For Health Care Leaders: Lessons From the Golden Arches

McDonalds Seeks Way to Keep Sizzling which appeared in the March 10, 2009 Wall Street Journal is a pretty standard business press article which is nominally about how the “golden arches” has remained profitable during the recession – but it reads like an instructional manual in effective management style for any industry (yes, health care is an industry) in any economy. If Janet Adamy’s characterization of McDonald’s President and COO Ralph Alvarez is anywhere near on the mark, health care leaders have plenty to emulate in his leadership methods and style. This is another of those often published corporate snapshots that I suspect are not on the daily “must read” list for most busy health care leaders. Hence the mission of this blog – to “push” it out to you. And your reciprocal response – to take a few minutes to read it. Here’s why….

Arch Insights into Business Success

There are parallel take-home lessons in this article. One set is about how McDonald’s – the corporation – runs as a successful business. It could have described any successful business (e.g. a hospital, medical practice, imaging center, etc.). Turns out that it’s often about relentlessly sticking to the basics: “McDonald’s has been on a roll since 2003, when, to get out of a slump, it halted rapid expansion and instead focused on improving the food, service, atmosphere and marketing at its existing outlets.”

Success for McDonald’s had been all about excellence in fundamental areas: service, customer centric and efficient processes, purchasing and negotiating, maintaining a product mix that delivers value, and using “real time” monitoring/data to characterize (and act upon) emerging operational financial and market performance trends in a timely fashion. It’s so simple, right? So why doesn’t every health care organization do the same?

Arch Leadership Lessons

The other set of lessons is about both corporate and personal leadership. Ralph Alvarez was a Cuban refugee – not born a corporate scion any more than most hospital CEOs are. Mr. Alvarez, learned the skills he later relied upon as a COO as he rose from being an analyst at Burger King, then an accountant at Wendy’s unable to land a position at McDonald’s, to a regional manager at McDonald’s where he was hired as part of a diversity strategy. And he used them to beat the odds and rise to the top of the company in 12 years.

Think about how his leadership style can be directly transposed to health care. It is characterized by some very NON executive methods such as personally stepping down into local stores incognito to make observations about customer service and efficiency. By regularly interacting with local franchisees to learn about performance and problems “on the ground.” By truly loving the data and looking for the story before it’s a story. By setting a clear strategy with bedrock principles while valuing creativity, flexibility, and responsiveness in implementation. By stressing the use of information technology and computerized systems to understand performance in “real time” – and permitting local managers to make customized promotion and pricing adjustments at the individual franchise level rather than centrally controlling all aspects of the business. By seeking and rewarding innovation. A model for health care leadership? I think so.

McDonald’s – the company – learned its leadership lessons the hard way. It learned about succession planning and managerial development when two senior executives died in rapid succession early this century. So “succession readiness” has been part of the corporate consciousness for the past decade and is now woven into a corporate culture of “developing others.” How good are we at that? In my experience, not very. In fact we often fear or avoid or are “just too busy” to pay attention to developing others while bemoaning our thin leadership pipelines.

Can health care leaders learn something of value from the burger flipping crowd? Bet you 99ΒΆ we can.