How McDonald's avoided a major Public Relations disaster!!

Peter Woolfolk  0:03  
Welcome. This is the public relations review podcast, a program to discuss the many facets of public relations with seasoned professionals, educators, authors, and others. Now, here is your host, Peter Woolfolk. Welcome to the public relations review podcast and to all listeners all across America and around the world. If you have been in the public relations business for any period of time, most likely you've had some exposure to or actual involvement with crisis communications. Now we have discussed this topic on the program most times in terms of what to do, what not to do and how to go about it. Today, however, my guest will discuss in some detail how the McDonald's Corporation, yes that McDonald's, handled a potentially embarrassing incident with its former CEO. Now this incident has received national news coverage, I say potentially embarrassing because our guest today, David Johnson, CEO of Strategic Vision PR Group, detailed it in a COMMPRO newsletter article, just how McDonald's went about handling this matter the right way. So joining me today from Suwanee, Georgia, a suburb of Atlanta, is David Johnson. David, welcome to the program. It's great to be on. Thank you for coming. So why don't we begin by first having you give us some background on what the problem was at McDonald's with their former CEO, and then how they went about getting it resolved. Definitely. Last year, McDonald's and their former CEO, Steve Easterbrook decided to part ways the fast food giant led Easterbrook go, after he admitted to a consensual relationship with an employee, and they parted ways they terminated him. They said that there was only evidence of non physical, consensual relationship, nothing intimate. So they agreed he agreed to terminate him without cause. And he was allowed to keep his big parachute package, which was about $40 million.

Unknown Speaker  2:19  
Well, then, this year, they began hearing rumblings that there were other relationships that Easterbrook had. And they were far more beyond just, you know, some flirty emails, they were consensual. In fact, there were intimate video calls and video texts, very much like what we've heard about with jeffrey toobin this week with the New Yorker. And so McDonald's decided, oh, no, this isn't what we agreed to. So first thing they decided to do was get ahead of it. They knew that the story would probably come out from one of the persons who had leaked it to them, the information would probably go to the media. So McDonald's came out and said, Look, we let this person go, we let them go. For this reason, we have now found out and we investigated it, that there was far more to the story than we were told. And what we're doing now is going after him for that buyout, because there was cause Mm hmm. So do you have any idea how that former CEO responded once they said, Hey, hold on a minute, we want that money back? Oh, of course, he knows. He says, No, this isn't so. But the bad thing for him is they found nude photographs of Easterbrook that he sent on his company computer. And I mean, it's his is faces there. So it's just like, you know, like the neck down his faces and his neck, His face is included. So people know it's him. Now going into litigation, and you and I know how long that can take. So where this will ultimately end? We don't know. But from a PR standpoint, from a crisis standpoint, McDonald's, the fast food giant was fast and handling this crisis, and they handled it in the right way. They did a full and transparent investigation after these allegations came out. They made a swift decision on how to act based on the findings. And they were also proactive in getting the story out first. And they shared it with their investors, they shared it with the news media, and then they announced what they were doing moving forward. That's what you always want to do.

Unknown Speaker  4:39  
It was a one day story in the news media and 

Unknown Speaker  4:45  
of course, it's been overshadowed by you know, COVID-19 by the election, but the way that they handled it, they were able to defuse the situation before it became a total crisis.

Unknown Speaker  4:57  
Now, once as I said, once the photo came out, obviously I hadn't heard that that part of it but that that pretty much it's hard to, to deny something once people have photographs of you actually committing some some misdeeds, and and of course on the computer computer on top of that, to have they say begin to see codified this and use this for other parts of the company said, here's how the right way to go about handling these problems

Unknown Speaker  5:29  
They are and they're also, two, as a result of this going really in depth as far as how to handle problems of sexual misconduct of how to report it without fear of retaliation, out of fear of retribution. And they're also, of course, doing the standard thing that any corporation does with something like this, retraining all their executives, all that or managerial positions, as far as how to deal properly with accusations of sexual misconduct, how to have it investigated properly. And also reviewing the policies of McDonald's as well with such situations, because I mean, McDonald's has a very strict policy, that consensual sexual relationships are not accepted. And Easterbrook knew this. In fact, he was the one during the height of the metoo movement, who instituted the new sexual misconduct policy. And then of course, he gets caught in it the irony of ironies. So he was doing one of those things about Do as I say, not do as I do.

Unknown Speaker  6:37  
Exactly. And we find this so many times with a lot of crisises of this nature with a major corporation, the CEO, the chairman, the board, they set the standard, this is how it's going to be handled. But lo and behold, when the scandal hits, they believe that it applied to everyone but themselves.

Unknown Speaker  6:57  
Let's talk a bit more about not only McDonald's, but others because one of the important things is you alluded to is people reporting this. So obviously, somebody must have been someone at McDonald's, who knew about this and reported it a game that he had these consensual events. What programs should an organization set up so that people don't feel intimidated by making phone calls or sending the emails or however they want to get that information to the senior staff?

Unknown Speaker  7:30  
That's a great question. And it's something that a lot of corporations grapple with how to do it. Because one of the biggest fears that employees have when they witness misconduct, be sexual misconduct, bead financial misconduct, any type of misconduct among the C level executives, is how it will be handled, will be confidential, will I be protected. And one of the things that McDonald's did is they set up a special program within the their HR program in which the whistleblower can go anonymously. And they also have an email set up that is not traceable to the sender. And they can use that to file their complaint. And there are assured of anonymity.

Unknown Speaker  8:25  
And you know, I think that's important. I recall something that I did some years ago how one of the transportation companies here in Nashville wanted to get honest employee feedback about how they thought management was doing. And recognize was the best thing I can do. I mean, we want to do it by email, but I had a third party where they could send it to and they could codify the information and management couldn't track it back to them. Because I think you're absolutely right. Some people aren't just aren't comfortable thinking that well, I'll just drop it in this box. And it'll it'll be taken care of.

Unknown Speaker  8:58  
Now, and there's been too many instances that we've heard where there's been retaliation over the years. And it might not be actually overt it could be covert retaliation, but people's careers are stymied, they're unable to advance they're forced out of a corporation. There has to be a comfort level. And that's the only way to that a major corporation is going to be able to route out this type of misconduct as well. If employees are not comfortable, if they do not feel secure, they're not going to report the misconduct and that's a double edged sword for corporations. Number one, the misconduct continues and it affects company morale, because it goes around. We all know the the water cooler gossip, people talk about it, and it does affect morale. And the other thing is, the secret usually gets out and it gets out to the media and a blows up in a way that is damaging to the corporation. Having anonymity where employees can feel safe and secure, helps ease all those problems. And it gives a peace of mind to for the employee who is filing the complaint.

Unknown Speaker  10:12  
You know, I think you touched on something very important that I think maybe some companies forget, it just said they try to maybe sweep it under the rug or, or downplay it until and then all of a sudden, all hell breaks loose. Now, it's a different I mean, it's a barn fire as compared to just a, you know, just something in the trash bucket that's burning, because they tried to sweep it away when they should have adjusted right up front as soon as it came out, and in a way that people could respect them, and follow and agree with. Exactly, and that's one of the biggest problems that any corporation has, is they're not proactive, you want to get the information out, you want to control the narrative. And a lot of corporations feel, well, no one's talking about it, you know, we can just cover it up, we can handle it internally. That's a fatal mistake. These types of scandals do get out, especially now to social media, people posting things on Facebook, on Twitter, we know it's going to get out and then the media magnifies it. And then the corporation is facing a major crisis, not just the initial crisis, but how they try to cover it up, which makes it look doubly as bad, the thing any corporation wants to do is get out in front of it, and not having to be talked about how they might have covered it up or pride to prevent it from coming out. Because corporations forget the damage that is done in a situation like that is immense. It affects consumer confidence intersects the stock price of the company. But more importantly, it also affects the employees, the internal communications. And a lot of times, companies in a crisis overlook their employees, and they can't, they need to consider all their stakeholders when dealing with a crisis. You know what this recalls, several years ago, I believe it was General Motors that was having some problem with an ignition switch or something along those lines. And cars were either catching on fire or causing some major problem that once it happened, the driver couldn't control and causing car crashes, and even a few deaths as a matter of fact, right? And it came out that the engineers some engineers knew about it, but decided there, again, sweep it under the rug until these investigations took place and say, Hey, wait a minute. Yeah, somebody knew about this. And you should have done something about it. And I think General Motors paid some really, really stiff penalties and fines as a result of that. They did it was right when Mary Barra was taking over General Motors. That's right, the first female CEO, and I will say this, there was a cover the end that had occurred prior to her becoming CEO. And her handling of the crisis was the way that any corporation wants to handle the crisis. Number one, she addressed all the stakeholders. She accepted responsibility. She did a video, and it was played for all the employees, she allowed employees to question them, her. And she accepted responsibility. She addressed the legislative oversight committees as well, the media, the vendors, the employee, of course, the stock holders, and that was the way you want to do it. Because you never want to forget any of your shareholders, when you're your stakeholders when you have a crisis, and she did it perfectly. And that is still one of the textbook examples of how to handle a crisis. Well, you know, I think somehow another we need to get that kind of information over to some of our leaders in politics, because having worked in the government, I know that the people who are there who are career people they want to do their jobs and do it well. It is some of those who come in, let's say part time or temporary, who don't want things bad things to get out and drive have to find ways of covering up. And those people, those people being those career employees, they will find a way to get the information to the media as long as they can't be traced or track back to them because we go back to Watergate. Somebody blew the whistle. I'm I don't know how I forget exactly the details of that gasoline meeting in the garage at night, so forth and so on. But somebody wanted this people to know what was going on just because it wasn't right. Right. Well actually was Mark felt and the reason that he did it was he was passed over as the director of the FBI when j edgar hoover passed away. Mm hmm. And he was resentful and he also was

Unknown Speaker  14:59  
distrustful of Nixon? So he leaked the information to, of course, Woodward and Bernstein and the rest is history. But no, you're right, we always have the whistleblowers in government who blow the whistle, it might not come out right away, but it does come out right away. And part of the problem is being in politics or in corporations, the initial thought, of many level, many high level executives, is to try to cover it up, try to brush it aside. And the problem with any crisis being a political crisis, or a corporate crisis, it usually isn't the initial crisis that brings you down. It's the cover up that does. And that's why if you have a good effective crisis communications plan, you can avoid that second crisis, which could be the most damaging. And I think that, you know, the way people look at it, you're absolutely right, that, you know, prices are going to happen, and we can't always control those. But it's how you respond to it, that that determines how people are going to view you, as you move, move forward. That is a huge issue, right there.

Unknown Speaker  16:14  
It is. And it'd be a major issue. And one of the things too, that we see over and over again, is a lot of corporations don't have a post crisis strategy. McDonald's did with this one, they plotted, they chartered their path forward, how they were going to handle it, and they had things in place. A lot of corporations just figure, let's get through the crisis, and they don't think about the post crisis and how to handle it, and how to chart that path forward. Let's talk about that a little bit, because that's something that we don't hear a lot aboout that. Okay, well, now, what happens once this crisis is over? What do we do? And let's talk about the process of developing what that should be because something has to happen. Once the crisis is over somebody, somebody's jobs got to be refilled. Perhaps, if there's been a fire, where do we go after the fire, that sort of thing? Give us a little bit of insight as to some of those things that need to be addressed following a crisis. Oh, definitely a lot of things need to be the first thing you want to do is after the crisis has subsided, is to evaluate, how did you handle it? Then the next step is, how do we move forward from that crisis? What did we learn from it? What steps can we implement, so that something like this never happens again? And also, what is our vision going forward? A lot of times, we don't hear about that. The companies just figure, okay, we survived this, go back to usual, you can't, of course, like with McDonald's, they had to replace your CEO. But it goes beyond that you've got to change the culture of your company as well. So it doesn't happen again, you mentioned GM. That was one of the things that Mary Barrett instituted so that people were not scared to announce, to go and report problems that could cost the company money, the engineers were scared to do it. And the CEO at the time, and other high executives just didn't want to hear about it. You've got to change the culture of the company, after crisis. And we've so often we don't see that happen. I mean, for example, a crisis that happened here in Georgia, but it affected everyone was the Equifax data breach. And Equifax what they did, and they're still rebuilding their reputation, all these years after this, is they had to go in and clean house with their executives, because it turned out a lot of their C level executives were cashing in on the stock market, when all this was coming down cash, you know, with their stocks, and that culture had to change you had bring in a new fresh team, and a new approach and how you were handling things? Well, that's what I hear here is that somehow or another, there has got to be some way because changes, if they're going to be effective, it has to start at the top and it has to come down from on high, so that people will know that we're serious about that. So somewhere along the line, there needs to be some C suite training for senior executives on crisis communications, what happens if you if you screw this up, or you try to dodge it, those kinds of problems can be cite examples of it, and then get the buy in from the chairman, President and Senior Vice President, those people and once you have that buy in, then everybody else I would imagine should be on board with it. And then there's a plan developed, that we'll all know what it is and what to do when these things happen. Exactly. That's one of the key levels is to

Unknown Speaker  20:00  
a plan in place when the crisis hits. But so often we find now with your major corporations for more your medium sized corporations, they know they need public relations. So yes, they hire a PR firm. But the one thing that they don't think they need to consider when they're developing their PR plan is a crisis management plan. So when the crisis hits, a lot of these medium sized companies, or even a lot of these startups, for example, they're caught unprepared, they don't know who the spokesperson is going to be to address the crisis. They have never mapped out what potential crisis is they could be facing. So they're not ready to respond right away. And what happens is social media and traditional media shapes the narrative. That's why having a crisis management plan is so critical when you're doing your PR plan.

Unknown Speaker  20:53  
You know, it sounds to me as I listen to this, that one of the highways for opportunity is for PR people to speak at, let's say, the chambers of commerce. Because I mean, it's fine for us to talk among ourselves about having a crisis communication plan. And so we know how to execute it. But it's the people who impacts perhaps don't understand why they need to have one. And two chambers of commerce would be one place that we could have a chance to talk to CEOs and small business people is, here's what it is, here's why it's important. And here's some of the consequences that can come should you not have it all handled correctly?

Unknown Speaker  21:32  
Oh, tradit, you're completely correct. I mean, the Chamber of Commerce is, is are a great place, business associations are a great place as well. Because most of these members, I mean, they spend their time working to make their business, the best that it can be, which that's what they should be doing. But they never think about when a crisis might hit, and it can hit at any time. I mean, it doesn't necessarily even have to be something that they have done. It's something that their employee could do. And it gets magnified and placed all over the web. And that damage is complete. I mean, Papa John's, for example, their franchises, but here in Georgia, you had during the height of it, when everything was happening with George Floyd, you had we had to they were college students working at a Papa John's facility. And they thought they were being funny. And they made nooses and they posted it on Instagram. Of course, that became a crisis for Papa John's. And I mean, Papa John's, the CEO, the executive board had nothing to do with that they were not responsible, but still that reflected on their company, and they had to address it. And they of course, had a plan on how to address it. But a smaller size company probably would not your employees, their actions, their words, their social media posts, they reflect on your company?

Unknown Speaker  23:03  
Well, you know, that's the sort of thing that does that, I think could be a session for him. Small businesses that chamber meetings around the country, he says here, here are some things that can happen to you. And if they do, here's how you should handle them. And also have a plan to deal with your your your business after the issue has been resolved.

Unknown Speaker  23:25  
Precisely, you have to hit that plan moving forward. But you also have to have a preliminary plan in place for when the crisis hits. Otherwise, you are at least 24 hours behind the curve.

Unknown Speaker  23:39  
Well, David, you've provided us with a lot of information today on not only what can happen to you, but how you should go about handling it, but and just in closing, I'd like to find the view might have some additional wisdom you'd like to pass on to our listeners.

Unknown Speaker  23:54  
The one thing that I would say is we're seeing this more and more with social media. Social media drives the narrative in a crisis. So make sure you have a strong social media policy in place. And when you're responding to a crisis. Don't forget your social media.

Unknown Speaker  24:14  
Well, thank you so much. My guest today has been David Johnson, who is the CEO of Strategic Vision PR Group just outside of Atlanta, Georgia. I certainly want to thank him for joining us and providing you the listeners with all this information. And if you've enjoyed it, please give us a review and we look forward to having you for the next episode of the public relations review.

Unknown Speaker  24:36  
This podcast is produced by communications strategies, an award winning public relations and Public Affairs firm headquartered in Nashville, Tennessee. Thank you for joining us.

Transcribed by https://otter.ai