Scott Hodge

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McFailure?

Apr 18, 2007
6 Comments

Did you know that McDonald’s (yes, that one…) built and opened up two four-star European hotels back in the early 2000′s?  They were the brainchild of Urs Hammer – chairman of McDonald’s Switzerland, who was responding to the parent companies push for diversification and new ideas.

Mchotel1
Imagine this…  Arch-shaped headboards, 24 hour on-site McDonald’s, a cylindrical see-through shower stall that protruded into the bedroom, brightly colored decor, high-tech beds and maple wood floors. 

As you might suspect, the venture didn’t last.  By 2003, both hotels in Switzerland were closed.

The April 2007 Harvard Business Review had an interesting article about the hotels entitled, "The Upside of Falling Flat".  The author, Stefan Michel (a services management expert and assistant professor of international marketing at Thunderbird) shares three observations about the venture:

"First, even for a company with deep pockets and billion-dollar brand equity, it is extremely difficult to take a name that is well established in one category (McDonald’s IS fast food) and achieve success with it in a different, if related, category.

Second, for companies going global, the more complex the service offerings, the more important the cultural context (unlike a fast-food restaurant, a four-star hotel is full of individualized customer interactions, for which guests have diverse and high expectations). 

By supporting him (Hammer), McDonald’s was reinforcing and nurturing its bottom-up innovation culture."

Even though the hotel ventures failed, there’s certainly something to be said about an organization as large as McDonald’s empowering their executives to step out and take big risks.  So perhaps this was not, in fact, a "failure".  Because without THIS "failure", who knows if their next big success could ever happen. 

I can’t think of too many "successes" that weren’t preluded by a failure or two.  Or three.  Or ten.


6 Responses to “McFailure?”

  1. allen says:

    man.. that is a really weird hotel but it was a gutsy try!

  2. Good insight Scott. With risk will come failures, but eventually success as well. It’s refreshing to see a corp as large as McD’s as forward thinking. Maybe they’re getting scared that documentaries like SuperSize Me and Fast Food Nation might start sinking into their core base.

  3. Kathryn says:

    Many years ago one of their employees had a great idea that McDonald’s wouldn’t get behind.
    Someone had the crazy idea to blow out a wall and install a “drive thru” …McDonald’s didn’t think it would work so the guy used his own money to add the drive thru!
    McDonald’s obviously learned from that mistake and are now heading in the opposite direction!

  4. Doug says:

    My heart skipped a beat……
    I thought it was titled Macfailure.

  5. Michael says:

    I recently read about and mentioned the documentary “Super Size Me” in our blog. The main point was that in the book Simple Church, they state McDonalds is influencing future generations. Churches are not.
    I guess they are not doing it through hotel rooms…which I guess is even a better thing.

  6. Erik says:

    anyone hungry for a quarter pounder with cheese meal? then you can go to your room and sleep it off. count me in.

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