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 it’s 11:57 am on a cold winter Monday. What do you have in mind? What’s your next thought?

I AM HUNGRY! Correct?!

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 find yourself at lunchtime?

Two years ago I was at Little Caesars buying a $5 hot and ready pizza. Wondering if this was for my team? No! It was all for me; and I ate every last slice. If it wasn’t pizza, it was some kind of hamburger, taco, sandwich with fries, and a soda. So it was only natural that he weighed 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 an economy that was changing rapidly. 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 is a condensed summary.

On a scale of 1 to 10, how do you rate your leadership skills? On the same scale, how do you rate its effectiveness? “Your LEADERSHIP ABILITY always determines your EFFECTIVENESS and potential impact on 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 skill is a 4, then my ERA can’t be higher than a 3. If my ERA is a 4, then my leadership skill is at least a 5. Does that make sense?

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

Do you find yourself 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 with which we can identify. Two weeks ago, I never would have imagined blogging every day (DISCLAIMER: I’ve missed a few days here and there posting content to my blog, but when I stop to think about it, I’m constantly blogging every day while coordinating taxes). tax returns, tax consulting projects, and answering questions from clients about technical tax concepts several times a day).

Well, ask yourself, “How high or low am I on my LID for LEADERSHIP CAPACITY and/or EFFECTIVENESS?” If I’m at a measly 3 in leadership ability, how do I bump that up 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 little 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 similar experience; this is scalability! Ray literally worked BEHIND him. Did you know that during his first eight years with the McDonald’s brothers, Ray did not receive a penny of salary? 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 cashing? This means that he would have to work day in and day out 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 SALARY with the promise of payment 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. The “cover” on Ray Kroc’s 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 hamburgers, fries and soft drinks. It doesn’t matter if you buy a burger in small town Evanston, Wyoming or in downtown San Francisco, California on Market Street, you’ll experience the same taste and smell that is repeated all over the world. That’s 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 come across information in one book that is addressed in another book, I am forced to think that this 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 all about a fully scalable, 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 be successful in a direct sales business if he adopts one important foundation:

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

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

Robert goes on to teach that “you don’t need highly trained 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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