Profiles, Stories

Q & A With Modern Tao Ke Kenneth Yang On Adapting The Business For The New Normal

Kenneth Yang was only fifteen years old when his journey with McDonald’s started. His father, George Yang, brought him along to Hong Kong to train and work with him in a McDonald’s. There, he saw his father’s passion for the company, even before the older Yang got the coveted franchise.

Because of this, he was eager to help his father grow the business. He studied the ins and outs of the fast-food chain and worked his way to the top. Now, McDonald’s Philippines is one of the leading fast-food chains in the Philippines thanks to his leadership as its President and CEO.

From adding new services and innovations to having stricter safety protocols, the pandemic has changed how Yang runs the company. Read how Yang transformed McDonald’s Philippines into a new normal-ready company in this Q&A from the Modern Tao Ke Webinar Visayas Edition!

Q: How did McDonald’s Philippines start and how are you involved?

A: When I was 15 years old, I think that was 1980 or 1979. My father brought me to Hong Kong and I didn’t realize that I was not there on vacation but to work as a crew member in McDonald’s together with him. That time he was trying to get the franchise of McDonald’s. He wasn’t awarded it at that time but through his own initiative he went ahead to go and experience working in McDonald’s. Actually it was 1981 when he was awarded the franchise and we actually opened our first branch in Morayta that year.

Since then we have had a lot of milestones. We became a wholly owned Filipino company in 2005 and today we have 668 restaurants all over the Philippines. My involvement really in McDonald’s started – Actually even during my college years as I was a part-time crew member of McDonald’s and then right after college which was 1986 I joined the company. 2 years of taking my MBA in ‘88 up to ‘90 and then I rejoined. I’ve been working in McDonald’s ever since. It’s been a long time.

Photo | People Asia

Q: There is a bitter challenge now with the pandemic so how did it affect the operations of McDonald’s Philippines especially with your products?

A: As the CEO, this is my biggest challenge ever. At one point in time, I think that was around April, we had only thirty percent of our restaurants open and of those restaurants that were open, we could not serve dine-in and it’s only recently that dine-in was allowed. Imagine the disruption and also the big drop, the significant drop in our revenue, in our sales.

April was the worst month for us so far and May has improved because we were able to open around sixty to seventy percent of our restaurants and today we have about ninety percent of restaurants. The other big thing really impacting us is also similarly our employees not being able to come to work and also at the same time [is the] curfew. There is so much reduction in hours… That is really difficult and so what we are experiencing today is really a far cry from how we were performing before this crisis. I think at this point we are really forced to adapt.

Q: How does McDonald’s Philippines address the challenges you talked about? Are there safety measures being implemented in all franchises? And if so how are you able to utilize them and ensure the business is still earning?

A: I think obviously being in the restaurant industry, [safety is important], actually in McDonald’s, it’s been a hallmark of ours to really prioritize quality service cleanliness and food safety, [especially now, we’ve doubled our standards.]

We have an ‘MSafe’ program and it is really to reinforce current procedures and implement additional procedures to ensure the safety of our people because we believe that if we want to keep our customers safe we need to keep our people safe and by keeping our people safe, the customers are safe. We’ve worked together with the Department of Health, the Department of Trade and Industry to implement and execute all these safety protocols. We are one of the first to also pioneer what we call “No touch” or “contactless”. When dine-in wasn’t still allowed, we were doing mcdelivery and drive-thru and we were doing it contactless meaning the delivery rider mustn’t come into contact with the customer and the customer mustn’t also come into contact with the delivery rider. We use various procedures and also tools to be able to help us achieve that.

Q: How can you still ensure the business is still earning despite all those costs?

A: As a business we all want to continue to earn a profit, however at this time, that is really difficult especially when your sales have been heavily impacted greatly so what we’ve tried to do is to look at other areas where we can reduce cost, it doesn’t mean we would sacrifice on quality but there are other things that we can look at at being more efficient whether it’s the scheduling of people, scheduling of manpower or finding new ways to do something at less cost.

We are working a lot with our suppliers, our supplier community, so that we can continue to keep our cost low so that we can keep our menu prices low at this time when there is a recession, a lot of unemployment and income is going to go down, definitely purchasing power will be affected so as a company it is really important for you to adjust and if you have to find ways to conserve your resources and reduce your cost, you have to but I think more important than that is that you have find new ways to generate revenue. For us we are using different channels so [since there’s no] dine-in, we have to make sure we are available for deliveries and our drive-thru is there. [We also have something new ] called ‘Pick-up’. You can actually order in advance and you will pick it up in the store because if there is no dine-in or not much seating allowed and thirty percent [is only] allowed today then you have to find other ways to generate revenue and that’s the way to survive.

Q: Is there pressure to do more now in terms of technology as the business prepares for the new tomorrow?

A: We started on this digital journey actually quite early… I think at that time there were no apps yet, it was really just a website but now, everything is on the app so the mobile phone is really indispensable and that’s where we focus on our digital efforts. We have our McDo app and we actually have another app where we can give digital coupons or promos to our customers and it is easily available in the Appstore or in the Android store.

I think the way to go is really digital and cashless… all though the Philippines is way behind, I think we are accelerating. There are also partners for the medium in terms of payment for us. Before it was cash to credit cards, now these mobile wallets I think are really the way to go and I think the government is really supportive of that.

Photo | Philstar

Q: Are there any other innovations that the franchisees and the Filipino customers take from McDonald’s?

A: Well for example now, [there are almost no] dine-ins or birthdays parties…so we’ve tried to innovate also. We have what we call now, Mcdo party-to-go party boxes and we try to help customers organize these Zoom parties where they can share their food, share laughter, and discussion and see each other [even if they’re not] physically together. Those are examples of what we are doing.

Q: How do you see this pandemic will affect their operations? Do you think there is any effect whether it’s family-run or professionally-run?

A: I think yes whether it’s a family-run or professionally-run, definitely the business is not isolated from what is happening. It’s just based on scale, some are large companies, some are smaller companies and the advantage of other smaller companies is that they have flexibility or more flexibility in what they do and how they adjust. In a larger company, if you have a larger organization and there’s so many processes. It might be more difficult because you might be carrying a lot of fixed costs but I think definitely in this situation whether you are professionally-run or family-run, you can’t take it and just wait and not do anything because you have to take control.

For us our priority is first protect our people and protect our business and protect the brand because you want your business to survive and thrive later on even if it means you’re going to be a little weaker or you have to downsize a little. We have to work together with our employees because our employees are our lifeline too. We take care of them, they will take care of the business… even if you are a small business, you need your employees.

Q: Many of the SMEs in the food industry are some of those thriving during these times. How can they stay in the momentum or improve their services so that they can continue to manage?

A:  I’ve noticed that so many young people have taken the opportunity because [they’re staying in the house.] I think what works for whether you are a startup or an already established company, large or small, you really have to focus on your customers. Now, they would value their money more. They will not spend on things that will waste – they can’t do nice-to-haves, they will go for must-haves.

And that sums up our Q & A with Kenneth Yang!

The Modern Tao Ke Webinar Visayas Edition is an event under the Saludo SMEs Campaign and is second out of four webinars organized by Globe myBusiness together with CHiNOY TV. Through the Saludo SMEs campaign, and through this event, Globe myBusiness’ is equipping the Chinese Filipino community with the right knowledge and business solutions to rebuild their businesses, especially at this time where many Tao Kes are in the middle of reopening their doors in the new normal.

You can watch the full webinar here! Stay tuned on our social media pages for the next webinar set this July 2020!

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