Transcript

Steve:

I think I think people businesses are generally better at the tools and giving very tangible skills to the manager, quite to a lesser extent. But I think that’s not too difficult. It’s quite easy to just put a load of managers through that type of training.

Sylvie:

Hi, I’m Sylvie Milverton, CEO of Lynx Educate. This is “Talent is Everywhere”. We’re here to talk about how to keep talent and how to develop talent in order to build a strong business. We’ll interview leaders to hear their best experiences of how they invested in people.

Hi, Steve. Great to have you on our podcast. As I always say, the best part of having a startup is getting to meet interesting people. And I’m especially looking forward to hearing your stories because you can approach it from a couple of sides who’ve been obviously deep inside companies with known brands. You know, Krispy Kreme, Cafe Nero. You know, and now with your role as an external consultant with your own venture, Three59, helping HR Professionals move from operational to strategic leadership. You know, when you’re planning this, you sort of framed up for me how you think about companies being successful and less successful in their people development strategies.

So maybe we can start with that. How you see the extremes of how companies often approach these challenges. 

Steve:

Yeah. Hi. So it’s great to be here. Thank you for inviting me. And yes, I think, you know, the conversation we had was I spend spent most of my career in, I guess what I’d call scale-up businesses or businesses have just come through that scale-up phase.

They’ve been successful startups and they’re now beginning to grow quite quickly and they’re trying to navigate their way through this. How do we move from this? All hands on deck while your sleeves up get the job done? Because that’s what startups have to do to be much more structured, much more organized, and much more professional. And I’ve seen businesses take two routes. Both have their weaknesses and I’ve seen some businesses fail on those. So I think the first one is really that classic one of the startups has a lot of loyalty to the people who got there in the early days. I think you know what it’s like. So we don’t know where where people are. They get stuck in.

The founder feels really loyal towards them, but the risk is that those people quite quickly run out of steam. And when the organization gets to a certain size, they’re limited in experience or skills or, you know, just what it takes to get it to the next level of growth. And then the other side is the businesses have tried to compensate for that by buying the talent since they’ve gone out to larger businesses and they’ve looked for another new marketing director, a new HR director or someone who’s worked for a much bigger organization, and they brought in the skills and knowledge.

Then you start to see it creaking because the culture starts to be put under pressure and the heart and soul of what’s made the business successful in the first place starts to crumble a bit. And often you’ll lose some of those loyal people as well who feel they’ve been passed over for promotion. So there seems to be two extremes that happen in those growth phases. Both have their weaknesses. Now unfortunately there have been businesses that have suffered from one or the other of those at some points in my career.

Sylvie:

And do you think it’s you know, do you think it’s the root cause of that? You know, from an overall leadership perspective, do you think it’s, you know, not understanding the important role that people development and human resources takes in these kinds of businesses

Steve:

This is an interesting one now. I think there’s definitely something around that are mostly founder-led organizations, so typically the founder hasn’t been through that journey themselves. So they don’t know what they don’t know. And there’s a lot of focus on what’s this week, what’s this month, how do we deliver this year’s performance. So the the kind of forward thinking is lacking both in terms of time and energy, but also in just the experience of the leader. The founder often becomes the CEO, incredibly passionate.

It’s really important that they’re at the helm still, but they lack some of those more traditional strategic approaches to people. You know HR, often as an example, seen as a very operational, responsive department rather than a real partner that’s helped grow the business and that’s just the lack of exposure to it, I think. 

Sylvie:

Right. And so if we’re thinking so, obviously there’s like a better sort of middle ground where we would ideally be, you know, anticipating the growth needs, looking at the current employees, you know, thinking about how to build them into the next role. How do you think about that, you know, middle option and what are some examples of where you’ve seen it successful?

Steve:

Yeah, I think I’ve been fortunate. I’ve seen both sides of that equation kind of fail, but also some organizations that have been successful and I’ve been part of helping them be successful as well in in a couple of cases. I think the middle ground is you’ve got to protect your culture and the heart and soul of what’s made you successful.

That’s really, really important because as soon as you give that away, you never getting that back. But you do need to build in the capability to grow to the next phase. And I think the key then becomes strategic development. It sounds a bit sounds a bit too highfalutin, but it is thinking about developing people for the future earlier than most startups or scale-up businesses think they need to.

I think it’s a lot of learn as you go. You can build the skills as you go, but at some point, if that business can take a pause and look at its senior people, you know, heads of function, and think how do I turn a “Head of” into a “Director of” or a more, you know, “Chief People Officer” or a “Chief Marketing Officer” before I need to?

They can then go. And that takes a very deliberate pose and plan to build those capabilities. But what you’re retaining is obviously the loyalty, but also that the heart and soul and the cultural parts of the business that once that’s gone, you’re never going to pull that back in the box again afterward. So I think it’s it’s having a people strategy of people development strategy earlier than you think you’re going to need it.

Sylvie:

And when you talk about culture and, retaining it, I think about this a lot, trying to, you know, have a framework for hiring people. What I try to do is, establish the values of our company. And then the first screen is, “Are you aligned with the values?”, and then you start getting it is somebody who wants the job, do they get it? Do they have the capacity to do it? How can we help them? 

And so when you’re talking about, you know, once you’ve lost the culture, it’s gone. Do you mean that, certain people align with values and that if you’ve brought too many wrong people and you lose your culture, or is it the opposite of there are certain people that are really representing the culture and you must retain them, like concretely, how do you how do you relate that to people?

Steve:

I think it’s turning the culture into something a bit more tangible. It does start with the values and that needs to be aligned to the mission and the type of the organization you want to be. But the culture comes through in how you do things, your process of doing business, you know, are you a business that is happy for a lot of autonomy and people to make decisions in the moment because that is appropriate for your business?

Well, are you a business that likes have process and system and the right levels of signoff, neither is right nor wrong is appropriate for the business. But what I’ve seen with smaller businesses where it’s very autonomous to a degree, not fly by the seat of your pants, but make decisions quickly, be agile, and move forward, who then bring in people from larger corporations. They’ll often bring in people who have the only way they know how to do things is the large business way of doing it. 

So the first thing they do is put in processes and systems that rub against the way of doing things in the organization. And so when I’m talking about culture, it’s not so much about values because I think a lot of people can align and that’s quite easy to spot, but it’s how you execute those values, how you put them into practice on the ground that is really, really important to move from being on sort of a low administrative burden business to a high one or vice versa because that’s where it starts. It starts to break down. 

Sylvie:

And then how do you think about the idea that you do have to anticipate development needs? I mean, so obviously in a perfect world, when someone has time to sit down with everyone and really think like, what’s your career path? Where are you developing? But, concretely, like let’s say a scale-up of 50 people with 100 people, that you’re going to, need to grow by, double digits of 50% the next year. Concretely, what is it? Is it enrolling people in programs? Is it giving access to learning? Like what? Like maybe you have an example, from a somewhere else where you’ve been, where you were able to see a pretty successful way of thinking about building that talent pipeline. 

Steve:

I think a good example is when I was a Hotel Chocolat it was a private business, but it was getting ready to IPO. So still quite small, but getting ready to move in to kind of be a bit more of a grown-up organization. Very, very successful, fantastic brand, fantastic product. And the operation ran really, really well. But there were a number of things that needed to be different for investors in the city to take the business seriously. So there’s a lot of work going on in the background in all functions, finance, the manufacturing processes, but from a people’s point of view, the focus was very heavily on leadership capability because being a small startup business growing very, very quickly.

What it had was a lot of kind of specialists who worked in quite siloed ways. So everyone was very good at what they did and the leaders of those functions were very focused on doing the best thing. Patrick Lynch Tony actually describes this as being like a team of people where you’re just adding up the scores and hoping that the scores give you the wind in the spokes rather than working as a real team across it.

So moving people from that is from that vertical leadership of functional leadership into a more horizontal leadership. So the investment in people was firstly put into how to develop that leadership capability for those leaders because then the plan was so that would sort of flow down through the organization as it grew. So I think that was a really good example.

So the effort was who are the most influential leaders in the business? How do we move them from being just the marketing head or just the HR head or just the manufacturing head to being a business leader who had a specialism and that wasn’t to shape the program, but it was a combined program of taking leaders through to the next level. What it also did was create an environment or start to create an environment of actually learning is important to this business because you need to start from the top. If your leaders don’t believe in learning, then why should the rest of your organization? So it set the set of stall out for the rest of the business too.

Sylvie:

Yeah. Now that’s really interesting. And I’m wondering, it’s interesting because we know like learning is important. Like no one’s going to argue that it’s that it isn’t. But if we go back to some of the examples that you had that, didn’t work, I’m sure if we talked at the time to the CEO, he or she would have said, of course, learning is important. Of course, people are at the center of what we do. But you know what? Why not? Like, why didn’t it work? What? I mean, or perhaps I’m wrong. Perhaps the person wouldn’t agree with that statement. 

Steve:

So I can think of two organizations that I’ve worked with on this topic, and they both went in different directions. One became over-corporate and one fought against it and struggled as it grew because it didn’t have the right environment to grow properly. I think the latter was a “No, learning is not as important, let’s just sell as much as we can, we’ll make some money, and then where we invest that in selling more.”. So it was more, it was a very narrow view and that that was more your latter approach. I think the former was more probably just a lack of hindsight and I was involved in these businesses after the events.

I’m kind of unpicking it afterwards rather than having gone through the whole journey. So some of the speculation, but I think they they were successful. They didn’t see the need to be different in the future. They thought their success was almost keep doing what we’re doing and we’ll keep on being successful, but not appreciating that both the environment that they were operating in and the size of the business would conspire against them to say, No, the world’s changing, you need to do things differently.

So there was development, and there was training put in place, but it was very much about maintaining the status quo rather than accepting that the world will be different in the future and therefore we need to adapt to it before that happens. 

Sylvie:

Now that makes sense. And I spent a lot of time thinking about like types of learning like that. There’s some kind of learning that’s like, day-to-day knowledge transfer, like just information has to get into the brains of people so they can do their job. And then there’s some sort of secondary type of learning, which is, we call it deep skilling or career development or talent development, which is, to move people, on into that next way.

And my sense is that companies overinvest in the first kind and then forget to invest in the second time. And a lot of it, I think, is because they think that only the most senior people need those really, deeper or more developed skills. But probably in the example, you say if those companies had thought of those kinds of skills for some percentage of everybody, it would drastically change the culture and the capabilities of that company.

Steve:

It’s interesting that because I hear a lot when I speak to L&D people about the is it the 70-20-10 model of learning. You know, 70% is on the job, 20% is kind of self-taught, I think. And 10% is kind of more formal, structured learning and is often used as a way to push back managers who say we want training courses and it seems kind of almost a defense mechanism and I don’t know how accurate or scientific the 70-20-10 is, but it feels to me, from what you’re saying, is that 10% does need more attention and maybe more deliberate focus.

It doesn’t need to be all of the training, but there needs to be an element of what does the unknown future hold for you and what would you need to have in your armory in readiness for it? As opposed to how do you just be good at your job or what your current job now? And the world’s moving at a rate of knots now. I mean, this year has been super scary with AI developing, and if people aren’t thinking about two years down the road, they’re going to get left behind very, very quickly. I guess they probably always have been.

Sylvie:

Yeah, you’re right. And that’s so interesting. You talk about that 70-20-10 because that actually drives me a bit bonkers because it makes it sound like 10% is important. But if we flip it and imagine a company of 100 people now what if ten got one? Two had an amazing, amazing course to become a manager. Three were like learning how to apply AI on the job. The other two are learning new sales and new negotiation skills and the other ones like becoming a digital marketer.

Like you’ve just completely transformed your company. Like 10% is a massive number. In fact you would probably be fine with 5%. Yeah. And so that sort of 70-20-10. Yeah, I agree with you. It’s sort of yeah, it diminishes. And you know, another thing I want to ask you about, you’ve often told me and I learned a lot from this, that, the most important thing is managers like the way to maintain and motivate people is really investing in managers.

And I feel like managers are the ones suffering the most. They have so much paperwork, they have so much responsibility. Yeah, I would love to hear like how should we do it. How should we invest in managers and especially managers who are like in these frontline customer facing jobs? Like what is your recommendation?

Steve:

Oh this middle manager piece. Yeah, I was told this when I was at Caffe Nero. I was introduced to this concept when I was a HR at Caffe Nero it was around the time that Clinton was, was president in the States and he had that famous it’s the economy stupid line. And we, we adopted the it’s the manager, stupid. You know, if there’s a problem in a store and we worked in retail at the time, if there’s a problem in the store, 95% of it will be linked to the manager.

And it is a very successful store. 95% will be the manager. We just need to get our heads around that. And that’s not always meaning that the manager themselves is the problem. It could be that they’ve not been trained well or developed well. They’re not being led or motivated appropriately or supported. So but that was the hub of everything. And I think in this middle manager role is it’s squeezed because there’s so much pressure on them from the top to deliver. 

There’s a ton of people challenges when they’re trying to lead to manage their team and they have the least amount of, I guess, flexibility and freedom to do anything about it. Their reliance on above and below and probably certainly my experience in retail, so many have been over-promoted and there’s there’s been a bit of a sink-or-swim mindset in the organizations that I’ve been exposed to.

So if you were going to say, I’ve got a budget of X, but I’ve got far too many people to develop, I would say invest the majority of it with the middle managers, because that’s where the real impact is going to be. People at the top, they’ve got that because they’re successful and they’re probably going to carry on being successful in their own measure. The people at the frontline will benefit from having a better manager. If you can invest development and other things into a middle manager, I think it’s the biggest bang for your buck, the biggest leverage. 

Sylvie:

Interesting. And so what kinds of things would you recommend, like a manager, like coaching or people skills or also even just practical skills like using tools or analysis, all that.

Steve:

I think people, businesses are generally better at the tools and giving very tangible skills to the manager, quite to a lesser extent. But I think that’s not too difficult. It’s quite easy to just put a load of managers through that type of training. I think coaching would be fantastic and I think whether it’s the 1 to 1 coaching, group coaching is taking on a much bigger role in business nowadays or even online coaching I think it is really pushing forward.

There’s a lot of AI stuff coming out now, isn’t there, in terms of in terms of coaching. So it’d be interesting to see where that goes. But I think anything that helps the manager’s soft skills is I’m not I just hate that phrase, but it’s because they’re so powerful. But it’s the ability to manage themselves as individuals. It’s the ability to manage teams, the ability to manage upwards.

I think they’re the the bits that would make the biggest difference to managers and where I’ve seen that. So go back to Hotel Chocolat again. We saw a lot of great impact from that sort of approach by focusing on that population. If you  are in retail hospitality, where you have the classic structure of a site manager, an area manager, and then the support office or head office, I would go area manager, issue number one priority, and you site manager, issue number two priority.

Everyone else will benefit from that as a kind of trickle-down or other some sort of other effect. They would be my two biggest areas. 

Sylvie:

Hmm, that makes sense. And, maybe you can also share your own story and how you were supported like when you were at T.G.I. Fridays and Pret A Manger that you went from some, frontline roles and then marketing and HR. You maybe just tell that story and also how you were supported in those organizations to develop yourself, to be able to grow.

Steve:

Sure. I mean, I’ve been so lucky, Sylvie. I think in some respects I’ve landed in some places where I’ve been too lucky and it’s made me a bit kind of rose-tinted glasses to the rest of the world. So I started my hospitality career with TGI Fridays just as a bartender, and someone came along and asked me to go and work in marketing for a year. And the reason they did is they wanted somebody within the organization who knew the brands, who knew the business, and they were happy to invest or accommodate my total lack of marketing experience.

And it was just a blast. Had a brilliant time. Got to learn a lot. Probably the biggest lesson was I didn’t want to be in marketing for the rest of my life, which was a good learning, but actually the exposure was just was just incredible. I then went back into restaurant management and having spent a really good time there, but a lot of credit to the Fridays leadership at the time of saying take internal people and put them forward.

And then like a lot of the Fridays people at the time, moved over to Pret A Manger in the very early days, I think we had about 35 or 40 sites at the time, so much, much smaller than it is now. And I was there for about six months and someone came to me and said, We need someone to do recruitment.

We don’t have any internal recruitment. Can you do that for us? And again, they were taking an operator and saying, we know you don’t have classic recruitment skills, but we think you can add more value because of your experience within the organization, and that six months in recruitment has turned into, a 25-year career in HR. I didn’t even know what  HR stood for when I first made that step. So I’ve come. I’ve learned that now. But some have come a long way since. 

And I just think full credit to both Fridays and Pret and I wasn’t the only one. Lots of people benefited from that, too, saying a good person. They’ve got an understanding of the organization. They know the culture. We can find a way to compensate for their lack of knowledge in that particular topic because that’s trainable. That’s something that they can learn. So yeah, I love it. Unfortunately, as I moved through my career, I realized that they were quite good relative to a lot of other businesses. So it’s been a good template for me to try and implement in the businesses I’ve worked in.

Sylvie:

Yeah. Now that’s amazing. And that’s I mean, that’s totally my inspiration for starting Lynx, but it feels it’s so obvious and so good. And I guess the conditions that allowed that was leadership who realized that you know, back to your first point, the culture, the kind of company, the way we do things here, the kind of people, the kind of work ethic that’s pretty hard to keep rebuilding.

But what’s actually fairly easy to do is find motivated people and train them with pretty tangible skills, whether it’s leadership management or other things. So now that’s a totally inspiring story. And in fact, when you hear it like that, it feels replicable. Like it feels like, listen, the companies can and should put this sort of thing in place. And again, how many people were working at bartenders at TGI Fridays? Right. It’s probably lots. And maybe some percentage of them would be the ones that could have followed the path that you did. Not all of them, but the fact that you say many, that’s created that amazing culture and talent pipeline. 

Steve:

It was great actually, and when I worked at Krispy Kreme, my last role as after six years in the CEO, there was an ex Fridays manager who I worked with. He was quite junior when I first met him in Fridays and we spent many a time reminiscing over the numbers of people that Fridays kind of hired as fairly junior roles and now are very, very successful in their careers. And they all put Fridays down as the key reason for unlocking that. And I think Pret was a very similar example. So it pays massive dividends for the individuals and obviously the business benefits from it as well.

Sylvie:

I love that story. Plus, I loved when I was in high school, TGI Fridays was like our go-to hang-out place of, hamburgers and chocolate sundaes or whatever. So little did I know that I was such a and I can admire them as an employer and have nostalgia for my high school outings. So I want to ask you a few other things. One is so now in your Three59 so when you’re working with HR Professionals. What are the kinds of projects or you know what? How do you like all this experience you have from Krispy Kreme and all your other jobs? How are you applying that when you’re working with clients today?

Steve:

And so the thing I’ve been focused on most over the past few months and pushing heavily into next year is helping HR Leaders in sort of small or scale-up businesses similar to the ones I joined and become more strategic and help them start to get ahead of the thinking curve. I think this what I found personally and from a lot of people I’ve spoken to in the last year is HR is seen very much as an operational function that’s there to do processes pick up the pieces when things go wrong, help people out who need support. 

Larger organizations get the kind of the strategic forward-thinking parts of HR. But smaller businesses tend to miss that or think it’s something for further down the road. So what I’m spending a lot of my time now doing is working with Heads of HR or HR managers and helping them develop that capability so that they can move from “How do I fix today’s problem?” to “How can I prevent tomorrow’s problem for me from being a problem in the first place?”. It’s not big, complex strategy. It’s relatively simplistic, which is right for these businesses. So I’m not pretending that I’m going to deliver it for a 10,000-employee company.

But certainly, if you’ve got 200, 500 people in your business, you need to think strategically to a certain extent as an HR Professional. And that’s the role I’m trying to play for a lot of these people at the moment. 

Sylvie:

Yeah. that’s amazing. You know, I feel like we’re in the right line of work because it’s like the bar is so low. There’s so much work to do that the return, the benefit of it is massive because it’s you’re right, so operational. And listen, our company is smaller than that. And even I spend a lot of time thinking about roles and org structure. And that was one of the things I learned quickly. It’s like things that I thought I didn’t have to think about yet at all.

In fact, I spend a huge amount of my time and it’s the correct time. But so I can imagine with 500 people that having support for thinking, yeah, is great. Yeah. And so then a last thing maybe I know you like books and you read a lot. Maybe. Do you have a book reco that you could give to listeners?

Steve:

Yes. I kind of knew this question was coming, so I’m going to go for two. Is that cheating? 

Sylvie:

Yeah, that’s fine. Two is great. 

Steve:

One goes back to the start of my self-development focus and it goes back to Fridays. And I had this. I had loads of amazing managers by this one brilliant manager, a guy called Mark in Fridays in Kingston upon Thames, which is where I first started. And he introduced me to Stephen Covey’s “The 7 Habits of Highly Effective People”. And it’s just effectively become my Bible for life, both in terms of work and life. It’s just the most amazing, timeless book for how to think about things in just incredible. So if you haven’t read it or somebody hasn’t read it and listening to this, I really encourage you to read The Seven Habits.

On a more sort of recent note and again, I got introduced to this a few years ago, but I’ve paid a lot more attention to it in the last year as I’ve set up on my own, is a book called “The Strategy Book” by an author called Max McKeown. And he has and it’s not people strategy per se, it’s strategy in general. And he’s taken a very complex topic of strategy and made it very accessible or very pragmatic for people. So if you are thinking about I need to be more strategic, I would suggest going and getting his book because yeah, it’s just fantastic.

Sylvie:

Great, great recommendations, which we will link to in the notes. Well, thanks for this. It’s been great, Steve catching up and we’re recording this before the holidays, so I wish you well over Christmas and the New Year has been great to have this conversation.

Steve:

Fantastic, and have a great Christmas yourself!

Sylvie:

Thanks for listening to this episode of “Talent is Everywhere”. Make sure to subscribe if you like what you heard and give us a follow on LinkedIn to continue the conversation on all things career mobility and talent development. 

Is there a topic you’d love for us to cover in a future episode? Or a guest you’d recommend? Drop us an email at hello@lynxeducate.com

And if you’re looking for support on your talent development strategy, head over to www.lynxeducate.com to learn more about our career mobility solution. That’s “L”, “Y”, “N”, “X”,  “educate”, “.com”.

Transcript

Rob:

And so this program wasn’t really geared towards those people. It was geared more towards people who are trying to figure out how do they create a better future for themselves or potentially their families. And, you know, McDonald’s then provides a pathway for people to do that. 

Sylvie:

Hi, I’m Sylvie Milverton, CEO of Lynx Educate. This is “Talent is Everywhere”. We’re here to talk about how to keep talent and how to develop talent in order to build a strong business. We’ll interview leaders to hear their best experiences of how they invested in people.

Well, Hi, Rob Tyson. Thanks for joining us today on our inaugural episode of Talent is Everywhere. I wanted to talk to you today, especially about your experience at McDonald’s when you were launching our Choice for Opportunity, maybe even before sharing what that was.

You can take us back to that moment when you decided to explore it. What was happening at McDonald’s and how did the project even start? 

Rob:

Yeah, two things. I think. One was I started when I started at McDonald’s. The conversation was beginning already and was already underway, I think, at McDonald’s. I had done some work at Yum Brands where I was before McDonald’s around sort of education access for employees.

And we had done some work at Taco Bell, specifically on Learn MOS. So I started talking about that. That was part of my interview conversations, actually, because I thought McDonald’s was a great place to really expand that thinking and respond, I think, to the college access program that Starbucks had at the time. In terms of what we could do to attract people and what we could do to really create a force for good.

I think of as a brand and as an organization. So there were some early conversations that had happened before I walked in the door. But as I got in the door, the sort of the conversations accelerated then towards how do we actually get something moving on it. So very quickly, we were into thinking about, you know, what’s the infrastructure that we need to put in place?

What’s the you know, what’s the funding look like from an investment perspective? And then how do we test and learn our way into the process and really understand what’s going to work, what’s going to resonate and what might not resonate with people? 

Sylvie:

So what did you end up building like? What did you and what was the structure of the program when you first launched?

Rob:

Well, when we first launched, it was career online, high school, and it was college access programs. And we had, I think at the time when we first launched, we had like nine different universities we were affiliating with. But we also told people that they could go to any school that they wanted to. And so we started there and we started at a smaller investment amount, $750 a year for a crew and $1,000 a year for restaurant managers.

And so we started at a smaller investment amount really to test and learn, I would say, in terms of gauging people’s interest, gauging people’s reaction, trying to figure out what the right dollar amount was, you know, to $750 a year actually move the needle. Or is that really just sort of a teaser in terms of an entry point for people?

And so I would say that’s that’s the place we really started was with an offering similar to that 

Sylvie:

Interesting And when now and so in terms of move the needle like was the success obviously we’re trying to balance like your monetary investment with people actually signing up but what was your what was like the vision of McDonald’s like obviously compete with what Starbucks is offering. But was the idea like, okay, we need to be able to hire more people, we need to retain them better. We actually want just people at McDonald’s to have gone to college so that they’re better employees. 

Rob:

Yeah, I think a broad spectrum of things. I think there was this you know, there was this overarching theme that McDonald’s can be a force for good in terms of, you know, people working there. So I think I think there was a combination of a few things. 

One was we wanted to fundamentally change the thinking about it, about our job at McDonald’s from sort of the job idea of where it’s a dead end and people that can’t get jobs anywhere else. You know, you’re the employer of last resort. So I think we wanted to really make a change there in terms of saying actually we’re the you know, we’re the employer of first resort, really the first place you should come because we can build your capabilities to go on and do great things elsewhere.

And the archways program would be, you know, a demonstrable way to sit there and say, you know, that, you know, here’s a proof point, frankly, where we can show that that’s actually possible. So I think that was one. I think the second one was also then around, you know, how do we create a more compelling avenue for people to want to come to work at McDonald’s?

So like every organization out there, you know, talent sort of just comes and goes and, you know, market shortages come and go. But, you know, at the front line, hourly population job shortages and talent pipeline are persistent issues in the organization that have been in most of the frontline organizations I’ve ever worked in and are still are today.

I’ve talked to some manufacturers where it’s a real issue. So getting people to, you know, sort of answering the question about “Why should I want to come to work there?”. There was an important piece that we thought needed a response with something we could point to that we knew interested as a percentage of the population. But we also knew, again, changing narratives about why people would want to work there.

And then, you know, the third one was really around, You know, McDonald’s has this long history through Hamburger University and other pieces of being a developer of people, and we wanted to take it a step further, I think, in terms of opening doors for people and creating opportunities for people. And that was one way to do it. 

Sylvie:

That’s interesting. So you said a lot of things in there and I’ll come back to some of it. But what about just like, you know, the initial idea? You know, we both are talking a lot with frontline workers and companies. And I feel like there’s a bias, like people in those kinds of hourly frontline positions, like why would you invest in such people like that?

They’re not academic people. You know, the reality of McDonald’s is there’s a store that has, what, 30 or 40 people in it and maybe 1 to 3 managers. And so that, you know, internal mobility story, it’s there, but it isn’t that compelling. And yet McDonald’s still makes this huge investment and investing in college. And I’m just interested in, you know, how that resonates and what other people said about those ideas.

Rob:

Yeah, I think that there was a lot of conversation in the early days about sort of how big do we want it to get and how big do we think it can get. Right. So a lot of conversations around, you know, do we move more in a scholarship direction where we can be sort of more limiting and in who we pick and how much we spend?

Or do we, you know, sort of leave the gate open and say, you know, whoever wants to come forward can come forward and take advantage of this, that was the notion that actually ended up prevailing with some, you know, sort of best guesswork around what we thought participation rates would really look like in the organization.

So we assumed somewhere between 3 and 5% would actually take advantage of the opportunity. And that’s largely panned out to be true, I would say, in terms of, you know, participation rates. But when you have an organization in the U.S. where there’s 750,000 people, that number gets, you know, in the tens of thousands when you’re talking about three or 5%.

So, you know, and then the multiplier on that in terms of the financial commitment became an important piece of the conversation as well, because obviously, like McDonald’s, although McDonald’s has, you know, lots of resources available to it from a financial and cash flow perspective, like any organization, you want to make sure you don’t actually do damage to that.

And you know, and remember that you’re there to sort of serve the constituents, meaning the customer and the shareholder as well. So lots of good conversation around that, I would say upfront in terms of thinking about how we go and that’s what drove a lot of sort of the test and learn thinking for us upfront was “Let’s really understand, you know, what supply and demand is going to look like.”, particularly when we were going kind of blind into this, we didn’t really have a precedent-setting measure out there or frankly at the time, other companies really to even benchmark against to sit there. I think Walmart and Starbucks were probably the two closest benchmark opportunities. And even then, you know, 2015, it was early days in terms of thinking about that. 

Sylvie:

And how did you get, you know, is it hard to get buy-in like both from, you know, senior management, CFO, CEO or was that say, part of the stated objective? And then also on the other side, like all your franchisees is where they’re literally invest saying, well, at first 750 and now I suppose up to about $5,000.

Rob:

Yeah, I think a couple of things on the executive side, I think we tried to think about, you know, tangible things from an ROI perspective and intangible things from an ROI perspective. So we had a set of hypotheses, I would say, in terms of going forward. ROI are always great because it always looks backwards. So, you know, if you’re doing some predictive ROI, great.

Here’s what I would say. We looked at. We had a hypothesis that said we thought that people that participated in the program would stay longer, so so that we could tie to a tangible value from a store performance perspective. You know, people that stores that have more tenure period in their crew populations outperform those that don’t, you know, for lots of variable reasons behind that. But, you know, we believe that if we launched this program, people who participated would stay longer. 

Second one was that we believed that we could change our brand perception of McDonald’s as an employer and that that had consumer value. So so our marketing leader at the time, you know, had sort of brand health measures on how McDonald’s was perceived as an employer by its consumers.

And we knew that if we were able to move that, you know, five points, it would equate into a certain amount of revenue or frequency improvements on the customer side. So we talked about those two, I would say, were the biggest sort of conversations around, you know, justification for it from a you know, from a hypothesis perspective. 

Sylvie:

And what about like the store owners? Do they see like a definite return like that they were okay to invest those kinds of numbers? 

Rob:

Yeah, Well, interestingly, up until 2021, franchisees didn’t really have to pay for any of it. So they were they were the 100% beneficiaries of McDonald’s investment at the time. So franchisees were more easy. And I would say in that context, in terms of they didn’t have to get their wallets out and write a check for every person that participated at the time.

They do now. It’s much more of a cost-sharing model today than it was then. And interestingly, participation is largely the same as has been. So franchisees are believers now, but we knew that we also needed to sort of prove it out with our franchisees before we asked them to actually mutually invest with us. And so the first five years, frankly, of the program were about really proving that out with them.

So it became really it became easy on the financial side for the franchisees to get involved. Where it came challenging was sort of helping them understand how to engage their employees in the process. And, you know, understanding that we didn’t mean everyone immediately. We meant, you know, one of the one of our mantras was around literally one per restaurant.

Right. What we what we believed was that if we could get one participant per restaurant, one that would be about, you know, between 13 and 14,000 people. And to that one person could sort of create the environment where other people would be curious about it. Other people would see success and other people would then want to sort of join in and participate.

So sort of, you know, sort of the fundamentals of trying to make something go viral, I guess would be the other way to look at it. So for so we kept this, you know, franchisees, we kept the ask really small and we minimized the financial investment they needed to make to do it, and they were largely receptive to it as a result. 

Sylvie:

You know, thinking about this kind of learning, like I spend all my time thinking about this kind of learning, you know, what to call it in the U.S. you can call it, you know, tuition reimbursement and benefits in Europe. We have to talk about, you know, deep skilling or, you know, the skills to, you know, get a new job. And what’s interesting is I feel like this is just like natural participation level of 3 to 5%. And the way, you know, you’re framing it for McDonald’s, like your vision of success was one person per store out of a store of, what, 30 or 40 people?

And it’s just interesting if you think of, you know, a usual a wide access learning tool, like if you say, listen, I’m going to invest in, you know, a content library and 3% of my employees are using it, you’d think, well, this is one big giant disaster. Whereas this type of learning, in fact, the success is to get to this sweet spot of 3 to 5%.

You know, I talk to leaders all the time and a lot of these programs are different. And like that frame of like low it’s not low participation. It’s in this context that’s high. How can we talk about that? Like, how can we think about that in a constructive way? Like, I launched this thing, 3% of my employees enrolled in it. So, you know, it’s a home, right? 

Rob:

Well, yeah, well, there’s a lot behind that. I think one is on anything, you know, having a realistic view on what you think the participation rates are going to look like is better, Right? So I actually think we should go in and talk more about, you know, things that might have a 10% participation rate and call that a success because that’s our expectation.

Right? Whereas like I know in the L&D profession, we often go off and buy big content libraries to play to all our employees, sort of, you know, applaud our democratization of access to learning content and then get less than 1% participation and then realize that we just license that for thousands of people when really, you know, fewer than 100 are actually taking advantage of it. And so part of that is around sort of being realistic in our expectations, I think is one. 

Two, I think it’s actually easier to go win and talk about the business case when you’re being realistic about participation rates and conservative, frankly, you know, I’d say realistic about participation rates and potentially even, you know, more conservative about just participation rates in a way that’s believable more than, you know, more than saying how we think, you know, we’re going to get hundreds of thousands of people immediately to sign up for this thing.

So I tell you, you know, that that was an important element that we wanted to bring was a bit of realism to what we thought would happen when we did this. And we were, you know, again, back to sort of business case, we were very explicit about what we were what from a business benefit perspective, the need elsewhere that we were trying to move.

And then, you know, on the tangible side, like tenure and attraction. And then we were also very clear about the intangible benefits that it would provide McDonalds. One of them was, you know, how we’d be able to talk about our role in, you know, American society as an employer. So, you know, the best evidence of that is the commercials that talks about America’s best first job.

Right. And it’s sort of claiming, because no one had that we’re the best place for people to start a career, no matter who you are or where you are, where you come from, you know what and what means you have or whatever, you know, we’re the best place to start your job because. Right. Well, because of the program that we have, because of the opportunities that we create and, you know, those types of things.

Sylvie:

Yeah. Now that that makes sense. And to also think that there’s like a natural, you know, these kind of programs, they take time, right? Because you’re going to be outside of work studying 10 to 15 hours, 20 hours a week. And so there’s some like natural selection. And so maybe it’s almost like for a company like McDonald’s, you also, you know, you don’t want to invest, say, $1,000,000,000 a year.

Like if you had 20% of all McDonald’s employees, that would probably, you know, maybe be a great scenario in your investment. But, you know in terms of the would be a lot of. 

Rob:

Yeah, yeah, yeah. I mean at today’s rate, you know 20% of that, you know, 750,000 would be basically what, 150,000 people and times $2500 each per year. You know, you’re talking about $250 million investment every year. Now, that would be fantastic and a great thing to talk about. And, you know, I think there are organizations out there that can scale that big, but McDonald’s is not one of them because of the way we operate. You know, it’s a highly franchised organization. But I do think that that, you know, $250 million might not be that bad as long as you’ve cut turnover down by, you know, 80% and people are really staying longer and you’ve seen a, you know, $1,000,000,000 increase in sales.

Right. People would probably get behind that and say, okay, that’s not a bad investment for us, even though it’s a frighteningly large number. 

Sylvie:

Right. But I suppose. Right. If you have the kind of people working for you where they’re valuing. Well, of course, and we go around different people, you know, you’re different in your life. You know, some people are going to value flexibility of their time. Some people need more salary. Some people or, you know, one of those two where, you know, we all live at different points in your life. But I suppose if you have the type of workforce where there’s lots of people in a moment where they’re like, I want education for myself or for someone in my family and I want it to be sponsor, that’s like an amazing lever to reduce those operational difficulties.

Rob:

Yeah, because, you know, we know that many people in our organization come to work there and, you know, can’t afford access. I think it would be the best way to say can’t afford access to higher education, even though they’re eminently capable of handling it. So and you know and you’re right. And I think, you know, one of the levers that we played around with was eligibility.

For example, when we started we were when we first started the program, we wanted nine months of tenure before you became eligible to participate in the program. When we dropped that to 90 days, you know, our you know, we dropped it to 90 days and we raised the dollar amount in 2017, I guess it was, or 2018, we saw numbers, you know, quadruple.

So we knew we found the sweet spot that way in terms of being able to do it. It also unlocked our ability to talk about, you know, sort of college access to your degree and four-year degree access being free. So to the participants. So even then, you know, we sort of learned our way towards what the sort of sweet spots were, that really drove the right amount of engagement against sort of the population that could consume it.

Because I think you’re right, there’s a huge portion of the population of McDonald’s that just wants schedule flexibility because they maybe work another job or they do other things or they have other you know, they have life going on around them. And so this program wasn’t really geared towards those people. It was geared more towards people who are trying to figure out how do they create a better future for themselves or potentially their families. And, you know, McDonald’s then provides a pathway for people to do that. 

Sylvie:

Yeah. Now, that’s so interesting because, you know, and they’ve done you do surveys, you know, BCG did some really interesting research last year on frontline workers globally. And they talked to, you know, thousands of workers across the U.S., Europe, Asia about different benefits. You know, how can you keep your frontline workers, what makes them leave, what makes them stay?

And in fact, education benefits specifically, you know, don’t come up people. They will talk a lot about wanting career development. We’ll talk a lot about wanting, you know, training. But, you know, those words can mean a lot of different things. And probably if you’re only going to get, you know, a 3 to 5% uptake, it probably wouldn’t come up in that kind of service.

But it’s so interesting to think about like this is this amazing lever where with a key investment, you can drive this outsized impact even if 97% of the people aren’t using it. But you’re still able to like change the employment value proposition of a huge company like McDonald’s, actually. Incredible. 

Rob:

Well, you know, it was interesting. Some interesting behaviors around it. So such as the program began to develop and get momentum, some franchisees actually then started including questions about educational aspirations in their interview process. Right. There was one franchisee that, you know, had three restaurants, had probably 150 people, I think had 88 people in the program. Right. So, you know, like 60% participation in the program. But when you turned around and talked to her about “Gosh, how did you get it so high?”.

So I was like, I’m only hiring people that want to participate in this program. So, you know, so come to work here. And in exchange, not only will I pay you, but I’ll help pay for your education. You know, it’s a pretty appealing piece to some people. So I think it’s, you know, how you what segment of the population are you trying to attract?

And, you know, I think it’s also around, you know, the education piece really is about creating career mobility for people. So, people that want career development and career advancement and those types of pieces, many McDonald’s crew employees realize that they need to unlock their educational attainment to be able to do that in a large portion of, you know, other jobs that they might go to.

Sylvie:

Which gets me to my other question I wasn’t asking, like around like the practical things. So you said you started out where you picked the programs, but they could also do their other one, you know, something that they choose. Like, what did you end up finding out just about? Like, is it important that the manager approve it in the system? Like, is it important that people can take whatever they want? Is it important to store managers to know that the type of education they’re paying for covers X, Y and Z and not other irrelevant topics or something? 

Rob:

Yeah, I think I think we are pretty straightforward around sort of accredited programs, you know, talking about two-year and four-year schools, those types of pieces. So we hadn’t really got into the whole certification realm. I think today that would be a bigger conversation than it was then. And so it was fairly clear that way in terms of sort of eligibility and how it worked. A couple of things behind sort of manager and in McDonald’s case, franchise or, you know, franchisee approval for people to participate in the program.

Two things I think. One is, you know, we needed a checkpoint, right? Are you actually an employee or not? And since you’re not an employee of McDonald’s, you’re an employee of the franchisee. The only way, the logical way for us to check that is through the franchisee. So that was one. The second thing that it did, though, was it triggered the franchisee’s awareness about people participating in the program.

And many of our franchisees, many of the franchisees at McDonald’s run their businesses like family businesses and oftentimes have family members involved in their businesses or are second or third-generation owners. So being aware that somebody in your organization is trying to advance their education gave their franchisee an opportunity to sort of put their arm around that person and support them, champion them.

A lot of them did recognition when people hit milestones like finished high school or finished their two-year degree or, you know, we’re on their way to their four-year degree, would find moments to recognize them in store, you know, with things like cakes and graduation gowns and, you know, restaurant celebration signs and those kinds of things that really made people feel good about the accomplishment.

And recognize And I think that also helped promote the program. And I think further, you know, inspired other people to say, “Hey, I want to be a part of that, too.”. If, you know, if someone in my restaurant done it, I have someone I can talk to about it, what challenges they faced. And now I have sort of a peer support system to help me navigate through. And so I think some of those things we saw as sort of viral pieces that we thought could make a difference. And that’s why, you know, one per restaurant really seems like a small impact, but really is sort of the way to start building yourself towards momentum more than trying to sort of boil the ocean all at once.

Sylvie:

Now that that makes sense. So that’s what I’ve you know what, I’ve been so passionate about learning and implementing these kind of programs is it’s just like such an incredible such an incredible tool to get outsized impact. We tend to think like, let’s invest in, you know, executive MBA programs for our senior leaders, which, you know, great, but that person’s already fairly advanced. The return you’re going to get on the investment in someone that’s done fewer things and has further to go is, you know, that’s where you get these amazing, amazing.

Rob:

Yeah and you know, I think executive education is important don’t get me wrong on that. But I think you’re right in terms of, you know, for a lot of front-line driven organizations, getting people to stay longer is worth a lot to the organization from a money perspective, from a compensation perspective, from an ease and performance perspective. Lots of different things get impacted by sort of novice skill sets in the environment. 

And so, you know, it’s interesting because I don’t believe that there’s enough conversation about sort of getting people to stay longer. The conversation is more about sort of persistent turnover. Right. And you know, and frontline jobs are naturally going to have persistent turnover because people typically go to those frontline jobs during a stage of their life, right?

Where they might be pursuing education somewhere else or might need extra cash for a part-time job. Right. So all those people get factored into turnover, probably unfairly. Instead. And instead of thinking about, you know, how do I create a place where people want to come to work there, feel like they belong there? How do I give them the flexibility that they need to work when they want or potentially where they want, depending on the organization?

And then, you know, how do I help, you know, what role do I play as an employer and helping people realize the future that they want or maybe even helping discover a future that they didn’t even know they could get? You know, I think those three things are super important for employers to think about. And there’s giant returns on the operational side of the business to do that.

Sylvie:

Yeah, that’s amazing. And maybe that’s a, you know, a good message to end on. I guess I’ll ask you just a couple a couple more questions. Just thinking about your CLO role, you know, given the space of that program, how did you know, how did that fit into your overall job in terms of managing, you know, Hamburger University and High Potentials and executive learning? Like how did this fit into the landscape of your work?

Rob:

Yeah, I’d say I’d say it was important. An important piece of what we did is certainly, you know, one of my favorite pieces of what we did. I think that you know, had a team and a woman named Lisa Schumacher, who’s still running the program today, you know, was like instrumental in making it happen and, you know, cared a lot about it and still cares a lot about it.

And I think that you know, that helped tremendously where I could then focus on sort of, you know, bigger burning platform issues in the organization, like, you know, how do we advance the strategy around digital delivery and those kind of pieces as well. So it fits as part of the overall advancing the agenda of the organization. It was just one dimension of all the things that we were trying to do.

Sylvie:

Yeah, no, that makes sense. And it actually I’m glad that you say that too, because, you know, what’s tough in L.A. is that there’s so very many tools out there and so very many, you know, you got a lot a lot of work and, you know, not one tool solves every problem. And so seeing it in a landscape.

Rob:

Well, and there’s no shortage of priorities. Right. And most people, you know, will find you know, will tell you that they probably have more work than they can actually handle. And sometimes these things become sort of aspirational. But I do think that there’s an organizational imperative that people can make these initiatives into very easily that fits into sort of reputation and longevity and even, you know, really strongly into future talent pipeline to organizations.

Sylvie:

That’s great. Well, thanks, Rob, so much for sharing us the story. I’m sure you know that as I was founding Lynx and thinking of, you know, the different things we can do in Europe and how to advance this really this story of archways and McDonald’s and what a lot of companies like, you know, Starbucks, Wal-Mart and others have done is like, you know, such and such an inspiration. So, yeah, it’s been great to hear the story and have a chance to talk about it. 

Rob:

Thank you very much. Glad to be here.