The Japan News McDonald’s Japan is expected to see record-high profits in the current year as rebuilding efforts bear fruit. In the wake of food scandals that undermined its reputation, McDonald’s Holdings Co. (Japan) (see below) chief Sarah Casanova visited all 47 prefectures in Japan to specifically talk to mothers about what they wanted from McDonald’s. Casanova recently spoke to The Japan News about her experiences and thoughts.
Q: You came to Japan for the first time in 2004. What were your impressions from your stay? Were there any perplexing cultural differences?
Casanova: I first came to Japan in 2004 as the chief marketing officer for McDonald’s Japan. My husband and I, we both love Japan. So first impressions, everything is very organized. Everything has its place ... the gardens are beautifully manicured, the streets are clean, there’s so many people living in Tokyo and yet everything is organized. So that was the first impression about Japan, and it’s still our impression today.
Q: You have experience in Russia and Asian countries and have successfully held important posts throughout the world. What is the key to overcoming differences in people’s thinking?
A: I have worked in Russia, Ukraine, Turkey, Canada, Malaysia, Singapore, Japan. And the one thing I learned, and I learned it early on in Russia, is never presume to know what a customer wants. Never take anything for granted. And the key to overcoming that is listening, listening to what customers have to say, listening to what your people have to say, listening very closely to what they have to say. I think that would be number one. And number two is being open to good ideas coming from anywhere. The North American way is not always the only way or the best way, you have to be open to people from anywhere having good ideas.
Q: Cultural differences also have an impact on how you manage your staff.
A: Yes. So, in 2015 I embarked on visiting every prefecture in Japan to talk to moms. At the same time, I’d spend a lot of time talking with the moms, but I spent just as much time talking with our crew people and our managers and our franchisees, and understanding about the business, what they like about McDonald’s, why they work for McDonald’s, what they thought McDonald’s should be doing. Got some very interesting perspectives.
One of the things that I love about Japan is omotenashi. When I travel around the country, and I talk to our crew people, and I say why did you join McDonald’s or why do you work for McDonald’s, 99.9 percent of the time they say, because I want to take care of customers, because I like talking to customers, because I like to see a customer smile, I like it when they say thank you. We have amazing people in our system in McDonald’s Japan. And I think part of that is Japanese culture, no matter where you go, the level of service and omotenashi is amazing, I really admire it. The second thing I get from my people is teamwork. The Japanese ability to work together as a team is amazing. So yes, listening to our people is just as important as listening to our customers, because they’re all customers too.
Q: What appeals to you in Japanese culture?
A: Number one again is omotenashi and service, it’s everywhere. And not just in the hospitality industry. You can go anywhere in Japan, whether it’s a do-it-yourself hardware store or a vegetable market, anywhere, and the service is amazing. Things that we like, I mean, we love to travel around the country, it’s a beautiful country. So we go out on the weekends, up in the mountains and see what we can find. So that’s gorgeous, lots of things to see. Love sumo wrestling. So when we arrived in 2004 my husband got really interested in sumo wrestling. Now, he knows a lot more about it than I do. And I had a chance, of course, to talk with Hakuho because he worked on Grand Big Mac with us a couple of years ago, and so we had the grand yokozuna. He’s a big McDonald’s fan. At least that’s what he told me.
Recovery from scandals
Q: A few years ago you had some food safety problems. Looking back at those incidents, what problems do you think existed regarding food safety at your company?
A: First of all, we apologized for the anxiety and concern that we caused our customers. Obviously at McDonald’s food safety and quality is the foundation of our business, we take it extremely seriously. I think there were a couple of things that we learned. So, McDonald’s has outstanding food safety and quality systems. But the journey is never over, the journey is never finished. The world is changing, technology’s changing, there’s always room for improvement.
So I said it earlier, one of the things about McDonald’s is that we are very strong when we work together, and following the incidents, we took that opportunity to start bringing all of our supply chain from around the world together. So our suppliers from Japan, our suppliers from America, our suppliers from Europe, we bring them all together once a year and we have a food safety summit where we talk about the newest things going on with food safety at McDonald’s, the suppliers can share best practices with each other and talk about how are we going to continue to get better with food safety.
The second thing would be, especially from talking to moms, they said we want more information about your food. Where’s it made, who’s responsible for food quality? They said, you’re not being very transparent about your food. So we took the opportunity to launch “Mieru McDonald’s quality” [a campaign to make McDonald’s food information transparent].
Anything you want to know about McDonald’s food is on this website: where it’s from, how it’s made, who’s responsible for it, it’ll show you videos of how the food is made, it answers many, many questions. Because there’s these worldwide rumors, bizarre and strange rumors about McDonald’s food, I’ve heard them everywhere. If you want to know the answers, it’s on this website. Because we actually asked Japanese customers — you didn’t have to be a customer, you could be anybody — send us your questions about our food and we’re going to answer a question a day on the website. And we did, we had our suppliers answer them, we answered them, very transparent, all the nutritional information, allergy information, is on this website.
The next thing I learned from moms is, you need to make it easier to get to this information, because I don’t wake up in the morning and think, I need to go to McDonald’s website. That’s why now on top of all of our packaging you see a QR code. That’s because of feedback from moms, they can easily access the information about our food from that QR code and also from social media. So those would be some of the learnings.
Q: In the current fiscal year your company is expected to see a record-high profit. What kind of efforts do you think helped your business recover?
A: We needed to understand what customers wanted from McDonald’s and so that’s why I went out to all 47 prefectures to meet with customers and ask them what they wanted from McDonald’s. We revamped our research efforts and asked customers, what do you expect from McDonald’s.
And we heard the same thing over and over and over again, and it was, we want McDonald’s to have great tasting burgers and fries at a price we can afford every day, served with a smile, quickly, in a clean, modern environment, and please please please make McDonald’s fun again. So, a place that people can get food and [an] experience that no one else can deliver.
That’s what we heard from our customers. So we took that input and we wrote the business revitalization plan, and it was a four-point plan. The foundation of the plan was food safety and quality, so taking every action we could to elevate our food safety and quality systems. That being the foundation, then the first [point] was customer-focused initiatives. So these are visual changes for the customers that they told us they wanted to see. In menu, in value, restaurant experience, brand engagement.
The second point was modernizing our restaurants. So in 2013 only 20 to 25 percent of our restaurants would be considered modern. Over the past 2½ years we’ve remodeled over 1,500 restaurants, bringing us to, it’ll be 85 percent by the end of this year. So now, most of the time when you see a McDonald’s it’s a remodeled one, it’s not an old one. And the goal is to get to 90 percent by the end of next year.
The third point was regionalizing or localizing our business structure. So we were a national structure, everything was coming out of Shinjuku. We went to three regions with three regional offices and we pushed decision-making and resources closer to the customers and to the restaurants so we can be faster. And customers across the country are different, so it allows us to better address consumer needs.
And then the last one was cost efficiency. You’re not going to save your way to prosperity but it gave us an opportunity to say, are we investing in the right areas. So that was the plan, we had a great plan, because it was steeped in deep consumer insight, it was driven by the customers.
The second key ingredient is a plan, [but it’s] just words on paper until people get behind it and execute it. We had to get the whole team, 130,000 people, aimed at the same goals. So we changed our internal communications system.
Looking forward to Olympics
Q: Do you think there’s room for more expansion?
A: Absolutely. There is so much potential for McDonald’s in Japan. So, our existing restaurants would be first and foremost, growing the business in our existing restaurants. And then also, we’re going to start expansion.
So in the second half of this year we will open more restaurants than we close, for the first time since, I think — we’d have to go back. We talked about expanding delivery, with UberEATS, and using third-party. We talked about new restaurants. You see what we’re doing with breakfast, and with coffee, and the new products you continue to see. So there is lots of room for growth.
Q: In 2020, the Olympics will be held in Tokyo. What are you planning in terms of new services or measures ahead of the Tokyo Olympics?
A: Well, we look forward, all of our restaurants, because we know there’s going to be a lot of visitors coming to Japan. And we look forward to being ready to welcome them in McDonald’s restaurants. Because everyone who comes to Japan is going to look at McDonald’s and say, “Ah, a taste of home.” So we also want to make it easy for customers to visit. So cashless makes it easy because you don’t have to worry about having yen. You can use your credit card or whatever. We’re also looking at — we already have them in our restaurants, but the counter mats with the picture menus on them. A Big Mac looks the same in every country, and that’ll be easy for customers to be able to point out what they’re interested in eating that day.
■ McDonald’s Holdings Co. (Japan)
McDonald’s Holdings Co. (Japan) was founded in 1971 and is headquartered in Tokyo. It operates McDonald’s restaurants in Japan and plans and manages domestic promotional activities. Japan is the second-largest market for McDonald’s after the United States, with 2,900 restaurants and 1.3 billion customers served each year.
Casanova joined McDonald’s in 1991 in Canada and has been with the brand for 26 years. She set up McDonald’s marketing operations in Russia, and has worked in Turkey, Ukraine, Belarus, Canada, Malaysia and Japan. Her first stint in Japan was from 2004 to 2009 when she served as chief marketing officer. She then became the managing director of the Malaysia business in 2009, before becoming CEO and president of McDonald’s Japan in 2013. She is a Canadian citizen and earned an MBA degree from McMaster University in Canada.