Who is the best CEO in the world? That’s a hard question. You can’t judge a leader very well until you see him over the long haul, and most especially during the tough times. It’s in the response to adversity that we can really gauge performance. Having said that, let me put forward a serious contender.
In 1971, after serving nearly a decade in the United States Navy, Jim Skinner, the son of a bricklayer, came home to Davenport, Iowa, and joined McDonald’s as a management trainee. Last month, Mr. Skinner retired as the CEO of McDonald’s Corp. after 41 years of service. He presided over one of the most remarkable turnarounds in corporate history and was aptly recognized by Chief Executive magazine last month as CEO of year.
Here’s a guy who started out on a crew flipping burgers, who never graduated from college, who stands 5 foot 5 and is not very charismatic. And yet he learned how to create a vision and lead people to it. From a leadership standpoint, it’s an incredibly instructive case study. Consider what he did.
But first, consider the circumstances in which he came to the job of CEO. McDonald's lost two chief executives in rapid succession before Mr. Skinner got the nod. In 2004, Jim Cantalupo died of a heart attack after just a few months as CEO. His successor, Charlie Bell, was on the job only a few weeks due to colon cancer. Enter Jim Skinner. As he once said of himself, “I’ve been a walk-on in everything.”
At the time of his appointment as chief executive, McDonald’s was languishing. The menu was stale, service was mediocre, the stock was $13 a share and same-store sales were $1.6 million annually.
Fast forward eight years: A healthier menu features over 100 choices, service is consistently good, the stock is at around $90 and same-store sales average $2.4 million. Sales increased an additional $20 billion under his leadership. The company has registered annual growth of 5 percent during each year of Skinner’s tenure. McDonald’s powered through the Great Recession as if it didn’t exit.
To really appreciate these accomplishments, you have to absorb the scale of what we are talking about. McDonald’s is the largest food-service company in the world. It has more than 31,000 restaurants in 118 countries. Here’s the breathtaking part — McDonald’s 1.6 million employees serve 68 million customers every day. That’s like feeding every man, woman and child in France every day. Not least, the average employee turns over more than once a year. It’s amazing that McDonald’s can maintain such consistency when it draws from a largely unskilled and inexperienced labor pool.
How did Mr. Skinner do this? Obviously, this is a man who knows how to build and maintain systems. In 2004, the system was broken, so he and his team took a hard look at everything and emerged with what they called “A Plan to Win.” They distilled out three global priorities and drove those priorities with a consistent and relentless focus — “optimize the menu, modernize the customer experience and broaden accessibility to more customers.”
Mr. Skinner is not flashy. In fact, he earned the nickname “Jim Skipsdinner” for routinely retiring to his hotel room after a day of meetings on the road rather than participate in the ritual of a corporate dinner. This is a man who didn’t talk a lot about himself or try to be in the spotlight. What does this say about the man? It says he’s sensible. It says he doesn’t have an ego problem. It says he’s focused. It says he understands how to align 1.6 million employees through clarity, focus and reinforcement, so they can in turn engage 68 million customers a day.
When he retired last month, he said, “I’m honored to have served and earned the trust of the board, our shareholders, franchisees, suppliers and the men and women of this great company.” That statement reflects an accurate understanding of leadership: to serve and to earn trust.
In America, it’s culturally acceptable to poke fun at McDonald’s, and yet we still find ourselves in the drive-through. The oatmeal and Asian salad are really quite good.
Timothy R. Clark is the founder of TRClark LLC, a management consulting and leadership development organization. His newest book, "The Employee Engagement Mindset," has just been released from McGraw-Hill. Email: trclark@trclark.net