Back in 1930 Dick and Maurice moved across the USA to California in search of the American dream. Straight out of High School they made their way towards Hollywood and eventually secured themselves jobs in a movie studio. The entrepreneurial spirit flowed and shortly they decided to set up their own theatre just 5 miles outside of Hollywood.
For four years Dick and Maurice worked hard but despite their spirit they struggled to pay the rent on the premises. Not to be beaten they started to look for better business opportunities. 3 years later in 1937 they started a small drive through restaurant. It was a hit and took advantage of the market trend for Americans and the freedom of their cars. At the time it was novel for their customers to sit in the car and the food was brought by carhop's straight to the customer.
By 1940 they moved their operation to a boom town and restructured their menu. Their sales exploded and saw turnover hit over $200,000 around $3 million today. Not Bad! 8 years later Dick and Maurice revamped their operation to reflect the times and removed the carhops, serving walk in customers only. They streamlined their menu and concentrated on selling hamburgers. They focused on delivering their food in 30 seconds or less turning their kitchen's into 'assembly plants'. By 1950 they had almost doubled their turnover to $350,000 ($2.7 million) and they split around $100,000 ($800,000) in profits, placing the brothers in the financial elite in the town.
If you were to look out their restaurant back in the 50's you would find a small neon sign in the window that simply said "McDonald's Restaurant" And the rest as they say is history! Or is it?
This is the thing, McDonald's Restaurant was successful certainly the brothers had created and were famed for creating a system for food delivery and they were sought for their expertise in those areas. Realising they could Franchise the McDonald's System and benefit without actually opening more restaurants themselves the brothers started their franchising efforts back in 1952 Result:-- Failure!!!! The McDonald brothers never really went any further!.
Now they were in the financial elite! They were successful owners and operators, efficient managers but what they lacked was effective leadership! Their thought process's secured their position they had reached their leadership ceiling.
In 1954 a gentleman called Ray Kroc, a milk shake machine salesman visited the McDonald brothers to see what all the fuss was about. His interest was peaked by the brothers request for a machine that could deliver 10 milk shakes at once. He immediately saw the potential and struck a deal with the brothers, this was 1955 and he formed a new company called McDonald's Systems Inc later called McDonald's Corporation. He bought a franchise and used it as a tool to sell other franchise's from.
Kroc immediately assembled a team of razor sharp people around him. The very best he could find and as his organisation grew they in turn attracted others with leadership skill. Despite being in his fifties Kroc went without for a number of years including taking no salary for 8 years. He personally borrowed money and invested everything to hire key leaders for his organisation. Did it pay off?
In 1961 Kroc paid the brothers $2.7 Million ( $18.5 Million Today ) for the exclusive rights to McDonald's and proceeded to build a Global Entity! Despite the brothers best efforts their vision had succeeded in selling only 15 franchises of which only 10 opened actual restaurants. Between 1955 and 1959 Kroc opened 100. In the next four years he opened 500, and today there are more than 31,000 stores worldwide!
The difference between Kroc and the McDonald brothers was leadership, Kroc understood that leadership was directly proportional to effectiveness. The McDonald brothers effectively capped there progress by being ineffective as leaders.
Today leadership is more important than ever, when a football team plays badly, when a company is in trouble, when economies go bad we look to replace the manager, the boss and ultimately the leader of the country!
Talented effective leaders will only go as far as their leadership and that is why leaders will read all the books of other great leaders, that is why leaders will fly all over the world to be in the company of other's who have identified themselves as such. Information and vision is a pre requisite to great success today more than at any other time in history.
Mark Taylor - Effective Leadership