Fast-food giant learns to go slow

John Betts walks up to the new touchscreen kiosk at the front of a McDonald's restaurant and taps in my Greek salad order.

Then the chief executive officer of McDonald's Restaurants of Canada Ltd. punches in his bespoke burger: a hamburger on a black sesame seed bun with double blue cheese, double bacon, caramelized onions, sliced jalapenos, grilled mushrooms and two sauces – sriracha and chipotle aioli. With fries and a lemonade, it comes to $14.84, not exactly a fast-food bargain compared with a $7.99 Big Mac/fries/drink combo, but not lavish either.

Welcome to the premium burger wars. The chain here recently hired 3,000 greeters/servers, such as Melina in this downtown Toronto restaurant, to help customers at the new kiosks, bring their orders to the table and slow down the fast-food chain's "dining" experience to spur spending.

"To get fast, you've got to slow down a little bit," Mr. Betts says after we settle in at a second-floor table by the window, overlooking a strip club and payday loan shop on Yonge Street. Within 10 minutes, Melina appears with our orders.

At 64, Mr. Betts, a McDonald's lifer who started part-time toasting buns at an outlet in Southampton, N.Y., in 1970, isn't slowing down. But he is wagering that he can shake up the business by instilling in his staff some of his methodical ways, with an eye to detail.

He noticed, for example, that his burger's double bacon order was confusing. It wasn't clear each serving has two strips of bacon and he is changing the wording to be more explicit.

After taking the top job at the chain in 2008 with a mandate to revive its flagging fortunes and take on archrival Tim Hortons Inc., he made his first big bet on "premium roast" coffee. He perked up that business with a new brew and free java, setting up separate McCafé sections – now even standalone McCafés – serving coffee and baked items such as "authentic" French croissants ($1.69 apiece). Now, he's turning his attention to customized burgers.

In his direct and personable manner, he has energy to spare and the demeanour of someone who could be a decade younger. He uses a disciplined and strategic approach on the job and in his personal life.

He watches his weight and works out regularly with a trainer twice a week or at hotel gyms when he travels. He weighs himself weekly. At our lunch, he savours his burger but leaves half of it and most of his fries. He pointedly pats his trim middle.

When he's not having his usual Big Mac for lunch – or a salad once a week with "crispy" (breaded) chicken rather than the grilled chicken I ordered – he favours European and seafood fare.

"Some people have hobbies, some people are voracious readers – I love to eat and go to different restaurants and experience different cuisines," he says. "I don't qualify myself as the ultimate foodie who necessarily goes for that global palette or suite of offerings. I'm a little more of a traditionalist."

He takes criticism about McDonald's head on. Unhealthy food. Low wages. He acknowledges that some people are embarrassed to eat at McDonald's.

"That's what I'm working on," he counters. "Those are things that you've got to deal with. … What I like about McDonald's is that it's part of everybody's life. Love it or not, everybody's got a connection to it. And I love being part of a brand that's constantly reinventing itself, trying to stay contemporary with the times."

Today, as consumers gravitate to "fast casual" restaurants with a warmer atmosphere and food touted as healthy and fresh, he is determined to benefit from the trend.

He admires the Vancouver-based fast-casual Joey Restaurants chain for its attentive service. "That was a model for us," he says. "Every time you go there, they will always ask you one question, I've never seen them not ask it: 'Do you have any allergies?' You don't get that at a lot of restaurants – the attention to detail. I was pretty impressed."

To try to emulate that service, his team has started to recruit staff from hospitality and flight-attendant schools to chat up customers and make them feel better about McDonald's. He says McDonald's pays its new "guest experience leaders" (greeters/servers) above minimum wage, even $1 to $1.50 an hour more.

Its "create your taste" customized burger program, launched here last fall, has spurred customers to spend about 30 per cent more at the kiosks, he says. It's now in about 550 of its 1,400 Canadian outlets, with 450 to go.

But he found when McDonald's began testing create-your-taste last year in Alberta, employees were uncomfortable moving out from behind the counter to chat with customers.

"The vast majority of them couldn't make the cut," he recalls. Staff had been trained in the "six steps" of serving customers, including taking their order, receiving payment and assembling the order.

"For 50 years at McDonald's [Canada] it's about: 'Do your six steps, smile and be fast,' right? And that's it. Just move quickly. But when you take one of them and put them in the dining room and ask them to greet customers and slow down a little bit and engage in a conversation, most of them didn't like it."

George Cohon, who founded McDonald's Canada 49 years ago and went on to found McDonald's in Russia, says he can rarely find Mr. Betts in his office because he travels so often, visiting McDonald's restaurants in Canada and beyond. "He asks a question and listens to the answer. A lot of people don't do that," Mr. Cohon says.

Adds Robert Nadeau, a McDonald's franchisee of seven Toronto-area restaurants and another admirer of Mr. Betts: "Sometimes John can be a little impatient, like most successful people. John would like to see some things done yesterday. That sense of urgency and that desire to get results could sometimes create stress for some people."

But Mr. Nadeau says the CEO motivates franchisees by spending time with them and giving them feedback, including a monthly e-mail titled "Betts on the road."

Mr. Betts acknowledges "at times I can drive it pretty hard" with high expectations of his staff but "I don't get a lot of push back." He's on the road three out of every four weeks, talking to franchisees and customers.

In the early 2000s, when he was responsible for Michigan – at the time the worst performing U.S. market – two archrivals, Tim Hortons and Dunkin' Donuts, announced they were putting a big push on that state. "They were two powerhouses. They both had great products."

Mr. Betts promptly took his team to Canada to check out Tim's, which he was familiar with because he visited his father, a diplomat, and his stepmother in Toronto. The McDonald's executive put together a battle plan, focused on improving its coffee.

"What we did was we blunted the growth" of the two rivals, he says. "And it wasn't about coffee, it was about breakfast. You do the coffee thing and breakfast goes through the roof."

He convinced franchisees to remodel their restaurants. Within a few years, Michigan became McDonald's top U.S. coffee market, he says. "I remember I'd get up at meetings and I'd talk about the importance of coffee. I think people thought I was insane."

Subsequently, in overseeing McDonald's beverage strategy, he launched McCafé south of the border. By the time he arrived in Canada, he was ready to apply the lessons to this market, where the chain had been overtaken by Tim Hortons six years earlier as the country' top food player. He felt he was up to the challenge. "Things that I do well are all things that were deficient up here: focus, strategic focus and focusing on less, not more."

His efforts so far seem to be paying off, with Canada now singled out as among the U.S. parent's top markets. The division's brewed coffee sales have more than tripled under his watch, while its coffee market share has risen to 12 per cent from 5 per cent, he says. In that estimated $4-billion-a-year fast-food market, McDonald's has grabbed coffee business from Tim Hortons, whose share has slipped to about 75 per cent from 78 per cent over that same period, according to researcher NPD.

Mr. Betts's coffee achievements mark a high point in his career. A low point? Biscuits. Five years ago, McDonald's Canada borrowed from the Tim's playbook in launching biscuits. They were a flop. He hadn't applied his usual methodical ways to the roll-out. "We could have done a better job on the consumer research side."

His persistence has paid off in other ways. He met his wife, Bridget, in Boston when they both worked for McDonald's in the late 1980s. As a marketing manager, she was his senior. On their first encounter during a tour of McDonald's restaurants, he tapped into his operations expertise to provide a primer on point-of-purchase (POP) promotional material.

"I said, 'See what's the matter with this POP here, if you just turn the positioning of the product … and then the customers will understand what we're trying to communicate.'" He impressed her enough that she accepted a non-McDonald's dinner date with him soon afterward.

For the first few years after they got married, they often lived in different cities as they climbed the corporate ladder. "She was in New York, I was in Boston. I went to Chicago, she came to Chicago and I went to South Carolina. She came to South Carolina and then I went back to Chicago. It was a mess – the modern couple. But it worked."

Unable to have children, they started the adoption process. But during the next four years, their adoption planning was derailed as they moved to four different states. Each state had different approval rules, forcing them to start from scratch each time.

The children, now 22 and 20, were adopted in Ukraine. Bridget left McDonald's after 17 years with the company to stay home with them. Still, with all his travelling he generally got to see the children only on weekends. "So they were my hobby, so to speak," he says, drawing imaginary quotation marks with his fingers in the air to lighten the conversation.

In July, he will again take advantage of the McDonald's perk of an eight-week paid sabbatical for every 10 years worked. He's taking his wife and then, separately, his two children, to Europe to visit places where he lived when growing up as a diplomat's son. But he hints he could have another decade left in him at McDonald's. "I get this sabbatical and then maybe one more and then I'll be done."