The Golden Arches, the Big M, McD – McDonald’s has many nicknames and a world-wide presence. It is considered NOT just the world’s leading fast-food joint but also one of the world’s foremost real-estate owning companies. So entrenched in mainstream pop-culture today, economists have even named an economic indicator after its most ubiquitous product, the Big Mac Index. This compares the cost of living around the world. Is there anyone around who has NOT heard of McDonalds?
How did McDonalds become the behemoth it is today? What kind of leader did it take to lead and guide this giant corporation through the initial years when getting the meat and ketchup and mayo just right was critical. At the same time, the books needed to be balanced, and the employees motivated. Perhaps not as commercially famous as Zuckerberg, Gates, and Ford, whom we have come to know and revere; Ray Kroc nevertheless is the man credited with taking McD from the small neighbourhood joint into the big league. Kroc left an important legacy in business development and leadership history. But what is his story and what kept the man going?
Robert Anderson, Kroc’s biographer, summarised his strengths and traits using the acronym – Hope. It stands for honesty, organisational skill, positive thinking, and enthusiasm. Let us have a look at some of the traits that enabled Kroc to become the man behind the fast-food revolution.
Leadership Principles – There are a few broad principles that shaped Kroc’s leadership:
Once he had witnessed the McDonald brothers’ hamburger drive-in in San Bernardino, Kroc knew he had found what he was looking for: the opportunity to establish a nationwide chain of standardised, fast-food eateries. Building a business on 15-cent hamburgers, Kroc initially envisioned McDonald’s as an opportunity to sell more multi-mixers, but the more he immersed and the more he invested, the more he realised that McDonald’s had the potential to rewrite the fast-food rule book. In the process, he established the quick service restaurant business. Kroc possessed the courage to take the plunge, believing in his vision. More importantly, he was able to tweak this vision as he developed and built on it.
“Luck is a dividend of sweat,” said Kroc. “The more you sweat, the luckier you get.” “There’s almost nothing you can’t accomplish if you set your mind to it,” he told a group of MBA students in 1976. And he lived those words. Kroc held fast to his dream of McDonald’s restaurants. The most famous disappointment for him came when he was turned down by a fellow war-time ambulance teammate – a certain Walt Disney who at that time was about to open a mega theme park. Disney turned down Kroc’s idea of opening a McD in the theme park which would have helped accelerate McD’s growth. However, undaunted, he kept going. Kroc was convinced he had a good product!
Whilst he was rigid in his adherence to standards in food preparation and service, he was open-minded and eager to embrace new ideas, chiefly from operators. New products like Big Mac and Egg McMuffin emerged from operators. Kroc’s attempts at new products – the Hula Burger and a strawberry dessert, to name but two – were abject failures. Yet Kroc was smart enough to run with a good idea no matter who originated it. That is leadership. In fact, the Ronald MacDonald character was dreamt up by one of his supervisors as a marketing tool; replicating it chain-wide proved to be Kroc’s masterstroke. This raises an important question: Are we “empowering” or “overpowering” our greatest assets – our people.
Kroc built the McDonald’s system on the simple, but fundamental philosophy that everyone would profit, or no one would. For this reason, he established a system than put operator profits first. Only by ensuring operator profitability would the system succeed. (In contrast to other franchisers of the time, Kroc charged no mark-up for supplies and equipment. He sold everything at cost.) “My belief was that I had to help the individual operator succeed in every way I could. His success would insure my success”. He applied the same philosophy to his suppliers. This faith in letting others prosper first cost McDonald’s dearly in the early years, but it paid off handsomely in the end. What are your professional relationships like?
Passion and enthusiasm
Kroc loved the hamburger business. He could wax lyrically about the water content of French fries, or the curves of a hamburger bun. More so, he enjoyed talking up his restaurant business; it was his passion and his vocation. “It requires a certain kind of mind to see beauty in a hamburger bun,” he was once quoted as saying. This kind of enthusiasm seems innate to many sales people, and they need it in spades.
Ardour for what they do steels them against the rejection that sales people face on a daily basis. Kroc possessed so much enthusiasm that he was contagious. As his enthusiasm was so infectious, he was able to attract many of the right people. When you surround yourself with the right people, the vision takes on a powerful life of its own. It enables momentum to be built by the shared sense of mission thus making success a surety!
Toleration of Dissent
Many entrepreneurs live by the rule, “My way or the highway.” Not Kroc. His boldest move in this area was his hiring of Harry Sonneborn as his finance manager in 1956. As different as night and day, Kroc and Sonneborn formed a remarkable team. Where Sonneborn was taciturn and detail-driven, Kroc was outgoing and visionary. But without Sonneborn’s talent in spotting a saving, McDonald’s would never have survived.
It was Sonneborn’s idea to establish the Franchise Realty Corp, a real estate venture that enabled McDonald’s Corp to profit from the growth of the chain. Sonneborn and Kroc clashed constantly, but Kroc tolerated the dissent because he knew Sonneborn was good for the business as a whole. In that vein, have you been listening or merely hearing what your team is telling you?
Salesman that he was, Kroc had an eagle eye for talent. He plucked Fred Turner, the organisational mind behind the McDonald’s operating system, from the ranks of potential operators. Kroc nurtured Turner as he did others; and in the process, built his business by selecting the right people at the right time. This is a lesson that is the mantra of the management gurus – right people in the right places, and being empowered to do the right things!
As generous as he was with advice, Kroc was generous with a dollar. After becoming a multi-millionaire several times over, he established a foundation to support his charitable efforts. Even before he was wealthy, McDonald’s staged promotional events linked to local Chicago charities. To be certain, the original aim was publicity; but over time, Kroc and his team initiated a culture of giving that is alive and well today throughout the McDonald’s system.
Of course, the point of giving is not to “get something back,” but rather to “give something back”. Giving helps create a culture where everyone in the organisation becomes more outwardly focused in ways large and small that help benefit others. Is this sense of community spirit a part of your company’s DNA?
Kroc was probably the best example of a person who sees the cup as half-filled and not half-empty. “I have always believed that each man makes his own happiness and is responsible for his own problems,” so wrote Kroc in his autobiography, Grinding It Out. It was a philosophy that served him well. Faced with adversity throughout his life, he overcame much of it and succeeded beyond his wildest dreams.
Kroc’s documented leadership story began late in his life, and his greatest skill as a salesman, in hindsight, was not selling cups, milkshake machines, or burgers. No, Kroc’s greatest ability was to sell an idea! The reason he was so persuasive was not because he was a good storyteller (he was); a good socialiser (he was); had a way with words (he did). Kroc’s leadership was built on his ability to sketch a vision and have the listener participate in it with him. Whether he was talking about french fries, or the McDonald’s system, he believed in the absolute truth of what he was saying.
His sense of conviction loaded with plenty of optimism, dwarfed doubt and helped the listener live in the dream with him. Most importantly, this vision was predicated on the idea that the listener would benefit by sharing in the dream with Kroc. All who participated would be enriched. Kroc’s conviction coupled with his overwhelming optimism create a leader who is able to inspire people and one from whom managers everywhere can learn. I hope that this article sheds some light on what it takes to be a successful leader. I believe one needs passion, vision, and dogged determination in the face of rejection to make it. ·
Golden nuggets (pun intended!) of Leadership from a burger joint boss. Vinesh Naidu is “Lovin’ It” and hopes that these words of wisdom “shake” us up with its insights sandwiched between anecdotes! Click here for more articles.