Denis Hennequin: Managing a New McMomentum

 
The world’s largest restaurant chain is back on an upward trajectory. Helped not only by strong financial results across its 40-country European business but also by fresh thinking, especially external projection of brand values following mis-steps and PR disasters earlier in the decade. Denis Hennequin, the Frenchman who has been President and CEO of McDonald’s Europe since 2005, talks candidly about brand transparency and future challenges in management, marketing and menus. Interview by Bruce Whitehall
 

 
McDonald’s had a lean time around the 2003/04 period. How’s the European business looking now?
 
Hennequin: In 2006, we posted our best sales in nearly 15 years, with operating income up by 9% and an increase of 5.8% in comparable sales over the previous year. The increase in systemwide sales was 7%. Great financial results are, however, only achieved when the overall perception of our brand is strong. Research measuring trust in the company, value for money, good employer status and other measures indicates our results are good and improving.
 
What has helped bring about change?
 
Hennequin: We now see brand transparency as one of our three core European strategies, alongside upgrading the customer and employee experience and enhancing local relevance. These three issues are now placed at the heart of everything we do. Branded businesses like ours can no longer take customer trust for granted. successful brand is not just a trademark but is also a trust-mark. Today, more than ever before, our customers care what we do and how we do it. Their purchasing decisions are based not just on quality and value but also on ethics.
 
Why has brand transparency become so important?
 
Hennequin: People think big companies such as McDonald’s have a lot of secrets. We believe we have to engage with them, and with detractors as well as supporters. We had several major PR issues at the end of the 1990s and in the early part of this century, especially in the UK with the beef problems and the drawn-out McLibel trial, which was terrible. There was also the negative effect of high profile media activity surrounding books like ‘Fast Food Nation’ and films like ‘Supersize Me’. I can only talk about what I know and, for me in France, the big impact came in 1999 when, as part of an anti-globalisation protest, French sheep farmer José Bove smashed up one of our restaurants during construction. He was protesting against a US surtax on importation of luxury products like Roquefort cheese so it had nothing to do directly with Mc- Donald’s. But it was a wake-up call for us. We had been in France for 12 years and thought everything was going very well. We simply did not understand why we were getting so much criticism suddenly. As a very visible and accessible business, we knew we were a symbol. But we did not want to be a scapegoat because, when you become one, you find that everybody goes against you. So we were forced to react, and that led to a new strategy in France.
 

 
| 15 October 2007 | Bruce Whitehall |