I’ve been thinking a lot lately about business leadership. What makes a good leader today?
As luck would have it, I recently watched The Founder, starring the underrated actor Michael Keaton as Ray Kroc, the “founder” of McDonalds. Turns out, stealing the McDonalds brothers’ intellectual property and last name aside, Ray Kroc had some pretty good ideas about leadership that ultimately led to the success of the company and can still be applied today.
Side note: yes, I know McDonalds is not doing great right now and other restaurant chains are, ahem, eating their lunch. But, at the time, Ray Kroch was able to capitalize on a few key ideas to great success.
How are you going to steer this ship?
A Good Leader Takes a Step Back
The McDonald brothers, the original founders of McDonald’s, spent years perfecting their “Speedee Service System,” the assembly-line style fast food kitchen we all know today. They cut down on costs by eliminating wait staff and paired down their menu to the top-selling items – burgers, sodas, shakes, and fries.
Their first foray into franchising was a disaster. It was difficult for the brothers to control quality standards because 1) they were in California and franchisees were far away in a different city or state and 2) they hardly ever ventured outside of their original location.
So, you can imagine their consternation when Ray Kroc, who they trusted to create and supervise their second attempt at franchising, started suggesting new menu items, sponsorship opportunities, and that the brothers should expand the franchise even more. Who was this yahoo to tell them how to tinker with their creation?
It is a difficult thing to go from working in your business to working on your business, to giving up some control and letting others take on the day-to-day details and hands-on work. It’s a risk – what if a staff person comes back with less-than-stellar work? You have spent all this time growing your business and now you’re just supposed to what, give up the reins?
In a word, yes. In three more words, a little bit. What the movie makes painfully clear is that the McDonalds brothers were never going to grow their business to the fast food behemoth it is today by themselves. They needed right leadership, and the right people, to grow and they needed to let those people take the lead.
Finding the Right People Is Worth It
Initially, Ray sold McDonald’s franchises to a few friends from his country club. This was not a great success. They changed menu items without consulting him first. Burgers were overcooked. Locations were messy. And what was worse, they did not care. Their livelihood did not depend on these restaurants and so they let standards slide.
Ray then decides to fish for the right franchisees in different waters. He found them in VFW halls, American Legions, Shriners Clubs, churches, and synagogues. He sold franchises to regular, working-class people who were willing to work hard and had some skin in the game.
The lesson in all of this: finding the right people is tough. But, hiring the wrong people can be a costly mistake. Is it time to expand your talent search?
Leaders Work on Growing Their People
Let’s be clear: Ray Kroc was not a nice guy. But, he knew good talent and ideas when he saw them.
Ray didn’t immediately squash new ideas from his staff, he tested them out first. He took chances on people who might otherwise be overlooked, because he liked their work ethic. His original Director of Operations, Fred Turner, started out on the line of one his restaurants. Ray initially took interest in him because he literally liked the way Fred flipped burgers.
Ultimately, good leaders grow people. And by growing their people, they grow their business.
A Strong Brand is Worth a Lot ($2.7 million in fact)
Ray Kroc understood the value of a strong brand. He knew that even more than burgers and fries, McDonalds was selling the chance to spend time with your family, a sense of community, a slice of Americana. He also knew he could copy the Speedee Service System all the wanted, but no one was going to go to a restaurant named after him. Kroc’s doesn’t quite have the same ring as McDonald’s.
This is the point in the movie where things take a dramatic turn and we see Ray basically bullying the McDonald brothers into selling their very name to Ray for $2.7 million.
While I don’t advocate bullying, I do suggest looking at your brand and identifying what makes you stand out from the pack. In a world of increasingly commodified goods and services, what is special about your company?
Its an old saying, but its true: what got you here won’t get you there. The things that make a business owner successful at first –a great product or service, hard work, attention-to-detail – are not enough by themselves to take a business to the next level.
To level up, business leaders must step back from the day-to-day, find and grow the right people, and cultivate their brand. What steps are you taking to get to the next level of your business?