Behind the Golden Arches

There is often a great mystique surrounding success. We want to peek behind the façade, get the inside scoop. I have spent 23 years of my professional career in senior positions with the McDonald’s corporation – one of the greatest, and most polarising brands in the world. I have dealt with currency devaluations, coups and natural disasters all in a day’s work, and sometimes in countries as diverse as Saudi Arabia, Tahiti and American Samoa. As my time with the Golden Arches comes to a close I have come to realise that the greatest successes can be attributed to the simplest of secrets.

Regardless of where I was working in the world, the question I was most often asked about McDonald’s was: “How can McDonald’s replicate the same experience in Hong Kong, Hungary and Hanover?” McDonald’s is often referred to as the most successful small business in the world. It started in California in 1940 when Dick and Mac McDonald opened McDonald’s Bar-B-Que restaurant. But it wasn’t until 1954 when a salesman named Ray Kroc visited the store, that everything really changed.

Kroc had a compelling vision – to create a franchise chain of McDonald stores all over America. The first of the distinctive restaurants, featuring the strong red and now famous bright yellow “golden” arches was opened in Phoenix with daily sales of $366.12. By 1965 there would be more than 700 identical restaurants throughout the United States. At one stage McDonald’s was opening a restaurant somewhere in the world every four hours.

Consistency is king!

As at February this year there are more than 32,500 McDonald’s restaurants in 117 countries. Each McDonald’s restaurant has, on average a, team of 60 people. Times that by 32,500 restaurants and you have almost 2 million employees tasked with delivering a consistent product day in, day out.

There is a famous saying “the devil is in the detail” and in my opinion, the relentless focus on a consistent delivery of quality, service, cleanliness and value (QSC&V) is the defining element to McDonald’s success. From the boardroom to the stockroom QSC&V are the values that drive every decision and every interaction with customers. And consistency is the glue that holds it all together.

If Consistency is king at McDonald’s, then Action surely is queen. I have always loved Nike’s famous tag line ‘Just Do It’ because it is very similar to the sentiment you would feel in any McDonald’s restaurant or office anywhere in the world. If McDonald’s needed a tag line to sum up its philosophy it could be borrowed from the famous Elvis Presley song

A little less conversation (a little more action). Everyone, from the managing director to the newest recruit has a single-minded focus on service delivery, not service theory!

There is a common belief that owning a McDonald’s restaurant is a license to print money, and the appeal of the Golden Arches will translate to every corner of the globe, but even Ronald McDonald has had a few near misses.

Not all growth is good

For a good part of the last decade I was responsible for opening new territories for McDonald’s in the South Pacific. A feasibility study indicated a 70 percent positive result for opening the McDonald’s brand in Papua New Guinea. This looked good on paper but I had some reservations about the stability of the local economy and the dependency we would have on the expat community to fuel sales. Although we were hungry to expand, the decision was made not to proceed.

This is an important lesson for all business owners. Despite the modern day obsession with quick expansion, the desire for growth can be your undoing. I have found most aspiring and seasoned entrepreneurs are passionate by nature, and this passion is amplified when it comes to their product or service. Passion is a wonderful quality as it helps ignite and propel your dreams and desires, but if left untempered, and not cross-checked by reason, can lead you to make decisions that could cost you a fortune.

DIY feasibility studies

If you are thinking of expanding your brand into a new territory you might like to consider some simple and practical feasibility tests before diving in.

I always prefer the grassroots approach wherever possible. Literally walking the streets, counting the passing cars at critical intersections, monitoring the busiest shopping districts, just observing everything that might be a clue. If the streets are busy, it’s important to know why. Is your competition near? How good is the competition?

I did this in the Pacific region and it paid off. I literally counted the cars that would go through the busiest intersection in a 15-minute block. I ate in the local cafes and watched the local people, studied the menu and the pricing.

I invented my own easy index model to compare prices from region to region. I would buy bread, milk, flour, butter, eggs and a couple of canned drinks. I would then buy the same items in Sydney and other cities to get an idea of the local economy and monetary value. It might sound simple, but simplicity in the early stages fans out to efficiency in the later stages of business growth.

Once you have considered the financial feasibility of expanding into a new market or territory, it’s also worth conducting a personal feasibility audit. Ask yourself, “Do I have the skills necessary to take my business to the next level?” and “Is my heart really in it?”. The skills and talents required to birth a brand are totally different to those needed to successfully expand your brand. It will be much harder to be passionate about something that doesn’t use your natural skills and abilities.

Lost in translation

In the modern business world communication, both on and offline, has become incredibly complex. Because I have worked in many different cultures I have had the opportunity to witness firsthand how communication really can become lost in translation.

Here’s a true story. When a non-standard order is taken at McDonald’s, say for example, a Big Mac with no cheese, this is called a ‘grill order’. On the opening day in Samoa it was hot and really busy. All of the managers and crew were busy serving the throngs of customers waiting patiently for their first Big Mac when I noticed one customer who was waiting longer than expected. It turned out he was waiting for a ‘grill order’. I instructed the crew to “Get the grill out – I want the grill out now”, or words to that effect.

After a few minutes I noticed that everything was slowing down. Like really slow. So I went into the kitchen and found four chefs trying to get the grill out. As in the huge apparatus for cooking the food! There were four strong Samoan guys about to pull the grill up from the floor and out of the wall. I screamed, “Stop! What are you doing?” They looked at me in disbelief, “We are getting the grill out just like you asked!”

Humans are very good at adding two and two and getting seven. So regardless of whether you are expanding into an exotic new country, or have more local ambitions, try to weave the language of simplicity into all of your business dealings.

­–Merrill Pereyra is the author of Expand Your Brand – How to Supersize Any Brand, Anywhere in the World

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