Serving Up Innovation
A Project Management Office Is Helping a Fast-Food Empire Transform into a Digital-First Leader
BY SARAH FISTER GALE
PORTRAITS BY KEVIN PENCZAK
Scott Badskey and Amy Martin, McDonald's Corp., Chicago, Illinois, USA
Crowds at McDonald's self-service kiosk in Leicester Square, London, England
PHOTO BY: JEFFREY GREENBERG/UNIVERSAL IMAGES GROUP VIA GETTY IMAGES
Size: 40 full-time employees
Annual budget: US$10 million
Average project value: US$7.3 million
McDonald's has a craving for change. Decades after it turned the restaurant industry upside down by scaling fast-food convenience, the organization is on a mission to transform the customer experience once again, with cutting-edge tech projects.
“We believe the digital experience was critical for growth for McDonald's,” says Daniel Henry, executive vice president and global CIO, McDonald's Corp. “It's about being a better McDonald's.”
—Daniel Henry, McDonald's Corp., Chicago, Illinois, USA
But with more than 20,000 locations around the world, McDonald's needed to overhaul its governance to deliver on its digital-first vision. By creating a global technology project management office (GTPMO) in 2016, McDonald's was able to establish and cultivate a new mindset fueled by agility.
“There are so many things happening in technology, and it's working at a very rapid pace. The global PMO is at the center within McDonald's of all of that transformation and change, and oftentimes we're leading and driving that change,” says Scott Badskey, director, global PMO, McDonald's Corp., Chicago, Illinois, USA.
By aiming high from the start, the 40-member GTPMO has managed 131 projects with an average value of US$7.3 million in its first two years. In 2017, the company developed and implemented a mobile ordering technology simultaneously across seven countries in less than a year—a US$155 million initiative that was a 2018 PMI® Project of the Year finalist. McDonald's also acquired two artificial intelligence and machine learning startups in 2019 to help it automate and personalize drive-through orders.
With so much disruption on the menu, the GTPMO helps McDonald's prioritize issues, track progress, and identify and mitigate risks.
“It was important to create the right structure. That's why we created the global PMO office,” Mr. Henry says. “It's why we really embraced the core principles of project management.”
APPETITE FOR AGILE
Getting teams to embrace a more collaborative environment meant the GTPMO had to cultivate a dramatic culture shift, says Amy Martin, senior director, global PMO, McDonald's Corp. “Before we had the global technology PMO, life was very siloed,” she says. Teams working on individual efforts under local leadership slowed the pace of global progress and did little to improve the brand experience for owners, crews and customers.
“We recognize that going halfway isn't going to work,” she says. “We can deliver great features and capabilities from our core dev shop, but if the markets can't pick it up or pick it up in a waterfall approach, we're not getting the benefits of being agile. So, right now, we're on a journey of making sure we marry good project management with an agile way of working.”
For example, early platform tests showed the rollout of the mobile order technology was missing critical targets, leading to inconsistent deployments across markets. So the PMO implemented a strategy that included more aggressive testing in a dedicated reliability war room, where developers went through 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 solve reliability issues before they pushed back the project schedule or caused a loss of confidence, Ms. Martin says.
The GTPMO also addressed the risk of delivery delays by establishing a monthly release cadence for developers, with faster sprints for smaller deliverables. This required the development team to focus on delivering a minimum viable product (MVP) to keep the project on track. Pushing teams to deliver bits of a platform at a rapid pace accelerates delivery through constant iterations. “We have to be able to flex and adjust but still stay true to the course that we are trying to achieve,” Ms. Martin says.
For instance, on a recent project to introduce and increase delivery capabilities at restaurants, the MVP framework allowed the team to reduce 87 features to 12 for the first version of the platform. “That was really transformational for the business because they didn't understand what it would take to actually deliver 87 features,” Ms. Martin says. “But they did understand what it would take to deliver 12, and then we build from there.”
The GTPMO also ushered in new processes and standards, including a tiered governance structure that assigns program leaders to oversee progress on different aspects of critical projects, which helps lay a foundation for accountability, says Mr. Badskey. Now the company can “focus all of our initiatives in a strategic way to align with the priorities directed by leadership,” he says.
As with any transformation, success lies with the employees. So the GTPMO fosters a culture of perpetual learning that balances technical, business and people skills. The GTPMO supports all team members to earn the Project Management Professional (PMP)® certification, and it conducted training to strengthen agile knowledge. Because innovation often requires forging a new path, there are also courses emphasizing emotional intelligence. All of this is designed to fuel an inner hunger to improve and adapt and help GTPMO staff sharpen their leadership skills.
“I like them to ruffle a few feathers because that means they're pushing the boundaries,” Ms. Martin says. “If they're not ticking people off, they're staying in their safe zone, and that's not the place I want them to be.”
—Amy Martin, McDonald's Corp.
To ensure the GTPMO has the authority and support to drive change, Ms. Martin reports directly to Mr. Henry, the global CIO. And she's also worked to establish partnerships with executive leaders across the organization, providing a strategic and highly visible platform for the PMO. Through these partnerships, Ms. Martin's team is able to clearly define structures and governance upfront.
“Having that alignment at the C-suite level has set the PMO in a position of authority,” she says. PMO team members “are the ones guiding and influencing the outcomes.”
Past projects often suffered because different leaders and business units set priorities based on their own agendas. To avoid these types of conflicts, the PMO established an enterprise-wide process in which stakeholders work together to prioritize projects and objectives in ways that best meet everyone's needs based on the time and budget allowed.
“Even if we had unlimited resources and unlimited money, we still can't do it all,” Ms. Martin says. By validating and sequencing project goals through this process, the project leaders get buy-in for the project plan before moving forward.
Once deployment begins, enterprise prioritization drives accountability among stakeholders to deliver the agreed-upon outcomes, Mr. Badskey says. “Bringing all of those parties together ensured that when we develop our plans to deploy that technology to a given market that it truly is an end-to-end integrated plan for the company.”
Guided by the GTPMO, McDonald's can reshape its interactions with customers in a way that increasingly makes the company's restaurants a part of consumers’ day-to-day lives, Ms. Martin says. “The type of work that our PMO is responsible for has a global impact on the way the McDonald's operates today,” she says.
The mobile ordering platform was deployed across all markets in November 2017—one month ahead of schedule and US$10 million under budget. And the payoff was nearly as fast. A year after the project was completed, global sales increased 4.5 percent, and the app had accrued 60 million downloads, helping McDonald's build a database of customer behavior that provides insights into purchase intent.
“It has been a wonderful experience to see the foundation we've built within the global PMO and how it's provided a catalyst for change,” Mr. Badskey says. PM
—Scott Badskey, McDonald's Corp.
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Consecutive quarters of sales growth as of October 2019
Proportion of restaurant sales expected to be digital by 2020
Number of restaurants that implemented mobile order and pay program
Number of restaurants that implemented self-order kiosks