How McDonald's stays ahead - #findaba16 chat with CFO Zafar Mahomed


Keeping track of what happens in the business and measuring everything is what makes McDonald’s flourish as a business, conference attendees heard during Finance Indaba Africa which took place at the Sandton Convention Centre on 13 and 14 October 2016.

By Tiisetso Tlelima

In a robust question and answer session, McDonald's CFO Zafar Mahomed addressed a hall full of young hopefuls and start-up business owners, and emphasised the importance of assessing how well your business is doing by prioritising data capturing. McDonald's prides itself in measuring everything that it does at all its franchises which include counting how many cars use its drive-through ordering system, how many customers come through the door, how many deliveries it makes and how long people stay at the restaurant on a daily basis.

He jokingly adds that McDonald's even measures how long the staff behind the counter should take to get a customer a burger, saying it should take 'two steps and one minute', to roaring laughter.

"The devil is in the detail, we measure everything," beams Zafar. "Measure the small stuff that is going to make you money. Count the stores and know where you're at. It's a lot of data but we make sure the right people are looking at the right data."

One conference attendee asked the question; what happens when there's a data overload? In his response, Zafar told the upcoming businessmen and women that it's important to have a proper team to avoid data overload and to manage and filter the information accordingly. Constant communication and keeping in touch with this core team is paramount in ensuring the right information is given to you when you need it.

The information that people give you about your business also helps to make up the data and the feedback can be useful in the growth of your company. "People ask us a lot of questions and we make sure that we build our business around those questions," he says.

Very instrumental to the success of McDonald's is that the company is run the same way it has been running for years. The business has used the same tried and tested formula and does not experiment much around their processes. The potatoes are picked from the same farms and delivered by the same suppliers.

"In terms of process there's nothing we can do better than the way the 35,000 restaurants across the world and 240 across South Africa have been doing it, however that doesn't mean we can't experiment around the menu and introduce new dishes." The eatery has introduced a new burger called the Boerie Burger to the menu which has been doing amazingly well in the various restaurants.

The business doesn't change its processes unnecessarily. In this way, it becomes almost impossible for the fast food chain to fail. In the event that change is needed, the business does an intensive risk analysis before making any significant changes.

The business is proactive in the manner that it is run. If decisions need to be made quickly there is very little red tape involved. "We respond to issues immediately," says Zafar. "Let's take for instance the issue of [violence] which occurred in Braamfontein during Fees Must Fall this week, we had to shut down the store because customer and crew safety came first."

What sets McDonald's apart from other fast food chains is their ability to choose prime locations for all their restaurants. McDonald's is nearly at all the hotspots in South Africa which are selected carefully.

"Everything we do as a business is about property whether we own it or not, the location means a lot for us," explains Zafar. "Where we are positioned is important because we are going to be there for a while. Our people predict where the new hotspots are going to be in future and that's how we make our site selections."

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