Never Give Up
I recently received a copy of "Grinding it Out, The Making of McDonalds," written by the company founder Ray Kroc in collaboration with another author.
The book illustrates several key concepts in the complicated world of business. These include the importance of values in corporate culture, the fundamentals of absolute cost control, systematization, teamwork, always maintaining a clear outlook, and the benefits of a good advertising strategy, among many other topics relevant to an entrepreneur. Key among them is the value of perseverance.
The one who perseveres wins
The first lesson for an entrepreneur is the importance of persevering. When a young person asks me what the most important factor is for succeeding in any company, I always respond, "never give up." Kroc's life illustrates this principle very well.
Ray Kroc was a successful seller of paper containers for several decades, but before that he was a pianist who was never outstanding in the field. Thanks to the knowledge he gained from the food industry throughout the United States, he was able to become the national representative of a brand of industrial mixers known as "Multimixers." He understood his work very well and developed it with enthusiasm and although sales were a passion, he did not find his true calling until the age of 52, when he met the McDonald brothers, Richard and Maurice, and became acquainted with their small restaurant in San Bernardino, California.
What initially attracted Kroc's attention was the amount of Multimixers that the McDonalds used in their hamburger business. Curious to know how his mixers were used, he traveled from Chicago to San Bernardino and soon forgot about the machines. He discovered he was more interested in in the operation of the restaurant itself - which became a real obsession.
Shortly after World War II, the McDonald brothers had developed a novel food production concept, on which today an entire fast-food industry is based, namely, products with an irresistible flavor, easily processed, hygienic, high quality, and systematically prepared from one moment to the next. This necessarily implies a simple menu, which originally had no more than four items: hamburgers, french fries, soft drinks, and milk shakes.
From his first visit to Richard and Maurice's restaurant, Kroc was absolutely fascinated. Long lines to buy a simple hamburger with french fries to be consumed outside the restaurant — since the simple establishment had no tables — the industrial quantities of food that were sold by a relatively small outlet, the quality and simplicity of the menu, and the low prices. French fries deserve special mention because the recipe and cooking process had been so extremely refined by the McDonald brothers, giving something so simple and inexpensive an incomparable flavor.
Kroc understood that this concept should be extended nationally and convinced Richard and Maurice to grant him the master franchise. With great skepticism, the brothers, who only thought about their retirement, agreed.
But for Ray Kroc, running the company was never easy, to begin with because the McDonald brothers established conditions that eventually proved to be ridiculous and put the entire project at risk. For example, when opening the first restaurant in Chicago, Kroc discovered that the city’s extreme climate made the design of the establishment demanded by Richard and Maurice impossible and the cold weather made it difficult to duplicate the flavor of the French fries, which is why he had to hire a chemical engineer to solve this problem.
Kroc’s own wife always had doubts about the project. After all, what would make a 52 year old man compromise the family’s wealth earned over the course of a lifetime in a company full of risks and that he was not familiar with? But Kroc persevered.
The team and its values
From the outset, Kroc understood that the formation of a team would be crucial to the success of a company plagued by challenges. One by one, he began recruiting those who for decades would accompany him in creating this great success story. Such recruits ranged from the company’s chief financial officer, Harry Sonneborn, who discovered highly innovative ways to fund the chain’s franchise holders; June Martino, his accountant and tireless assistant who kept the team united, even in the most difficult stages, to Fred Turner, the tenacious director of operations.
For decades the McDonald's organization was very compact and operated out of a small office in Chicago, but always had the best people to run a growing chain of restaurants where tens of thousands of people were employed. From the first day, the features that this company offered the public were quality, customer value, service, and cleanliness, watchwords that the founder repeated as a mantra.
To meet these conditions, Ray Kroc was absolutely rigorous in the attributes that he demanded of his colleagues: tireless work, intelligence, and absolute attention to detail. The work days at the McDonald's Corporation headquarters were extreme, but the benefits to all its founders were unparalleled.
Systematization and cost control
Every aspect of an outlet’s operation was analyzed and documented millimetrically. For example, software was developed to calculate the exact humidity, temperature, and cooking time for french fries, to achieve the unmistakable taste of the product throughout the world; all the processes in the restaurant outlets were meticulously designed to maximize productivity per second of each operator of a grill, and the way of cleaning the kitchen was thoroughly detailed in order to achieve total hygiene, among thousands of other factors that might appear to be miniscule. Kroc's passion for detail had no limits.
To achieve the highest quality and cost control, the training of franchise holders and their employees was always key. So was the development of suppliers that would meet the highest quality standards at a low price. Thanks to such efforts, for decades the hamburgers were sold nationwide at 15 cents and French fries at 10 cents. Without rigorous control of processes and costs this would have been impossible.
The importance of a good advertising campaign
Despite the constant doubts of his business team, an advertising strategy that clearly communicated to the public the qualities of the golden arches trademark — value and total quality at low price — was always key for Kroc. He personally reviewed each of the company’s strategies and campaigns, especially those that were aired on television and he never doubted that the corporation’s success depended on well-designed and executed advertising.
In his memoirs, Kroc chronicles the battles he fought with his associates, partners, and franchise holders to invest substantial resources in campaigns that turned out to be instrumental in increasing traffic and sales in its chain of restaurants. He never doubted the enormous returns of these investments and created innovative policies to finance ambitious advertising strategies at a national and regional level among the franchise holders.
A leader’s vision
Today, among many who paradoxically benefit from free enterprise, it is fashionable to speak of "savage capitalism." When we read the biographies of the great captains of industry we understand that capitalism is not at all wild. It involves a commitment to excellence and constant improvement, is means taking risks and investing resources in the untiring pursuit of value for our clients. Far from being savage, it is the representation of a civilized culture that seeks the highest level of well-being, raising the quality of life of all members of society.
In addition to being a passionate philanthropist for his causes, Ray Kroc had the dream of extending a democratic vision of capitalism everywhere and creating successful entrepreneurs from any middle-class family with a desire to work very hard and move ahead.
So like Kroc, never give up!