This post is featured as part of the 2016 Grunig PRIME Research Fellowship.
Download the full paper: Reviving the Corporate Brand: McDonald’s Turnaround and Implications for Public Relations/Organizational Communicaiton
A qualitative case study was conducted to explore how, why, and the extent to which McDonald’s has accomplished its corporate brand revival (or rebranding/turnaround) over the past two and half years (March 2015 to July 2017). Data from top media articles, McDonald’s financial statements and external communication, and third-party (e.g., PRIME) research reports suggested McDonald’s rebranding has been largely successful. The corporate brand revived its financial performance and improved stakeholder perceptions. Third-party references (media, food advocates, and research firms) were mostly positive. What, then, contributed to McDonald’s rebranding success?
Three overarching themes emerged, including:
(1) shaking up corporate culture with discursively strong leadership
(2) searching for a dynamic rebrand identity that balanced continuity and innovation
(3) enhancing stakeholder relations: learning from resistance and managing conflicts
This study provided empirical evidence for the four critical issues in corporate rebranding process (Miller, Merrilees, & Yakimova, 2014), including leadership, branding revision, stakeholder buy-in and stakeholder tensions.
Firstly, the new CEO Steven Easterbrook played a crucial role in the turnaround with not only rebranding strategies, but also his strong discursive and framing skills, experience and commitment to the rebranding, boldness in challenging legacy beliefs, and his internal approachability and external authenticity, all of which helped inspire stakeholder confidence and humanize the brand. These findings provided strong evidence as to how transformational (Bass, 2005) and discursive leadership (Fairhurst, 2008) could positively shape the corporate rebranding success (Miller et al., 2014).
Secondly, McDonald’s leveraged in-depth, cutting-edge research in revising the corporate brand vision and identity. Though executives initially envisioned McDonald’s to emulate fast-casuals and better burger chains, they later embraced a value-oriented burger roots as recommended by research results. As a result, McDonald’s financial performance soared once the management pursued key customers’ interpretations of McDonald’s. With that said, the bold vision at the beginning of the turnaround – to transform McDonald’s into a modern, progressive burger company – was sufficiently bold to spark stakeholder excitement and broad enough to fit in various product/service offerings. This corresponded with strategic ambiguity (Eisenberg, 1984) – a strategic maneuver sometimes employed by the management to accommodate differing interpretations of an initiative, which may have facilitated implementation. Furthermore, this bold vision was not incompatible with McDonald’s heritage brand promises: QSC&V (quality, service, cleanness, and value). In fact, the brand must evolve since meanings for these words have progressed with time and environment.
Finally, McDonald’s turnaround was peppered with stakeholder resistance and conflicts, particularly during implementation. McDonald’s executives worked around the roadblocks by speaking the language of specific stakeholders (e.g., shareholders, franchisees, customers), encouraging internal risk-taking and participation, prioritizing within and among stakeholder groups, offering higher shareholder returns and franchisee financial assistance, and most importantly, demonstrating powerful leadership with dignity, confidence, tempered optimism, and a track record of strong performance. These insights can help other corporate brand managers and executives overcome stakeholder tensions in their rebranding endeavors.
Importantly, this study suggested that communication/public relations functions can and should contribute to corporate (re)branding, due to their communication and relationship-building expertise. This is especially true with corporate (re)branding practices assuming a discursive, relationship-centered, social-constructionist, and co-creational turn (Balmer, 2012; Leitch & Richardson, 2003; Melewar, Gotsi, & Andriopoulos, 2012; Mingione, 2015). Specifically, communication/public relations can assist corporate (re)branding in these aspects: Firstly, from a communication standpoint, practitioners should enact the role of discourse technologists (Motion & Leitch, 2007) and aid in corporate (re)branding by (1) creating emotional, inspirational, and personalized organizational communication messages via multiple channels to build a humanized and authentic corporate brand, (2) coaching CEOs in their communication, framing, and discursive skills, so that they could speak the language of specific stakeholders, balance optimism and realism, increase approachability internally and inspire confidence externally, (3) assisting in creating a bold and broad brand (re)vision that allows for multiple interpretations (i.e., strategic ambiguity) while generating stakeholder excitement, (4) constantly fine-tuning the linguistics of (re)brand vision to be anchored in stakeholder needs, preferences, and understandings of the corporate brand, and (5) openly communicating corporate (re)brand efforts to increase share of voice in prevailing discourses and issues, such as social responsibility, integrity, sustainability, technology-savvy, and so forth.
From a relationship-building perspective, organizational communication/public relations practitioners should enact the role of boundary spanners and relationship builders (Dozier, Grunig, & Grunig, 2013; Ledingham, 2003; Hon & Grunig, 1999; Huang, 2005; Ki & Shin, 2006). They could contribute to corporate (re)branding by (1) tapping into various media tracking and digital analytics tools to research stakeholders’ multiple and potentially conflicting interpretations of the corporate brand, while prioritizing stakeholder groups by means of urgency, legitimacy, and power (Rawlins, 2006), (2) helping the executives understand stakeholders’ needs, desires, interpretations, and visions for the brand, thereby informing more participative, co-creational, and relationship-centered corporate brand strategies, (3) attending to stakeholder tensions and resistance when implementing corporate (re)branding initiatives, and seeking to balance interests and resolve conflicts. Though achieving complete buy-in and perfect alignment is not always possible, leadership’s display of concerns and commitment to action can substantially reduce internal antagonism and inspire trust and confidence. In brief, these recommendations, based on a systematic study of McDonald’s case over the time span of past two and half years, cemented connections between corporate (re)branding and public relations/communication both theoretically and practically.
Sylvia Jiankun Guo is a Ph.D. candidate at the University of Maryland and the 2016 Grunig PRIME Research Fellowship.
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