What we should learn from the golden arches


I watched The Founder last night – the story of how Ray Kroc took McDonalds nationwide and created the phenomenal company that now operates across the world selling burgers.

The film is emotive – showing how Kroc tried to work with the McDonald brothers to grow a fantastic new idea but then, after being frustrated with the way in which they didn’t embrace his vision, was shown that he had been thinking about his business all wrong.

He wasn’t in the hamburger business, he was told. He was in the real estate business.

The way in which Kroc wrested control of McDonalds from the founders was by realising that the value of the business lay in the land under it rather than the burgers that were cooked on the land.

Owning the land gave him control – he could control what was done on his land.

This is the same insight that Steven Levitt and Stephen Dubner explore in Freakonomics. The landholder gets the value – a great brand selling in a great location has to pay more to be sited there – so the landholder gets to charge more.

The other thing that Kroc saw was the brand.

All across America, as he travelled, he saw crosses and flags, crosses and flags.

They signified America – a god fearing, law abiding country – a country for families and wholesomeness and apple pie.

His vision was to see McDonalds as a brand for America – with the golden arches just as iconic as the cross and the flag.

That was the insight that made him – a 52 year old salesman – who was able to see how a brand for a restaurant could convey just as much meaning and signify all that felt good for people at that time in that place.

The film shows other points. Kroc worked harder and longer than anyone else. He had human frailties. He was misunderstood and mocked.

Which goes back to the old saying – first they ignore you, then they laugh at you, then they fear you and then you win.

Kroc is shown listening to motivational tapes – the kind that we still can get and listen to today that extol the value of persistence.

Talent is not enough. Genius is not enough.

Persistence is what matters – when the going gets tough the tough get going and all that kind of guff.

At the end its all still complex.

Kroc built an empire – and in the film he’s pictured as someone who wanted to win at all costs, someone who wanted to crush competitors and have it all.

But the point is that he saw something that no one else did in the same way then.

He saw just how much people yearn for meaning – the golden arches mean something – a place of safety and sanctuary for families.

And that’s why they just keep coming.

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