Real Estate, Anyone? The True Success Story Of McDonalds

Posted on October 6, 2010 in Biz and Eco

By Sandhya Nag:

What does the most famous malls and shopping complexes have in common apart from the fact that they’re the most flocked places in India?

You go shopping-for clothes, footwear, accessories, household items, gifts, you’re inevitably hungry at the end of it. Hell, you go window shopping with friends, you see a place where you can relax and down some fast food which also happens to be light on the pocket. What am I driving at?

McDonalds. Yes.

You (and I) are more likely to walk in, than not. Which is what McDonalds is really all about.

McDonalds founder, Ray Kroc once walked into a class of students at Harvard and asked them what they thought McDonalds was about.

Burgers, they said.

And he asked the million dollar question: “ How many of you can prepare better burgers than the ones made at McDonalds?” Several hands shot up in the air.

He then told the class that burgers weren’t the deal, because obviously, there were so many people better at that. Infact, food itself  didn’t qualify as the topmost priority. And then he shared his million dollar idea.

That McDonalds wasn’t really about burgers, it was about ‘Real Estate’. Did I hear that right? Well yeah, you did.

McDonalds is about real estate.

It’s just about places. How amazing is that, right? You just put up outlets of McDonalds at places where your target market is, and Bingo!, you’re on your way to get those million dollars. The talent was in choosing those magical ‘places’.

Real estate isn’t the only factor which made McDonalds what it is today, but that was the core factor. Add to that a list of 4 to 5 ingrediants, you have the cake ready.

  1. Vision: A vision with clarity, is a vision to reality. Ray Kroc saw it in the form of his brother’s hamburger drive-in in San Bernardino. He wanted to own a standardized chain of fast-food eateries right across the world. 25,000 is a number, isn’t it?
  2. Agreeable to differences: Ray Kroc knew that you need a manager, who’ll hold it stable for you; and a frontrunner, who’ll go all out doing the front man job. His boldest move in this area was his hiring of Harry Sonneborn as his finance manager in 1956. As different as night and day, Kroc and Sonneborn formed a remarkable team. Where Sonneborn was taciturn and detail-driven, Kroc was outgoing and visionary. But without Sonneborn, McDonald’s would never have survived.
  3. Flexibility: An entrepreneur who invested everything he had at 52, Ray Kroc was a flexible man. New products like Big Mac and Egg McMuffin emerged from operators; Kroc’s attempts at new products–the Hula Burger and a strawberry dessert, to name two–were abject failures. Kroc didn’t discriminate the origin of those ideas.That’s leadership.
  4. Mentoring: The salesman that he was, Ray Kroc had a hawk’s eye for talent. He found  Fred Turner, the organizational mind behind the McDonald’s operating system, from the ranks of potential operators. Kroc nurtured Turner as he did others; and in the process, built his business by selecting the right people at the right time.

It is said that he would arbitrarily fire staff who erred in minor ways sometimes, and the executives wouldn’t carry it out. Knowing him all too well. The incident would be forgotten in a few days.

Charity begins at home:  After becoming a millionaire, he established a foundation to support his charitable efforts. The Ronald McDonald House, which provides housing for relatives of children undergoing lengthy hospital stays, is one such example.

Optimism and excellent mentorship no doubt proved to be the key, in addition to everything mentioned above. And the rest, as they say, is history. The tagline has another story in itself, but let’s reserve that for some other time! I’m lovin’ it! Bade se bada business paise se nahi — ek bade idea se bada hota hai. True, that!

References: http://www.lc21.com/directions/thoughts1.html and http://businessleadershipadvice.com/archives/2008_10_01_archive.html

Image courtesy: http://www.proprofs.com/quiz-school/story.php?title=fun-facts-about-ray-kroc

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