The Journal The Authority on Global Business in Japan

It has been nine years since Sarah Casanova joined McDonald’s Company (Japan), Ltd. Beginning with five years in Japan learning about the local market, she then took on the role of managing director of McDonald’s Malaysia before assuming the role of CEO for McDonald’s Company (Japan) Ltd., four years ago. Casanova represents the growing number of women taking on leadership positions in some of the world’s largest enterprises.

A lack of women in leadership is a prominent feature of business in Japan, and something the government and various companies are attempting to tackle.

“I don’t think there is a silver bullet that is going to, all of a sudden, make leadership positions diverse,” Casanova told The ACCJ Journal in an interview before speaking at a luncheon event on September 26. “I think it’s going to take ongoing, combined efforts.”

GROUP CHANGE
It’s not just the role of the government to make these changes, she explained. Companies and individuals also play an important role in encouraging women to seek leadership roles and change the status quo in Japan. She cited two major barriers for women attempting to re-enter the workforce: childcare and the prospect of long working hours.

“I know the government has been talking about how to increase the amount of daycare that is available, so that it is easier for women to re-enter the workforce; but there is only so much they can do,” she said. “They can set aspirational targets, but that in itself is not going to be enough.”

McDonald’s offers work-from-home policies and a program that allows women to re-enter the workforce, but “even with government and company efforts, it is not going to be enough if women won’t step up to the plate.

“In 2008, when we embarked on this journey, about six percent of our restaurant managers were female,” she explained. “Now, it is about 24 percent. In management, about six percent of our directors and above were female, and I think now it is 17 or 18 percent.” But, simply reaching key performance indicators isn’t enough, she said. Promoting men or women into positions they are not ready for does not work.

KEYS TO CHANGE
Speaking to 246 members of the American Chamber of Commerce in Japan at Tokyo American Club, she detailed how she guided McDonald’s Japan through the stormy waters of 2014 and 2015 and returned the company to growth.

“This is the story of a complacent giant, shaken awake before it was too late,” she said. McDonald’s entered the Japanese market in 1971, and by 2010 had grown to more than 3,300 restaurants and ¥542 billion in sales.

But then the company hit a speed bump, which Casanova pins down to a focus on expansion rather than reinvestment in its existing restaurants.

Quality issues put an uneasy spotlight on the famous brand just as Casanova was taking on her new role in 2014, and in 2015 sales dropped 30 percent from the record numbers of 2010 and McDonald’s saw losses of ¥34.9 billion.

“I think the number-one challenge was getting the company focused on customer-oriented strategies—and listening to customers and doing what is good for customers—not just making decisions that might be good for the company.”

She also shared the four pillars of her business revitalization plan:

  • Customer focused initiatives.
  • Investing in upgrading the restaurant portfolio.
  • Localizing business structure and operations.
  • Achieving cost and resource efficiency.

The fourth pillar involved closing 131 loss-making restaurants, and empowering teams across the country was another crucial element.

MARKET MATCH
The chain has also made strong efforts to adjust to the Japanese market. “Earlier this year, we launched Oishisa Kojo Sengen, our tastiness declaration. It is about working to make our regular menu even more delicious. We launched our new premium roast coffee in January, and in April—for the first time in eight years—we launched a new burger lineup created especially for the palates of Japanese customers.”

Modernizing the restaurants was also a top priority. Rolling out the dual-point ordering and pick-up system, digital menu boards, Wi-Fi, and a points program were all important. Mobile apps such as the McDonald’s Japan loyalty app and Kodo, a customer feedback tool, have proven very popular. With 39 million downloads and 7.3 million pieces of customer feedback to date, they are helping solidify relationships with customers.

And that’s important to Casanova. “The one thing that differentiates McDonald’s from our competition is our people. With restaurants, any competitor can copy most of the menu, the pricing, and the promotions; but they can’t copy the people. And it is our people that give our brand its personality.”

Maxine Cheyney is a staff writer at Custom Media for The ACCJ Journal.
It is our people that give our brand its personality.