McDonalds’ CEO fired for being a poor employer brand ambassador
How “love” turn someone into a poor employer brand ambassador
It might not be apparently obvious how a consensual relationship can turn someone into a poor employer brand ambassador, but we need to take into account the power structures at play.
Ex CEO of McDonald’s Steve Easterbrook, has made the headlines recently for being fired for “love.” “Aaaahh” you might think. “How sweet is that?”
But is it?
He was actually terminated not for falling in love (if that was the case) with a co-worker, but for being a poor employer brand ambassador. This is a core part of being a CEO.
CEOs are ultimately responsible for every element of the company’s branding, both consumer and employer. Warren Buffet famously said:
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Easterbrook is credited with something of a business turnaround. He almost doubled the company’s market capitalisation during his leadership and his compensation was linked to that success. His focus was on operational changes, especially harnessing tech with digital transformation. This included “digital ordering kiosks and mobile ordering as well as pay-and-pickup services, partnering with app-based delivery services.” However, on his watch, although McDonald’s continued to struggle with its consumer branding, when it’s food standards were examined and found lacking, the more serious difficulties were encountered with its employer brand reputation.
The problems occurred on two fronts – pay and harassment. In some locations, the complaints overlapped. 60% of their workforce is under the age of 21. As a result, poor, even exploitative employment conditions and pay have been associated with the company for many years. The significant pay differential between Easterbrook and the salary of the average McDonalds’ worker at $7017, also made the news headlines.
McDonalds has also been at the centre of a number of high-profile and controversial sexual harassment cases. During Easterbrook’s tenure, 50 complaints for sexual harassment or inappropriate behaviour incidents were filed with the Equal Employment Opportunity Commission. Women make up 52% of the McDonalds’ workforce. However, it would seem that gender balance did not appear to be a high priority until this year, even though Easterbrook assumed his role in 2015.
One of the reasons organisations have non-fraternization policies is because of the power differential which exists in the workplace. This means that a junior person (usually female, but not always) can feel coerced or manipulated to consent. Easterbook contravened the company’s non-fraternization policy. The relationship was short-term, so perhaps it was lust rather than love and that love in fact did not conquer all. He was let go for exercising “poor judgement,” although reportedly the relationship was consensual. Dealing with sexual harassment and sexism in the workplace is not an HR issue. It’s a business issue. First and foremost it requires leadership commitment. If a company’s leader does not follow the company policy, it will be difficult to apply it elsewhere. The message is – if the CEO can do it and get away with it, so can we. The CEO is the employer brand.
Easterbrook received a salary of $16m to embody and enhance both elements of the company branding not just to deliver shareholder value. He was fired for failing to carry out a significant part of his job properly.
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Late to the party
McDonald’s as a company was late to the gender balance party. It only took steps to redress a reported toxic culture to increase the representation of women in March 2019. The company committed to key initiatives to reduce gender bias and to create a more inclusive culture. They are also resolved to start examining the hi-po talent pools. This is to promote gender balance and accelerate their careers through executive mentoring and sponsorship. Yet the main board remains significantly male-dominated, with only two women on it.
Initially, these initiatives did not apply to the franchises which employ 95% of the brand’s headcount. In August they extended the programmes to include restaurant supervisors and employees. As a result, they will receive training through interactive and computer-based training programs and in-person discussions. This training will cover mitigating workplace violence, staging bystander interventions, unconscious bias, anti-bullying tactics and how to report complaints in the workplace.
The sweetener part for Easterbrook is the reported $41.8 million dollar severance package. That will I’m sure assist this minor career blip and he will be able to profit from the “Aaah-it’s-love-vibe” that has surrounded his departure. Meanwhile, lower-level employees who have filed sexual harassment complaints maintain that they have been fired or forced out without any compensation at all. His inflated salary highlights the male exceptionalism and focus that is so prevalent in our organisations. Maybe this made him think that he could get away with it and the rules didn’t apply to him.
What we need to see now is who is the approach of the incoming CEO. More importantly, how will he deal with the workers at junior levels who are probably still working in toxic environments. Then he needs to take public, concrete and measurable steps to build an inclusive culture and be a better employer brand ambassador than his predecessor.
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