Under growing scrutiny of corporate diversity, equity and inclusion initiatives, McDonald’s is the latest company to publicly communicate changes to its DEI strategy. While headlines often emphasize what firms are scaling back, McDonald’s statement highlights what it is choosing to retain—offering insights into which practices are likely to endure.
The fast-food giant announced plans earlier this week to discontinue aspirational quotas, pause participation in external surveys and remove mandatory supplier diversity pledges. Yet, its reaffirmed commitments suggest that effectively managing diversity remains a cornerstone of its long-term competitiveness strategy.
Here’s a closer look at how McDonald’s aims to embed inclusion into its operations and strengthen its competitive advantage—offering valuable lessons for organizations reevaluating their DEI initiatives.
Inclusion Converts McDonald’s Diversity Into Competitiveness
McDonald’s renewed focus on inclusion reflects a key finding from research: diversity alone is not enough to drive innovation or high performance—success depends on fostering inclusion. As McDonald’s explains it, “Our system leverages inclusion to operate successfully and grow our businesses” and “early and full adoption of inclusion gives us a competitive advantage.”
For employees to contribute their perspectives and unique resources, they must feel like integral members of the organization, with access to the resources they need and opportunities to influence work-related decisions. McDonald’s Employee Business Networks (EBNs) exemplify how the company embeds inclusion into its operations: “We also lean on employee business networks and franchisee affinity groups to help us solve business problems,” the company states.
This approach emphasizes that inclusion is not an isolated initiative, but a practice woven into daily operations, supporting McDonald’s commitment to “continuing to embed inclusion practices that grow our business into our everyday process and operations.”
McDonald’s approach underscores that fostering inclusion in all daily operations can convert diversity into a competitive advantage.
McDonald’s Diverse Workforce Demands Inclusive Leadership
McDonald’s highlights the importance of inclusive leadership as a key factor in sustaining a diverse workforce, even as it pauses external surveys. These surveys previously served to benchmark progress and foster transparency by sharing diversity outcomes externally. By discontinuing them, McDonald’s signals a shift toward internal evaluation methods, aiming to embed inclusion directly into its operations rather than focusing on external reporting.
Notably, firms continue to emphasize the need for executives to develop and apply inclusive leadership skills as they remove their DEI initiatives from public scrutiny.
Although firms face increasing pressures from anti-DEI activists, in the form of shareholder proposals and public campaigns, the fundamental challenges that have made diversity a strategic priority for corporate leaders ¾talent shortages, competitive pressures¾remain unchanged. This explains why firms like McDonald’s see inclusive leadership as critical to navigating these challenges.
As firms respond to both anti-DEI pressures and market realities, McDonald’s demonstrates that leadership remains a crucial lever for embedding inclusion in ways that drive long term success in workplace diversity.
McDonald’s Empowers Communities To Champion Diversity
The fast-food chain’s approach to fostering inclusion mirrors the co-design principles used by companies like REI and Mattel, particularly in its collaboration with Employee Business Networks and franchisees. Co-design principles emphasize designing DEI projects with rather than for identity-based groups by involving them throughout the process.
As McDonald’s explains in their public statement: “Our system thrives when we are shaped by the communities in which we operate.”
Unlike superficial consultation, McDonald’s states that the EBNs are involved in business-related decision-making. As such, EBNs are more than advisory groups—they are actively sought out to address business challenges a strategy that has been highly effective at other organizations, like IBM.
In addition to collaborating with EBNs, McDonald’s also entrusts franchisees with spearheading local diversity initiatives, empowering them “to champion causes and participate in activities that resonate with their customers and communities in a way that’s true to our Brand’s DNA.”
This approach highlights the company’s belief that inclusion stems from continuous engagement with communities, learning from them, rather than only imposing solutions from the top that risk being ineffective.
Ultimately, McDonald’s co-design approach reflects a shift from compliance-driven diversity to community-centered inclusion.
Accountability, Key To McDonald’s Inclusion Gains
The fast-food giant emphasized accountability as core to its long term diversity strategy. McDonald’s pledged to publicly report board, employee and supplier demographics in its annual Purpose and Impact report. It also said the firm will continue to hold its leaders accountable “for fostering an inclusive environment within their teams.”
Accountability is one of the most reliable levers for improving workforce diversity. That is because when leaders expect their decisions to be evaluated, they are more likely to act purposefully to suppress their biases, according to researchers Frank Dobbin and Alexandra Kalev, who have extensively studied the efficacy of diversity initiatives.
When leaders know that they may be asked to explain poor inclusion scores on their teams, they are more motivated to review their leadership practices. This should encourage them to develop inclusive leadership skills.
Similarly, publicizing workforce demographic numbers encourages scrutiny, which may motivate firms to have internal processes that promote fair and equitable hiring and promotion decisions.
However, diversity accountability may be limited to the demographic groups for which firms disclose numbers. McDonald’s last report provides information only on the representation of women and of five racio-ethnic groups. Notably, the firm’s most recent pledge does not mention franchisee demographics – a key feature of its last report, which may indicate a strategic decision to limit reporting in this area.
The Big Picture Takeaway
McDonald’s response to growing scrutiny shows that evolving a DEI strategy doesn’t have to mean scaling back efforts. By embedding inclusion into daily operations, prioritizing leadership accountability, and empowering employee networks and franchisees, the company demonstrates how DEI can remain a competitive asset rather than a compliance exercise. For organizations navigating similar pressures, McDonald’s approach underscores that thoughtful adaptation—rooted in transparency and collaboration—can strengthen both organizational resilience and community connections.