Tom Corfman is a senior guide with Ragan Consulting Group, which helps firms set up govt thought management applications.
Chief executives of worldwide firms don’t often become involved in native politics, however CEO Chris Kempczinski of Chicago-based McDonald’s Corp. has proven there’s an exception: When a mayor’s approval ranking is about 25%.
“Whereas it could wound our civic pleasure to listen to it, there’s a common sense on the market that our metropolis is in disaster,” he mentioned on Sept. 14, 2022, in a speech earlier than The Financial Membership of Chicago, an unique group of enterprise leaders.
Kempczinski by no means talked about Mayor Lori Lightfoot by title as he voiced broadly felt considerations about crime, bemoaned Metropolis Corridor’s frayed relationship with the enterprise group and griped about taxes. He didn’t have to.
“His feedback possible will function a blueprint for any pro-business mayoral candidate who has but to emerge,” wrote the Chicago Tribune Editorial Board in reward of the speech.
5 months later, Lightfoot was on her manner out, ending third in a crowded area of 9 candidates.
In response to an inventory of eight questions, a McDonald’s spokesperson declined remark, saying by electronic mail, “We’ve nothing extra to share presently.”
In some methods, Kempczinski’s speech was the kickoff of the Chicago mayoral election, possible strengthening opposition to the incumbent that was already brewing among the many metropolis’s company elite. It additionally provides an opportunity to evaluation three factors that CEOs ought to think about earlier than leaping into native politics. However first, some background about politics within the Windy Metropolis, the place Ragan Consulting Group relies.
Practically 4 years in the past, Lightfoot turned the third Black, second lady and first brazenly homosexual individual to change into town’s mayor. A former federal prosecutor and massive legislation agency companion, she rode to an upset win in 2019 over outrage about political corruption. (Think about that in Chicago!).
Whereas worries about crime performed a key position in Lightfoot’s defeat within the Feb. 28 non-partisan election, she was additionally damage by perceptions that she didn’t ship on guarantees to reform authorities, improve transparency and alter police ways. Layered on high of all that was her combative character. Liberal voters, the core of her assist in 2019, deserted her on this election.
Two candidates are combating to succeed Lightfoot in what is going to possible be a ferocious runoff election on April 4. Paul Vallas, a former CEO of the Chicago Public Colleges beneath Mayor Richard M. Daley who’s receiving robust assist from the enterprise sector, garnered almost 34% of the votes. Brandon Johnson, a county commissioner who’s backed by town’s highly effective academics union, the place he’s an organizer, collected almost 22%. In a metropolis the place race performs a task in politics, Vallas is white and Johnson is Black.
The 2 candidates provide sharply totally different visions of tips on how to run the nation’s third largest metropolis, particularly on crime. Vallas is campaigning on a law-and-order message, whereas Johnson guarantees to enhance public security by spending extra on social providers, psychological well being care, training and housing.
McDonald’s, with 2022 income of $23.22 billion, has an extended historical past within the Chicago space, from its first restaurant in a suburb in 1955 to its headquarters transfer from the suburbs to town in 2018. Kempczinski started his remarks by describing the financial affect if his firm left.
“Two billion {dollars} a 12 months is the financial contribution of getting McDonald’s headquarters right here,” he mentioned, repeating the quantity.
“What if McDonald’s wasn’t right here? It might be $2 billion that left town in a single day,” he mentioned, snapping his fingers.
The speech earned nationwide media protection. When reporters seized on Kempczinski’s implied menace to relocate the corporate’s headquarters, McDonald’s PR staff clarified that the corporate didn’t intend to maneuver. One week later, the corporate purchased a full-page print advert within the Tribune, promising its continued dedication to town, and posted it to its web site.
Mockingly, Kempczinski’s remarks about Chicago overshadowed his personal announcement that the corporate was shifting an innovation heart with 100 staff from a suburb to its metropolis headquarters.
At a time when shoppers proceed to need chief executives to be extra engaged in social points, the speech is a exceptional instance. It additionally raises at the least three key questions that CEOs ought to think about earlier than plunging into native politics.
1. Are you able to win? “Don’t Make No Waves, Don’t Again No Losers,” was the title of a landmark 1975 e-book about Chicago politics. The precept nonetheless applies and never simply to Chicago. Even with all of Lightfoot’s disadvantages, her defeat was hardly a certain factor when Kempczinski spoke out. 5 months between his speech and the election is a very long time in politics.
This doesn’t imply CEOs shouldn’t become involved in political points they aren’t sure to have an effect on. However the probability of a positive consequence is an element to weigh. Politics is totally different than social points, the place taking a stand can resonate with staff and prospects, particularly when coupled with a plan to take motion.
2. Who’s the viewers? The members of the Financial Membership enthusiastically acquired Kempczinski’s remarks.
In an indication of approval by many enterprise executives, The Wall Road Journal Editorial Board thundered, “When residents not really feel protected at a serious restaurant chain and a CEO points a public plea, social order is breaking down.”
However earlier than entering into the fray, CEOs have to be aware of how their stance can be acquired by different audiences. Simply ask Disney, which didn’t anticipate the barrage unleased by Gov. Ron DeSantis (R-Fla).
In Chicago, a white, male CEO criticizing a Black, feminine elected official fashionable amongst many African Individuals can produce unintended penalties. In 2021, Kempczinski drew protests at McDonald’s headquarters after the publication of a textual content message to Lightfoot through which he blamed the dad and mom for the taking pictures deaths of a Black youngster and a Latino teenage as a result of they “failed” their kids. He apologized and met with staff.
The corporate additionally has confronted harsh criticism over alleged discrimination towards Black franchisees.
But Kempczinski and McDonald’s suffered no backlash from his remarks.
3. Do you’ve got your information straight? In these circumstances, the CEO’s numbers have to be bombproof.
Lightfoot fired again, in fact, saying, “What would have been useful is for the McDonald’s CEO to teach himself earlier than he spoke.”
The town’s crime statistics, whereas excessive, are enhancing, the administration mentioned. And a report variety of firms are shifting to town or considerably increasing, contradicting Kempczinski’s declare that fewer firms are headquartered right here. Taxes have modified little since McDonald’s moved to town almost 5 years in the past.
Furthermore, reviews by Crain’s Chicago Enterprise evaluating Chicago with different cities on crime and enterprise local weather provide a extra reasonable image of town.
But Kempczinski’s message was so robust that any questions in regards to the accuracy of his claims acquired scant consideration.
CEOs should decide their points correctly. Kempczinski’s speech was not with out threat, however possible had its supposed impact. With the run-off lower than a month away, will the McDonald’s chief govt provide one other Chicago evaluation?
