Peter Bush: McDonald's Mr Fix It

McDonald's CEO Peter Bush has been instrumental in turning around the embattled image of the once untouchable fast food company.

In 2001, while in the heat of battle, then McDonalds CEO Guy Russo appointed one of the country's top fix it men to help re-energise, if not re-brand the besieged company. It was a time when the fast food giant was under fire from health lobbies, a time when the once formidable reputation was facing extreme prejudice. In the last five years media wars have been fought, movies have been made, industry anger curbed and battles lines drawn. And through Peter's strength, leadership and vision, along with the confidence and supervision of Russo, McDonald's is stronger than ever appealing to both traditional and new markets.

It was perhaps the best decision Russo made in his tenure as CEO, Australia. He has now moved into an International Relationship Partnership role with the company, based in Hong Kong but he certainly owes some level of thanks to Peter, who has played a major role in reversing the 'McDonald's means obesity' tag, by introducing new menus, new products and staunchly defending the product.

Peter, in fact, has made a career of 'image fixing'. As the marketing chief at Arnotts, he was forced to repair the damage caused by extortionists in a threat to poison Arnotts biscuits. An advertising blitz commissioned by Peter ensured the company regained lost market share. Months later in 1998, Peter found himself in the position of spokesman for the Sydney to Hobart Yacht race which tragically claimed six lives.

What came of these problems was greater consumer concern, particularly with the Sydney to Hobart race. Hard lessons were learnt but the race now has some of the most stringent safety measures of any ocean racing event.

It is Peter's philosophy to always put the consumer first and it is this philosophy that has been responsible for his success at AGB-McNair, Schwartzkopf and with his own consulting company Peter Bush and Associates. He has a long and distinguished career as CEO and although he was hired as a consultant to turn McDonald's image around, he was the perfect choice for CEO when Guy Russo moved to Hong Kong.

WCM: You have worked for a range of major companies, what are the differences between these companies and McDonald's?

Peter Bush: They are very different types of companies. They are all fast moving consumer goods companies where you don't have control over distribution. The commonality, however, is that you really need to spend your time and effort focusing on doing what customers want. That's been a key element of my career all the way through. Determining and making sure we stay very focused on what it is the customers want and ultimately what it is that takes to grow the business.

WCM: When you joined McDonald's what was the mandate?

PB: I joined McDonald's as a consultant. I came in to work with the then CEO (Guy Russo) on helping to re-focus and reinvigorate the business. The key consumer paradigm in the late 1990s was 'I grew up, but McDonald's didn't'. It was really a reflection that over the preceding 10 years, McDonald's hadn't changed that much, building exactly the same looking restaurants, exactly the same kind of food. I think the key thing we did was to focus very aggressively on what it was the customers wanted from McDonald's. They wanted improved food quality, they wanted increased variety in food and they wanted the entire McDonald's experience to be way more relevant.

WCM: What do you put the lack of 'growing up' down to?

PB: At the time McDonald's focus was very much on expanding stores. The business focus was to expand store count versus the number of sales we get in any given store. So it was about more stores versus organic growth. Secondly, McDonald's had a very powerful formula and it was about replicating that formula in as many sites as possible. As the business was doing that, it lost sight of the fact the marketplace was changing very rapidly. There were growing health concerns. If you think about it in this era people started jogging, gymnasiums grew up, everyone by the end of the decade had a bottle of water on their hip and the penetration of new kinds of eating experiences, I'm not talking about direct competition, but noodle bars and sushi bars and the coffee phenomenon, all these things were emerging rapidly and demonstrably showing that customers wanted to share in different kinds of things.

WCM: What was involved in changing the mentality?

PB: The business was focused very much on driving itself through a series of food promotions. The business ran about a dozen food promotions per annum. Those promotions were typically a Hawaiian burger and designed to bring people in. What we recognised we needed to do was address some of these issues in the marketplace and become more relevant, particularly in terms of the built environment, having more food variety, the way people were treated. We needed to address the big issues like the myths surrounding McDonald's. For instance our ice creams were big, fattening ice cream, we didn't use 100% beef and all these other quite mystifying myths that are out there about the business. We were caught up in the obesity debate. Very simplistically, the marketplace said McDonald's is to blame. It was very easy to point the finger and blame those nasty guys in fast food. You can't address these concerns with a six-week promotion. So all of these things, the change in design of the restaurant and the kind of food we sold to address obesity became long-term strategies. So the fundamental change for us was identifying those issues internally and externally and to develop a long term plan to address each of these issues over the long haul. We completed the original three- year plan in December (2005) and have now moved into a new five year plan.

WCM: What is that plan?

PB: More of the same by and large. There are a couple of really defining elements. The target of the business is to become Australia's favourite brand. That's not Australia's favourite fast food brand, that's Australia's favourite brand. That's a very aggressive target for us and the two overriding principles behind that are about food quality and remaining relevant. Then underneath hang a lot of strategies.

WCM: How do you usurp say a Nike to become the country's favourite brand?

PB: If you provide customers with exactly what they want you will win out with customers every single time. We are aggressively and rapidly changing customer perceptions of this brand. You have to have a target somewhere, so why not target number one.

WCM: Is it worth getting a famous face to promote the brand?

PB: Our view on this is that we think our promotional monies are better spent on addressing the issues that face the brand rather than having spokespeople do it on our behalf. I think there is probably great relevance for someone like Tiger Woods to represent a sporting brand because they carry the clubs, the shoes, the clothing, but a Tiger Woods relationship with McDonald's is quite tenuous. We're really going out aggressively on the broader issue and saying we need to put our money into resolving the issues in perpetuity, not having someone stand up and polishing them for a few weeks.

WCM: What were you goals when you started at McDonald's?

PB: The goals the CEO set me were to were to grow transactions and replace myself, which might sound overly simple but that's clearly what he (Russo) asked me to do. My goals haven't really changed in this organisation. It's quite literally to become Australia's favourite brand and I guess to do that the challenge that we're on is to do several things and they apply to all businesses: know where you are going, know how you're going to get there which means having a plan and make sure you have the right people. I put a lot of time and effort and believe very strongly that it's certainly not about me, it's about the team and making sure the team really do lift with the plan. Then staying the course and staying true to where you are headed. I think way too many organisations come undone through impatience.

WCM: You are renowned for your problem solving skills, which is one of the reasons you were brought into McDonald's as a consultant, how did your time with Arnotts, during the extortion controversy and the tragedy of the 1998 Sydney to Hobart ocean race steel you in terms of leadership?

PB: You don't expect, in career terms, to have two of those things occur in your life, but I think those events do two things. At one level they are quite energising and exciting because of the enormity of them and you're involvement, but secondly you suddenly recognise that the same issue is relevant - which is the safety of customers. The safety of customers at Arnotts was the single defining means by which we managed the entire extortion crisis. Every single decision we made went through the litmus test of making sure our customers were safe. In a very different kind of way the '98 Hobart race, although we had limited capacity to leverage against it, we made sure that in the aftermath we redefined ocean-racing safety. Which again was all about saying 'how do we make sure this race remains safe?'.

WCM: How have you coped with all these challenges?

PB: This might sound crazy, but I tend to be less stressed and thrive more when there's a lot more pressure on. My wife will be the first to tell you that in the first week of a two- week holiday I'm unbearable. I tend to come into my own in what other people would describe as enormous pressure. I think other people say of me, and I guess it's quite true, that I have the capacity to look at something that's pretty messy and get to the guts of it very quickly and say of the hundred things that are creating this mess, these are the five things we have to go after and that will get us to where we need to be.  

WCM: So what do you think defines a good CEO?

PB: It probably differs in different businesses and with different issues, but I think being able to provide the strategic vision is clearly the CEOs role. I think that's the first thing - providing the capacity for people to contribute to that vision, which is about getting the right team together and giving people the authority to get on and do what it is they need to do. You should also have a lot of fun on the way. I don't necessarily mean guffawing belly laughs, but being prepared to take risks, celebrating successes and making sure it's not all down and dirty hard work, and that even some of the hard work can be fun. I think having the capacity to reward your people for a job well done are all parts of the role of CEO.

WCM: How many staff do McDonald's employ?

PB: Australia-wide we employ about 56,000 people. That's through franchising, our own stores and everything else. In head office there's about 300.

WCM: Do you look over the franchises?

PB: I have responsibilities for Australia/New Zealand. That's about 1,000 restaurants.

WCM: How do you manage that number of people.

PB: I don't. I don't even try. My role is to make sure people know where we are going and the role they can play in getting there. We have a vast infrastructure of people who are well capable of doing their little piece in that. My role really is to say this is where we are going and each of you can play a role, and this is the role you can play. The more I am able to give that clarity, I think the easier it is to get where we are going to go.

WCM: What is the key to inspiring people to reach that destination?

PB: One of the big mistakes that companies make, and it's usually made from the top and the senior management team, is that they will sit around and build a pretty good business plan and know exactly where they want to go, but fail to communicate it down throughout he organisation. I think it is absolutely key that when you work out what it is you want to do, you put a lot of time and energy and effort in communicating that to the troops. A lot of companies will come up with a vision statement, put it on a plaque and post it around the building, we spent time and energy doing presentation after presentation and if we are talking to crew in stores it's a very different kind of presentation. It has to be horses for courses. You put lots of energy into making sure that everyone has the capacity to know where they are going. That provides them with their best capacity to take the journey.

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