Tasty Secrets McDonald’s Can Teach You About Business Success
While McDonald’s wasn’t the first franchise business, it has become the premier example of the business model. With roots that trace back to a Southern California drive-in started by brothers Dick and Mac McDonald, McDonald’s has grown to a network of well over 38,000 locations in more than 120 countries. Today, I’m going to share with you tasty secrets McDonald’s used to reach business success.
In 1954, Ray Kroc discovered a successful restaurant run by two brothers, Maurice “Dick” and Maurice “Mac” McDonald, while he was on a sales call in San Bernardino, California.
By specializing in a limited menu, they were able to focus on quality and quick service. Ray Kroc saw an opportunity to bring McDonald’s across the United States, and this was where their collaboration began. Kroc was able to turn their business to the mass market with overwhelming success after buying the rights to franchise McDonald’s restaurants across the country.
Beyond just Happy Meals, over 65 million people eat at McDonald’s every day and they serve over 100 million burgers daily.
When Ray Kroc became a franchise agent for Richard and Maurice McDonald in 1955, I doubt anyone would have expected the company to become a burger behemoth that has more than 35,000 stores in 119 different countries. Unless you’re standing in one of the most remote regions on the planet, chances are there’s a McDonald’s branch within a few minutes’ drive from you. In fact, one could argue that McDonald’s has created one of the greatest business models to follow.
McDonald’s revolutionized the restaurant industry. It was once a single burger restaurant.
Now it’s chain is worth over $190 Billion and features ninth in the top 10 most valuable brands. McDonald’s enterprise dominates the fast food industry with a brand value of over $155 Billion. The secret of McDonald’s success is a revolutionary system that revolves around logic, persistence, and opportunity. It was introduced into the business by its founders the McDonald brothers.
Here I bring you some tasty secrets and business lessons that you can learn from this incredibly successful brand.
So how did the chain grow from a single restaurant into the expansive corporation it is today? It’s not a question that has a concise answer because McDonald’s is first-class in every segment of its operation. With that in mind, this article focuses on five of the characteristics which stand out when speaking about McDonald’s success.
McDonald's Secret #1: Consistency
Tasty Secrets McDonald Can Teach You About Business Success - McDonald's Secret #1: Consistency
It doesn’t matter if you’re visiting a McDonald’s in California or Connecticut, America or Australia—you’re going to have a similar experience wherever you are. No matter where you are in the world, you can be certain that when you walk into a McDonald’s you’re going to have a familiar experience in terms of the menu, food wrapping and design of the building. In 1961 Ray Kroc launched the Hamburger University as a training school that emphasizes consistent restaurant operations procedures, service, quality and cleanliness.
Eating at McDonald’s, customers know what to expect and can rely on that knowledge when making a decision on where to eat.
The early efforts towards process repetition and efficiency not only set the basis for McDonald’s success from the standpoint of customers’ expectations, but also help McDonald’s stay on top in a culture where producing at a quick pace is commonly expected. Consistency means having clear rules that cannot be broken and that everyone follows. It’s simple, but consistency in any business is critical. Consistency creates exceptional customer service, drives efficiency and is central to every aspect of a successful business from internal and external communication to high quality output, agile delivery, plus much, much more. Like McDonalds, your working system must be efficient and deliver a consistently positive customer experience, to be profitable and scalable.
What keeps customers coming back to McDonald’s? The secret lies in their recipe for consistently generating the same food quality and the same selling success, every single time.
When Kroc first approached the McDonald’s with his franchising idea, the very first test branch he put up was his own. Kroc took the brothers’ assembly-line food production style, and extended the idea of systematizing all the way to building a franchise operation—much like a design template that had to be exactly the same as that of the original McDonald’s restaurant. Everything had to be defined and done in the same manner. The same food suppliers, the same food preparation procedures, and the same kitchen layout system for griddles and frying vats, had to be in place. The same time-and-motion-saving mechanisms from taking orders and cooking to packaging and handing the food over to the customer, all had to be the same.
When you read the history of McDonalds, you notice that the original owners focused a lot of time and effort on streamlining their cooking process.
Their original menu contained hotdogs, hamburgers, cheeseburgers, potato chips, soft drinks, coffee, and apple pie. The offerings were diverse but the brothers still wanted to streamline and simplify the menu. They removed hot dogs, potato chips and pie and replaced them with French fries and milkshakes. Fries and shakes were easier to make and consume, which made them very popular. In essence, they made a franchise-worthy menu even if it wasn’t their original intension to franchise their restaurant. The standardized system they established worked in their favor and contributed to their success.
Because of the rigid consistency that exists in every location, people know exactly what to expect when they pull up to the drive-thru window, which is one of the most important factors in maintaining a successful business.
Through maintaining consistency with what matters most across each and every franchise location, McDonald’s has managed to build a nearly impenetrable foundation that won’t be cracking anytime soon. Consistency in product and service delivery generates trust and demonstrates professionalism. For example, if we sometimes deliver late or if quality is variable then those inconsistencies will affect our reputation, customer perception and retention. Be consistent in everything.
📚 Additional reading
If you want to truly make a difference in the world with your business and its services and products, answer this honestly: are you consistent in everything you do?
McDonald's Secret #2: Spot & Grow Talent
Tasty Secrets McDonald Can Teach You About Business Success - McDonald's Secret #2: Spot & Grow Talent
Did you know that 40 percent of McDonald’s executives actually began as hourly employees? That’s because the company knows how to spot talent and tap into the “hidden talents” of employees. McDonald’s then rewards these employees by allowing them to work their way-up. It not only reduces turnover, but also builds a company that is full of employees who know the business inside and out and are extremely loyal. More importantly, however, this creates a company that is committed to one shared vision.
Millions of young adults got their first job with McDonald’s.
While this helps to keep wage bills down, McDonald’s also provides industry-leading, on-the-job training for young workers. Last year, the company ranked eighth on a list of the ’25 Best Multinational Companies to Work for in the World’. Most senior McDonald’s managers started out serving on the shop floor and worked their way up to the boardroom. Though a job in the kitchen at McDonald’s doesn’t seem very glamorous, a lot of the people who started at McDonald’s have ended up going on to great careers, citing McDonald’s as the place where they learned the fundamental etiquette that comes with entering the workforce.
McDonald’s also allows leadership roles in their restaurants to give each employee the opportunity to succeed.
A former McDonald’s store manager — who has since gone on to work under former president George Bush — recalled that, during his time at the restaurant chain, he would pay close attention to how each employee worked at their position, and would oftentimes move them to one area or another if it meant they would succeed more in a certain spot. The willingness McDonald’s shows for its personnel to succeed are part of what makes it such a good company to start working for — and part of the reason why they’ve maintained a track record as being a great first job for teenagers and young adults.
The career ladder is very attainable for everyone who wishes it in McDonalds.
Approximately 20% of the top management staff passed through the very beginning position in the kitchen. Everything in the hiring and promotion people in McDonalds depends on ability and hardworking skills of a particular person. For a new coming employee there is a set of stages he/she should take in order to have a desired position within the company. People taking high positions within the company and willing to know all internal processes need to pass through them by themselves. They should clearly understand all the details their subordinates report to them so that they do not only rely on their results, but can estimate what has been made incorrectly or in improper way. McDonalds exactly gives such an opportunity for people to start from the early steps and grow till the desired point of destination.
By not developing talent appropriately, you run the risk of losing the employee, along with their skills, knowledge and abilities.
You also risk losing the potential value they could have brought to the table at each stage of their growth through the business. You can see the potential, so tap into it early, rather than when it’s too late. Key talents are hugely self-motivated, and by developing them and investing in them early, you can tap into that. They will feel engaged, supported and visible; mitigating any risk of them leaving the organization. The right time to begin the next step of their journey may be just around the corner — be ready.
📚 Additional reading
As any great people manager will tell you, one of the most important aspects of the job is to effectively spot talent within your team and to support their development.
McDonald's Secret #3: Efficiency
Tasty Secrets McDonald Can Teach You About Business Success - McDonald's Secret #3: Efficiency
Do you understand your numbers? Can you identify what directly influences the revenue? Do you know where your investment is best spent? In 1948 the McDonald brothers debuted a new kitchen assembly line they called the “Speedee Service System.” They also measured revenue from every menu item and discovered the numbers influencing and boosting profits. They discovered that 87% of total sales came from hamburgers, fries, and pop. So they focused on what was selling/driving revenue. This was a bold move but one that paid dividends.
The ability of McDonald’s to have both the fastest and most cost efficient procedures gave them a persistent advantage over rival fast-food chains.
In the 1960s, they realized the need for more sophisticated mechanical equipment and electronic aids to help speed up the food preparation process and make their products more uniform. The McDonald’s Research and Development Laboratory was established to address these issues. Technicians and engineers worked on everything from a dispenser that gave the exact right amount of ketchup every time, to the Fatilyzer—a testing device that allowed operators to analyze meat shipments as they were delivered. With regard to continually lowering costs and improving operations, Kroc was relentless.
Spotting inefficiencies, identifying opportunities and factoring in human frailty all need to be a priority.
That sometimes means breaking the formula to improve it. And there are no shortcuts! There is, however, one universal prerequisite to business growth, which McDonalds identified, and that’s automation. The limitations of human cognition, the biases and heuristics that lead to poor decision-making, can all be overcome by automation. The original intention of the McDonald brothers was to create an establishment where people would buy their meals and leave. The entire restaurant was designed with that in mind so in the early days, heat would be turned down to prevent people from lingering; angled seating was installed that placed them close to the food, and the placement of the chairs discouraged socialization. Because of this, more customers walked in and out of the doors, bringing in more business as well. Naturally, McDonald’s was more profitable than other restaurants because it simply got more business.
Implementing automation anywhere your business tasks include repetitive, high-volume functions.
Automation will take a huge load off of tedious and repetitive tasks that you perform constantly. You can apply automation to bookkeeping, invoicing, payroll, logistics, social accounts, e-mail lists, and so much more. All of these functions can be entirely automated or partly automated and under the guidance of capable supervision. Automation can additionally apply to everything from packaging and shipping to internet security and marketing efforts. Start implementing automation and you will see a drastic increase in time available to spend on more important things.
If you don’t understand the value of optimizing your business processes and you’re happy with business as usual, you’re going to fall behind your competitors.
Not only do business processes enable you to pinpoint inefficiencies before they become crises, but streamlined processes also enable you to produce consistent results and scale up your business operations. Every business is made up of a series of processes and daily tasks that ideally lead to value for the customer. The more efficiently these processes run, the more likely the effort will be profitable. With replicable processes in place, you’ll experience more consistent outcomes as all staff are completing workflows the same way. Optimizing business processes can help you avoid mistakes and delays, improving cost-effectiveness, productivity, supplier relationships, and customer satisfaction.
📚 Additional reading
Most organizations have one thing in common: they’re interested in improving their results. One powerful way to achieve this is by increasing workplace efficiency. Efficiency in the workplace means when employees carry out the correct tasks in the right way, with the least waste of time and effort.
McDonald's Secret #4: The brand Is The Business
Tasty Secrets McDonald Can Teach You About Business Success - McDonald's Secret #4: The brand Is The Business
McDonald’s has done an excellent job at establishing a brand presence. But beyond the “Golden Arches“, McDonald’s has created an emotional experience that takes us back to our childhood. Even though we realize that there are better products out there, most of us have a bond with McDonald’s that is almost unbreakable — which is why you hear so many people proclaim their love for McDonald’s fries. The fries have a look and taste that you will find exactly the same no matter where you are in the world. You can count on it.
A strong brand presence helps your business build credibility and memories with your customers that will convert them into lifelong advocates.
When Ray Kroc was asked why he didn’t just steal the McDonald’s brothers idea and set up his own restaurant using their secret formula, he said it wasn’t all about the way the food was prepared and delivered: the name mattered. Effective branding is also about powerful, well-structured storytelling. People are hardwired to transit information through stories. They engage our emotions and impact our memory in a way that statistical information can’t. Storytelling enables the marketer to develop a deeper connection and unity with audiences. Above all, stories give a brand its soul and this allows brands to bring people together through common values and a shared sense of belonging.
McDonalds paid keen attention to establishing a solid brand.
The first official store looked eye-catching and interesting. All the surfaces were shiny and clean, thanks to the ceramic red and while tiles. The counters were bright sheet metal and the establishment has glass with pulsing white, yellow, red, and green neon lights. The cherry on top was the famous Golden Arches that over the years have become synonymous with the McDonalds brand. Despite the fact that there are some 35,000 restaurants worldwide, no matter which McDonald’s you enter, you can be guaranteed a consistent experience (aside from the language differences). From the wrapper around your burger to the spoon used in McFlurry’s, everything about McDonald’s is completely consistent.
A good brand communicates a clear story. Companies with clear stories are valued higher by customers and investors.
Companies with clear stories have employees who understand what they do and why they do it. Companies with clear stories are able to move people’s emotions, which is key to moving sales. People want to work for companies who do great things and great things are only great if they’re understood clearly and simply. Put all that together and you have the potential to drive real money into your company. After all, nobody buys what they don’t understand. Brands are essentially patterns of familiarity, meaning, fondness, and reassurance that exist in the minds of people.
A good brand will have no trouble drumming up referral business.
Strong branding generally means there is a positive impression of the company amongst consumers, and they are likely to do business with you because of the familiarity and assumed dependability of using a name they can trust. Once a brand has been well-established, word of mouth will be the company’s best and most effective advertising technique. Just like with the reputation of a person, the reputation of a brand precedes it. Once a certain perception of the brand has been established in the market, an uncontrollable chain of propagation begins. If the reputation is positive, potential new customers may come into contact with the brand, having an already-positive association in their mind that makes them more likely to make a purchase from this brand than from the competition.
📚 Additional reading
You can’t effectively approach how to create a brand without being consistent and maintaining that consistency as you extend your brand to every part of your business. The best way to build a brand starts with establishing what that consistency is going to look like and the feeling you want it to evoke.
McDonald's Secret #5: Look Toward the Future
Tasty Secrets McDonald Can Teach You About Business Success - McDonald's Secret #5: Look Toward the Future
While maintaining consistency, McDonald’s is able to keep customers on their toes with constant product innovations. Franchisees were largely behind these innovations, through observations of customer trends and behaviors, and this is what led to the birth of many of McDonald’s now-iconic menu items. From the Happy Meal to Big Mac and even McFlurry, these were all developed through franchisees to increase McDonald’s range of product offerings.
At first, the characteristics of consistency and innovation seem to contradict one another.
But in fact, they work together to allow for McDonald’s continued growth. Staying consistent with the core components of your business doesn’t mean the products you sell, or even the way you deliver them, have to stay the same. With a solid foundation and established processes, you can tweak your product without causing disruptions to better serve your customers. Innovation stemming from responsiveness to customers and franchisees has played a big role in McDonald’s fending off stagnation over the years. Consumer tastes change over time and a company needs to respond to these changes. Innovation injects dynamism and allows the firm to exploit markets previously overlooked or ignored. The introduction of the Egg McMuffin in 1971, for example, enabled McDonald’s to cater initially for the breakfast trade.
With technology constantly evolving, it can be hard for some companies to keep up, which may lead to their methods of service being outdated and lacking the efficiency that comes with embracing modern solutions.
However, McDonald’s has proven themselves to be a business that enjoys taking on tech, as they hold equity stakes in several technology companies. They’ve used these acquisitions to their advantage, incorporating futuristic inventions such as AI into their drive-thrus and automated order kiosks. You’ve probably noticed in recent years that McDonald’s has been adding touch-screen kiosks inside their outlets for quick and easy ordering – similar to the self-checkouts you’d see in Target or Walmart. This is a prime example of how McDonald’s is embracing change not only on the corporate level, but in ways that even the most casual customer will be able to notice.
By tapping on technological advancements, you too will be able to improve your business operations, reduce cost and automate processes, which makes it more convenient for both your staff and customers.
Apart from hiring, McDonald’s largest acquisition is that of tech personalization company Dynamic Yield to create a customized drive-thru menu that can be tailored to things like the current weather, restaurant traffic, and trending items. Upon the start of the ordering process, the display also has the ability to recommend additional items based on your current selection. On a global scale, McDonald’s has also begun incorporating their first voice-initiated application process (Apply thru) in certain countries.
Digital transformation is an ongoing trend across all industries, and it is no surprise that McDonald’s is also embarking on this journey.
A few years back, McDonald’s invested $6 billion in their ‘Experience of the Future’ redesign, in hopes of modernizing most of their U.S. stores by 2020. Some of these improvements include the revamping of self-order kiosks, improving the readability of menu boards, and creating more parking spots for curbside pickups. They are also striving towards sustainability, by announcing plans to reduce greenhouse gas emissions by 35% by 2030, alongside a 31% reduction in emissions intensity. The McCafe Sustainable Coffee journey is also another initiative created to increase awareness of sustainable sourcing.
📚 Additional reading
If you’re looking into how to venture into innovation, observing trends and consumer behaviors can be an easy first step! Consider food trends that are increasingly popular, and find ways to assimilate them into your products, and they are bound to attract curious consumers!
In the minds of customers, creating a uniform and consistent product is one of the most important aspects of McDonald’s success. No matter where you go, once you see the ubiquitous “golden arches” you know exactly what you’re going to get. They’re not known for high quality food, service, or atmosphere—but as evident from the enormous amount of customers they serve, McDonald’s is the clear leader in cost, speed and consistency.
McDonald’s isn’t everyone’s restaurant of choice — although the company continues to work hard to change that — but it’s hard to argue with the level of success it has achieved.
By building a truly valuable brand and making sure the company delivers on consumer expectations, McDonald’s has risen to the top of its industry, and continues to strive for greater success. There are no shortcuts to success. There is only the logic of the way your processes are structured, the persistence to sustain and improve those processes and the ability to seize opportunities when they arise.
Follow this simple formula and you will dramatically increase the probability that you will succeed.
Many businesses have lost opportunities from poor processes and a deficient infrastructure. It’s a common problem that can mean the difference between a profitable, scaling business and a stagnant business; in fact, businesses lose as much as 20 to 30 percent of their revenue each year due to inefficiencies.
Customers know what they want. The main function of a business is to discover these wants and cater to them.
When customers are telling you what their desires are, it’s an invitation for growth and deepening bonds for the future. In addition, having the foundation of consistent processes allows businesses the flexibility to innovate and adapt to consumers’ concerns, and improve the brand with minimal disruption.
The moral? Work hard. Keep your eyes open. Make your own luck.
Very few companies will ever come near the magnitude of operation McDonald’s has achieved. But the lessons the corporation showcases are on display to be learned by entrepreneurs striving to make their company the best it can be. Do you think McDonald’s is going to thrive even better in the near future? Feel free to share your thoughts in the comments below!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.