Ragan Consulting Group senior consultant Tom Corfman develops executive thought leadership workshops.
McDonald’s Inc. CEO Chris Kempczinski is an exception: 25% mayor approval.
“While it may scar our civic pride to hear it, there is a broad perception out there that our city is in crisis,” he told The Economic Club of Chicago, an elite club of business executives, on Sept. 14, 2022.
Kempczinski spoke about violence, City Hall’s strained relationship with business, and taxation without mentioning Mayor Lori Lightfoot. No need.
The Chicago Tribune Editorial Board praised the address, saying “His views undoubtedly will serve as a roadmap for any pro-business mayoral candidate who has yet to emerge.”
Lightfoot finished third in a nine-person field five months later.
McDonald’s spokesman replied via email, “We have nothing else to share at this time,” to eight queries.
Kempczinski’s statement kicked off the Chicago mayoral contest, presumably solidifying business elite hostility to the incumbent. It also allows CEOs to study three criteria before entering local politics. First, some Chicago political background for Ragan Consulting Group.
Lightfoot became the city’s third Black, second woman, and first out homosexual mayor nearly four years ago. She won in 2019 after political corruption scandal. In Chicago!
Lightfoot lost the Feb. 28 non-partisan election due to concerns about violence and her failure to deliver on pledges to modernize government, enhance transparency, and modify police practices. Her combativeness topped it all. In 2019, liberal voters supported her.
Two candidates are vying to follow Lightfoot in a fierce April 4 runoff election. Former Chicago Public Schools CEO Paul Vallas, backed by industry, received approximately 34% of the vote. Brandon Johnson, a county commissioner and organizer for the city’s powerful teachers union, won almost 22%. Vallas is white and Johnson is Black in a city where race matters politically.
Both candidates have distinct crime-fighting strategies for the nation’s third largest city. Vallas offers law-and-order, whereas Johnson vows to spend more on social services, mental health care, education, and housing to promote public safety.
McDonald’s, with 2022 sales of $23.22 billion, opened its first Chicago suburb restaurant in 1955 and moved its headquarters to the city in 2018. Kempczinski began by discussing the economic consequences of his firm leaving.
“Two billion dollars a year is McDonald’s headquarters’ economic contribution,” he repeated.
What if McDonald’s wasn’t? Snapping his fingers, he stated $2 billion departed the city overnight.
National media covered the address. McDonald’s PR staff dispelled reports that Kempczinski threatened to transfer the company’s headquarters. One week later, the corporation bought a full-page Tribune ad and uploaded it to its website, pledging to stay committed to the city.
Paradoxically, Kempczinski’s statements on Chicago overshadowed his news that the business was moving a 100-person innovation center from a suburb to its downtown headquarters.
The speech is notable at a time when customers expect CEOs to be more socially involved. Before entering local politics, CEOs should evaluate at least three crucial questions.
Can you win?
“Don’t Make No Waves, Don’t Support No Losers” was the 1975 Chicago political book. It applies beyond Chicago. Even given Lightfoot’s disadvantages, Kempczinski’s statement didn’t guarantee her loss. Politics takes a long time.
CEOs shouldn’t avoid political topics they can’t change. Yet, the likelihood of success is important. Politics is distinct from social problems, where taking a position may connect with employees and consumers, especially when paired with action.
Who’s watching?
The Wall Street Journal Editorial Board thundered, “When citizens no longer feel secure at a major restaurant chain and a CEO launches a public plea, social order is breaking down.” Several business executives approved.
CEOs must consider how others may react before joining the battle. Disney didn’t expect Gov. Ron DeSantis’ attack (R-Fla).
In Chicago, a white, male Entrepreneur insulting a Black, female government politician popular among African Americans might backfire. After Kempczinski’s text message to Lightfoot blamed parents for the gunshot murders of a Black youngster and a Hispanic adolescent, McDonald’s headquarters protested. He apologized and visited workers.
The corporation has also been slammed for discriminating against Black franchisees.
His statements didn’t affect Kempczinski or McDonald’s.
Are your facts correct? The CEO’s figures must be flawless in this situation.
“What would have been useful is for the McDonald’s CEO to educate himself before he spoke,” Lightfoot said.
The government stated the city’s high crime rates are improving. Kempczinski claims that fewer enterprises are headquartered here, but a record number are migrating to or growing in the city. When McDonald’s arrived almost five years ago, taxes haven’t altered.
Crain’s Chicago Business crime and business climate reports paint a more balanced image of Chicago.
Kempczinski’s message was so powerful that doubts regarding his statements were ignored.
CEOs must choose problems intelligently. Kempczinski’s speech was risky yet effective. Will McDonald’s CEO provide another Chicago appraisal before the run-off?
