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McDonald’s eyes Nordic growth with regional structure and strategy


Following the 2017 acquisition of its 440 Nordic-based restaurants by British investor, Guy Hands, McDonald’s has been on a journey of transformation. A key aspect of this process during the last 12 months has been establishing a regional supply chain organisation to support its 80 franchisees and 40 McOpCos (McDonald's Operated Companies) across Denmark, Sweden, Norway and Finland.

Despite the disruption caused by COVID-19, the business is already reaping the benefits of its new regional strategy and design. 

“You can’t underestimate the complexity of trying to operate with four different ways of doing things,” says McDonald’s Nordic Supply Chain Director, Søren Vogt. Vogt, who joined the business in 2017 to lead the regional Supply Chain transformation, is no stranger to McDonald’s, having worked for several years at Scandinavian chicken supplier, Danpo. He sees the transition from a national to regional matrix model as the perfect way to drive efficiencies as well as innovation – taking a “really good organisation and making it even better.”

Innovation, in particular, is important. According to Vogt, every market believes it is the best, but each can benefit from a more joined-up and collaborative approach. Establishing a Nordic business structure and culture is giving McDonald’s a huge leverage in the regional market, he says. 

A good example of regional innovation in action is the implementation of McDonald’s order and pay service. The Nordics is one of the world's most digitalized territories. And taking advantage of the region's high-tech consumers, the business piloted its mobile order and pay app in Norway before rolling it out elsewhere in 2020.

A similar strategy was employed the following year with home delivery, starting in Sweden before expanding into Denmark, Norway and Finland. Customers can now order food and have it delivered to their homes from over 300 Nordic restaurants. This is exactly how Vogt envisages the business driving innovation moving forward – “pulling together resources from across the Group and implementing improvements in all four countries, rather than each market operating separately.”

Establishing a regional supply chain organisation to support restaurants across all four countries has allowed Vogt to introduce more specialists into his team. Where previously, for example, there two or three sourcing professionals focused on one market, McDonald’s now has ten sourcing professionals working on regional solutions. This larger team, he says, with its broader focus, can deliver far more value to the wider organisation, as well as building better relationships with suppliers.

According to McDonald's Head of HR for Denmark, Claus Jeppesen, transitioning to a regional matrix business is about utilising local market strengths while identifying Nordic “synergies.” A matrix organisation, he says, does not make the local markets obsolete but rather builds on a strong foundation that already exists. As Jeppesen explained, while each country still thinks of itself as 'McDonald’s Norway', 'McDonald’s Sweden', etc. there’s more focus now on developing cross-country initiatives, while still maintaining local strengths.

When building a team in this context, he says, it’s important to search within each country for the same position. Achieving synergies between the territories is only possible if each country is represented in the new regional team – whether that’s finance, marketing, or supply chain.

To ensure a thorough search of the Nordic market, McDonald’s needed a talent partner with a truly regional perspective. Nigel Wright was the obvious Nordic choice for the project, as he explains: “The Nigel Wright Group has helped our Danish business recruit several key roles over the years, and I was keen to engage them again on this assignment. They are indicative of the type of partnerships we want to build in the future – i.e. those suppliers that can assist us on a regional level, with in-depth knowledge and networks across multiple territories, rather than only within one specific country.”

Tasked with identifying two Sourcing and Category Leads and a Supply Chain Analyst for Vogt’s team, Nigel Wright Danish Country Director, Søren Hjorth Lee, and Swedish Country Director, Mikael Andersson, worked collaboratively to find a solution to McDonald’s talent needs. “The consistency of delivery and communication was excellent,” says Vogt. “It was a joined-up approach which made the process much simpler and contributed to its success.”

All positions were filled despite a 10-week pause on recruitment activity due to COVID-19. And even though some candidates dropped out of the process because of pandemic-related market uncertainty, Vogt is delighted to have three “very strong” new team members already adding value to the business. He commented: “Søren and Mikael did a fantastic job; they worked closely together to give us different perceptions of Nordic based candidates in their respective markets. This was to ensure that we got the best insight on each potential new hire. It was a terrific level of support during a period where COVID-19 had significantly delayed the process.”

Moving forward, McDonald’s will continue its journey of cultural transformation in ‘the new normal’– getting the benefits from its organisational redesign by improving communication between the different territories and getting managers used to reporting-lines and people development within the matrix structure. Creating an organisational chart is a very small part of the transformation process, says Jeppesen, but it’s the fine-tuning that takes place after that that “really tests the logic of your strategy.”

Interestingly, both Vogt and Jeppesen agree that, in many ways, COVID-19 has been an enabler for cultural transformation at McDonald’s. By forcing people to find collaborative ways of working while being home-based, the challenges of communicating and collaborating across national borders, they say, are significantly diminished. Having a Nordic-wide people development department, in particular, has been hugely beneficial. And virtual meetings have facilitated more consistent ways of working across the four countries.

The new Nordic organisation aims to open 100 restaurants and create 5,000 jobs during the next 5 years. Despite COVID-19, McDonald’s opened 14 new restaurants across the Nordics in 2020 and the business remains on track to reach its targets. For the supply chain, Vogt says 2021 is all about delivering on expectations by leveraging the larger regional team now in place, driving efficiencies and leveraging cross-market opportunities within the new structure.

He commented: “Hiring three new people has given us a huge boost in resources and the department is already fast developing into a truly regional service offering solutions across the Nordics.”

 

 

 

 

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