McD Leadership Institute adds execs to Hamburger U. empowerment legacy

McD Leadership Institute adds execs to Hamburger U. empowerment legacy

OAK BROOK ILL. McDonald’s Corp. [3], Marcia Vargas’ career seemed to be in a holding pattern. —After 13 years with

She had started out in human resources with the fast-food chain in Portland, Ore., and three years later transferred to its headquarters here outside of Chicago to work in HR for the company’s central division. But at the end of 2005, her supervisor nominated her to attend McDonald’s Leadership Institute, a formalized training program geared for mid-management, director-level employees. Six months after completing the program, Vargas was promoted to vice president of U.S. diversity initiatives. —After 13 years with

The institute not only helped Vargas improve her leadership skills, it gave her exposure to senior-level executives both in the United States and around the globe. —After 13 years with

“It was demanding, but I’m absolutely glad I did it,” Vargas said. —After 13 years with

Challenged by chronic difficulties in staffing and forecasts of worsening labor shortages, restaurant companies increasingly are improving their internal leadership training programs to help retain talented workers, develop women and minority candidates for promotion, and generate new ideas and strategies to propel their business forward. —After 13 years with

“When you are in 118 different markets, you need to have strong, talented people across all functions, across all geographies, and this is a major way for us to attract top talent,” said Rich Floersch, chief human resource officer for McDonald’s, which is operator or franchisor of 30,000 restaurants worldwide. —After 13 years with

While such tactics as launching new Snack Wrap menu items and extending operating hours have kept its same-store sales on the rise for several quarters, McDonald’s also credits some of the chain’s improvement to a commitment the company made to employee development as part of its “Plan to Win” strategy launched three years ago. —After 13 years with

Out of that strategy came “Leadership at McDonald’s,” which last year was further refined into the Leadership Institute, an intensive, yearlong training program geared for mid-management directors worldwide. Training facilities are in Oak Brook and in the chain’s regional headquarters abroad. Candidates must be nominated by their supervisors. —After 13 years with

When the latest class of 38 leadership students finishes the course later this month, McDonald’s will have graduated a total of 184 middle managers from 45 countries, said David Small, vice president of the Leadership Institute. Of those, 40 percent have been promoted; 42 percent of the students were women; and 36 percent were minorities. —After 13 years with

The institute’s goal is to continue the type of development and training that takes place at Hamburger University, Small said. —After 13 years with

Hundreds of managers and owner-operators come every year to Hamburger U. on McDonald’s corporate campus in Oak Brook to learn how to run a McDonald’s restaurant. The two-story building houses classrooms, an auditorium and a restaurant laboratory. Students from around the globe stay at a hotel adjacent to the university during their training. —After 13 years with

But after Hamburger U., there typically had been little leadership training and development for employees as they advance in their careers, Small said. —After 13 years with

And as McDonald’s business strategy has changed in recent years, there was a need to refine and increase leadership training, he added. —After 13 years with

“The business was not doing so well in early 2000, and from my perspective that was one of the best things that could have happened,” Small said. “Sometimes it takes a crisis to change. We’ve changed our business strategy, which requires different skills and capabilities to lean against. —After 13 years with

“Our leaders recognize that [career managers were saying] ‘I know how to run the McDonald’s of old, but I need to get smarter to run the future McDonald’s.’ There is a real hunger to learn. We already have that culture with HU.” —After 13 years with

The time commitment Vargas had to make to the training gave her pause before she agreed to join a class last year. —After 13 years with

“I knew enough to know it was a pretty intensive program and not to immediately dive into it,” she said. “I knew some people who had pulled out of it because it was so intense.” —After 13 years with

The institute requires both time and travel. —After 13 years with

Students attend workshops on strategy, finance and talent management in addition to working on a project. Their coursework culminates in presenting their project solution to McDonald’s senior-level management, including chief executive Jim Skinner. —After 13 years with

For its project, Vargas’ team tackled ways to free up restaurant managers from some administrative duties so they could spend more time assisting customers and managing employees. Her group investigated ways to simplify the management of cash in a restaurant, from counting it to delivering it to the bank. They suggested using machines that take cash directly from the register, store it and count it, and having security trucks pick up the cash, rather than having the manager make bank deposits. —After 13 years with

After their project presentation to senior management, Vargas and her team were invited to present their ideas to the chain’s franchisees at a recent convention. The team’s idea now is being tested in a restaurant in Illinois and in some units in Australia. —After 13 years with

A big benefit of the leadership training is in helping to generate different approaches to business challenges, Floersch said. —After 13 years with

“We’re seeing some cool ideas,” he said. “Some find their way into the organization, and for others maybe it’s not the right time.” —After 13 years with

Vargas said the program helped make her a better leader. —After 13 years with

“The leadership piece, as you move up, is not about the technical skills, it’s about the ability to lead and inspire, set direction, and be futuristic,” she said. “I’d do it all over again if I had the chance.” —After 13 years with