Learning Lessons from McDonald's
by Luke Setzer
Starting and running a successful business requires an enormous depth and breadth of skill across a wide range of disciplines. These include research, product development, marketing, accounting, capitalization, etc. Ayn Rand noted that the businessman represents the New Intellectual who counters the long tradition of the Attila and the Witch Doctor, i.e. the mystic of muscle and the mystic of spirit.
Among the New Intellectuals of the business world, Ray Kroc stands as an example of the most grandiose, world-dominating possibilities available. If Objectivists want to change the world, they would do well to study his methods at franchising McDonald's across the globe. This especially holds true when considering how best to franchise a global Objectivist club network.
Origins of McDonald's
A Wikipedia article about McDonald's offers a detailed overview of how the mega-franchise began and traces its path to its current position as the largest restaurant chain in the world. Readers of that article should note that the original McDonald brothers, Dick and Mac, did not initially have a grandiose plan for a global market. They started in 1937 with a simple hot dog stand called the Airdome in Arcadia, California. Only later in 1940 did they open a restaurant called McDonald's in a new location.
By 1948, after learning that hamburgers created the most profit, they developed an innovative "fast food" assembly line system for their products. By 1953, they began to franchise the concept and developed their famous brand symbol of the golden arches. In 1954, entrepreneur Ray Kroc negotiated an agreement with the McDonald brothers to start his own franchise chain using the name and systems they established. Over time, Kroc managed to grow his franchise to a substantial number of restaurants. Finally, in 1961, through a cleverly written contract -- and a lack of business savvy on the part of the brothers -- Kroc managed to gain total control of the McDonald's name, chain and systems.
Evolution of McDonald's under Ray Kroc
In the ensuing decades, Ray Kroc and his team of marketing geniuses manage to create an entire mythology around McDonald's populated with memorable characters -- Ronald McDonald, Hamburglar, Grimace and others. They developed tailored sales schemes targeting specific market segments. These included families and children, particular geographic regions of the United States, and eventually other nations. By remaining sensitive to cultural contexts, McDonald's achieved an impressive penetration and domination globally. Its menus in other nations reflect the values and demands of their respective cultures. In all cases, however, the fast food delivery systems remain universal.
McDonald's and the Four Basic Human Needs
All humans need food to live. They also have psychological needs for meaning, bonding and knowledge. In its own ways, McDonald's seeks to fill these needs. By offering tasty food in an enjoyable atmosphere where people can spend time with their families, McDonald's fills physical and emotional needs. For the egoist, arguably, it also fills the spiritual need for meaning since the egoist sees the enjoyment of his own life as his own highest cause. Through its tray liners filled with informative nuggets of knowledge, McDonald's even addresses mental needs as well.
Challenges to McDonald's
The reader should feel no surprise to learn that a massive network of restaurants such as McDonald's has faced challenges from numerous directions, some internal and others external. These have ranged from faulty management decisions to outright envy-driven acts of violence. The Wikipedia article outlines the most notable of these.
Objectivist Clubs and McDonald's
Objectivist clubs have generally remained independent of each other with little interaction. The leader of a local club usually remains isolated. Such a leader garners little in the way of guidance and "lessons learned" from other club leaders in other parts of the world. This approach has the benefit of giving the local club leader complete freedom to exercise his own creativity. It has the detriment of truncating his knowledge and abilities from those of others.
The success of McDonald's has demonstrated a core principle of widespread success: The principle of systematization. McDonald's has performed global market research and development to perfect its systems for profitably marketing its consumer items. Moreover, with respect to Objectivist epistemology, it seeks conceptual common denominators among its thousands of restaurants to achieve economies of scale in those aspects of its business where such commonalities most serve its bottom line.
A global Objectivist club network needs also to have all "franchisees" seek such common denominators aggressively. They need to ask themselves questions such as:
- What common needs do all people have that our club network can fill?
- What literature can we develop and market to the widest range of consumers?
- How can we fulfill our mission of making Objectivism the philosophy of choice among the widest number of people and do so profitably, i.e. without going bankrupt?
- How can we create the most positive possible marketplace image?
- How will we efficaciously handle challenges both internally and externally?
Conclusion
The reader may love or hate the food that McDonald's serves. However, no one can deny that the famous chain serves a wide range of lessons to anyone seeking to create a global system of distribution. Those who seek to spread Objectivism would do well to accept Ray Kroc as a mentor.
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