Reading Reflection No. 1

The book Grinding It Out: The Making of McDonald’s is about how the author, Ray Kroc, became business partners with the McDonald brothers who ran a small hamburger restaurant in California, and created the McDonald’s fast food empire.  Clearly I was most certainly surprised that in over twenty years he did not take a paycheck or use an expense account from the McDonald’s corporation.  He decided that the royalties from his previous successful venture in developing a milkshake blender were enough and that the company would gain more success without his expenses.  Unlike so many greedy corporate leaders he put the company’s best interests before his own. 

The most admirable element is that Kroc did not take advantage of the franchisees.  Even though contracts were signed to return franchised stores to the company after twenty years, he refused to enforce that and allowed them to prosper indefinitely.  The least admirable activity was that Kroc authorized huge campaign donations to win favors from politicians and government agencies.  Although he was successful at implementing honest business growth ideas, bribing the government became an essential strategy.  Kroc did have to deal with adversity and failure along the route to success.  The fries tasted differently because of the way the dry desert air cured the potatoes at the original store, but he was able to develop a process to make the taste consistent.  There was a meat distribution cartel in California that wanted kick-backs to handle the McDonald’s business, but he was able to contract with a small business owner to successfully deliver over 300 million hamburger patties a year. 

Ray Kroc had amazing intuition that enabled him to find success.  He had a clear vision of his goals and how to accomplish them.  He decided during high school that education was unnecessary since he did not need training to become wealthy.  He was very adept at analyzing the market and creating a system to benefit the customer.  He believed that working hard and taking advantage of free enterprise would lead to an improved society as a whole.

There was one part of the book that was confusing.  A number of franchisees formed the McDonald’s Operators Association.  This was a clandestine group that met to discuss conspiracy theories about the company.  They feared that their franchises would be stolen back when their leases expired, and they publicized rumors about McDonald’s in an attempt to damage the corporation.  Although Kroc was considered trustworthy and he did deliver on his promises to not let this happen, a surprising amount of effort was put into this negative campaign.

The questions that I would ask the entrepreneur are as follows:

Question 1: What was the biggest failure you dealt with in building the McDonald’s empire?  Entrepreneurs learn a great deal from their own failures and how to utilize their resources to turn a negative situation around.

Question 2: Why did you not believe in offering food with nutritional value and instead focused your efforts on “junk” offerings?   It seems as though it would have been beneficial to all parties concerned, to take advantage of the reputation and strong customer following by offering a healthier menu.  This could increase customer loyalty and impede competition.

Ray Kroc truly believed in a combination of hard work and strategic planning to accomplish success.  He was always thinking of ways to improve the current situation and continuously planned to take his endeavors to the next level.  He proved himself to be a problem solver for both his employees and the franchisees.  Although he delivered a product that may not have been very nutritious, it did have worldwide appeal.  He was integral in the massive success that McDonald’s is today.