McDonald’s: from Ray Kroc to the coronavirus

Three years ago, an extensive and detailed article by Daniel Settembre was published in the digital and print columns of the famous business magazine Forbes. It aimed to summarize, in six points, the most important lessons left by the founder of McDonald’s, Ray Kroc, to all those involved in business, especially in the restaurant industry. The article started with the concept, conveyed by Mr. Kroc, that a company is not a work of art: you don’t give it the final touch and then exhibit it, but you constantly work on it, never lowering your guard and ensuring success every day. To this, we can add business lessons that we can consider “eternal” but not immutable. Therefore, we feel inspired to contribute in terms of updating those six assets of successful business.

Vision and Analysis

Let’s start from the beginning. Kroc’s first lesson concerns perhaps the most intangible part of the business creation process because it starts from intuition, from the idea. In 1954, in California, there was a boom in economic development, and much of the retail terrain was still unexplored and wild, as it was in the whole Western world. There, Kroc had the idea to replicate the McDonald brothers’ hamburger joint, and this idea struck him like lightning. Today, this step is still fundamental (without ideas and strong entrepreneurship, after all, you cannot do business or make progress in a broad sense). However, while there was plenty of room before, the market is now crowded, contracted, highly competitive. Therefore, alongside the idea, market analysis and benchmarking must be applied.

Check if someone else has already executed our idea well. If the idea has already been thought of, reflect on how to remodel it, improve it, adapt it to our context and target market. In short, you don’t necessarily have to be first to be successful, but you have to be inspired by the best and surpass them or do something different (indeed, McDonald’s is not the only successful fast-food chain).

If you don’t have a completely original idea, take inspiration from the best to start but don’t copy them. As Bernard of Chartres said: “We are like dwarfs on the shoulders of giants, so that we can see more things than they and more distant, not certainly because of the keenness of sight or the height of our body, but because we are lifted up and carried aloft by the stature of the giants.”

Customer Centricity

This is another “eternal” lesson that is often overlooked in favor of profits. Why? The profitability of the business should represent the effect of the strategy, not the goal. The purpose is to satisfy the customer, always! Kroc always emphasized how his behavior towards customers was characterized by fairness, clarity, and consistency in promotions and messages. Above all, in handling complaints. In their operations manual, there is a powerful section on procedures for handling complaints. Customer satisfaction comes first.

Trade-Off between Specialization and Service

Kroc never wanted to lose sight of the path he had taken when he developed franchising. He didn’t want to “tarnish” the concept with activities and products different from his core business, fast-food hamburgers. Ultra-specialization allows you to immediately rise to the top of customers’ minds by positioning yourself as the example of the restaurant that sells that “specific product.” This is still valid today but not always sufficient. McDonald’s is the perfect example. If the chain had remained with a single-product menu, it would probably have collapsed. This is because in the last 20 years (the period in which the chain has seen most of its changes), many characteristics of the market have changed, as have people’s tastes. Selling salads allows families to go to McDonald’s even if the mother is on a diet or the father needs to control his cholesterol, without sacrificing the taste and enjoyment that children can have eating fries and hamburgers. Selling salads also allows the target of workers to go there more often because they know they can also find light or low-calorie dishes. However, few would think of associating McDonald’s with salad. The “ruffian” extension of the menu is more of a service than an economic return, but it determines and consolidates loyalty.

Digital Quality

Perhaps this advice is also absolutely valid today. Kroc approached the business by ensuring that the specialization of McDonald’s restaurants had no shadows. He cared for every single aspect of the business, down to the frying mode of the fries, studying the type of potato and how best to store it to achieve the best frying performance. Today, attention to detail, if you really want to leave a positive impression on the customer’s mind, is indispensable, indeed, it is taken for granted. The quality of raw materials and preparation is now a prerequisite, and the customer takes it for granted. However, this care also extends beyond the restaurant; it must also be applied to communication, especially in the online world, between websites and social media. Image is everything because you can’t taste the product from a smartphone; I must be able to tell it, make it taste good with the eyes. Therefore, unlike the 1950s, a crucial detail today is the quality of visual content, graphics, photos, and videos. It’s not enough to aim for quality. Work on a digital and social perception that is up to par.

Innovate when Things are Going Well

We have already seen how analyzing potential competition is a crucial factor in starting a business. It is clear that if we do not stop, neither will the competition. Often, however, we approach competition by demonizing it, accusing it, criticizing it in the best case. Kroc took inspiration from the successes of the competition to challenge it sometimes on their own ground. An example, in modern times, is that of delivery. Driven by necessity, today, many restaurants have included delivery services among the purchasing options, but in unsuspecting times, those who were already equipped for this found themselves ready to face the emergency challenge. Why is that? Because they innovated even when things were going well. You shouldn’t always wait for necessity to seize virtues. This could sometimes be fatal. Delivery is a strategic asset that can make a difference in this period and ensure the survival and even the prosperity of the business. Innovate constantly and you will always be one step ahead.

Social, social, social

It is one of the first items to be cut in times of difficulty, and sometimes it cannot be condemned. However, if we want to take Roy Croc’s example, he never hesitated to spend an extra dollar on advertising because it “returned with interest.” Unlike the 1950s, however, today advertising channels are varied and diverse, from posters to Instagram posts, and the available budget is not always sufficient for “blanket” campaigns. Therefore, the first thing to do is to study a communication plan according to the following steps:

  1. Study successful competition (not necessarily the competitor around the corner, but also one from another city).
  1. Establish the channels to use based on our target (a venue frequented by young people will not advertise in newspapers, for example).
  1. Allocate the budget to the number of channels and the duration of the campaign (there is no “permanent” communication, but many phases of communication).
  1. Understand if you are capable (in terms of skills and time) of managing the communication campaign. If the answer is no, it is necessary to find a professional to do it (and then allocate a budget for it).

WARNING! Always remember that a wrong post on Instagram or an extra comment on Facebook can do more damage than a spilled glass on a customer. The web does not forgive and does not forget, and recovering reputation is hard.

We still want to remind you that the best advertising is that of satisfied customers. The famous “word of mouth” now runs on social media, and an Instagram story can bring a group of friends of our satisfied customer, just as Kroc’s child who saw the TV commercial brought his grandparents who accompanied him. Today, the word of mouth multiplication factor is very high.

In conclusion, it can be said that the world itself has not changed radically: the basic assets are the same, but living conditions, styles, needs, and tastes have changed. Kroc’s lesson is universal, but like every lesson, we must be good at grasping its intrinsic message and adapting it to our world.

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