Everything I Know About Leadership I Learned at McDonald's
Ablang
Paul Facella
Inside Management, Ltd.
In these trying economic times, strong leadership seems elusive. But
even during times such as these, there are principles that you can
adopt to help you become a better leader -- whether it’s in the
office, in your community or at home. There is no better place to
learn about these principles than McDonald’s, one of the most highly
regarded, well-run corporations in the world. Even during this
recession, McDonald’s stood out as one of the few companies to post
gains.
To learn more about the principles that define leadership, Bottom Line/
Personal talked with management consultant Paul Facella, who spent the
first 34 years of his career at McDonald’s, rising from behind-the-
counter cashier to regional vice president. There he developed an
understanding of the company’s culture and the principles of
leadership underlying it.
LEAD BY EXAMPLE
At McDonald’s, I learned that effective leaders model the behavior
that they want to see in others. This started first and foremost with
Ray Kroc, McDonald’s founder.
I saw humility and graciousness the first time I met Ray. He was known
for visiting with regional employees whenever he came to town. Because
I was the highest-ranking staff member in the New York franchise where
I worked, it was decided that I would dine with him. I was a director
of operations at the time, and so this was quite an honor for me. In
the limousine, Ray insisted on taking the small "flip seat," offering
me the most comfortable seat because I was his guest.
Having the head of one of the most successful businesses in the world
put me at ease made a huge impression on me. I have never forgotten
his efforts to make an ordinary employee feel special. I vowed to
adopt this mind-set in my own life.
Even today, I always try to remember the impact I have on others. When
new members join an organization that I belong to, I go out of my way
to interact with and welcome them.
It was not unusual at McDonald’s to see leaders, such as Ray himself,
demonstrate what needed to be done. No task was too humble, even for
the boss.
During a visit to one New Jersey restaurant, Ray picked up cigarette
butts in the parking lot, setting the tone for cleanliness. When
executives were out in the field, they always made a point of pitching
in. If there was a problem, they would jump behind the counter and
help out.
The influence of Ray Kroc and others at McDonald’s has always stayed
with me. Even though I am a senior member and former officer of my
local volunteer fire department, I always try to be the first to pick
up a mop or a broom. When junior fire department members see me doing
this, they invariably pitch in as well.
FOSTER RELATIONSHIPS
Integrity is valued above all else at McDonald’s and permeates the
culture of the company. Everyone is treated as a partner. Some even
say it is like a surrogate family. There was an unprecedented level of
trust between people involved in all aspects of the business. We
called it the "three-legged stool." This meant that the relationship
between the three interdependent partners -- the franchisees, the
suppliers and the corporate staff -- was understood to be vital to the
company’s success.
Making the "three-legged stool" work often required taking gutsy steps
that might have seemed counterintuitive.
Example: There were times when Ray told suppliers to raise their
prices. He figured that for these companies to become long-term
partners, they needed to succeed, and they wouldn’t if he forced them
to accept profits that were too low. This worked. When vendors
increased profits, the result was stronger loyalty to McDonald’s.
Vendors had so much faith in McDonald’s that they actually helped bail
out the company in 1959, when it was in trouble because of a real
estate deal gone bad.
This culture of trust was so strong that important agreements often
were made with a handshake rather than a written contract. Many
suppliers, now second- and third-generation businesses, haven’t had a
formal contract with the company for 50 years.
The high level of trust also reaped rewards for the company. Because
they felt such loyalty, suppliers, franchisees and employees often
suggested some of McDonald’s most successful products and concepts.
Example: Herb Peterson, a franchise owner, was the creator of the Egg
McMuffin in 1973.
RAISE THE BAR
At McDonald’s, the company mantra is "Never be satisfied." We always
were looking to break our records, whether it was increasing the
number of customers or lowering costs.
To raise the bar as high as possible, we used metrics, or
measurements, to determine whether we had reached our goals. We
measured everything from hourly sales to how many bags of potatoes
were used each day. We made goals measurable. This especially helped
team members know what they were working toward and gave them a sense
of ownership. It also encouraged an environment of friendly
competition.
Example: When I was a manager, many cashiers were coming up short each
day, so I put up signs showing just how over or under each cash
register was. Within 24 hours, every person’s total was perfect. No
one wanted to be the lowest performer in the store.
PROVIDE RECOGNITION
At McDonald’s, recognition is everywhere. The company makes it a way
of life, encouraging managers to recognize employees regularly. Ray
knew that there is no better way to inspire people. Even front-line
employees were recognized. You might think of a crew job at McDonald’s
-- working the kitchen -- as menial, but if you worked hard, you were
noticed and rewarded. For many, that meant being promoted and
advancing from crew to operator to the corporate office.
Result: About 42% of the current worldwide leadership at McDonald’s
started out as crew members. Whenever possible, employees at
McDonald’s are recognized in public with fanfare.
Example: To acknowledge a McDonald’s staff attorney who had joined a
national Hispanic organization, the company president addressed the
entire floor of the office to congratulate him and then gave him an
all-expenses-paid week at a corporate retreat. The move also
encouraged other employees to join similar organizations.
At McDonald’s, recognition always is sincere, meaningful and tailored
to the individual -- whether it is a bonus, concert tickets or time
off. When I was an assistant manager, I was out one evening with my
future wife at a restaurant that I could barely afford. I saw the
owner/operator of the franchise where I worked. We waved to each
other. When I was ready to pay the check, I found that he had paid for
our dinner. At times such as these, I felt as if I would do anything
for the company.
Bottom Line/Personal interviewed Paul Facella, president and CEO of
Inside Management, Ltd., a management consulting firm based in
Lynbrook, New York. He is author, with Adina Genn, of Everything I
Know About Business I Learned at McDonald’s: The 7 Leadership
Principles That Drive Break Out Success (McGraw-Hill). www.InsideManagement.com.