Jim Cantalupo, who had successfully worked on McDonald’s rapid international expansion in the 1980s and 1990s, was recalled and appointed CEO from 1st January, 2003. Cantalupo also had a holistic view of McDonald’s as he had worked as an auditor of McDonald’s.
Cantalupo created a “Plan to Win” strategy which was put down as a one page document, which talked about People, Products, Price, Place and Promotion. One may feel that a one-page document would not suffice for a strategic purpose, but it is important to know that this “Plan to Win” strategy actually worked and brought about a significant turnaround for McDonald’s because of sound implementation. McDonald’s appeared to have been influenced by partner brands such as Chipotle Mexican Grill and Donato’s Pizza. Cantalupo felt that McDonald’s needed to return to the basics of “Quality, Service, Cleanliness and Value” (QSCV) which had brought success to McDonald’s.
Cantalupo felt that the old system of grading individual stores needed to be recovered. This would make individual stores concentrate on serving customers better. New groups of store owners with expertise in food, service, marketing and finance were recruited. Rapid opening of new outlets were curtailed. Whereas McDonald’s used to open around 2,000 outlets in a year, only 513 outlets were opened in 2003. The idea was to focus on enhancing QSCV to elevate customer experience. A concept of “Revitalization” was brought in by Cantalupo and his Chief Operating Officer, Charlie Bell, which conveyed the message to McDonald’s outlets that their No.1 and only job was to improve their restaurant and in case of any obstacles, senior executives of McDonald’s were to be called promptly. Marketing spends were cut down and an innovative menu was brought into place, consisting of healthier salads and sandwiches. As marketing spends were cut down, a system of regions bidding against each other for a limited pool of cash was incorporated and winners were chosen on the expected rate of return on investment.
As Cantalupo and Bell were successful in leveraging the QSCV model and were able to develop and deliver an innovative menu for customers in a short span of time, McDonald’s turnaround was realized by early 2004. In April 2004, Jim Cantalupo died suddenly of a heart attack. Charlie Bell was chosen as the new CEO, but unfortunately, a couple of weeks later he was diagnosed with colon cancer. He worked as CEO till November 2004 with conviction and belief to instill the changes that he and Cantalupo had envisioned. When he had to retire in end 2004 (because of being terminally ill), he was happy that he had a number of capable deputies in place who would continue to build upon the good work that he and Cantalupo had done to turn around McDonald’s.