With 35,000 restaurants in 121 countries, McDonald’s is not a so much a F&B outlet, it’s a machine, an army of operational excellence.
It’s also a network of franchisees, which makes innovation a bit harder, as you can’t really design a new service or product and just push it to the network.
During the Break conference in Bali, Zaki Fasihuddin shared the story of McDonald’s digital innovation team which tries to reinvent the experience and, who knows, take the lead on the restaurant of the future, a necessity when revenues are rather on the downward path for the fast-food giant.
McDonald’s digital innovation team: from 3 to 130 employees in 18 months
Zaki joined the McDonald’s digital team in early 2014, with previous experiences at PayPal, American Express, and mentoring roles in the startup scene of San Francisco.
On the left, Zaki Fasihuddin
“The brand was global, the scale as well, but there was no holistic approach of the digital”, he says, adding they acknowledged lacking talent in house on this topic.
Zaki was recruited to open McDonald’s office in the Silicon Valley, to bring folks who “get it” in the company, with experience in coding, shipping and product typically. The idea was to create an internet company inside this company, to bridge both offline and online worlds.
“What is the McDonald’s of the future, from a customer experience first. We take the customer journey, in the restaurant, at the airport, in the car, the physical engagement level”.
And the assets of the burger brand don’t stop here: “we’re also a brand of fun, with key partnership with sports events such as the Olympics, so we can create engaging experiences. I went from being focused on payments to content creation, music and games, connected car, virtual reality, because the brand is so broad”
The McDonald’s digital innovation team has two hubs in Chicago and SF, and then all over the world, with the team now counting 130 people globally. The CEO gave them a mandate to re-imagine the restaurant experience of tomorrow.
From a consistent brand to mass personalization through context
Rather than “making fast food faster” as suggested Mike Chen from Swell, the organiser of the conference, the objective was to integrate each customer’s context into the overall experience.
Digital at McDonald’s is not just marketing, and Zaki’s teams innovate on the customer journey in two main areas:
- customer experience: innovation on a specific future (ordering, payment, mobile), by building products, it’s a model where they switch from agency reliance to bring it in house, as they want to own their future and skills;
- customer engagement: how to ship, to distribute, to engage on social networks, or when we ship a mobile app, customers have a reason to continue using it
Beyond the customer journey itself, three categories are assessed as strategic for McDonald’s digital innovation teams:
- In-restaurant experience, and how could a user control the restaurant with the remote control that the smartphone is becoming. “Today you can either be in line in the restaurant or drive-in. How can you change it? Customise your food, where you’re seating, who you would want to meet? There are core items such as fries, Big Macs, but also a lot of thing to “unbundle the restaurant experience”, says Zaki
- The next generation of drive-ins, to reduce frictions in the drive-through. “How about ordering while driving? How to integrate the car experience? That’s why we also work with the smart car ecosystem”
- Food anywhere. “Why can’t the food come to you? We do it well in Asia with delivery. The sharing economy model in transportation now allows it. What is the uberification of food? It’s key for us, at McDonald’s we know that if people don’t take cars anymore, there’s a huge impact”
How to reconcile the corporate and the startup teams and rhythms?
As in many corporate innovation case studies, one of the main challenge is the culture clash between an ageing, processed and risk-adverse corporate workforce, and the “break everything, and as fast as possible” mindset of startupers.
When ApplePay launched, for instance, Zaki and his team created a secret project with 20 people in the company, from the CEO to people in the restaurant, both to have the decision making, the support and people who understand the behavior. It took them less than 90 days for the whole project, rather than the usual months it would have taken with the corporate process.
The main issue with the F&B, he adds, is that “everything is about safety and control, no one gets sick after a McDonald’s despite the huge volumes sold everyday, everywhere”.
Tech, on the other side, is all about risk-taking. “Our team is not so much about digital experiences, but that there’s a different way to work. Once you did it once, you can do it again and again”, he adds.
For him, what’s important is also the co-creation opportunities between big and small companies, rather than “off the shelf” purchase.
You can find another of our case study from the same conference with Lufthansa Innovation Hub, and we’ll be publishing soon about Absolut in the field of F&B too.