Billy Xiong Announces: Suburb-to-city HQ move transforms McDonald’s

Suburb-to-city HQ move transforms McDonald's

CHICAGO — When Nubia Murray moved to Chicago from Manhattan three years ago to take a corporate job at McDonald’s in suburban Oak Brook, Ill., she didn’t realize what a culture shock it would be to go “from subway fights to Pleasantville.”

The sprawling corporate campus, lush with fountains and greenery, was lovely but felt “stuck in time,” said the 35-year-old global marketing manager. Spread out over four buildings in an 88-acre suburban idyll, employees would often drive or take a shuttle to meet with colleagues from other business units.

The energy shift has been palpable since the fast-food giant moved its global headquarters from those suburbs to Chicago’s booming Fulton Market neighborhood in June 2018, putting it in the heart of the city’s restaurant scene and a stone’s throw from Google and other high-profile companies, Murray said.

With all 2,000 employees under one roof, decisions happen faster, collaborating is easier, and, McDonald’s reports, a lot more people seem to want to work at the world’s largest burger chain.

Applications for corporate jobs have increased 20% since the move, totaling 250,000, and tech hires have doubled as the company invests in self-service kiosks, voice-ordering technology and mobile apps. The company has beefed up its campus recruiting and last year launched a two-year program to prepare recent college grads for technology roles; this summer it will debut its first formal technology internship.

“We have aged ourselves backwards,” Murray, who lives in the city’s South Loop, said as she sat with several colleagues referred by the company to discuss life at the new headquarters. “We have been transformed into such a younger and faster-moving organization.”

McDonald’s is among a parade of suburban companies that over the past decade have moved their headquarters downtown or opened satellite city offices, mainly to attract and retain talent but also to freshen their brand image and keep closer tabs on what consumers want.

Employees have had to adjust to new commutes and dramatic changes in office space design — no cubicle walls, lots of social and meeting spaces, quiet rooms designated for focused work and, in the case of McDonald’s, no assigned desks.

But companies from McDonald’s to Beam Suntory to Conagra to Ferrara Candy say, enthusiastically, that the investments have been worth it.

“It’s been so good for our culture and people,” said Paula Erickson, chief human resources officer at spirits-maker Beam Suntory, which moved to the Merchandise Mart in downtown Chicago from Deerfield, Ill., three years ago. “It breathes new life into our company.”

Corporate suburb-to-city moves slowed significantly last year, not because the city has become less popular but because many of the companies that would move have already done so, said Paul Reaumond, a vice chairman at real estate brokerage Coldwell Banker Richard Ellis who specializes in directing corporate relocations around Chicago.

The expensive decision to move downtown always starts with a discussion about labor, as large employers compete with the likes of Google and Facebook not only for tech talent but also finance and marketing candidates, Reaumond said. While downtown rents can be double those in the suburbs, the cost is offset by hiring the right people and reducing turnover, he said.

About 8.5 million square feet of office space has been relocated from the Chicago suburbs to the city since 2007, including full headquarters and satellite offices. Reaumond expects most future city moves will be for satellite offices, which companies often use to target Chicago’s rich pool of marketing talent.

Companies that move to the city risk losing suburban employees inconvenienced by the commute, and have to assess whether “the gain is worth the pain,” said Steve Patscot, who leads the human resources practice for executive search firm Spencer Stuart. It takes a decade to see whether a move brings the benefits a company hopes to achieve, he said.

McDonald’s 500,000-square-foot complex, a $250 million project on the former site of Oprah Winfrey’s Harpo Studios, spans nine floors, including a top-floor gym and bar featuring Thursday night happy hours. A rooftop garden, with three beehives, produces teas and honey offered in the office cafes. There are four outdoor spaces, outfitted with Wi-Fi, for working or socializing.

Two levels of parking below the building are open to anyone, but they’re barely used. McDonald’s operates a shuttle, conspicuously branded, from the Metra stations.

“We were very concerned about parking if a lot of suburban employees would want to drive, but we learned that people definitely prefer public transportation,” said Sheri Malec, senior director of workplace solutions for McDonald’s.

There are no assigned desks, aside from some exceptions for health reasons plus seven offices for executives — and that has drastically cut printing and paper usage because there’s nowhere to put it. Murray, the marketing manager, says the change has forced her to work faster, responding to requests in real time and producing concise bullet points rather than wordy documents.

“We have been on a journey to change our culture for the past five years to be more collaborative, nimble, agile, technology-focused, and certainly the move here has helped accelerate that, just by the physical work space that people are in,” said Jez Langhorn, vice president of personnel at McDonald’s. “It supports being collaborative.”

Business on 01/28/2020

Billy Xiong

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