Ray Crok Rules

Rule 1 - “I believe in God, family, and McDonald's,” said Kroc. “And in the office, that order is reversed.”Despite not having found the fast-food industry until he was in his 50s, it soon became his entire life. From the moment Kroc first set his sights on the McDonald brother’s restaurant, he devoted almost every waking moment to realizing the potential that he saw in it. For Kroc, this wasn’t just another restaurant; he wanted his chain to be the biggest and the best in the country, and then the world. From the large scale marketing campaigns right down to the size and weight of his hamburger patties, Kroc ran his operation like the big business he knew it could one day be. “I didn’t invent the hamburger,” said Kroc. “I just took it more seriously than anyone else...We take the hamburger business more seriously than anyone else.” Time Magazine dubbed Kroc one of the world’s most influential builders and titans of industry because he did just that – he built a small business into a billion dollar enterprise and, he did it by focusing on the details and caring more about his business than anyone else. For Kroc, McDonald’s wasn’t just about serving hamburgers as quickly as possible; for him, it was an art. “It requires a certain kind of mind to see beauty in a hamburger bun,” he said. “Yet, is it any more unusual to find grace in the texture and softly curved silhouette of a bun than to reflect lovingly on the hackles of a favourite fishing fly? Or the arrangement of textures and colours in a butterfly's wing?” Not if you’re Ray Kroc; “Not if you're a McDonald's man. Not if you view the bun as an essential material in the art of serving a great many meals fast.”Kroc was a perfectionist; he wanted McDonald’s to be the best it possibly could be. “Perfection is very difficult to achieve, and perfection was what I wanted in McDonald's,” he said. “Everything else was secondary for me.” That is why, instead of simply selling the franchise rights to his milk-shake formula and hamburger recipe, Kroc branded a service. From the layout of the store, to the cleanliness of the parking lot, to the number of pickle slices on a patty, Kroc ensured that a McDonald’s in Delaware would provide the exact same quality service as one in Nevada. McDonald’s might portray an image of clowns and happy-go-lucky children, but behind the marketing, Kroc was an astute and shrewd entrepreneur who was all business. After the McDonald brothers refused to sell Kroc their very first store – the Big M – Kroc opened up a McDonald’s right across the street and drove them out of business. “If any of my competitors were drowning, I'd stick a hose in their mouth and turn on the water,” he said. “It is ridiculous to call this an industry. This is not. This is rat eat rat, dog eat dog. I'll kill 'em, and I'm going to kill 'em before they kill me. You're talking about the American way – of survival of the fittest.” Rule 2 - “None of us is as good as all of us,” Kroc would say. A strong proponent of teamwork, Kroc understood that his growing company could only continue its meteoric rise up if it had the support and the dedication of its workers behind it. In order to ensure staff loyalty and motivate his employees, Kroc did his best to guarantee that they were treated with respect and were able to operate on an equal playing field. In the early stages of the business, Kroc personally took charge of the entire hiring process. Once he had made the decision to bring someone on board the McDonald’s team, Kroc would give each and every one of them a badge with the title of Management Trainee. It didn’t matter what their actual job was; Kroc wanted every employee to feel valuable and like an important part of the team. Kroc would then tell his workers to think of a better way to do their job or of any improvements that could be made in customer service, which could then be written down and placed into a Suggestion Box. The effect of this was that it made McDonald’s employees, especially the new ones think that they were on their way up within the company. Even if you were just a janitor, as a Management Trainee you could feel like you were an important part of the management team. Kroc praised his workers and promoted them accordingly. In return, the majority of McDonald’s employees would love showing up to work every day and would deliver better service with a smile, which was a crucial component of Kroc’s strategy. “McDonald's is a people business, and that smile on that counter girl's face when she takes your order is a vital part of our image,” said Kroc. Kroc’s Suggestion Box wasn’t just a means to make his workers feel like they were valued. Rather, Kroc would use the ideas given to him by his staff to try and improve the business. Indeed, many of McDonald’s most successful products all started with innovations that came from the bottom up. The Happy Meal, for instance, which has become one of the chain’s trademarks and most successful products, was the result of ideas generated from people working within one of the McDonald’s restaurants. Kroc understood that since he was relatively removed from the daily operations of the chain and its customers, some of the best ideas were bound to be those that came from the people who were actually in charge of what was going on inside the four walls of his restaurants. “The success of additions such as the Filet-o-Fish, the Big Mac, Hot Apple Pie and Egg McMuffin…each evolved from an idea of one of our operators,” said Kroc. “So the company has benefited from the ingenuity of its small businessmen.” Kroc saw his staff, as well as his franchisees as his own internal customers and did his best to ensure that they too were equally as satisfied as the external customers they served.It was by embracing innovation, fostering a sense of teamwork, and rewarding hard work that Kroc ensured his workers were on board 100% towards achieving his dreams. Rule 3 - “If you’re not a risk taker, you should get the hell out of business,” Kroc once said. He didn’t build a franchise empire with over 3,000 stores in just ten years by sitting back and repeating the same formula that had worked once over and over again. Instead, Kroc strove to constantly improve his company and retain his place at the forefront of the industry by taking advantage of new opportunities. Even when there was big risk involved, Kroc stared the gamble in the face and rolled the dice. Kroc didn’t invent the hamburger; he simply had a dream about what he could do with that burger and where he could take it with the right business model. From the very first day he met the McDonald brothers and witnessed their small operation and successful use of the Multi-mixer, Kroc could sense the possibilities. “When I saw it working that day in 1954, I felt like some latter-day Newton who’d just had an Idaho potato caromed off his skull,” Kroc said. “That night in my motel room I did a lot of heavy thinking about what I’d seen during the day. Visions of McDonald’s restaurants dotting crossroads all over the country paraded through my brain.”At that time, the most popular restaurants were those where customers came to dine in for a nice meal. But, with its paper plates, speedy service and on-the-go mentality, McDonald’s was breaking new ground. Kroc wasn’t afraid. Instead, he invested heavily in the company. Even during recession and weak economic times, Kroc remained firm in his commitment to the business and refused to let fear stand in his way. At one particularly hard point in time, when McDonald’s was suffering financially due to wider problems in the economy, the company’s executives decided to slow down construction in its expansion process, Kroc threw a tantrum, insisting that it made no sense to wait for the economy to improve because the cost of building would then also increase. Rather, Kroc said that the perfect time to build was when times were bad. He ignored the risk and was courageous enough to take advantage of both the good times and the bad. “I don't believe in saturation,” said Kroc. “We're thinking and talking worldwide.” Nothing about Kroc’s business strategy was small. From his talk to his deals to his expansion plan, Kroc liked to bet big. And, it was in betting big that his payoffs were even bigger. From his early days as a Multi-mixer salesman, Kroc said he developed an eye for what would work and what wouldn’t, and to take risks accordingly. “I considered myself a connoisseur of kitchens,” he said. “I prided myself on being able to tell which operations would appeal to the public and which would fail.”Growing his business was a continual process for Kroc, one which involved much risk and reward. But, it was only in striving to always be better and take advantage of new opportunities that Kroc became the legendary success that he did. “When you’re green, you’re growing,” said Kroc. “When you’re ripe, you rot.” To fellow entrepreneurs, Kroc posed this question: “Are you green and growing or ripe and rotting?” Rule 4 - “Luck is a dividend of sweat,” said Kroc. “The more you sweat, the luckier you get.” Despite all his hard work, Kroc was not always a lucky man. From his early days in starting up McDonald’s to even after the chain was a well-established global presence, Kroc experienced his fair share of failures. He was not immune to disappointment; what set Kroc apart from his competitors, however, was how he learned from his failures and bounced back. During his time as an ambulance driver for the Red Cross towards the end of World War I, Kroc met a fellow young and ambitious entrepreneur by the name of Walt Disney. When Kroc first began selling McDonald’s franchises around the country, he remembered Disney and sent him a letter in 1954. Disneyland was still under construction at the time, but anticipation about its prospects was great, and Kroc sensed an opportunity. “Dear Walt,” he began. “I feel somewhat presumptuous addressing you in this way. Yet I am sure you would not want me to address you any other way…I have very recently taken over the national franchise of the McDonald’s system. I would like to inquire if there may be an opportunity for a McDonald’s in your Disneyland Development.” An agreement with Disney would have been a significant boon to Kroc’s growing business but, for whatever reasons, Kroc never received a reply from his old army pal. Kroc could have become disheartened and lost faith in his goals. Instead, Kroc chose to remain undeterred and continued approaching other franchisors across the country. Crisscrossing the U.S., Kroc carried on planting McDonald’s restaurants wherever he could. Yes, he was turned down by what would have been one of his biggest franchisors to date, but Kroc didn’t let that stand in his way. Kroc’s failures weren’t just limited to his early on in his career. Even after McDonald’s had become a global empire and one of the most successful giants in the fast food industry, Kroc continued to come face to face with brick walls. The entrepreneur that he is, Kroc’s desire to take risks and innovate didn’t decrease with the success that he had already achieved. Instead, he continued to try new things in order to take his company to even greater heights. From upscale hamburger restaurants to German-tavern restaurants to pie shops and even other theme parks, Kroc’s endeavours were often met with dismal results. What kept Kroc going even throughout the most disappointing of failures? How did he bounce back from the twists of fate that could have just as easily ended his career? With his keen sense of future trends, Kroc had a strong belief in himself and his vision. And, he wasn’t doing it for the money: “If you work just for money, you'll never make it, but if you love what you're doing and you always put the customer first, success will be yours,” said Kroc. “All money means to me is a pride in accomplishment.” Rule 5 - “We're not in the hamburger business,” said Kroc. “We're in show business.” Kroc understood that it was all in the message; the success of McDonald’s was going to be based on how the company was perceived by the public. Thus, Kroc spent much time and effort developing an effective marketing plan. First and foremost, Kroc decided to focus on marketing at the local level. It was by thinking big, but acting small that Kroc was able to expand the chain into a global powerhouse. In the eyes of Kroc, each McDonald’s that he helped erect was a local business and also part of a local community. Thus, each franchise had to be marketed and tailored to its unique needs and those of its surroundings. In order to do this effectively, Kroc focused on marketing within the four walls of each unique store. By insisting that his franchise operators lived in the communities where they worked, Kroc was ensuring that they would be better equipped to understand the unique dynamics of their locations. This principle of neighbourhood marketing became one of the keys to the entire system. Much like Kroc had encouraged suggestions from his staff in a bottom-up manner, he also recognized that marketing had to be executed in a bottom-up strategy. Kroc understood that it was in each unique neighbourhood franchise that the retail war would be won or lost. Thus, while each McDonald’s outlet kept the basic standards in terms of “QSC” (quality, service and cleanliness), marketing needs were tailored to each. Kroc devoted a large part of the McDonald’s budget towards hiring regional advertising agencies. He believed having these local representatives who could work “on the ground” would help ensure that even as the company’s national stature and spending continued to grow, it could retain its overall localized system. These field executives would organize grand openings, birthday clubs and also help initiate a wide range of community programs. Community involvement was extremely important from Kroc’s point of view, but not simply for altruistic purposes. Kroc was an astute businessman who understood that community involvement was a key part of an effective marketing strategy. Contributing to the local neighbourhoods in which McDonald’s restaurants were located would improve public attitudes towards the expanding chain. This tradition of giving back that Kroc initiated so many years ago remains an integral part of the McDonald’s corporate philosophy. From Hurricane Katrina and the Tsunami in South East Asia, to the Florida Hurricane and Camp Mickey D’s in San Antonio, Texas, McDonald’s continues to build its community presence. As the company carries on its expansion process today, it is increasingly embracing new forms of marketing and promotion. From celebrity endorsements to sports alliances, McDonald’s is making strategic moves into the worlds of music, fashion, sports and entertainment. And, while it undoubtedly has a national marketing presence, McDonald’s has not lost sight of Kroc’s original goals of creating predictable but unique restaurants, custom tailored to each individual neighbourhood. “We're not in the hamburger business,” said Kroc. “We're in show business.” Kroc understood that it was all in the message; the success of McDonald’s was going to be based on how the company was perceived by the public. Thus, Kroc spent much time and effort developing an effective marketing plan. First and foremost, Kroc decided to focus on marketing at the local level. It was by thinking big, but acting small that Kroc was able to expand the chain into a global powerhouse. In the eyes of Kroc, each McDonald’s that he helped erect was a local business and also part of a local community. Thus, each franchise had to be marketed and tailored to its unique needs and those of its surroundings. In order to do this effectively, Kroc focused on marketing within the four walls of each unique store. By insisting that his franchise operators lived in the communities where they worked, Kroc was ensuring that they would be better equipped to understand the unique dynamics of their locations. This principle of neighbourhood marketing became one of the keys to the entire system. Much like Kroc had encouraged suggestions from his staff in a bottom-up manner, he also recognized that marketing had to be executed in a bottom-up strategy. Kroc understood that it was in each unique neighbourhood franchise that the retail war would be won or lost. Thus, while each McDonald’s outlet kept the basic standards in terms of “QSC” (quality, service and cleanliness), marketing needs were tailored to each. Kroc devoted a large part of the McDonald’s budget towards hiring regional advertising agencies. He believed having these local representatives who could work “on the ground” would help ensure that even as the company’s national stature and spending continued to grow, it could retain its overall localized system. These field executives would organize grand openings, birthday clubs and also help initiate a wide range of community programs. Community involvement was extremely important from Kroc’s point of view, but not simply for altruistic purposes. Kroc was an astute businessman who understood that community involvement was a key part of an effective marketing strategy. Contributing to the local neighbourhoods in which McDonald’s restaurants were located would improve public attitudes towards the expanding chain. This tradition of giving back that Kroc initiated so many years ago remains an integral part of the McDonald’s corporate philosophy. From Hurricane Katrina and the Tsunami in South East Asia, to the Florida Hurricane and Camp Mickey D’s in San Antonio, Texas, McDonald’s continues to build its community presence. As the company carries on its expansion process today, it is increasingly embracing new forms of marketing and promotion. From celebrity endorsements to sports alliances, McDonald’s is making strategic moves into the worlds of music, fashion, sports and entertainment. And, while it undoubtedly has a national marketing presence, McDonald’s has not lost sight of Kroc’s original goals of creating predictable but unique restaurants, custom tailored to each individual neighbourhood.