McDonald’s, scalability and leadership

McDonald’s, scalability and leadership – John C. Maxwell

Imagine for a moment that you stop typing, take your eyes off your computer screen, look at the wall, and realize that it’s 11:57 a.m. on a cold winter Monday. What do you have in mind? What is your next thought?

I’M HUNGRY! Good?!

With our busy lifestyles, what fast food options come to mind? McDonald’s, Wendys, Burger King, Taco Time, Subway and the list goes on. Where do you usually meet at lunchtime?

Two years ago I was at Little Caesars buying a $5 hot and ready pizza. You ask if this was for my team? No! Everything was for me; And I ate every last slice. If it wasn’t pizza, it was some kind of burger, taco, sandwich with fries and a soda. So, it was only natural that I was 240 pounds back then.

What does my weight and previous eating habits have to do with McDonald’s, scalability and leadership? ABSOLUTELY NOTHING! But, here is the fascinating truth. McDonald’s was at the roots of a rapidly changing economy. John C. Maxwell shares the story of the McDonald’s brothers as part of his discussion of “The Law of the Lid.” What law is that? Well, here’s a condensed summary.

On a scale of 1 to 10, how would you rate your leadership skills? On the same scale, how would you rate its effectiveness? “Your LEADERSHIP CAPACITY always determines your EFFECTIVENESS and the potential impact of your organization.” You’ll find this on page 1 of chapter 1 in John’s revised and updated book; The 21 Irrefutable Laws of Leadership. So if my leadership ability is a 4, then my ERA can’t be higher than a 3. If my ERA is a 4, then my leadership ability is at least a 5. Does that make sense?

John illustrates the Dick and Maurice story very well by emphasizing that the two brothers recognized an opportunity to reinvent their restaurant into a drive-in selling burgers, fries, drinks, etc. In fact, they saw great success in their company and “his genius was in customer service and kitchen organization (p3).” However, they did not rush after the franchise concept because they “lacked the leadership necessary to make a larger company effective (p3).”

Are you in a similar situation? Are you an expert in your field, clients love the work you do, but don’t know how to scale your business to build a bigger company? We all have something we can identify with. Two weeks ago, I never would have imagined blogging every day (DISCLAIMER: I’ve missed a few days here and there blogging, but when I do stop to think about it, I consistently write every day while coordinating taxes). tax returns, tax consulting projects, and answering customer questions about technical tax concepts several times a day).

Well, ask yourself, “How high or how low do I take my LEADERSHIP ABILITY and/or EFFECTIVENESS LID?” If I’m at a measly 3 in leadership ability, how do I raise that to a higher number? Now between 1937 and 1954, I’m sure the McDonald’s brothers enjoyed their success with their regional restaurant model. Then they met Ray Kroc and he wore his LEADERSHIP SKILL CAP a bit higher than the brothers. You see, Ray could envision a large restaurant company where everyone followed an established system of processes that presented each customer with a similar meal and a similar experience; this is scalability! Ray literally worked the BEHIND of him. Did you know that during his first eight years with the McDonald’s brothers, Ray didn’t get paid a dime? Would you sweat and cry for eight years without a salary?

What if I told you that you could collect $2.7 million, but you would have to wait 8 years before collecting? This means that he would have to work day after day for 8 years before he could collect a penny of the $2.7 million; Would you be all in? It would be hard to find any man or woman today who would work WITHOUT WAGE with the promise of pay in 8 years.

Well, that’s exactly what happened! “In 1961, for the sum of $2.7 million, Kroc purchased the exclusive rights to McDonald’s from the brothers, and proceeded to build it into an American institution and a global entity. Ray Kroc’s “cover” in life and leadership was obviously very superior to that of its predecessors (p4)”.

Fast forward more than 50 years later and McDonald’s is a global icon for burgers, fries and soft drinks. It doesn’t matter if you buy a burger in the small town of Evanston, Wyoming or in downtown San Francisco, California on Market Street, you will experience the same taste and smell that is duplicated around the world. That is the incredible story of McDonald’s, Scalability and Leadership under Ray Kroc.

Just so you know, I’m currently reading about 10 books at the same time. When I find information in one book that is covered in another book, I am forced to think that it is not a coincidence, but that I should probably take the message seriously. In his spin-off book The Business Of The 21st Century, Robert T. Kiyosaki talks about assets. Well, asset number 5 is about a fully scalable and duplicable business model.

If you haven’t read the book or haven’t heard of the book (FYI, Robert is the author of Rich Dad, Poor Dad; ring a bell?), then I’ll let you know right now that Robert is talking about direct sales. He points out that he doesn’t need to be a skilled salesperson to succeed in a direct sales business if he adopts one important fundamental:

Design your tiny business model so that it can be multiplied and replicated many times without your direct involvement.

Remember, the McDonald’s brothers were experts in customer service and kitchen organization. They struggled to design their business model in such a way that anyone could duplicate it many times over. However, when Ray Kroc came onto the scene, “he did not seek out an elite corps of especially talented restorers with high-level experience to execute his many operations. Instead, he engineered the experience right into the operation (p67).”

Robert goes on to teach that “you don’t need highly-skilled salespeople to duplicate what you do. You need people who are willing to learn basic business and communication skills and grow personally into self-determined entrepreneurs and team-builders (p69).”

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