moment, that that helps you understand the future, it helps you develop the right strategy, it gives you the direction that you need. It's it's not enough just to know what the numbers are, you've got to understand what people are thinking, feeling, and doing. And that's what that's what marketeers are about. That's what businesses are about. Ultimately, you want to change people's behaviour to do more of the thing you want, and whether that's come more often, spend more often, buy something different, think differently. Those are the those are the things that you get to play with as a marketeer if you do the job really well. If you don't understand those, and if the whole business doesn't buy into that, then I think you're on a hiding to nothing.

SPEAKER_00 46:02

I'm I'm gonna I'm gonna close this because I I think um you've touched on the the answer to both my last questions. Single piece of advice to the CMO who's a wannabe CEO.

SPEAKER_01 46:17

First of all, most importantly, be a student of your business and your brand. Um the key levers that drive business success, understand what makes people in your organization tick, and the people who your customers tick. And really always enjoy and believe in the power of marketing, but keep it in balance and keep it accountable. Make sure that you're clear about what you're gonna do, why you're gonna do, what it's gonna deliver, and then report back on people. I think it puts you in the best possible position to be seen as a credible business person, not just a marketer. Um penultimate question, single piece of advice for agencies of any kind be obsessed um by the impact that you're having on the business. What's needed in that business, influence the action the business takes, not just the marketing. Um and then commit to what you're gonna do and again deliver it and be accountable for the results it generates. It puts you in a different place. You stop being seen as a person at the end of the line, and you can be right up front. Yeah, certainly McDonald's, our agency partners are always part of the initial strategic conversation, and then were there right at the end to deliver it for us.

SPEAKER_00 47:36

I uh I can't let you I can't let you go without asking you uh for your go-to McDonald's order.

SPEAKER_01 47:44

I go to McDonald's. Ah, so my all-time favourite is the quarter pounder deluxe. It's not on the menu at the minute. It wasn't on the menu when I came back, and I'd spent 10 years asking people to make it for me as I went through the drive-thru and tell them what was in it. So my first achievement was getting it onto the menu in 2009. Um, so that would always be my go-to. However, so it's not on the menu at this point in time. So uh I now go for the muck spicy, the uh the spicy chicken with a crispy coating. Absolutely gorgeous.

SPEAKER_00 48:14

Very good. Alistair, you've been um a joy to chat to. Thank you very much. Thank you, Alistair, and thank you for listening to this episode of the Effectiveness Files. Stay tuned for further episodes coming soon.