What I learned from McDonalds — And Ray Kroc.

From movie “The Founder” and my little research.

Not so long ago, I watched this movie called “The Founder”. Well, thank god my insomnia came that night. Otherwise I might have not discovered this ‘shocking’ — yet crazy —thought in my brain. The timing was perfect, because I have been trying to find a missing puzzle for Beon Intermedia & Jagoan Hosting Indonesia future growth strategies. It may be only a piece of puzzle, but it helped me to get a better view on what we are trying to achieved. I wrote this as my future references, and maybe — I deeply hope so — it will also help you find your missing puzzles too.

It’s a long run, get a coffee.

First of all, this is not a deep research report kind of thing. If you find it useful, then good for you. If you don’t, then it’s okay to move on. I would be happy if you share some of your insights too. Oh, and THIS IS NOT A MOVIE REVIEW. But I will give you a little spoiler:

The story of Ray Kroc, a salesman who turned two brothers’ innovative fast food eatery, McDonald’s, into one of the biggest restaurant businesses in the world with a combination of ambition, persistence, and ruthlessness.

Yes, I copy-pasted those texts from IMDB website. When I first saw this movie title on Exodus — a KODI Add On — I feel a bit intrigued by the synopsis, but I scrolled all the way down anyway. I was about to watch Dr. Strange that night, but my head was like “Watch ‘The Founder’!” So, thanks to my brain, I’ll never forget that night. — Wait, that’s too exaggerating, moving on.

Long story short, I was amazed on how McDonalds brothers — Dick & Mac McDonalds — eliminate all things that every other drive-in restaurants had that time. It was a crazy move I think, because at the time, every drive-in restaurant in USA was a hangout place for the youth. They were smoking, drinking beers, and leaving the trash everywhere. The brothers were crazy enough to eliminate cigarette vending machine, put a ‘no smoking & drinking’ sign, took down unnecessary menus, and many other things that will drive the youth away. They transformed their restaurant into a family-friendly restaurant. They also gradually removed the carhops, waitress who deliver the food & drink to the customer in their car (At the time people ate the food on/in their car).

Why I found these actions are amazing: They’re not afraid to eliminate everything that they thought are dragging down their business, even though it was a popular trend at that time. They realized that their current market, the youth, were bringing so much pain that cost them dollars. They always did a lot of cleaning before closing the restaurant. They need the carhops because their customers are a bunch of cocky little bastard who are too lazy to took the food themselves. By eliminating all of those actions, the brothers eliminated a lot of operational cost, all in order to created a new value for their business — the family-friendly restaurant. A value that later become the core value of McDonalds up until now and bring them as big as they are today. So, are you still afraid to eliminate something that is dragging you down, just because it’s so popular right now?

The brothers have also created the ‘Speedee’ system. The origin of a FAST FOOD system that we all know today. In the movie, you will see the brothers go to a tennis court, draw their actual scale of the kitchen’s blueprint on that court. Then they called their employee to come — this is where it gets interesting — and tested the kitchen layout by pretending that they are working! The brothers were on the side of the court, watching every move done by their employee. It’s like they were orchestrating the whole activities. They changed the layout couple times until they found the best one. They also made couple of cooking tools to meet the system’s needs.

Yes, these guys knew MVP before it was cool. And that MVP helped them to reduce the wait from 30 minutes to only 30 seconds. Wow. Just wow.

What I learned from this: Data is powerful, yes, obviously. But they created the speedee system not just by gazing at the data. They do something about it. Data will be useful only if you can ‘extract’ the insights, and insights can only be extracted if you know your goal. Everyone talks about big data — everywhere. Yet in my experience — I’m not a data scientist nor an expert regarding this matter — the bigger the data, the more likely we’re going to be diverted by something, which maybe, so far away from our goal. So, set your goal CLEARLY before you swim into your data pool. The brothers show me that it’s not the size of the data that matters, but how it can help achieving goal is the most important part. By staying focused on their goal to speed up the serving process, they saw just the right data. They created a lot of automation process to help them achieve it. And also, create & test a prototype before you go any further — duh!

The Brothers were actually a kind men. They were very proud of their system, and they invited a lot of people to see how their ‘Speedee’ system works. The wikipedia said that James McLamore, founder of Burger King, and Glen Bell, founder of Taco Bell were some of the people who visited the kitchen and inspired by the system.

But among the man who was invited to their kitchen is the man who deeply inspired me in this movie: Ray Kroc. I don’t know why, but if I google “McDonald’s Founder” his name came up. And oh yeah, this man is so ruthless that I love him so much. Just keep reading, you’ll know why.

In 1954, Ray Kroc came to the first McDonalds restaurant at 1398 North E Street at West 14th Street in San Bernardino, California. I’m not gonna fill you in with much details about him, his nature, or about his early encounter with McDonalds. If you are curious, you can read more about him here or watch the movie yourself.

What I wanna share in this article is about how he ‘ruthlessly’ took over the business. He started as franchisor of the restaurant and also the man who perfected a lot of things for McDonalds. However, he was an ambitious man, but the brothers was more like the ‘enough’ persons. A lot of his ideas — which were some very amazing ideas I think — were rejected by the brothers. Those rejections were preventing him to grow, which he thought preventing the business to grow as well. According to the movie, he was on the verge of bankruptcy when he met with Harry J. Sonneborn, the first president & chief executive of McDonalds Corporations.

Harry was the man who proposed the idea to get more profit from the business by owning the land being used for the restaurant. Kroc saw this as an opportunity. They joined forces and created a real estate business, then leased the land to every McDonald’s franchise. A business that later become one of the keys to take over McDonalds from the brothers. This business gave Kroc a control. While the brothers controlled the inside of the restaurant, he controlled the outside. This control has eventually grown too strong for the brothers to handle. Also, having so many properties, made Kroc gained investor’s trust, thus gave him money to buy McDonalds. In 1961, he bought McDonalds from the brothers, and left the brothers with nothing but USD$ 2.7M.

What I learned from this case: Yes, Ray’s ability to think big is one of his key success. But the most interesting thing in this case is the way he ‘snatched’ McDonalds from the brothers. When he doesn’t have any control on the business, he created his own control. And that control is the key resource of the business. By owning the key resource, he was able to use it to turn the table. Now ask yourself these questions:

  1. What is the key resource in your business?
  2. Do you already have the control of it?

If you think you do, take a moment, and answer these question honestly:

  1. What makes you think that ‘that thing’ is the key resource?
  2. Are you sure you’re the only one who controls it?

But if you don’t, then start looking. Maybe seeing the movie will help you, like it helped me.

Well, I think that’s it from me. Please do remember, all those written up there were only based on my thoughts after seeing the movie and doing a little research on Google & some books. Some of them maybe different from the real fact, but I get what I learned, and I shared them with you. And I really wish you to share some insights too!

Oh, and I’ve also tried to map their business strategies into Blue Ocean tools, and I wrote an article about it.

NB: This is MY FIRST long english article and I’m not a native english speaker. I hope you can bear with my english, hope it won’t give you cancer. Please, don’t be too harsh on me 🙂

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  1. Ranggi Ramadhan Ranggi Ramadhan on 17 October 2018 at 19:14

    Mantap sharingnya gan!

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