Atop the golden arches: HH Prince Mishaal Al-Saud

Speaking to The CEO Magazine from his native Saudi Arabia, His Highness Prince Mishaal Al-Saud has the upbeat tone of a man who has recently received good news.

In this case, it’s the Golden Arches Award, the highest accolade the McDonald’s global corporation bestows on its franchisees.

Only the top 1% of global franchisees is awarded this prize and this recent win marks the second time Prince Mishaal’s firm, Riyadh International Catering Company (RICC), which owns and operates McDonald’s Saudi Arabia, has received such an honour.

"The award is granted in recognition of our consistency in delivering a superior customer experience, giving back passionately to our community and ensuring a positive and favourable environment for our employees," Prince Mishaal says.

"It shows we have taken leadership in representing and building up the McDonald’s brand. It is a great honour."

The road to this acclaim began back in 1993 when Prince Mishaal finished university and was considering which arm of the family business to go into. McDonald’s Saudi Arabia was an easy choice.

He says he could have gone into a number of companies which were more established, but the globally renowned restaurant seemed like a good fit.
"I knew the potential it had and I was also very eager to work with such a renowned global brand. I knew that I would personally gain a lot working with such a glamorous, multinational company."

"I also felt that the brand had enormous potential to grow in Saudi Arabia. I took it upon myself to really dedicate my life to building the company and not just achieving the vision I had at the time, but exceeding it."

Prince Mishaal’s father had obtained franchise rights for McDonald’s restaurants across central, eastern and northern Saudi Arabia.

When Prince Mishaal became President of the company in 1996, there were only 15 McDonald’s outlets in the territory. McDonald’s Saudi Arabia’s growth since then, however, has been dramatic.

By 2012, it had 75 restaurants in the country and was committed to doubling this number by 2015.

"At the time, we called that a bold plan," Prince Mishaal recalls. That ambition has since been more than realised, with 152 outlets operational by the end of 2015.

Today, the company has 162 restaurants and is once again setting aggressive targets, this time aiming to have more than 300 restaurants across its territory by 2027.

Early days

Entering the business immediately after graduation, Prince Mishaal acknowledges there was a "very steep learning curve" initially.

His first years with the company were spent in the US; as required by the McDonald’s corporation’s franchise agreement, he travelled there to complete a three-month intensive training program.

"I started from a crew position where I was mopping floors, cleaning parking lots and cooking burgers and fries," Prince Mishaal recalls.

"Considering I was just entering the business world, it was a challenge to learn and understand the business, and acquire all the necessary management skills, knowledge and expertise."

Prince Mishaal credits his father, Prince Khalid bin Fahd Al-Saud, with shadowing him, coaching him and generally providing the guidance to get through this first stage.

"He has always been my mentor in business," he says. A supportive staff at McDonald’s also helped him successfully move into management.

"I was blessed to have such a wonderful team at the time. They supported me immensely.

For the first two years, I did not make any decisions, I was just learning basically. It was only in my third year that I began taking on an assistant manager’s role."

I was blessed to have such a wonderful team at the time. They supported me immensely.

Growth

McDonald’s Saudi Arabia was a late entrant to the kingdom’s quick service restaurant (QSR) market, but soon made up for lost time and is now comfortably the lead player in its segment.

It has achieved one of the highest penetration rates of any national McDonald’s company; more than 85% of the population are McDonald’s customers.

Prince Mishaal credits the company’s commitment to customer service as the main reason for this market dominance.

He says further expansion will depend upon the company continuing to achieve the kind of operational excellence that leads to word-of-mouth recommendations.

"Our main priority is to ensure that we can offer every one of our customers a unique and differentiated experience when they visit our restaurants.

It is extremely important that we have the right people, and that they are well-trained, qualified and motivated to deliver.

Ultimately, we are a people business, so if we don’t have the right people, we will not be able to deliver the customer experience levels that we need to differentiate ourselves," Prince Mishaal explains.

"In the old days, McDonald’s was perceived as a burger company run by great people, but today we define ourselves as a people company offering great burgers."

Today we define ourselves as a people company offering great burgers.

Growth will also be dependent on how well McDonald’s Saudi Arabia can integrate new technology into its business.

The global company recently announced a blueprint called Experience of the Future, which outlined its plans to stay relevant in this field.

"Technology can allow us to provide our customers with a unique experience."

Modernisation

Embracing technology is part of modernising the brand, which Prince Mishaal says will be instrumental to the company’s ongoing success.

"This could involve self-ordering kiosks in our restaurants, digital menu boards, table service for our customers, and having hostesses in our lobbies. We are changing the entire customer service experience inside our restaurants to stay relevant and to ensure we maintain our lead in the market."

Digital is an important business driver and a major component of the company’s marketing spend.

"We know that this is the gateway of the future and our objective is for customers to think of us as a progressive brand," Prince Mishaal says, adding that digital technology will facilitate more personal communication, allowing for greater flexibility.

"We’re redefining the meaning of value in this area. It is no longer mass communication; it is addressing each customer’s individual needs and expectations."

"There’s a lot of investment being made to achieve that, whether it’s through applications and software, or some other means."

The company has introduced a global mobile application that aims to engage with customers in a more tailored way.

"We only launched that a couple of months ago and we’re already seeing impressive results. It’s another example of how we as a brand are progressing to stay relevant to our customers."

In addition to updating its customer-facing digital tools, McDonald’s Saudi Arabia has invested heavily in a state-of-the-art IT operations hub, which represents a significant upgrade to its connectivity infrastructure.

The hub hosts applications such as enterprise resource planning, reporting, digital signage and digital multimedia broadcasting, and will allow the company to streamline and standardise processes across its extensive operations.

The hub incorporates a number of cutting-edge technologies, including copper and fibre-optic raceway systems, HD patch panels, OM3 fibre-optic cabling and server cabinets.

All this makes for an extremely reliable and versatile system, one capable of scaling up as the company continues to expand in terms of volume and outlets.

Convenience has long been integral to McDonald’s success and it is looking at new ways of offering convenience to time-poor customers.

The company was an early adopter of home service delivery in 2001. Prince Mishaal says the company identified the service as a growth driver very early on and has invested heavily in equipment and technology to facilitate delivery.

It has also sought to extend opening hours as late as possible, so it can offer customers greater flexibility and convenience.

McDonald’s is modernising its restaurants through the Experience of the Future platform, which incorporates ‘guest experience leaders’ (to welcome customers and provide table service), self-order kiosks with wi-fi and phone chargers, various payment modes, and energy sustainability features such as smart hand washers, energy-saving lighting, and biodegradable cutlery.

Prince Mishaal describes the platform as "a blueprint to help us get organised, stay aligned and move ahead in the right direction".

The Saudi Arabian outlets have been so successful at implementing these new measures that McDonald’s Saudi Arabia was invited to present on the topic at McDonald’s worldwide convention.

"We were the only nation to present a case study," Prince Mishaal notes.

"There were more than 15,000 people from the McDonald’s system from all over the world, including the CEO, senior management and franchisees from all 118 international markets."

"That was a very proud achievement and showcases our commitment to lead."

Under Prince Mishaal’s watch, McDonald’s Saudi Arabia has been meticulous in maintaining high standards.

"We are committed to running one of the best McDonald’s operations in the world. That’s been a commitment we have had since day one, and one which we have successfully achieved."

"We’ve been recognised by both McDonald’s Corporation and our customers for being one of the best-run operations in the world."

Prince Mishaal has assembled a highly productive management staff and says that maturity and sharp judgement are the most important qualities he looks for in selecting his senior team.

High-level project management ability, attention to detail, an ability to work with minimal supervision and a faultless record of executing tasks are also must-haves for those on his team.

Similarly, nobody will get into the upper ranks of the company without demonstrating excellent people skills.

Leadership style

"I have very high standards and I expect everyone I work with to deliver accordingly. People drive our business, it’s not all about the food at our restaurants. The people behind it make it unique and successful."

While the president asks a lot from his employees, his workplace is far from dour. "One thing I am very clear on is having a fun leadership style," he says.

Nor is it a one-way street where hard work goes unrewarded.

"I strongly believe that I need to always be there for my team to support them. My door is open 24/7 to every employee in this organisation, from crew all the way up to senior management. In return, they will try to give their heart and soul to the business."

"I’m a big believer in collaboration and the sharing of ideas," says Prince Mishaal. This attitude has proven a good cultural fit in McDonald’s, where he learned the value of an open-door policy."

One of his other touchstones as a leader is a saying favoured by Ray Kroc, the company’s uber-influential former CEO: ‘None of us is as good as all of us’.

I’m a big believer in collaboration and the sharing of ideas.

Providing local employment

When he started at the company in 1996, one of Prince Mishaal’s main objectives was to ensure McDonald’s Saudi Arabia grew into a brand with an emphasis on employing locals.

"Restaurants were not an appealing sector for the Saudi workforce. Back then, it was basically unheard of to find a Saudi working in a QSR."

The restaurant chain now has 1,400 Saudi citizens working for it, a number that represents 28% of its total staff.

This is a high percentage in the QSR sector, though Prince Mishaal says they will continue working on this.

"We still have a long way to go. Our ambitions are still far from achieved, but we have no doubt that as a brand we will continue to lead in this strategic initiative. We will be doubling the size of our Saudi workforce."

We have no doubt that as a brand we will continue to lead.

Transforming the restaurant chain into an attractive employer for Saudis involved extensive collaboration with the Saudi Arabian Ministry of Labor’s Human Resources Development Fund.

"They’ve been very supportive of our business," Prince Mishaal confirms.

"We’ve cooperated with them in developing local initiatives which we felt served our purpose. We initially worked on many initiatives in a trial-and-error phase. We had zero Saudis working for us and we tried a lot of unsuccessful things to attract them."

Prince Mishaal formed an executive committee to identify the obstacles preventing Saudis working in the sector. He headed up the committee himself.

"We spent a lot of time in developing strategies to address every one of those obstacles," he recalls. "Then we began gradually implementing them one by one.

"This process involved face-to-face interviews with locals, questionnaires and extensive market research exercises."

Yet even this didn’t see local employment numbers rise like Prince Mishaal had hoped. In 2012, however, the company finally made a breakthrough by appointing a specialised global team to undertake even more comprehensive research. T

his work found that Saudi nationals sought flexibility in their worksite and rostered hours, favoured employers that would invest in their training and development, and wanted more competitive salary packages.

"For us, that was the game-changer," Prince Mishaal recalls. The influx of Saudi employees picked up pace, and later that year the company celebrated its thousandth local employee.

It was the first in the industry to reach this milestone and celebrated with a ceremony that was endorsed by the Ministry of Labor.

The painstaking work and patience have paid off and McDonald’s Saudi Arabia is now recognised as one of the leading local employers not just in its industry, but across the whole private sector.

"We are one of the leading companies in terms of offering job opportunities to the Saudi youth, not only in terms of employment opportunities, but also for training, development and career growth."

The company also benefits from much lower turnover rates than many of its competitors.

We are one of the leading companies in terms of offering job opportunities to the Saudi youth.

The ministry later chose McDonald’s Saudi Arabia to be involved in a government campaign called ISRAR, which aimed to promote skills in job seekers.

This included being involved in a television show, which looked at best practice in integrating "the needy" into mainstream employment.

"We had some great examples and a high success rate, especially with youth and people with Down syndrome. It’s something I am proud of."

In another endorsement of the company’s ability to bring Saudi nationals into its workforce, the ministry conducted a series of industry-wide workshops where it presented the McDonald’s Saudi Arabia story as a case study of best practice in the restaurant sector.

The company has also been a recipient of numerous Great Place to Work awards. "The secret to success is really having the right people in the right place. We believe in empowerment and working together as a family."

"We believe in trusting and supporting each other with one aim and one objective."

Local suppliers, local flavours

Prince Mishaal says part of running a successful national McDonald’s program is tailoring the menu offerings to regional tastes without detracting from the essential appeal of the restaurant.

"One of the great things about McDonald’s is its consistency across its products globally. When you go to a McDonald’s, you know what to expect. Having said that, we’re also very keen to offer some local integration."

"So anywhere you go in the world, you’ll find core menu items alongside local products."

One important local variant in Saudi Arabia is that the menu is exclusively halal.

This means that all poultry and cows, along with all food items involved in food production, follow strict Halal procedures.

The company exclusively uses hand slaughtering in strict accordance with halal principles.

McDonald’s Saudi Arabia’s menu includes the familiar Big Macs, Quarter Pounders and sundaes, as well as options such as the McArabia sandwich, grilled chicken on local bread, and a haloumi cheese muffin on its breakfast menu.

There is also a rotation of limited edition menu items."All these have added a local twist to McDonald’s flavours," Prince Mishaal says.

The local influence is also seen in terms of produce, with a number of suppliers in the country having passed through a rigorous vetting process to work with McDonald’s.

"It’s one of the most competitive processes in the McDonald’s system," Prince Mishaal says.

Any supplier interested in working with McDonald’s can apply, but they must pass through a screening process he describes as "extremely stringent".

All suppliers must qualify for Social Workplace Accountability certification, which verifies that they meet standards of workplace safety and compliance with labour laws.

Once this bar is cleared, the supplier will be given exact specifications and requirements and the company will work closely with them until they become fully capable.

This process usually takes two to three years and, once complete, sees the supplier added to the list of approved global suppliers.

There are also ongoing audits, carried out by both McDonald’s and third-party inspectors, to confirm that all suppliers continue to meet these high standards.

Approving suppliers is a responsibility that falls on the parent corporation rather than the licensees, Prince Mishaal explains, though he takes great satisfaction out of the progress made by local suppliers.

When RICC first obtained the licence to operate McDonald’s franchises in this territory, it worked exclusively with international suppliers.

Now, more than half of its produce suppliers are domestic. "That is a great accomplishment that we can all be proud to be part of."

Brand name power

It would be difficult to overstate the power of the McDonald’s brand name. Worldwide, it has been valued at US$97 billion.

"The name has very strong equity and that alone is a big differentiator," Prince Mishaal acknowledges. "We also benefit from the strong support we get from the global corporation.

That is one of our major strengths, and, as local franchisees, we are privileged to have a high level of involvement from the McDonald’s global team in every aspect of our business.

In a lot of franchises, the involvement of the global brand in a local franchise is minimal.

As local franchisees, we are privileged to have a high level of involvement from the McDonald’s global team.

As one of the world’s largest private employers, the McDonald’s global company has a wealth of knowledge that it can pass on, a particularly valuable asset in a nation where people are overwhelmingly employed by the government.

"That relationship really helps us implement strategies in the right way, and to minimise our risk and our mistakes," Prince Mishaal explains.

"We learn from the best practice of the global company, but also from the global failures. We learned the right development strategy and committed ourselves to following it."

One important takeaway from the global corporation was procuring prime real estate for each outlet and prioritising the establishment of what McDonald’s terms ‘gold standard’, freestanding restaurants.

More than 75% of the outlets under Prince Mishaal’s watch meet this definition.

"The gold standard restaurants have all the components necessary to give the full experience to customers," Prince Mishaal explains.

"Having those facilities has been a crucial contributor to our success."

A commitment to community

McDonald’s Saudi Arabia has its own social responsibility platform called Ajyalona.

It is named after an Arabic word meaning ‘our generation’ and concentrates on three key areas: humanitarian causes, advocating for healthy youth lifestyles, and the nationalisation of the Saudi workforce.

"We’re very proud of our involvement and the support we’ve given many local charities over the past 24 years," Prince Mishaal says.

"We are one of the very few brands that take social responsibility as part of our DNA. Giving back to our community is an essential part of the way we operate and do our everyday business."
A particular focus recently has been orphans and children with disabilities or special needs.

Last year, the company collected more than 1.6 million riyals,(more than €345,000) through its annual charity campaign which benefited two organisations working with children with Down syndrome.

The company has also taken on employees with the condition, some of whom have now been with it for more than a decade.

"They have been successfully integrated into the community and developed their skills. For me personally, that’s a great cause that I care about."

Since the company was founded, it has raised more than 10 million riyals for various charities working across a range of humanitarian causes.

The company is also concerned with communicating that its food should be part of a balanced diet and a healthy lifestyle.

"We invest a lot in these programs," Prince Mishaal confirms. "We’re educating the public on the right way of going about this."

This commitment to health involves reviewing the menu every five years and being transparent about the nutritional profile of every item, with extensive information being made available on flyers, placemats and an online platform.

The company also runs educational sessions for young mothers on childhood nutrition and healthy diets. Internationally, the company has committed to a healthier update of its Happy Meal menu, which is hugely popular with children, by 2022.

The revised menu will offer more balanced options and use innovative marketing to promote healthy choices.

Recently, McDonald’s Saudi Arabia ran a campaign called ‘Every Day. A Better Day’, which revised the menu to improve its healthiness, introducing a new frying oil with 80% less saturated fat and mayonnaise with half the previous calorie count. It also moved to exclusively using sustainably sourced fish in its restaurants.

Its efforts to promote sport and activity have included an incentive in partnership with FIFA where eight lucky Saudi kids had the chance to fly to Brazil for the 2014 World Cup and even accompanied players onto the pitch.

McDonald’s has sponsored basketball championships, soccer tournaments and marathons. "We run a lot of initiatives for kids," Prince Mishaal says.

"We encourage them to live an active lifestyle by developing programs that are fun, filled with sports and movements."

Prince Mishaal himself remains an unabashed fan of the restaurant and fondly recalls short trips to Europe as a boy when he could sample the McDonald’s staples, which seemed like exotic treats to a young Saudi Arabian.

"I love each and every item," he says.

"However, my personal favourites, which I am very passionate about, are the McRoyal burger and the double cheeseburger. Those two are my all-time favourites."

He will try a different menu item at least once a week, though he insists this is purely for research purposes.

"That is so I can evaluate them."

In his discussions with The CEO Magazine, a theme Prince Mishaal often circles back to is his immense pride in the company he has built, its far-reaching corporate social responsibility programs, its industry-leading record in providing employment for Saudi nationals, and the acclaim it has garnered within the global company for its culture and operational excellence.

"We have a great work environment and a very friendly culture," he concludes.