The E Word

Wayment! McDonald’s Always Had Inclusion as Its Secret Sauce

• Karen McFarlane and Brittany S. Hale • Season 2 • Episode 2

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Contrary to the headlines, McDonald's isn’t abandoning its DEI principles—it’s been blending them into its secret sauce all along.

In this episode, we dig beneath the headlines to explore McDonald's purpose and impact report, highlighting what the global giant is getting right, where we disagree and see a higher opportunity for its actions, and why its evolution could light the way for other organizations. From raising the bar on food quality to empowering employees and fostering community connections, McDonald’s has the chance to lead by example and prove that inclusion is a key ingredient for success. Karen and Brittany talk about HOW!

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Karen McFarlane:

Hey, Brittany, we're back at the.

Brittany S. Hale:

E-Word. We are Happy New Year. How are?

Karen McFarlane:

you.

Brittany S. Hale:

I'm good.

Karen McFarlane:

I'm good. I got over the flu last week so I didn't think I was going to get it, but I got it. But I'm feeling much better.

Brittany S. Hale:

I love that. That is the gift that keeps on giving. I think I had it the week before, so I just I like to say that's how we started off the year. It's all uphill from here. I mean, it's all good things for me.

Karen McFarlane:

All good things. I decided that my year wasn't going to start until February 1st because of the trauma that happened so far in January. So thank you for more. But just because my year didn't start right, it's not starting, doesn't mean that other people's years aren't starting and that the drama continues.

Brittany S. Hale:

Yes, it does, yes, it does. And you know, I wish we all could be as relaxed as Mina is. But it's okay, I know. But, Mina, we were talking right. You know, I wish we all could be as relaxed as.

Karen McFarlane:

Mina is, but it's okay, I know. But Mina, we were talking right before the show everyone that Mina wasn't around and then she came over to say hey, get started. Exactly, she's producing the show now.

Brittany S. Hale:

Yes, she is a producer.

Karen McFarlane:

Mina Hale is in the building.

Brittany S. Hale:

Exactly Hold on. Mina Hale she should be an actress.

Karen McFarlane:

I love it, love it, I love it, but okay when was it last week or the week before, when all this uh news came out around mcdonald's? We weren't loving it, right, right, right, because all the news came out that McDonald's has eradicated their DEI practices. It's like, oh my goodness, right. But then sometimes you have to look a little bit further, right, and we discovered that those are the headlines. But it's not that they eradicated their DEI principles, they're actually evolving them.

Brittany S. Hale:

All right. So I mean, this company feeds 68 million people a day. So what does a DEI evolution look like?

Karen McFarlane:

Well, they have a purpose and impact report, and, of course, you can go to their page, right, and you know, on the very first page of their purpose and impact report, it says our purpose is to feed and foster communities. Right, as a leading global food service retailer, we believe it's our responsibility to make a positive impact on the world, and this makes sense, right? So, even when the news came out, my immediate thought was, oh my God, that's horrible, but how? Because it is a brand that is integrated globally integrated globally, right, that is very deeply entrenched in certain communities and touches so many different aspects of life, because it is a food supplier. So how do you pull back? What does that look like in terms of pulling back your DEI practices, right?

Karen McFarlane:

And this is, I think, one of the. You know we've talked about this a lot that, in the political agenda, dei is one thing. It is about race, right? Yes, and it is. That's so far from the truth. It is a multifaceted discipline across your organization that is focused on the community, or even the greater society, depending on how. You know how your brand interacts with it, right? And so that's why I think it's really important to, like dig into what they were doing, what they were doing and what they are planning to do now, right. And when you have an organization that not only focuses on jobs but also planet and food quality and community, right. You have so many different aspects of where not just DEI because DEI is part, I think is part of like a bigger discipline, right, but where their purpose and their impact and their purpose and impact really falls into in the greater scheme of things.

Brittany S. Hale:

Okay, I like it, I like it, yeah.

Karen McFarlane:

So if I just just to level, set everybody right, they have four areas. Okay, they focus on the planet, so that's climate action, packaging and toy waste Sorry, packaging toys and waste nature, forests and water, so that's under the planet, under food quality and sourcing. Their categories are food safety, nutrition and marketing practices, which I think is actually pretty interesting. Responsible sourcing, animal health and welfare and responsible antibiotic use. Under jobs, inclusion and empowerment, fall, human rights, dei and talent and benefits, and we're going to see DEI evolve more towards inclusive efforts. And then community connection, which is community impact, and philanthropy and, of course, the famed Ronald McDonald House charities. Okay, a lot of different areas that they touch.

Brittany S. Hale:

All right. So this inclusion and empowerment being morphed, melded into inclusion.

Karen McFarlane:

Yes, yes. So I think there's a lot to unpack in it, but I think the way that we could kind of sum it up is that they actually have been doing well on all of these fronts, right? And so if you are moving from, say, aspiration to, or if you have moved from aspiration and you've gotten the work done right to a certain degree that your company is proud of, you've met your goals. Maybe you're even doing better than other. You know benchmark organizations around you. What is your next step? Do you stop Right or are you looking for a way to be more impactful in what you're already doing? And if you dive deeper into their report and their data, you see they're doing actually very well in these areas and they're focused on.

Brittany S. Hale:

Of course, this is self-reported, right but I but I also want to note at least what I saw in you know kind of the coverage over the years. They're recognized as one of the best places to work for LGBTQ plus equality. For seven years, so for almost a decade, this has been a space that's been recognized for what we would now call inclusive practices, so that's very interesting.

Karen McFarlane:

Well, the Human rights quality index. They got a hundred for many years in a row, a perfect score. So where do you go from there? So you know, just to underline that point you're making. Sorry to interrupt.

Brittany S. Hale:

No, no, I think I think that's a perfect kind of segue into what that evolution is, because it seems like the human Rights Campaign Foundation's Corporate Equality Index is also a target right for conservative groups who want to advance a political agenda to either adjust or eradicate DEI programming Right. And so now, given that I mean, it seems like McDonald's is saying they are going to take a step back and that they're going to they're no longer going to self-report to external groups and really just kind of focus on what they're doing internally One, I'm curious to know what you think about that. And then, two, I'm also curious to know what happens to these indexes. What do we do with that? If other companies follow suit and stop self-reporting, is there value in even having these still?

Karen McFarlane:

I believe in the reporting because people need to aspire to something. So I understand to some degree why McDonald's is like oh, we keep getting 100. What's the value? I'm sure it's not easy to pull these reports together, the resources, all of that stuff, right. And so every organization has limited resources in one area or the other, right, no matter how big they are. And so they may be redirecting those resources into something that they feel is going to be more impactful for their business. So I understand the thinking, if that's the thinking.

Karen McFarlane:

At the same time, you know, when you don't have organizations that are capable, like you can't see that organizations are capable of reaching the higher thresholds, then the companies that are aspiring to that, you know, will have this issue. You have to see it to believe it, right, essentially. So I still believe in the reporting. I think the Human Rights Index has some work to do around, unfortunately, right, because of the attacks on them, on how they can evolve their process. I don't know if it needs to be easier, I don't know, I don't know the details about that, but to encourage companies to not give up on, you know, reporting and benchmarking. Those benchmarks are incredibly important, like when we, when we consult for clients, right? People want to know how they're doing against other organizations, like organizations. So I really do think it's the responsibility of the organizations to continue reporting it to them. That's my, that's my personal opinion.

Brittany S. Hale:

Yeah, yeah, I mean, I I agree with that. You know, I always think that there needs to be some sort of accountability. I'm also very aware of the conversations that tend to lead a lot of these organizations, which are one. We don't want to attract any sort of undue attention from, these groups that are litigious, that seem to have support at the executive level. And how do we continue to one maintain our business success without attracting any sort of undue attention? So it seems like a lot of companies are going to want to fly under the radar.

Karen McFarlane:

Yeah.

Brittany S. Hale:

And I see a space where, in so doing, they may not report externally. But I guess I'm trying to figure out what that external reporting looks like. Is it you just continue to report to the HRC until someone tells you to stop right, Until you receive some sort of injunction or whatever, or do we evolve the way that people report?

Karen McFarlane:

I think it's an evolution. It might also be that these organizations join with. You know, organizations like the Human Rights Index, right, like to, especially the ones that are doing well to be like all right, well, where do we go from here? So how do we evolve those practices they know best because they're doing the hard work, instead of just saying no, we don't need to do this anymore. Maybe they don't need to do this anymore. They might not need to do this version of it anymore. So what is version 2.0, 3.0 look like? So I would invite them to think about that and participate in the larger discussion.

Karen McFarlane:

One of the things that I think should be aspirational for all brands, but particularly those like McDonald's, is to become a regenerative brand which is actually giving more than what it's taking out. And what does that look like? Maybe that's where McDonald's and other companies like them should be tracking towards. It might be a very elite, exclusive group, but that's okay. You know um be those forward thinking organizations that are here for society. Their, their purpose what did I say their purpose was? It was like to foster is to feed and foster families, and you know, feed is a can be a very specific term, but it could also mean something a lot broader, and so you know what is. What does that mean in a more enlightened society? It is one of the most recognized global brands, right Everywhere worldwide. Everybody knows McDonald's Some form of fashion, we know how it. Everybody, every single person, almost probably knows how it tastes, or how it's supposed to taste, depends on what you're at.

Brittany S. Hale:

I had a very delicious living mac in paris did it taste the same.

Brittany S. Hale:

It tasted a little bit better in my opinion, but the, the flavor combinations were the same and I think that's what you go to them for, right? Is that consistency? And to the point of them really kind of renaming their DEI team to their global inclusion team, they're inclusive of the flavors that are best represented in those markets. Yeah Right, yeah, all right. So when you go to a Big Mac or a Big Mac, when you go to McDonald's, you know, in Southeast Asia you're going to have different flavors represented. Right, you may have Ubi and you know other, you know just a purple sweet potato for people who are unfamiliar, for people who are unfamiliar, and that's not something that's present in Paris, but we're also going to have other types of flavors that a Parisian market or a French market is going to respond to. And I think that in and of itself is the articulated value of inclusion, and I can understand why they're moving toward inclusion, given that diversity maybe unfairly has become politicized and maligned.

Karen McFarlane:

And maybe maybe they have achieved the diversity, right, they don't need to call that part out anymore, right? They are maybe embedding the have already embedded many of the equity components, right, so it no longer needs to be highlighted as a focus. I mean, one of the main things is that a lot of this was aspirational and they have done it right. And, um, now it's just around just all the time, being inclusive all the time, because they've they, they have diversity, they've shortened up their practices, and now it's just about iterating that inclusion. Do I think that inclusion is absent of diversity and equity? No, because, right, what's the statement? You can have diversity without inclusion, but you can't have inclusion without diversity, right? For example, right, so it's already, it's embedded in that systemic process that they've already put into place and they'll have to keep. I just, and they'll have to keep.

Karen McFarlane:

I think I just felt to keep monitoring, right, like cause, the pendulum can switch for whatever reason at any time, right, but you know, it seems as if this is just about language rather than action. Correct, here, right, here, right, without working there, obviously so, and it seems as if, because they changed their language and the rhetoric that's going around, you know, it's just created an inflammatory environment around it. If we we think critically about it, there is no way that a company like mcdonald's could eradicate it. It is their soul, essentially. You know what I mean.

Brittany S. Hale:

And they want to maintain their presence in really every market. Right, and if they wanted so, being myopic or, you know, say hey, this doesn't matter, only creates an opportunity for a competitor to fill that gap. So for a small business, there's a space where you could get up and look around the building and say, huh, we don't have a lot of women in IT or, you know, whatever the case is, we don't have a lot of women in marketing, and maybe you make certain inferences that lead to business decisions that way. That is impossible for an organization like McDonald's. However, it is important that they understand who's buying these franchises. But what do the demographics look like for particular areas, not only of the country, not only of the United States, but of the world? And how do we amplify our own business success based on what we know?

Karen McFarlane:

We have to know that, yeah, One thing that's there's so much in this report, right, but they have five core values. Okay, One serve we put our customers and people first. Number two inclusion we open our doors to everyone. Three is integrity we do the right thing. Four community we do the right thing for community. We are good neighbors. And five is family we get better together. I'm not mad at those.

Brittany S. Hale:

No, I can't say that I am.

Karen McFarlane:

I'm not mad at those and their growth pillars. I'm not mad at those.

Brittany S. Hale:

And their growth pillars. One of their first growth pillars is marketing oh, tell me more.

Karen McFarlane:

Staying connected to what our customers love about us and bringing that emotion into our creative. The second pillar is core. Our core menu remains our competitive advantage and a strength that we are capitalizing on to grow share. And their third and final pillar is digital delivery, drive-through and development. They're four Ds. We will continue to expand our loyalty program to power personalized experiences while getting closer to our customers by accelerating the development of new locations.

Karen McFarlane:

So just what I like about the growth is it's really very focused on the customer set. Right, it's just said they're going to listen and represent, because I guess their primary vehicle is through that creative. Creative is huge, right, but that's how we get to know McDonald's in many different ways, and they're going to keep that consistency, what we love about it and they're going to find new ways to share you know more about what we love and then you have, like, all these other components. Like, one of the things that was highlighted in some of the more negative articles was that they were pulling back on their supplier diversity, outreach and goals. Right, but it's been a very core component of how they operate and so it seems to be more not like we're going to pull back on goals. We've met our goals. How do we?

Brittany S. Hale:

deepen that. I believe three years ahead of time, right?

Karen McFarlane:

Exactly. How do we deepen and evolve that engagement, right? What does that look like? You and I don't know, right, yeah, but if this is all true, right, it's where we want companies to be, because they could have very easily said check, check, we're done.

Brittany S. Hale:

Exactly, exactly.

Karen McFarlane:

They're like yeah, we're good, but we could be better.

Brittany S. Hale:

Correct, correct, we could be better. Question for you. Yeah, now again the news cycle is going to be full of reactionary headlines. And, to your point, we delve deeper, because that's what we do and if you were listening or watching you, that's what you come to us for, right for, for the deep dive. But everyone is not going to do that. Additionally, as we continue to evaluate these steps, we're entering a new space no one's in. No one can say for certain. I mean, I don't have my crystal ball with me, got lost in the mail. I don't know if you happen to have yours, no, mine broke. But given that we're, you know we're we're flying a little bit blind. How much grace do we owe these companies to iterate to figure it out, knowing that all of their moves are going to be assessed and or in the headline?

Karen McFarlane:

Part of me feels like we have no choice. You and I know how the speed of business goes. We you and I know how hard this stuff is in terms of not even doing it, but more so in communicating what you're doing and measuring what you're doing. There's no I think there's no argument that the metrics are still a little amorphous to many organizations or they're just limited to you know, mostly things around the talent pipeline, when there's so many other aspects to dive into, and then people are paralyzed by fear because of you know the rhetoric around DEI. So I think we have to give some grace in that respect, but we can't allow people to take their foot off the gas around this. And what does that look like in terms of allowing, like as a general consumer? We have these platforms, our social media platforms, like, so we say things out loud, we hopefully do our research, we become more informed and educated consumers and then, ultimately, we just put our dollars where our mouth is.

Karen McFarlane:

Now what I find a little tricky about that, to be honest, is that this is all about collective power and I can decide I'm not going to shop somewhere anymore and spend my dollars there. But how does that translate into a collective action or even a collective report that, because of this thing that Company X did, their shares have gone down, their revenues have gone down, because Karen and 20 million of her closest friends decided that they were no longer going to spend their dollars there. There is a disconnect in making that connection and so it kind of sometimes feels, if I'm being honest, like you know, it falls on deaf ears, right, because we don't know how to galvanize effectively around this stuff. And a friend of mine were talking about this this morning was like, like you know, for the black community in particular, right, like, okay, some of our like, we don't, the heroes or the voices are gone or they're not as loud as they were, say, in the 1960s. Because, right, we can just go on social media and say something, but there's, there's no organizing.

Karen McFarlane:

But the problem is there's no organizing around it, whereas back then there was organizing around all of this. We've lost this human connection to the organization of power and influence and we have to figure out a way to get that back. Otherwise, we're just reading headlines and reacting to them, but not doing anything about them. Correct, correct.

Brittany S. Hale:

I think that's kind of the down part of the advancement of technology. Right, we scroll, we have the reaction, and then we scroll once more and we're placated because we can see something that's more pleasing. So then we forget to ask the question what do we do or what can be done? If I don't like this, what can I do about it?

Karen McFarlane:

Yeah, it's like when, for example, when George Floyd was murdered and I was president of the New York chapter of American Marketing Association. At the time, you know AMA, you know CEO and leadership were not really interested in participating in the conversation, were not really interested in participating in the conversation and a few chapters, my you know few presidents sorry me, and like six others, were very intent on doing something and we didn't know what that was at first. Now we're all over the country. So you know Zoom and stuff was you know Right.

Brittany S. Hale:

It's still gaining its legs.

Karen McFarlane:

Right, exactly, but we organized around that, using technology, right, to bring us together, and we organized around it on a regular basis, so there was some consistency around it. We met almost every week, right, and then we figured out what we were going to do. We got it done and we met like every day like not every day, like quite often for a year, right and to execute our plan and there was an attachment to not only the issue but to the people that we were working together right, and we became friends and that was very unique because of the situation. But if you also think about, if you are organizing and you have to go to a meeting right, you have to physically put yourself in these spaces and the energy that comes off of that fuels your action, fuels your emotion, then you actually get more done through that. But, like you said, with social media, if you're not connected, truly connected personally, not only to the issue but the people that are fighting with you like you need that group mentality sometimes to keep you going then it's so easy to just scroll and go see oh, you know, puppies, I love the puppies.

Karen McFarlane:

There's so many times I'm like, oh, I don't want to see that scroll puppies Exactly. There's so many times I'm like, oh, I don't want to see that scroll puppies exactly. So we have to take responsibility. I mean, we are about to shift into a new era right now, the changing of the administration, who has some pretty broad, sweeping policies that are pretty, you know, antithetical to my own personal beliefs and, I think, many others. And, um, there there can be a feeling of hopelessness around it. I have to admit I don't know exactly what to do, or what you know all the time, but I think the biggest things that we can do, that we have no choice to do, is use our power of voice At the very least.

Brittany S. Hale:

Yeah, yeah, you know, and I think I think it's always a valuable question. Before we ask where are we going and what do we do is how do we get here. Before we ask where are we going and what do we do is how do we get here. What is very clear is there's a significant group of people who felt unheard, and this administration is a result of that. Whether or not it was truly true that they were unheard, the point is to your point, they use their voice right to exercise their power, and now we are facing the unknown, and I understand that there's a lot of emotional reactivity to it.

Karen McFarlane:

But as you said, the point is to continue to use our voice, continue to be curious and ask questions and continue to have these conversations. If you were um advising a company right now, that is not mcdonald's right. Um has been doing some, some good work, okay, but is fearful of the admin that's coming in or being laser pointed at for some reason, what would be if you're talking to management, ceo or C-suite team? What would be your one piece of advice for them?

Brittany S. Hale:

My piece of advice would be to continue to ask the question of how this furthers our business success. Do any of these initiatives further our business success? If so, how, and how do we know? That's always a question I want to know. How do we know If this is something that was performative, perhaps PR, if it was something where, again, you're trying to keep up with your competitors within your particular industry oh, they're doing this, so now we need to do this. My question is well, why, how does this further? What is the legitimate business purpose of this, and how do we know it's successful?

Karen McFarlane:

I think that's fair.

Brittany S. Hale:

Yeah, I think authenticity is going to be critical as we move forward, because people, however people feel about the administration, at the end of the day, people are going to want to be able to trust that what they're being presented with is the truth in some way, shape or form. We all develop relationships with brands. We all have these relationships that we pour into, and so, if this is I'm assuming that the organization I'm working with is somehow customer facing or has some sort of customer facing arm ultimately they are going to have to present a perspective to the public that they're going to have. You have to update your about us page Like it's. It's going to have to happen, but you need the clarity and you need to be able to mount a very strong defense before you even get. I'm not even talking about the courtroom defense before you even get.

Brittany S. Hale:

I'm not even talking about the courtroom, I am talking about for for the casual person coming through to say, well, what is this about this inclusion stuff you all have going on? Yeah, you need to be able to answer very clearly how this furthers your mission, your business goal. Ostensibly, you're in business because you want to solve a problem and be very successful at doing so, and you want to continue, year after year, to continue to be more and more and more profitable. This has to feed directly into it, and so I uh we spoke about accountability a little bit earlier. Um, you know me, I'm a political optimist. I'm going to seek the opportunity in all of the adversity and I'm going to see how does this deepen the trust between this particular company and their target audience?

Karen McFarlane:

I mean that's absolutely right. I have my militant look on today, so I would also add to that is do all those things and then go control your freaking company. Right, correct? You run things. Okay. Don't let any outside force tell you how to run your business. Okay, if it works for you, if you, if you think that these principles, however they show up in your organization, just like you said, are important and they're meaningful, go do the damn thing and run your business. Don't let nobody else push you around. That's how. That's my little tough love, that's it, and that's all folks.

Karen McFarlane:

Take care of your damn business. Yes, well, I'm glad we got to talk about this today that had some positive news about a company leaning into its values and not pulling back and not running scared. And so kudos to McDonald's for their hard work all these years and continue to make us proud and show us how it's done. You know and report on. So we know and report on it. Exactly. All right, brittany Mina, are we done? Are we good? Was that a good episode?

Brittany S. Hale:

We got the call, so it's time to wrap it up.

Karen McFarlane:

All right, then, until the next time on the e-word, Bye Brittany.