McDonald’s — A conversation with Mr. Kroc
Three things that Ray Kroc does damned well: sell burgers, make money, and tell stories
Mr. Kroc, what is the limit between the person and the entrepreneur?
“It’s a question I haven’t asked myself since 1954 … I am the kind of person who, without great educational qualifications or great merits, founded an empire and became one of the richest entrepreneurs in the world. Tell me…is there any limit?”
Do you feel you were a lucky man?
“I have always believed that every man is the architect of his own luck and responsible for his problems. As I always say: the two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it.”
We all know you preferred to help the McDonald brothers instead of copying them. Why?
“Honestly, the idea of “copying” them did not even touch me. I saw it through the eyes of a businessman. Put yourself in my shoes for a while: I had everything in my hands and I could go around talking about it making fire and flames, without having to make any effort.”
What made you believe in the McDonald’s project?
“I was struck by the idea of the assembly line applied to the catering industry. Unbelievable! Waiting times were more than halved...this undoubtedly seemed to me a winning model and it was thanks to this that I had my brilliant intuition: building an assembly line focused on the hamburger. In times when America was crazy about pizza, I built an empire of twenty five million dollars by selling hamburgers.”
Do you consider yourself a pioneer of the fast food chain Burger?
“Sure! I founded an empire on a hamburger. For many people McDonald’s symbolizes inventiveness and innovation and then today no one can resist the fascination of American meat and potatoes. The french fries is practically sacrosanct for me and the preparation is a ritual to be followed religiously. Another innovation was the use of large quantities of glass in the premises, which allowed the customer to assist in the preparation of the food and above all to create a clean and peaceful atmosphere, they love it!”
How did you get the idea of franchising?
“Probably without me the franchise industry wouldn’t exist. Or, even if it existed, it wouldn’t be as powerful and as important to the American economy as it is today. There was one decision in particular I made and that influenced the heart and the development of my franchise chain. Basically, I decided that the company would not be a supplier for the managers. In fact, I believed that I should help the single manager to be successful in every possible way. His success would guarantee my success. McDonald’s born as an American symbol and successfully spreads all over the world. McDonald’s offers calculability, predictability and control, all summarized in the idea of efficiency. the idea is to always make the same environment available to the customer, even if he is in another place in the world. For example, we all know that Italians would never say no to their Mediterranean diet. In short ..I mean a customization of places with a typical detail. So, Italians, here is your salad and your Parmesan.”
What about the “Golden Arches”?
“The McDonald brothers’ desire was to have a building with two arches on both sides. The arches were to be clearly visible from the street and were to induce people to stop. Our logo is not by chance, as well as representing the golden arches, it certainly has a psychological meaning … because you know that there is nothing more important than the shape.”
You said it has “a psychological meaning”…Do you know of Dr. Freud, Mr Kroc?
“Freud”…“oh yes, Louis Cheskin told me about it. Cheskin was a psychologist and a marketing innovator. It was he who convinced me to keep the current logo, claiming that the golden arches had a “Freudian” effect that made customers imagine a pair of nutrients mother’s breasts and that would have made them unknowingly more hungry! Without wasting time, I dedicated myself to the restyling: I removed the Speedee mascot from the brand and on the advice of Cheskin I kept the concept of the arch and transform it into a logo that should have generated a Freudian impulse in customers.”
What is your advertising strategy?
“I believe that advertising has always played a key role in the development of the McDonald’s Corporation. First McDonald’s motto was: KISS, which stands for “Keep it simple, stupid”. One very important thing for McDonald’s is that wefocus on creating memories in the minds of customers. Having a slogan is a simple way of getting people to remember your logo or brand and have a positive image with your company and modestly McDonald’s executes this flawlessly. The phrase “I’m lovin’ it” was so influential that today it is part of the North American vocabulary.”
McDonald’s has many competitors, how do you manage it?
“I have worked with people who have seriously suggested me the possibility of sending spies to our competitors’ premises. My answer to this kind of absurdity has always been one: to know everything you need, just look in the garbage. I swear to you that more than once, at two in the morning, I started rummaging in a competitor’s garbage to see how many boxes of meat or how many packs of sandwiches they had used the day before. Instead, it happened very often to find spies of our competitors in our premises. In any case, I soon came to the conclusion that a competitor could also try to steal my plans and copy my style, but he could not read in my mind, so I would have made him eat the dust anyway.”
Which is the key of the McDonald’s customers loyalty?
“Customer first! My philosophy was to help the customer. Nothing is more satisfying than the smile on a customer’s face. And do you know why? Because it means that he will return and that he will probably bring a friend. Our strength is to give to the customers what they really want: fast service, clean environment, high quality and above all affordable prices.”
How do you meet the needs of millions of customers around the world?
“Good question! That is difficult but not impossible. We think global to act local and in this way we incorporate in our model every traditional countries cultures. We experiment customer trends and needs through menu itself adding or deleting food according to the local popularity. This is our competitive advantage. Perfection is very difficult to achieve but perfection is what I wanted for McDonald’s , everything else is secondary for me.”
How would you reply to those who attack you for creating a junk food empire?
“This makes me laugh because for years the Big Mac consumer has accepted to eat low quality and low nutrition food without any problems, but when such a large company receives so many attacks and criticisms it must inevitably change and adapt itself to the new type of customer. For this reason the fast food giant has decided to include nutritional and caloric values on the packaging of its menus, providing it with a QR code that gives detailed information. So I would reply that we at McDonald’s strive to understand the changing trend of our consumers as soon as possible.”
Mr. Kroc, how do you explain the immense success of the Happy Meal?
“I really think that it is not a case that the key product for our younger customers is the Happy Meal. Since its origin, McDonald’s has had the goal of being a product for families, a place where they could eat together. Over the years this concept has become increasingly refined also by integrating child-friendly products. The product has the aim of helping mothers, do you know how difficult it is for a mother to feed her screaming babies? The Happy Meal is sold in a cardboard box and in addition to food and drinks it includes a beautiful toy, perhaps the reason why my premises are always full of small children.”
Mr. Kroc, you have often been called a “ruthless entrepreneur”, do you think otherwise?
“In this world we must be a little ruthless to survive, especially in the competitive business world, however this does not authorize us to be bad human beings. I’ll tell you a story… It was 1974 when Fred Hill, the famous football player, discovered that his daughter had leukemia. He discovered that there were many families who shared this pain, and in addition to their children’s illness they had further concerns: long trips to the hospital and the costs of forced stay away from home. It was during his daughter’s illness that Fred realized the need to create a place where the parents of sick children could meet to help each other. So I decided to support this idea and I promised to double every dollar raised. Today, Ronald McDonald House Charities is an international organization that carries out its cause in 64 countries with the help of 536,000 volunteers, helping more than 5.7 million children and families every year.”
What advice would you like to give to a young person who is studying to become an entrepreneur?
“You have to make every aspect of your business perfect if you want it to be successful. If you’re not a risk taker, you should get the hell out of business..and remember: while formal schooling is an important advantage, it is not a guarantee of success nor is its absence a fatal handicap.”
If you could go back in time, would you act the same way?
“Sure! If you still refer to the McDonald’s brothers I confess you that they had machines that I couldn’t copy easily. And then there was the question of the name, probably the most important for me. My sixth sense was screaming at me that “McDonald’s” was the right name, I had the feeling that it would become one of those easy-to-promote names, which would attract the attention of the public. In short, as I always say: the more I help others to succeed, the more I succeed.”
Most of the answers are the result of our reading and reinterpretation of the life of the great Ray Kroc.
Written by Giuseppina D’Angelo, Alessia Migliaccio, Alessia Immacolata Gentile.
