You may wonder what an independent restaurant operator could possibly learn from the man who created the McDonald’s empire. What could you possibly have in common with a major corporation that serves millions of customers a day in more than 30,000 restaurants worldwide?
From an organizational standpoint, you may not have a lot in common with McDonald’s, however, Ray Kroc’s ingenious approach and guiding principles are not only relevant but provide highly relevant gems of wisdom every restaurant owner should know and apply.
Kroc’s leadership and business sense helped make McDonald’s the largest restaurant chain of all time and made more people (his franchisees) into millionaires than possibly any other one organization in history. Just how Ray Kroc was able to build such a massive and extremely profitable business operation in a relatively short time span certainly deserves our attention.
First, get to work ‘on’ the business, not ‘in’ it. When Ray Kroc secured the master franchising rights to McDonald’s back in the mid-1950s, he didn’t go to work “in” the restaurant. He went to work “on” the business. To Kroc, the first McDonald’s restaurant was a model or prototype that was to be reproduced again and again in cities and towns all over the country.
Instead of personally rolling up his sleeves and running that first McDonald’s, he began the process of analyzing every operational function of that restaurant from purchasing to prep to cooking and cleaning and so on. Without changing the essence of the concept, he made refinements and proceeded to develop a comprehensive set of standards and procedures, a system, if you will, for running a hamburger stand “the McDonald’s way.”
After Kroc had completed his first objective of building a complete “set of instructions” for operating a McDonald’s restaurant, he then moved on to the next phase of his plan. He was now able to show others – in this case, his franchisees – exactly how to run a McDonald’s restaurant in a systematic and proven way that virtually ensured their success.
He understood that he wasn’t just selling burgers and fries. In fact, his main product was the business, a McDonald’s franchise. His primary customers were not the people who bought the burgers, but the people who would pay for the right to own and operate a McDonald’s restaurant (the franchisees). To convince people looking for business opportunities to choose a McDonald’s over another franchise or any another business for that matter, he had to make it the best business opportunity available. His competition wasn’t other restaurants, but other business opportunities.
Kroc went to work on McDonald’s to make it the business opportunity of choice. He refined it to the point that it would operate in a consistent, predictable manner, the same way time after time with a low-skilled staff made up largely of teenagers.
Second, the ‘system’ is the solution. To have any chance of realizing his vision of a company with hundreds and even thousands of hamburger joints, Kroc knew every restaurant had to be operated in exactly the same manner. He required every new franchisee to attend the corporation’s Hamburger University to learn the McDonald’s “system” or way of doing business regardless of their experience.
Upon graduation, each franchisee knew precisely how to operate a McDonald’s restaurant. They were told to operate their restaurants “exactly” this way because “it worked.” If a franchisee deviated from the system in any way they risked losing their franchise. Kroc believed “the system” was the key to creating a successful business.
Another reason to have a system is that it’s the only way to get extraordinary results out of ordinary people. Restaurants can’t afford and really don’t need extraordinary people but they do need to leverage their people with excellent systems. You want ordinary people who are able to produce excellent results by having very good systems.
Why do more than 30 million people go to McDonald’s every day? Great food? Absolutely not! They go to McDonald’s because they know EXACTLY what they’re going to get (McDonald’s is fanatical about consistency and predictability and you should be too). Customers know precisely what they’re going to get regardless of what particular McDonald’s restaurant they visit. You can only create consistency and predictability, the two most important factors in any business, with a good system.
This systems approach to operating a business does not apply solely to franchised or chain restaurant. A systems approach works anywhere and you’ve got to have a systems approach to operate a successful restaurant because there are just so many variables and functions that need to be executed the same way, every time, with every guest. Without a system, it’s nearly impossible for employees to create a consistent and predictable experience for your guests over and over again. In short, without a system, you’re lost.
With a system, a restaurant becomes a valuable asset in itself because it has the ability to produce consistent results and do this with or without the constant, direct involvement of the owner. By the way, when was the last time you saw the owner of a McDonald’s franchise working in the restaurant? Probably never.
By contrast, many independent restaurant owners never stop working “in” their restaurant. They start out being the primary go-to person in the restaurant during the opening, which, of course, is understandable and necessary, but if they stay in this role for months and even years after a reasonable startup period, the business (and the owner) suffers.
When the owner continues to be intimately involved in the day-to-day operations of the restaurant, in a way they can’t also function as an owner. They are closer to being another employee. Sure, the owner is the boss and their name is on the lease and the bank loan, but beyond that, they are working in the restaurant in much the same way an employee or a manager would.
It’s important that restaurant operators recognize the implications of the way they approach their business and how they see their role in it. If they’re spending most of their time and energy running the restaurant, chances are good that their business isn’t achieving its potential for success and they don’t have much of a life outside of the restaurant either. The reason many restaurants have problems is that the owner is not focused on those functions and activities that an owner needs to be doing to move the business forward.