Do or Die: The Realities of Change

Editor's Note: Take a look at our featured best practice, Change Management Strategy (24-slide PowerPoint presentation). Seventy percent of change programs fail, according to the April 2001 Harvard Business Review article, "Cracking the Code of Change". According to Bain & Company, businesses that implement fast, focused, and simultaneous change programs can create enormous and long-lasting shareholder [read more]

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In business, there are really only two choices: do something or do nothing. One choice leads to growth and sustainability and the other, well, allows more room in the marketplace since there is one less player in the game. Every organization eventually faces the truth, change is the only constant. If an organization fails to accept this fact, they will, in fact, fail.

Daily, McDonald’s serves 69 million people worldwide. It’s hard to believe that statistic given the criticism we hear about the food, the looks of shame we give after we’ve grabbed a quarter pounder with cheese on our way to a mid-day meeting, or the fact that we crave those golden, salty, shoestring French fries. Despite that statistic, McDonald’s store sales have been in decline over the past two years and the reason is simple, the market has changed.

McDonald’s could blame a myriad of factors and present these reasons to their stockholders, but ultimately, its sustainability relies on its ability to transform. Now re-read the above paragraphs and replace McDonald’s with higher education and you will see that there are two American icons in need of transformation. You might be wondering what McDonald’s and higher education have in common and the answer is opportunity.

After two months as CEO of McDonald’s, Steve Easterbrook, is making serious changes because it’s do or die. In his video message to shareholders, he said, “The reality is our recent performance has been poor. Our structures are too cumbersome, decision-making too slow.” Easterbrook could have just as easily been addressing higher education instead of the shareholders. Higher education has an opportunity to learn some fast food lessons without the consequences of calories. Both McDonald’s and higher education need to transform in order to stay relevant, to meet customers’ needs, and to deliver a quality product. Transformation starts with reimagining how business is conducted.

1. A Geography Lesson: One of the biggest changes will be how McDonald’s is managed. In the past, McDonald’s has been managed according to geographic regions, instead, it will now break up its world market “into four country-cluster segments based on their importance to the company’s bottom line.”While higher education is not managed per se, academic institutions are held accountable by regional and national accreditation organizations. Institutions are accredited by an organization based on their geographic location while other institutions are accredited by national accreditors according to who they serve. The segmentation of institutions based on geographic locations has been made irrelevant due to changes in the market. Students are no longer bound by geography to choose an institution. Online education, MOOCs, and hybrid programs have allowed higher education to be accessible regardless of borders. Institutions should have the freedom and equal recognition to choose the accreditation organization that best meets the needs of the students they serve. Students have the right to choose and so should institutions.

2. Hold the Onions: While the customer may not always be right, they do always know what they want. In today’s market whether you’re a CEO, stay-at-home mom, or working student, everyone wants choices and the ability to customize those choices to meet their individual needs. McDonald’s is launching a pilot program in Australia that allows customers to use touch-screens to place customized orders. They no longer want to sell fast food, they want to sell fresh ingredients by delivering a feeling of a neighborhood burger joint.Just like McDonald’s customers, students want a quality program offering choices which are delivered to meet individual learning styles that allows students control over their education. Higher education is lecture halls, faculty, and ivy-covered buildings, but it’s also discussion boards, flipped classrooms, and competency-based education sprinkled with some prior learning assessment.

3. This is How We Do It: These are not just lyrics to a Montell Jordan song, it’s a structure that provides consistency within an industry called best practices. McDonald’s realized that sometimes what works best in one country was not communicated throughout the company to allow for world-wide implementation. This led to inconsistent service.Best practices provide processes and procedures for effectiveness and efficiency. They eliminate the need to reinvent the wheel. Best practices are developed and tested over time, but that doesn’t mean they cannot continue to be improved to meet evolving needs. Higher education needs to innovate and provide students with options using new technology that still meets the intent of established best practices.

4. Get There, Faster: Over the years, McDonald’s just continued adding to their menu. While customers want options, generally, the individuals going through the drive-thru just want to eat. They want to order, pay, pick-up, and be on their way. They are looking for convenience that satisfies the need.There are students who also want the drive-thru experience without sacrificing quality. They want to know the fastest way from point A to point B to earn a degree using the knowledge, skills, and abilities they have gained along the way. Students want to know that institutions respect their personal, professional, and financial resources. If your institution’s mission is centered on serving students, then offer clear pathways that helps them achieve their goals.

5. Serving #142: If McDonald’s and higher education are going to be successful in their transformation, they need to understand who they are serving. The customers and students from 1955 are not the same in 2015. In the past 60 years, customers and students have gained more knowledge, have access to more information, and have higher expectations. They live in a world that demands more from them and in turn they demand a lot from the marketplace.

Higher education and McDonald’s both serve a similar population who demand affordability, accessibility, options, and quality all delivered in the most efficient way possible. It’s a tall order to fill. Some may say it’s impossible. The ones who say it’s impossible are the ones who have already started losing their competitive edge. The world is changing and the leaders of tomorrow need the institutions of today to deliver a relevant product without sacrificing quality. It can be done, the question is, who comes first, the student or the institution?

If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours. – Ray Kroc, businessman behind McDonald’s.

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"The only constant in life is change." – Heraclitus

Such is true for life, as it is for business. The entire ecosystem our organization operates in—our customers, competitors, suppliers, partners, the company itself, etc.—is constantly changing and evolving. Change can be driven by emerging technology, regulation, leadership change, crisis, changing consumer behavior, new business entrants, M&A activity, organizational restructuring, and so forth.

Thus, the understanding of, dealing with, and mastery of the Change Management process is one of the most critical capabilities for our organization to develop. Excellence in Change Management should be viewed as a source of Competitive Advantage.

Learn about our Change Management Best Practice Frameworks here.