One day after Charlie Bell succeeded Jim Cantalupo as president-CEO of McDonald's -- which happened several hours after Cantalupo died of an apparent heart attack April 19 at
a corporate meeting in Orlando -- Robert Smith walked into a local McDonald's to grab a bite to eat.
Smith, founder and president of the Rockford, Ill.-based PR firm Robert Smith & Associates, was curious about the reaction among some of McDonald's rank-and-file employees
about the company's rapid changing of the guard. "I spoke to two managers who said, 'We just kept on flowing,'" Smith says. "I got the sense that employees were thinking that if
the CEO could be replaced so soon, they don't have a chance" should something unexpected happen to them.
Smith raises an interesting point for PR execs who, depending on their access to the C-level, must sell succession plans to several parties. Despite overall high marks
McDonald's received for its succession plan, the fast food giant and other major companies need to be mindful of employees' immediate concerns about succession.
"A lot of the praise came from outside people or management, but when customers walk into McDonald's they don't see managers, but employees," he says. "If employees are not
feeling good about the company it's going to come across. Customers don't care that the CEO was replaced so fast, but whether they have enough salt for their fries."
Jerry McVety, president of Farmington Hills, MI-based McVety & Associates, a division of HDS Services that specializes in full service and fast food restaurants, echoed
Smith's comments. "You have to sell the plan to employees as much as you do the media, if not more," he says. "Employees are your first line of defense and they need to know what
the plan of action is for succession."
Still, for the world's second-most recognizable brand (behind Coca-Cola) the first line of business following Cantalupo's death was to reassure investors (and suppliers) by
implementing a swift succession plan. Indeed, McDonald's stock was barely impacted by the succession plan, hovering around $26 during the two-day transition period.
From Martha to Michael, Dennis to Richard, most of the front-page news related to corporate America in the last few years has been of the scandal variety, providing the PR
industry with a compendium on how not to respond to crises. But for the most part, McDonald's succession plan offers senior communication execs a textbook example on how to
maintain business continuity when something unexpected and/or grave happens.
The McDonald's succession plan is in sharp contrast with some other blue-chip companies, such as Coca-Cola -- struggling to find a replacement for Douglas Daft, who announced
in February that he would be stepping down at the end of the year -- and Walt Disney Co., which has been getting bad ink because of investor upheaval against Disney CEO Michael
Eisner, who doesn't appear to be going anywhere.
"McDonald's did it well," says Dan Howard, professor and chairman of the marketing department at the SMU's Cox School of Business. "A lot of succession plans are half-baked and
are not discussed at board meetings, but they should be under scrutiny at all times." Howard points to a Reuters report showing that Colgate-Palmolive Co. has for the last several
years discussed its succession plan at every single board meeting.
Howard says there are three steps PR pros must take in order to execute an effective succession plan:
- An ability to communicate to stakeholders the company's succession plan beforehand.
- Insisting on "being in the loop" at the time of succession so as to work closely with upper management on communicating the change when it happens.
- After the succession has taken place, creating another succession plan to put on the shelf.
PR execs "have to know on a granular level who is being groomed [for the top spot] and how closely that person has worked with the leadership," Howard says, adding that the
McDonald's scenario should be a "wake-up call" to CEOs to make sure their VPs of communication are apprised of any succession plan.
John Baldoni, of Baldoni Consulting LLC, who in 1998 helped put together a McDonald's powwow similar to the one where Cantalupo was holding court when he died, says senior PR
execs must play a strategic role with employees, investors and members of the media. "You need to know who to contact [in each area] to make sure your story gets heard," says
Baldoni, whose clients include Ford Motor Co., Pfizer and the University of Michigan.
McVety adds that another crucial element in a succession plan is to have an executive from the tippy-top of the company -- rather than a PR executive -- serve as a spokesperson
to articulate the succession plan. "With a PR exec, it appears as if the company is hiding something."
Contacts: John Baldoni, 734.995.9992, [email protected]; Dan Howard, 214.768.2469, [email protected], Jerry McVety, 248.324.2500, [email protected]; Robert
Smith, 815.963.1497, [email protected]