“The two most importantrequirements for majorsuccess,” said RayKroc, “are: first, being in theright place at the righttime, and second, doingsomething about it.”
In 1954, that is exactly where Kroc found himself. After years of struggling through differenttrades, Kroc had finally stumbled upon what he saw as the next big thing in America. Inone of the greatest success stories of our time, Kroc took a small but successful California-based hamburger restaurant and expanded it into what is today a worldwide chain withalmost 500,000 employees, $20 billion in revenue, and a logo that has come to be moreglobally recognizable than the Christian cross.
“Well, what about me?”The day after he first met the McDonald brothers, Kroc pitched them his idea; he thoughttheir successful little chain of eight restaurants could be a successful nationwide chain.When the brothers asked who would manage the expansion, Kroc was ready with his reply:“Well, what about me?”
Kroc became the owner of McDonald’s Six years later, Kroc would buy out the McDonald brothers for $2.7 million, but more importantly, he would gain complete control over the business. “The McDonald brothers were simply not on my wavelength at all,” said Kroc. “I was obsessed with the idea of making McDonalds the biggest and the best. They were content with what they had; they didnt want to be bothered with more risks and more demands.”
The company continued to expand rapidlyIn 1965, McDonald’s went public; 300,000 shares were initially sold at $22.50 each, later jumpingto $49. Kroc had made $3 million on the sale. But, Kroc wanted more and embarked on anambitious campaign for foreign markets. First, the U.K., then Europe, Kroc began to erect GoldenArches in almost every continent.
That is the legacy that he leaves behind him.In 1974, Kroc stepped down as CEO of the company he single-handedly grew into a globalempire, but remained on as Chairman, and later, Senior Chairman of McDonald’s Corporation.He died of heart failure in 1984 at the age of 81, just ten months shy of McDonald’s selling its 50billionth hamburger.
Lesson 1 : Take Your Business SeriouslyTime Magazine dubbed Kroc one of the world’s most influential builders and titans of industrybecause he did just that – he built a small business into a billion dollar enterprise and, he didit by focusing on the details and caring more about his business than anyone else.
“I didn’t invent the hamburger,” said Kroc. “I just took it moreseriously than anyone else...We take the hamburger businessmore seriously than anyone else.”
Lesson 2 : Perfection was what I wanted in McDonaldsFrom the layout of the store, to the cleanliness of the parking lot, to the number ofpickle slices on a patty, Kroc ensured that a McDonald’s in Delaware would providethe exact same quality service as one in Nevada.
“Perfection is very difficult to achieve, and perfection was what I wantedin McDonalds,” he said. “Everything else was secondary for me.”
Lesson 3 : Kroc was an astute and shrewd entrepreneur who wasall business.After the McDonald brothers refused to sell Kroc their very first store – the Big M – Krocopened up a McDonald’s right across the street and drove them out of business.
“If any of my competitors were drowning, Id stick a hose in their mouth and turn onthe water,” he said. “It is ridiculous to call this an industry. This is not. This is rat eatrat, dog eat dog. Ill kill em, and Im going to kill em before they kill me. Youre talkingabout the American way – of survival of the fittest.”
Lesson 4 : Treat employees with respectA strong proponent of teamwork, Kroc understood that his growing company could onlycontinue its meteoric rise up if it had the support and the dedication of its workers behind it.In order to ensure staff loyalty and motivate his employees, Kroc did his best to guaranteethat they were treated with respect and were able to operate on an equal playing field.
Lesson 5 : Deliver better service with a smileThe majority of McDonald’s employees would love showing up to work every dayand would deliver better service with a smile, which was a crucial component ofKroc’s strategy.
“McDonalds is a people business, and that smile on that countergirls face when she takes your order is a vital part of our image,”said Kroc.
Lesson 6 : Be willing to be the risk takerKroc strove to constantly improve his company and retain his place at the forefront of theindustry by taking advantage of new opportunities. Even when there was big riskinvolved, Kroc stared the gamble in the face and rolled the dice.
“If you’re not a risk taker, you should get the hell out of business,”
Lesson 7 : Sense the possibilities with a dreamKroc didn’t invent the hamburger; he simply had a dream about what he could do with thatburger and where he could take it with the right business model. From the very first day hemet the McDonald brothers and witnessed their small operation and successful use of theMulti-mixer, Kroc could sense the possibilities.
“When I saw it working that day in 1954, I felt like some latter-day Newton who’d justhad an Idaho potato caromed off his skull,” Kroc said. “That night in my motel room Idid a lot of heavy thinking about what I’d seen during the day. Visions of McDonald’srestaurants dotting crossroads all over the country paraded through my brain.”
Lesson 8 : Like to bet bigNothing about Kroc’s business strategy was small. From his talk to his deals to his expansionplan, Kroc liked to bet big. And, it was in betting big that his payoffs were even bigger.
“I dont believe in saturation,” said Kroc. “Were thinking andtalking worldwide.”
Lesson 9 : Strive to always be betterGrowing his business was a continual process for Kroc, one which involved much riskand reward. But, it was only in striving to always be better and take advantage ofnew opportunities that Kroc became the legendary success that he did.
“When you’re green, you’re growing,” said Kroc. “When you’re ripe, yourot.” To fellow entrepreneurs, Kroc posed this question: “Are you green andgrowing or ripe and rotting?”
Lesson 10 : Kroc was not immune to disappointmentDespite all his hard work, Krocwas not always a lucky man.From his early days in starting upMcDonald’s to even after thechain was a well-establishedglobal presence, Kroc experiencedhis fair share of failures. He wasnot immune to disappointment;what set Kroc apart from hiscompetitors, however, was howhe learned from his failures andbounced back.
“Luck is a dividendof sweat,” saidKroc. “The moreyou sweat, theluckier you get.”
Lesson 11 : Connect with others During World War I, Kroc met a fellow young and ambitious entrepreneur by the name of Walt Disney. When Kroc first began selling McDonald’s franchises around the country, he remembered Disney and sent him a letter in 1954. Disneyland was still under construction at the time, but anticipation about its prospects was great, and Kroc sensed an opportunity.
“Dear Walt,” he began. “I feel somewhat presumptuous addressing you in this way. YetI am sure you would not want me to address you any other way…I have very recentlytaken over the national franchise of the McDonald’s system. I would like to inquire ifthere may be an opportunity for a McDonald’s in your Disneyland Development.”
Lesson 12 : Don’t work just for money.With his keen sense of future trends, Kroc had a strong belief in himself and his vision. And,he wasn’t doing it for the money.
“If you work just for money, youll never make it, but if you love what youredoing and you always put the customer first, success will be yours,” saidKroc. “All money means to me is a pride in accomplishment.”
Lesson 13 : Develop an effective marketing planFrom focusing on the local context of his restaurants to fostering an image of a fun and friendlyatmosphere with the likes of Ronald McDonald, Kroc proved to be a marketing genius. Throughmaking community contributions, Kroc also established a corporate tradition of creating apositive presence in society.
“Were not in thehamburger business,”said Kroc. “Were inshow business.”
Lesson 14 : Build tradition of giving backContributing to the local neighborhoods in which McDonald’s restaurants were located wouldimprove public attitudes towards the expanding chain. This tradition of giving back that Krocinitiated so many years ago remains an integral part of the McDonald’s corporate philosophy.
“The definition of salesmanship is the gentle art of lettingthe customer have it your way.”
Lesson 15 : Set the Highest of StandardsBy setting the highest of standards for himself and ceaselessly pursuing his dreams,Kroc would go down in history as one of the world’s most successful entrepreneurs.
“The quality of a leader is reflected in the standards they set forthemselves,”
Kroc attempted to describe what made his business the global empire it is today.Indeed, it was not as simple as just providing tasty hamburgers and fries. Kroc was anambitious entrepreneur who embarked on a strategic plan of expansion that would covernearly every continent. Kroc not only created an immensely successful company, he alsobuilt a global brand and revolutionized the American cultural landscape.
It’s easy to have principles when youre rich. The important thing is to have principles when youre poor.Thank You Very MuchSompong Yusoontorn