Cover Story
Lovin’ it
How Ralph Alvarez continues to push diverse ideas to keep McDonald’s at the top of the fast-food chain
By Mike Cottrill
Smart Business Chicago | May 2008
Page 1 of 3
The next time you think you have a hard time getting your people to move in one direction, imagine having roughly 31,000 locations and 1.5 million employees.
Welcome to the world of McDonald’s Corp.’s Ralph Alvarez.
So instead of spending all his time making out name tags or
constantly visiting the more than 100 countries that have a
McDonald’s, Alvarez, the quick-service restaurant’s president and
chief operating officer, and the executive team use another way to
unify the company: through its differences.
Building off the company’s diversity has become as closely tied
to McDonald’s growth as the Big Mac or Chicken McNuggets.
Want McProof? Since its inception in 1955, McDonald’s has had
only one slip in its growth, posting a loss for the first time ever for
its fourth quarter of 2002. Despite heading toward $16.2 billion in
revenue in 2003, the company was facing its worst margins and
things looked bleak.
“We took our eye off the ball some from the funding and the
focus around these long-term plans,” he says. “While we were still
very good, we could see how this is something that if you’re not
stirring every day, you can have a situation where you can lose
some of the progress.”
So McDonald’s refocused on creating opportunities for different
cultures to shine, adding to the foundation of recruiting minority
employee owners and franchisees.
“It’s easier to cater to the masses,” Alvarez says. “That’s the reality. But when we celebrate our differences, we’re better because
we’re different. That’s better than a leadership team that looks and
talks and thinks just like you.”
To keep benefiting from those differences, Alvarez has worked
to keep McDonald’s focused on growing opportunities given to
minority employees and franchisees, and then he makes sure that
the company isn’t just meeting quotas but giving the minority opinion a seat at the executive table. As a result, the company has
sharpened its focus on serving its diverse customer base, and
McDonald’s is setting growth records once again, posting just
under $22.8 billion in revenue and nearly $2.4 billion in net income
in 2007.
