Remade to Order
McDonald's Reinvented Its Customers' Digital Experience—and Its Project Governance—in Less Than a Year
BY SARAH FISTER GALE PORTRAITS BY SAM GRANT
Amy Martin, PMP, and Scott Badskey, McDonald's, Chicago, Illinois, USA
McDonald's CEO Steve Easterbrook ordered change—and he wanted it fast. The leader of the world's second-largest restaurant chain last year gave his team less than a year to complete a massive digital overhaul that would adapt McDonald's groundbreaking quick-service dining experience to today's hyperconnected expectations.
“I have absolutely no doubt that our industry will get disrupted by technology,” he warned. “Our discussions within McDonald's are ‘Why don't we be the ones to disrupt ourselves rather than wait to be disrupted?’ You have a choice to either be the disrupter or the disrupted.”
More than 60 years after the company turned the food service industry upside down, McDonald's launched the Digital Acceleration project in January 2017. The US$155 million project developed and deployed a custom mobile ordering and payment platform to more than 20,000 restaurants in the United States, Canada, United Kingdom, Australia, France, mainland China and Hong Kong. The new system lets customers order meals via in-store kiosks or a mobile app and pick up their orders as soon as they arrive at the restaurant. The project team also implemented geofencing technology, which uses the GPS on a customer's mobile device to direct orders to the proper restaurant based on the customer's location. That early detection also helps speed food preparation, shaving precious time off the delivery window.
PHOTO BY DPA PICTURE ALLIANCE / ALAMY STOCK
“It's about reinventing ourselves,” says Daniel Henry, executive vice president and global CIO, McDonald's, Chicago, Illinois, USA. “It's about showing our customers that we can be aggressive in how we move forward with technology to provide the experience that we want our customers to have.”
—Daniel Henry, McDonald's, Chicago, Illinois, USA
Rapidly scaling a global digital platform placed the project team in unfamiliar territory—unusually aggressive deadlines presented a daunting task for a company that has 37,000 restaurants in 120 countries. Decentralized and deliberate governance had become as much a part of the company's DNA as cheeseburgers and french fries. Transforming processes, culture and staff training was necessary to ensure immediate benefits and ROI.
“The largest risks that we had to contend with were the speed that we were running at and the pace and change that we were driving,” says Scott Badskey, director of portfolio and process management within the global project management office (PMO), McDonald's.
—Scott Badskey, McDonald's
One way McDonald's picked up the pace was rethinking its governance structure. Previous global projects had siloed plans deployed separately in each market, a structure that slowed progress and prevented consistent communication and delivery, Mr. Badskey says. So in December 2016, the company created a global PMO. Months later, the PMO chose to build a single team to deliver the project across all markets.
The centralized structure ensured the same level of quality and reliability for deployment in, say, China, as in Canada while still allowing customization to suit regional language, menu and culture differences. This structure also helped the PMO clearly define roles and responsibilities so the project team could anticipate and manage risks as they arose.
“Without that, we would have been challenged to successfully accomplish this project on time and under budget,” Mr. Badskey says.
The global PMO also accelerated delivery by introducing hybrid approaches, including a monthly release cadence with faster sprints for smaller deliverables. It was a new model for teams and executives accustomed to longer development cycles, says Amy Martin, PMP, senior director and leader of the global PMO. The delivery shift required leaders to embrace a progress over perfection mindset.
“McDonald's is a risk-averse organization,” Ms. Martin says. “If you get a small thing wrong in 37,000 restaurants, you get a lot of noise. As much as this was a digital-transformation effort, there was also a culture shift to deploy solutions faster into the restaurants.”
—Amy Martin, PMP, McDonald's
McDonald's mobile curbside pickup spot in Rockville, Maryland, USA
With so many global stakeholders, the project team knew a flurry of change requests was inevitable. Markets frequently wanted to tweak the system for their unique needs or customers, and operators came with new ideas for features once they had the chance to spend time with prototypes.
“It was just a highly complex environment,” Ms. Martin says. “If we had allowed all of those changes to organically fold into the work, we never would have gone live on time.”
The global PMO created a change control board to prioritize stakeholder demands, provide a firewall for developers and mitigate the risk of scope creep. The board met weekly to review the latest iterations, monitor the health of critical path goals and consider any change requests. The board approved no changes unless they met a valid business purpose, aligned with the strategic vision and had a defined budget.
Even with change control board support, the furious pace created more risks on an already-bold project. “Just like any project where you've got a brand new set of architecture, a brand new capability, there were a lot of unknowns,” Ms. Martin says.
The governance teams proactively looked for warning signs and immediately elevated potential critical-path problems to the risk register for mitigation, she says. For example, after initial key targets were missed during early iterations of the platform, the team established a dedicated war room that implemented more aggressive testing. Developers applied root-cause analysis, identified tickets looking for commonality and rapidly mobilized teams to address reliability issues as they arose. This early intervention helped the team ensure smooth rollouts, Ms. Martin says.
“This approach proved effective with keeping the overall effort on course throughout the year, ensuring the team could develop a mitigation plan and be proactive from the onset,” she says.
From the start, the team knew that getting restaurant owner-operators in every market on board with the platform would require robust change management. In addition to learning new technology, franchise owners and their staff had to roll out crew and manager training, make counter-design changes, create space to install kiosks and adapt parking lots for curbside pickup, Ms. Martin says. Each restaurant also had to rethink food prep timing to make sure the quality of each mobile order remained consistent, regardless of whether customers chose to dine in, carry out or have their food delivered curbside.
“Change management issues had to be incorporated into the project deployment strategy for every market,” Ms. Martin says. “We knew we had to help our folks understand that the way we operate is going to be very different for the deployment to be successful.”
To build buy-in, the team brought in experts to coach and counsel stakeholders on how to plan for the changes and communicate the value of the transformation throughout the restaurant network. The team also held technology demonstrations at restaurants, set strict deadlines for rollout and captured lessons learned to improve each deployment that followed.
“That enabled us to become faster as we continued to take on more market deployments,” Mr. Badskey says.
The project team reached the goal of 20,000 deployments in November 2017—one month ahead of schedule and nearly US$10 million under budget. McDonald's customers can now place custom orders, access special offers and pay for their meals on a mobile device. They can pick up their food at the counter or in the drive-thru, or have it delivered curbside.
Company data indicates customers are embracing the new system, Ms. Martin says. By early 2018, in the United States alone, the app had accrued 30 million downloads, with 110 million offers redeemed and 7.9 million active users. Ms. Martin also estimates that in the first few months—and with no marketing prompts—the new platform helped the company exceed full-year digital sales goals.
The benefits are a testament to the company's desire to meet disruption—and its competitors—head-on in an effort to transform the customer experience. As part of the planning phase, the project team studied how other retailers leveraged digital initiatives to boost customer frequency and loyalty. For instance, studying competitors led the team to implement the geofencing solution that allows customers who place mobile orders to pick up at any location, Mr. Badskey says.
“It really allows us to meet the customer where they want to be met,” he says. The entire project was an opportunity to “transform the customer experience.”
Along the way, McDonald's also transformed its project management structure and once again established itself as a disruptive force in the global restaurant landscape.
“A project of this scale can divide a team if you're not careful. But our team stuck together when things didn't always go the way we wanted,” Mr. Henry says. “It was never about an individual; it was always about the entire team.” PM
Amy Martin, PMP,
senior director, global project management office, McDonald's
Chicago, Illinois, USA
Why did this project have special meaning to you?
It showcases what an organization as vast and diverse as McDonald's can achieve when its people are focused on a common goal.
How did you relieve project stress?
We looked for opportunities to inject fun. For example, we leveraged quarterly awards and informal recognitions and celebrated incremental wins on a weekly basis.
What famous person could have been useful on this project?
Steve Jobs. There were many parallels with how he innovated and led teams to achieve greatness and the way we ran this project. His guidance to help the team see the possibilities could have come in handy.
What career lesson did you learn on this project?
Those who say it can't be done should get out the way of those doing it. Having the right team makes the seemingly impossible possible.
January 2017: Project launches.
February 2017: Five-store pilot project launches in Chicago, Illinois, USA. Project charter and plan formalized for kickoffs in Australia, Canada and China.
March 2017: Project goals established and shared with company investors. Deployment begins in United Kingdom.
April 2017: U.S. scale reaches 412 stores.
May 2017: Mobile app launched nationally in Australia.
June 2017: China mobile app goes live nationally. Pilot project is initiated in Hong Kong.
July 2017: U.K. scale reaches 164 stores.
August 2017: Key risks identified and mitigated before global scaling continues.
September 2017: U.K. app becomes available nationwide.
November 2017: Project reaches 20,000 store deployments worldwide.
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