McDonald's has ousted its longtime CEO Donald Thompson after years of slumping sales, food quality disasters, labor disputes, and marketing failures. McDonald's investors cheered this morning as Thompson, a 25-year McDonald's veteran, stepped aside to make room for new CEO Steve Easterbrook.
Easterbrook previously held the company's chief brand officer position; he will formally replace Thompson on March 1. Easterbrook will also take Thompson's seat on McDonald's board.
"Things just couldn't go on like this forever," said Christopher Muller, professor of hospitality at Boston University. While suffering through declining sales and fresh investor unrest in 2013, McDonald's then CEO Don Thompson appeared on Bloomberg TV to defend the company's (by many accounts, "out-of-touch") budget and health guide for employees. He told Bloomberg, "I find a lot of the comments [about the guide] ... I'll be kind, I'll say interesting." Perhaps his problem was not knowing what McDonald's customers want, or how to adapt to changing times. He said in another interview, "I don't know what we'll be selling in ten years, but it will be what customers want."
2014 was one of the worst years in McDonald's history. The company barred reporters from its shareholder calls last May. By July, the expired meat scandal in China dominated news reports. McDonald's looked even worse when it failed to break ties with the meat supplier responsible for selling that expired meat. In August, it fired its President. By October, McDonald's was grasping at straws: franchisees told reporters that "everything depends on Monopoly," and that the company hoped its annual McRib release would help bolster the bottom line.
McDonald's looked clueless last December when various marketing plans aimed at attracting millennials failed to improve its image. As Fortune notes, McDonald's current Super Bowl marketing push — even with all of its fancy bells and whistles — is falling on deaf ears. Has the American public forsaken this country's largest and most widely known fast food restaurant? That's something Steve Easterbrook will have to figure out.