Original subtitles

I'm Matthew marsh.

And i'll be your host here in the debosse theater for the week.

Onto our first session of Ken lyon's, 2024

mcdonald's are going to be telling us how to convince your c suite of the

real impact of creativity.

So in a moment, I'm going to ask you to give a warm welcome please to our

speakers, the president of international owned markets from

mcdonald's, June McDonald, the global chief marketing officer, Morgan

flatley, and the executive vice president and chief financial officer,

Ian Borden.

Wow.

Good morning everyone.

What an amazing turn out.

You can tell it's early in the week, I think,

yeah.

Before we get going on our topic, which is how mcdonald's have managed to, ooh,

mike's come on, how mcdonald's have managed to Embrace

great creativity

to drive measurable and tangible business results.

I'm joined here by Morgan, our global cmo, and Ian, our CFO.

Now just put a show of hands up there, how many cfos are in the audience?

Feeling a little,

not so many, which is a shame.

But who knows what we'll happen next year, maybe next year.

So before we get really stuck into the content Morgan.

Do you want to just sort of set the stage as a backdrop?

Yeah, sure.

I will just say I might regret having

my cfl frantican.

We did say last night at dinner vegas Rules.

So we're never going to talk about the 36 hours that Ian spent on the ground

at can.

But I thought I would start just by sharing a little bit of the context of

where mcdonald's was as a marketing organization, probably six or seven

years ago.

And I'd say we were

a business that really was not focused on creativity.

And, you know, certainly would have been sitting here talking about

creativity with the CFO.

And one of our presidents,

we were a business that was really focused on,

I'd say, running restaurants.

We were focused on operational excellence.

We were focused on speed.

We were focused on consistency.

A big Mac here tastes like a big Mac in you in the us.

Tastes like a big Mac in Japan.

So we really felt, I think, that marketing and creativity, at times

could disrupt the business.

And

we didn't talk a lot about creativity.

And I would say the other piece is, there were certainly spots of

excellence around the world.

There were markets that we're doing great creativity,

but it was a little happenstance, and I think

we weren't

building that around the world in a more cohesive way, and we certainly

weren't focusing on it.

So that's a little bit of where we were seven years ago, and we'll talk about

how we've gotten to where we are today.

And I think probably a lot of brands, if you're in a kind of global business,

can relate to there's lots of people doing marketing in little pockets

around the world, how to kind of elevate elevate that up.

But I think it can be quite easy, if you're a marketeer, if you work in the

agency world, to just instinctively understand why it's a good thing to

build a global brand or brand, just invest in your brand.

But how did you go about creating alignment in a business?

Lat mcdonald's,

yeah, I think.

And this is where

Ian will come into play.

One of the things was

getting really clear on consistent metrics, consistent tools,

consistent language, across the c suite on

marketing and creativity.

So over the last again, seven years, we've spent a lot of time focusing on,

what are the tools that help us understand

our brand and brand building.

What are the consistent measurement that we use

to track our performance around the world?

And in fact, some of that measurement sits on the CEO and our scorecard that

we look at every year and share with our board of directors.

So it's been about understanding the tools, making sure we get to consistent

metrics that we know are actually connected to performance and connected

to growth that Ian and I align on and spend a lot of time talking about.

And then ensuring

the tone at the top is set by the leadership team on expectations of the

role of marketing driving the business.

So I'd say metrics,

consistent tools, consistent language, and then also

partnership around the table

with the business leaders,

but also with our agency partners, and making sure that accountability is

shared, not just across the c suite and in our markets, but also with our

agency partners.

And from your perspect, this CFO,

what do you think create the alignment?

Well, bit a CFO language.

But we spent a lot of money on marketing in our organization, and it's

one of the most important investments we make as a business to drive growth.

And as you heard from Morgan,

she and her team have done a really nice job of what i'll call educating

our business leaders on the tools, the data

we've aligned between herself and myself, on the metrics that we're going

to use to measure

results.

And we've kind of taken, I think, from a few years ago, where we would have

said marketing was a bit of a black box,

a bit of a nebulous

part of our organization,

to a situation today where we have

full transparency and visibility, we have full alignment across the

organization on how we talk about results, about how we measure results.

And so through that, you've created

trust across the organization.

And so when Morgan and her team are talking about the outcomes of a campaign

in terms of what they've driven from sales or guess counts or profit

market share, we're not debating the results.

There's not a lack of trust in the outcomes.

There's full alignment.

Our cfo's

understand across the business what great creative execution can do, what

it can drive in terms of incremental outcome for the business.

And they understand

that when we immerse our brand in culture and we connect with consumers

in culturally relevant ways, that's going to drive really strong outcomes

and I think you can see on the screen here, even the Wall Street Journal has

picked up on.

I think some of the things that we're doing, I do love when your CFO talks

about culture, which does actually happen a lot in aczone, then

driving the brand in culturally relevant ways.

I think it's some of

Ian and I spending a lot of time together, and our cmos and our cfos and

our MDs and markets, spending a lot of time together, making sure there's

shared understanding and consistent language across the board, so we can

talk about it together and really support one another in the work we're doing.

And I think sometimes

having really shop metrics and key performance indicators can make people

feel that it's going to stifle creativity.

But we've found completely the opposite.

It actually liberates creativity because we're aligned on what we're

trying to achieve, both within the organization

and with our agency partners.

And Morgan, you mentioned a universal language.

And one thing I know you're repassionate about is fans and fan

truths.

Do you want to share a little bit more about the role of the fan that's fancy?

I mean, this, I could do another separate talk, and there might be some

this week from different mcdonald's cmos talking about fan truths.

Because I think this has been fundamental to our kind of creative

revival over the last few years,

and in a couple ways, but probably at its heart,

it's helped us start to talk about people who love our brand

and really, really lean into why people love us versus.

I think in the past we tended to focus on the rejectors

or the haters,

and what van truce has done has helped us get into kind of those rituals and

routines and idiosyncrasies

of people who really, really love our brand.

And that's just unlocked,

great, I think, creativity around the world.

But the other piece of it, which is probably relevant to this topic, is

it's provided really accessible language for our organization.

And I think we talked about metrics being one of the big takeaways,

alignment on metrics.

But I do think language is really important.

And,

you know, marketers tend to have their own language.

Finance folks also have their own language.

And we would talk a lot about consumer insights, which can feel a little bit unattainable.

But when we talk about fan truths, everyone who works at mcdonald's can understand

their truth around the brand and their fan truce.

again, as you can see up here, some of their quirky idiosyncrasies

and how they interact with the brand and the business and our food.

So what I love actually, is sitting around a table and hearing our CFO talk

about the fan, or our business leaders talk about the fan,

and or even our franchises, who are kind of key stakeholders for us, talk

about fancy.

So it's helped us, as a whole organization, can put the consumer and

the love of our brand at the center of what we do.

And I think a really fun and accessible and approachable way for us.

So it's been a really big part of the change, I think, and hopefully

something that the audience of their own rituals and relationships with the

brand.

It really is something that you can kind of understand, which is important

in the business, as is focusing on the people that love us.

Seventy to eighty of people around the world.

Visit mcdonald's every year.

So it's a big strategic choice,

focusing on the fans, which is, which is paying off

Ian turning to you.

Could you talk a little bit about global brand value?

Well, ok, i'll start with, I think, a really important headline which is,

our brand has been ranked as one of the five most valuable brands in the world

by cantar, and

we're the only non tech brand in that five brand list.

And the way I think about brand value is it's really the equity

that you're investing in, or I think of it as kind of the mote around our

business.

And as you grow your brand value, and you grow that equity in, that mode

that's what gives you a lot more confidence that the future momentum of

your business is going to stay strong.

We know that great

creative execution

drives brand value.

And as you drive brand value, you create more space and capacity for your

marketing teams and your agency partners

to kind of keep elevating that creative execution and keep investing behind

Greater creative execution.

And so this, you get this really positive,

virtuous circle that kind of really works in tandem.

We also know, though, importantly,

great

creative execution drives business results.

And I'm going to use our us.

Business

as the example, where I think our us.

Marketing teams and agency partners have really LED our system over the

last several years in elevating our creative capability and execution.

And if you look

at our us.

Business, our marketing contribution to our top line results

has grown by two, over two and a half times since 2019.

So think of

over two and a half time top line contribution on a fifty billion dollar business,

a pretty meaningful contribution

to our results.

So that's, I think, where you start seeing.

And if you look at our global results,

over the last five years, we've grown our global system wide sales by over

thirty billion dollars.

And marketing and elevating that creative excellence has been a really

important contributor to those.

Overall results, or even cfos, can get really excited when you stay c, those

really kind of clear and compelling outcomes for your business.

And it makes us want to really collaborate, engage and support our

marketing teams to kind of unlike that creative capacity.

And if you think about that's thirty billion dollars more noted

to our top line, which, I mean, the scale of our business can sometimes

still surprise me.

But obviously creativity's got a role.

Whether you're a small business or a large business.

And the largest restaurant company, we have a complex web of stakeholders.

So I know many of you in the audience will have retailers, or perhaps

bottlers, if you work in a soft drink business, one of our most important stakeholders

are our franchises.

Because 95 percent of mcdonald's restaurants are owned and operated by franchises.

And the way the model works is that they are putting in a percentage of

their top line sales into a joint pot that

we spend on their behalfs.

So believe you me, they are laser focused

on the return on investment that they get from the marketing.

So given that kind of attention

and the complexities of the global system,

how do you approach getting alignment and managing through that world that we

live in?

it's really hard.

I have a ton of empathy for all of our market cmos who are dealing with that

complexity every day.

Because the marketing at mcdonald's really does come out of our market teams.

And I think I think there are a few things in our pride i'll try not to

repeat myself, but certainly agreeing to what the metrics are, not just not

just across the c suite or with your CFO, but also with your franchises.

So, I mean, because

our marketing funds are Co funded,

there's a ton of accountability that sits on the shoulders of our marketers.

And I think part of the magic of many of our marketers, or of our cmos, in

particular, is this ability to talk about metrics and talk about the

business, whether it be with our owner operators

or with the MDs and the cfo's.

But also the best ones can inspire great creativity.

And I think that's why

we're in the strength of the business today, because we've built talent who

can do both and can partner with their agencies on due on doing both.

We really hold our agencies accountable to that.

So certainly, the metrics, this commercial savvy coupled with creativity.

But one of the new things that we actually haven't touched on much this

morning is

just how we better leverage our scale.

And so

Ian and I talk about this a lot because we feel our scale is like a huge

competitive advantage.

We operate in over 100 markets around the world.

We have 65 million customers who visit us a day.

So you think about

the data that we're collecting in, the interactions we're having with people

every single day, it's a huge advantage, but we're highly decentralized

in terms of our marketing.

So one of the big things we've done is recognizing that great creativity and

culture transcends Borders.

And how do we make sure we're capturing

the great work that happens in one market and scaling it to someplace

else?

And we talk about this as sharing and scaling.

And it's a pretty new behavior, I think,

for the marketers and the agencies in the room.

It's hard to actually take someone else's idea

and bring it into your market.

But what we've learned is we can have huge success when we start to do that.

So great example on the screen up here from our UK.

which is this idea around raising your Arches, signaling it's time to go to

mcdonald's.

You don't even need words.

It's a simple gesture,

an idea that really took the UK.

Bystorm, kind of strong cultural moment there, and then was quickly picked up

in 34 of our markets globally.

And you can just see

how markets reinterpreted that idea,

how they brought it to life on their own.

But that's how we can start to create, I think,

global movements.

And it's also how we can

really leverage killer, creative ideas that happen in one market and bring it someplace.

And we actually now award our markets for doing this.

We talk a lot.

I go out and challenge our agencies, who is going to have the next idea that

we can share and scale around the world?

So it's become a real badge of honor to come up with that type of killer

creativity that can get pulled into lots of different markets in a fun one.

And that's going to say, I mean, it's not that you want to get your cfo's

excited necessarily, but that's, I think, the kind of stuff that we get

quite excited about together.

Because it's,

again, in our business, it's all about how do we leverage our competitive

advantage, which is our size and scale.

And if we're all out doing our own things

differently, we're not leveraging that scale and capacity to its greatest

outcome.

Plus, every time that we do something there's a level of risk to that.

So if you can derisk that by taking an idea that's truly a global insight.

Morgan gave the example of the razor archers, or famous orders, which was

another campaign

that we did a couple of years ago that I think has been to over sixty markets.

you're getting those ideas that are truly rooted in kind of insights that

are borderless.

And then you can bring great creativity to light at scale, which is what drives

the most impactful outcomes for the organization.

And it's been a journey.

So

if you are in an agency or a client, is fun making content.

That's kind of the most exciting.

I used to be a marketer.

I still thought the most exciting thing was when you got presented an amazing

creative idea.

But I get enormous pride when some of the campaigns from the markets that I

look after and shared around the world there's a genuine, genuine, shared

pride and excitement about that,

just changing tech slightly.

And nothing to risk.

Creativity does not come risk free often.

So Ian what's your

risk?

Yeah.

So my CFO hand's going to shake a little bit on the topic of risk, but

I think you've got.

My view is, you've got to take risk to deliver the best creative outcomes for

the organization.

That's, I think, inherent

in pushing the edge on creativity.

You want to empower your marketing teams and your agency partners to make

you feel uncomfortable.

What we want to take risk on, though, is the execution

we don't want to take risk on the consumer insight, the strategy,

or, as Morgan talked about at the fan truce, that has to be grounded in a

deep understanding of the truth or the reality

from a consumer point of view.

And if you go back a few years in our business, we were taking risk on both

the idea

or the strategy and the execution,

which meant that even when we were delivering great creative execution,

we often weren't seeing

good returns or good business outcomes because the truth or the consumer

insight wasn't real, which meant we weren't connecting that great creative execution

with the consumer

desire, or consumer understanding or desire of what they were expecting to see.

And so we've moved in our organization from asking, will it work?

Is it

real?

Is it true?

And if it's not true, if it's not real, we're going to go back and make sure we

understand what that true consumer insight is.

I think today's context, at least in our industry, is maybe a relevant

example.

Because we're certainly seeing a lot of macroeconomic pressures on our industry

and our business.

We're certainly seeing consumers under pressure around the world.

And I think it can be tempting

in more challenging external environments to kind of go, ah, well,

we're going to peel back risk.

We're going to start

getting a little more tactical

and a little simpler in what we're doing.

And I actually believe it's the opposite of what we need to be doing.

We need to be

being bold.

We need to be really empowering our partners and our marketing teams to

drive great creativity.

Because that's what distinguishes

our brand in business from the others

in the space.

That's what consumers will remember when you're creating those magical

moments, or those kind of moments of relief

and joy, at least in our business,

I think that's what draws people to your brand and business.

And so we want to continue to kind of invest in great creativity to drive our

business results, but also the value of our brand as we look forward, and we

kind of tear up here and, you

know, bothering those people, and are eating the pregnant in the room, here

let's keep taking risks and pushing things.

It's Greater

sky, make people try.

And you see, in good ways,

the bigger risk is complacent, to see Anne totally.

And we were Morgan, and I were at a meeting with our cmos from around the

world yesterday, and we were talking amongst ourselves about how do we

continue to raise the bar,

you know, as we kind of looked to continue our growth, how we're not

going to do that unless we continue to take take risks.

So it's a very, very live topic.

So,

talking of risk, the grimace shake,

and grimalism,

when you associate with risk.

But yeah, there was a story to tell, risky, I do.

I mean, i'll do this one quickly just in the interest of time, because I think

the risk here was, we had this great program around the grimacehake that

some of you might be familiar with, in the us.

Celebrating grimace's birthday, a month long birthday.

And what we've learned over the last few years is the importance of making

our programs kind of viral.

And grimace is a great example where

there was a number of things that we put out into the world, and people took

advantage of them and started to capture,

drinking the shake.

And then they would die these gruesome deaths with the shake all over them,

some of which you can see up there.

And, you know, it was certainly risky and how does a brand react in that

moment?

But I think what we've learned over the years is we have to cocreate

with our consumers, and we have to let our fans in to play with our brand,

because that's what ultimately drives the virality

and the talk value.

And as Ian was saying, getting people to think about our brand and bring them

into our restaurants.

I mean, this program, I think, if I remember correctly,

like twenty of the sales that came from this program, was driven by earned

media through that moment, that was sparked in culture that we really let

play out.

So big learning for us is letting consumers play with your brand.

And there's another example that I think they'll pop up on the screen for

me, which is from Travis Scott,

which is kind of funny, because this was our first

foray into sharing the pen with consumers

and also with influencers.

And you can see on the left side, I think, yeah, the left side of the chart

was what we designed

for the program with Travis.

The right side of the chart was what Travis designed.

And it made us look a little bit uncomfortable.

I think

I had a lot of calls with legal

those weeks

and took a lot of risk

that I had to sign off on.

But it taught us so much about putting your brand out in culture and letting

people really play with it.

many of these items think we had four drops that were gone in a few hours,

and really started to get our brand more comfortable with pushing our

boundaries and getting caught up in the cultural zeitgeist.

That was a really, really fun fun learning for us.

It has stuck with us since then.

And I think

it's quite easy when you're sitting in kind of forms like this and celebrating

what was an amazing program,

but at the time, really scary.

And you have to be quite brave, both as an agency and a client, I think, to

have the faith in the idea to keep it, keep it going.

In the face of a lot of reasons of why not?

And you could have come up with a whole lot of reason, yeah, why not?

But for our brand, I think, in particular,

where we need to connect with a new generation of fans, this sort of

cultural relevancy

is

superimportant, and it's difficult to get there without taking some risks.

Now you've been introduced to Ian, who comes across as a very nice CFO.

I think

of somebody.

We don't think it always

haven't got to get something for the rest of the week.

We'll see lc, how that goes.

But you might be thinking, oh, my CFO might not be quite so open minded,

shall we say?

So, we've really been working unimagining stained that's a very

study, working together.

So in the instant,

I mean,

I think you can tell in, and I've built a really strong, trusting relationship.

So, I mean, I'd say, for marketers in the room, you really need to get to

know your CFO well, and speak the same language, and

bring them into

the marketing world, open up and touched on it, open up that black box,

so they understand

how you think about marketing, how you think about creativity.

I don't actually ask for ian's feedback on creativity, but I want to make sure

he supports me and the teams in terms of the risks we're taking and the

creativity that we're taking.

So just a couple, I think,

suggestions,

along with getting to know your CFO really well.

One is metrics, which we've talked about.

The second is we've really set a tone at the top.

I mean, I spend a lot of time sitting around leadership team tables talking

about creativity,

because the more I can bring my peers in on how important it is, the more

i'll have them as advocates for me and for the team.

So we actually, as a corporate leadership team, in just about every

big meeting that we have, talk about marketing and talk about creativity,

to the point where we've even spent time

with our MDs doing exercises on

how to judge great creativity.

So we've spent time with them,

really giving them the tools on how to think about creativity, how to empower

their cmos, to take risk, how to go to their agencies and ask

their agencies for killer creative work.

So we want our business leaders to be asking for that.

So part of it is giving people who might not spend as much time looking at

creativity or talking about creativity as we do, some of the tools to do that.

So there's now,

I'd say, for better for worse, for the mcdonald's cmos, a high expectation

by the c suite that we're going to deliver killer creativity to the business.

So, and then the last one, which is on the slide, which is kind of one of my lessons,

which I have again talked to our team about,

and also our MDs is just the power of yes.

And so the power of saying yes to work that makes you uncomfortable

and makes you nervous.

It's a conversation

we had with contagious years ago that helped us understand

the easiest thing to do is to say no to an idea that makes you nervous.

That's safe, that's comfortable, that's what your entire body is wired to do.

It's much harder to say yes.

But we're really empowering our cmos and our MDs to say yes to work that

makes them uncomfortable.

Because we've proven,

through this partnership, through metrics, through trust,

that saying yes to big risk, taking ideas, does drive our business.

So that's another theme I talk a lot about with our business leaders.

And how have you personally got comfortable with creative risk?

well, I think, as you heard from Morgan, I mean, a big part of it is us

developing a really strong partnership and relationship, I think,

understanding how we can support each other in our roles to get to the best

outcomes for the business.

I mean, for me, having run markets, having run segments of our business in

previous roles, and those jobs to spend a lot of time with your marketing

teams, with your cmos, with your agency partners.

And so, you know, that was certainly how I educated myself about the tools,

tools, about what great creative could do, and how that could really drive

results.

And

I think credit, too, as you've heard a lot from us today about the work that

Morgan and her team have done to really educate the business.

Because

if there isn't education, there's often mistrust, there's often

skepticism about outcomes.

We don't

debate the outcomes.

Now we've got a really high level of confidence that we've got strong

measures in place that give us a really clear understanding of what work is driving.

We know that great creative delivers the strongest

returns on our marketing spend.

And so my job is to support

Morgan and her team, to work seamlessly with them to make sure we collectively

are delivering the strongest outcomes

for our organization.

I think we've seen pretty strong evidence of the outcomes of that in our

business results over the Whales few years.

Thank you.

So just to sort of try and pull together a few final

threads,

if you really want your organizations to Embrace

creativity,

you do have to create the business case for it, and be able to clearly link the

outcomes and the results to the business case and to the work.

So we've talked a lot about the important importance of common metrics

for us.

It's truly liberated our ability to get funding, to be able to push great work

through.

So don't be afraid of the metrics and the rigor.

They can be your friend.

And I think our best

cmos

speak the language of the business,

and our best business leaders also speak the language

of marketing.

It's not the sort of weird black box that nobody can understand soul before

we close, Morgan, any just lost, any last thoughts or reflections?

No, I would just, I would say this word, yes.

So like how you say yes to

big risky ideas is one.

And then obviously your partnership with your CFO and your business leaders

says the other.

Thank you.

And maybe next year there'll be a few more cfos in the audience we can have.

Thank you.

Thank you

many.

Thanks to our first speakers of the week.

Jimcanal Morgan flatly, and even board and big, round applause, ladies and

gentlemen.

Thank you very much.

I think of being with us this morning.

I Matthew mart, and i'll be your host here in the debucy theatre for the week