WESLEY MISSION SYDNEY STRATEGIC PLANNING.
ALAN WALKER VILLAGE - OCTOBER 2003.
"WILL YOU HAVE FRIES WITH THAT?"
For people who do not think widely, McDonald's, the world's largest food service retailer, is an easy target for almost any criticism a person wants to make.
I happen to think McDonald's one of the world's best examples of almost everything good in a global commercial enterprise. I realize that some people have political objections to anything that involve the words "global", "commercial" or "enterprise", but that is their problem.
McDonald's, with more than 30,000 restaurants in 119 countries, serve 46 million customers each day. McDonald's opened its first restaurant in Australia in December 1971. Today there are more than 680 restaurants throughout Australia. Out of 20 million people in Australia, McDonald's restaurants in Australia serve more than 1 million customers each day.
It does not matter where you go in the world, in McDonald's you will find the same polite service, clean toilets and rest-rooms, and a standard of discipline among staff that has been the making of many young people who were formerly unemployed until they turned to McDonald's.
The Golden Arches, along with the Cross of Jesus, are one of the world's most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of the informal eating-out market in virtually every country of the world. They serve the world some of its favorite foods - World Famous French Fries, Big Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin.
But recently McDonald's has struck trouble. There has been fierce competition from other companies wanting to share the available dollar. Their very success has meant that all of the best sites for new stores have already been developed.
In a world that has been talking weight-loss and slimness, hamburgers, fats and fries are becoming culturally unacceptable. Then there have been the rumours about the destruction of third world rain forests to make way for beef ranches to provide beef for McDonald's, and force fed genetically modified chickens for their chicken-burgers; and opposition from the green environment movement that opposes any global corporation as the rapists of the earth. Then there have been changes in senior management with the possible loss of direction and momentum.
The result has been mounting debt, the first year in history that McDonald's has encountered a world-wide loss, the downturn in the value of the American dollar, increased local labour costs, consumer perceptions concerning the Company's products; negative publicity regarding the Company; changes in government regulations; changes in accounting policies and practices, and a downwards spiraling stock price that wiped hundreds of millions of dollars off the company's value. The Golden Arches were crumbling at the base! How could management arrest the slide? How could management create a sustainable future?
What has happened is a lesson for Wesley Mission Sydney and for all organizations that have enjoyed years of unprecedented success, and which now face challenges.
McDonald's response was to became a leader in corporate social responsibility. McDonald's commitment to social responsibility was a surprise that has now become an important part of their core values. More than ever, they are committed to doing the right thing for the local communities in which they operate and for the customers they serve. McDonald's is setting the standard for "social responsibility." McDonald's means local development, support for local schools, youth sports, and other community programs. Their Ronald McDonald House Charities help improve the health and well-being of children and families around the world.
McDonald's have become leaders in commitment to environmental protection. Their restaurants around the world have innovative programs for recycling, resource conservation, and waste reduction. They work with expert advisors and suppliers to make further changes so that resources used to meet today's needs will remain available for the needs of future generations. McDonald's work with their suppliers to improve animal handling practices, help preserve the effectiveness of life-saving antibiotics, ensure the quality and safety of restaurant environments, and promote the protection of workers' health, safety, and human rights.
Since 2000, they have published a Social Responsibility Report, something we did the year before and like us, they now use triple bottom line reporting. Recently, while studying how to legislate the use of gene modification in crops and animals in this country, I discovered McDonald's have called its suppliers worldwide to phase-out animal growth promotion antibiotics that are used in human medicine. The Global Policy on Antibiotics also creates a set of standards for McDonald's direct meat suppliers to eliminate growth-promoting antibiotics and to reduce other antibiotic usage.
McDonald's asks its producers that supply over 2.5 billlion pounds of chicken, beef and pork annually to take actions that will ultimately help protect public health. The company's purchasing power helps reverse the trend of antibiotics overuse in animal agriculture. McDonald's Europe began phasing-out growth promoting antibiotics during 2000. At the end of 2001, all European-based suppliers for poultry had eliminated growth promoting antibiotics for use in chicken feed. By end of 2002, the end was in sight for all USA based chicken producers. They are far ahead of Australian producers in this regard as you would have seen in the press and on television concerning Mangrove Mountain chicken producers.
But, as well as this, in 2002, McDonald's purchased more than $460 million in recycled packaging materials and reduced packaging materials by an additional 35 million pounds. They are also in an alliance the Centre for Environmental Leadership in Business, a division of Conservation International, to promote conservation and sustainable agriculture in our global food supply chains and address issues related to sustainability in the fishing industry. Recently they announced new global healthy lifestyle initiatives, including a commitment to develop new Happy Meal options, salads and wraps and a program to help educate consumers about the role of nutrition and fitness in maintaining good health. And they have diversified in their up-market Boston Market chain.
The result of all of this in terms of sustainability? The McDonald's revitalization plan is on track and their financial results are showing it. In September this year, there was a 70% dividend increase, the biggest in 25 years which pleased investors. There was a dividend payout of $500 million, which was up $200 million. Jim Cantalupo, McDonald's Chairman and Chief Executive Officer, said, "As part of our global revitalization plan announced in April, we remain focused on reasserting McDonald's operational and marketing leadership, becoming more relevant to customers and managing our business for financial strength.
The U.S. comparable sales have been positive for 5 consecutive months and we repaid $400 million of debt. We still have much to do to achieve our performance goals; so, we will continue to take the actions necessary to create enduring, profitable growth for all our stakeholders."
Here, as up-to-date as last week, is an international example of successful sustainability because senior management planned it in advance, and then worked to their plan. How does that apply to us?
In a famous essay, Benjamin Barber described the dynamics of globalization as the emerging "McWorld" culture. "We are facing the most powerful, fastest growing and successful religion in the history of the world. It is not Islam, Buddhism or any such other. It is global capitalism. This religion actually doesn't require any volitional choice of its converts. "McWorld" is a product of popular culture driven by expansionist commerce. It is about culture as commodity, apparel as ideology."
The world domination of McDonald's has less to do with food consumption than it does with capturing a market by capturing the appetites - both culinary and cultural - of a population. In his book, "Mustard Seed versus McWorld: Reinventing Life and Faith for a New Millennium" (Monarch 1999) futurist Tom Sine puts it this way. "Borders are melting and distance is dying as five billion of us now shop at the same macro-mall and stare transfixed at the same electronic images." Those images, whether on a television set or a computer screen, are not simply about increasing free trade and free enterprise; rather, they "are working to redefine what is important and what is of value in people's lives all over the planet."
How can Wesley Mission Sydney, in a world of global consumerism, stay focused on its work, define our core business, set Mission priorities for the future and plan for changes that provide sustainability? Like McDonald's we are facing great changes in church and government regulation, fierce competition for our future in areas where we must win contracts, and where we face public loss of confidence in the Uniting Church. Added to that, we face a major leadership change, the first in more than a quarter of a century. How can we create a sustainable future?
1. WE NEED RELIABLE PROGRESS INDICATORS.
An indicator is something that helps you understand where you are, which way you are going and how far you are from where you want to be. A good indicator alerts you to a problem before it gets too bad and helps you recognize what needs to be done to fix the problem. Indicators of a sustainable community point to areas where the links between the economy, the environment and society are weak. They allow you to see where the problem areas are and help show the way to fix those problems.
Indicators of sustainability are different from traditional indicators of economic, social, and environmental progress. Traditional indicators -- such as share-market profits, asthma rates, and water quality -- measure changes in one part of a community as if they were entirely independent of the other parts. Sustainability indicators reflect the reality that the three different segments are very tightly interconnected. But with Wesley Mission we have in reality a quadruple bottom line reporting. Our indicators are social, economic, spiritual, and environmental.
Sustainability requires this type of integrated view of the world -- it requires multidimensional indicators that show the links among a community's social, economic, spiritual and environmental areas. Indicators of sustainable community are useful to monitor our wellness as a church and ministry, so that negative trends are caught and dealt with before they become a problem. Indicators point the way to a better future. Indicators generate discussion among people with different backgrounds and viewpoints, and, in the process, help create a shared vision of the significance of our values and our performance.
An indicator is something that points to an issue or condition. Its purpose is to show you how well our systems are working. If there is a problem, an indicator can help you determine what direction to take to address the issue. Indicators are as varied as the types of systems they monitor. In our discussions, you will be asked to decide what indicators are the most important to each area of our work. To help you in this task, because many of you have not had experience in such strategic planning, may I suggest five characteristics of good indicators suitable for developing our work as a sustainable enterprise?
2. GOOD INDICATORS HAVE CERTAIN CHARACTERISTICS.
When you place an order at McDonald's, the staff always ask in their efforts to add on value to the order, "Will you have fries with that?" I think the word "fries" indicates not a salt and fat drenched slither of potato but the characteristics of good indicators!
F stands for feasible indicators. Do not chose indicators unless they are feasible, practical, possible. For example, some people think we should have excellent attendances at our fifty church services we hold every week. Numerical attendance records are a good indicator of our effectiveness. People who have no responsibility for running those services, and who never bring anyone else to attend them, always seem to advocate indicators that are not just feasible. They say, "I suggest that a mark of our success should be weekly attendances of 10% of our population." Great wish, but completely out of touch with reality. I notice the less responsibility managers have for results, the bigger their wishes! But true indicators must be feasible.
R stands for responsible indicators. Indicators need to measure those things we are legally or morally obliged to complete, that are accountable and for which we have a position of trust. Some indicators can measure conditions that are so complex that there is no direct measurement. They are responsible indicators. For instance, it is hard to measure the 'quality of life in my retirement village' because there are many different things that make up quality of life and people may have different opinions on which conditions count most. But a responsible indicator could be "The percentage of people desiring to move away from our care." That would indicate the quality of life in that village!
An indicator must be relevant to be responsible. That is, it must fit the purpose for measuring. A report card in our Wesley Institute that measured the number of different ball-point pens used by a student in a year would be a poor indicator of academic performance in music, drama, visual arts or dance. Similarly, a report card distributed a week before graduation arrives too late to give a student remedial help. In order for an indicator to be useful in preventing or solving a problem, it must give you the information while there is still time to correct the problem. Most reports arrive too late to be of any use. In our Child and Family Care, a responsible indicator of the effectiveness of our service in helping foster carers might be "the number of people coming to us to volunteer as foster carers for children, and the length of time they stay."
That indicator could tell us a great deal about our quality of support for carers and what we needs do to increase the number of children in care.
I stands for innovative indicators. All great works must innovate their product and serve the needs of their clients. Who would have thought that McDonald's would become a major server of salads and low fat products to a health conscious public? That required innovation. One of the biggest problems with developing indicators of sustainability is that frequently the best indicators are those for which there is no data, while the indicators for which there is data are the least able to measure sustainability.
Innovative indicators means developing a new set of criteria that people do not normally consider. For example, in our Mental Health hospitals, when people recover, they normally never want to return. One indicator of effective service could be the number of people who feel they have been so blessed by our hospital, that they offer to come back on a regular basis as a volunteer helper so that other people may receive the blessing they have. That would be an innovative indicator. In our gambling counselling services one innovative indicator would be the number of former clients who desire to train as a gambling counsellor to help others.
E stands for environmental indicators. Every part of our service to several hundred thousand people each year, must be aware of our impact on the environment. Hospitals for example, have huge waste problems as most of their implements used are single use implements designed when infection control was the major factor, not waste disposal. Volume of waste is an important environmental indicator. The number of incontinent pads used is a huge expense in every nursing home. Good nursing practise can reduce the number of incontinence pads needed, and hence that number can be an indicator of good nursing practise. In every centre of care we have, the amount of mulch placed on garden beds and the type of watering systems employed are environmental indicators of good management in water use.
S stands for sustainability indicators.
A sustainability indicator, is one that ensures we keep growing. For example, the number of people we employ is not on its own an indicator of sustainability. The number of staff staying with us for over five years, the number of staff attending courses to improve their performance, the number of staff applying for internal promotion are all sustainable indicators.
If you define a list of indicators for which data is readily available you probably have not thought hard enough about sustainability. I once had a fuel gauge on my car that displayed how much petrol I had in the tank, and based upon average speed converted it to how many kilometres I had left to drive before refuelling. The only trouble was, I would leave to drive to the Central Coast in the early hours of the morning knowing I had 120 kilometres of fuel left. That was a comforting thought. Often I would arrive at my destination and still have 120 kilometres of fuel left. Sometimes I would start with 250 kilometres of fuel left, and after driving 20 kilometres, it would display that I had 45 kilometres left before I needed to refuel. This was on a stretch of freeway that at night has no service stations and I had 90 kilometres left to drive! We have to know accurately what will sustain our endeavours.
You will note that indicators are all numeric measurements. Indicators are quantifiable. An indicator is not the same thing as a vague clue or a gut feeling. I never ask ministers how their ministry in a certain congregation is going because they only reply in terms designed to please me, promote themselves and which are not quantifiable. Instead, I average the attendances, I note the offerings, baptisms, commitments to Christ and membership transfers in or out of the congregation. That tells me all I need to know about the effectiveness of that ministry.
Those who have no numbers to report have nothing to report. They will think of all kinds of defensive excuses and declare they are more interested in the quality of their service rather than the quantity. But I have noticed that in whatever you do, if it is a quality service, more people want to avail themselves of it. No client wants to leave an effective and enjoyable service.
Will you have fries with that? That now means feasible, responsible, innovative, environmental and sustainable indicators of our progress as a Mission. Be careful before you criticize McDonald's. They are the world's largest food service retailer not without reason. McDonald's one of the world's best examples of almost everything good among a global commercial enterprise. They have learnt to reinvent themselves as a sustainable enterprise. No wonder 46 million customers each day enter beneath the Golden Arches. Should the soldiers of the Cross aim to do less?