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From the Archives: Ray Kroc

Ray Kroc was 52, working as a milkshake mixer salesman, when he came across clients Mac and Dick McDonald’s hamburger restaurant in Bernardino, Calif. Amazed their food assembly line delivered fast service, Kroc convinced them to franchise the company with his help. The next year, Kroc opened his first McDonald’s outside of Chicago. In 1961, Kroc bought the company and built it into what is now the world’s largest fast-food chain, with more than thousand restaurants almost 120 countries. Kroc, who died at 81, was the subject of a SUCCESS cover feature in September 1977 written by his biographer, Robert Anderson. The following is an excerpt.

Kroc. The name rolls energetically off the tongue.

Its Bohemian meaning, I was told by an old cleaning lady, is “step,” as in a fl ight of stairs. Had she known Ray A. Kroc, the multimillionaire founder and senior chairman of McDonald’s Corporation as I had come to know him in the 12 months I spent helping him write his autobiography, she too might have found a delightful aptness in the derivation.

For “step” implies a climber, and that describes Ray A. Kroc precisely.

He will be 75 years old in October. One would think he would be most interested in enjoying the fruits of his labors—relaxing in the Jacuzzi at his splendid ranch near Santa Barbara, Calif., or traveling around the world in the $4.5 million jet he bought a couple of years ago. But that’s not Kroc’s style. He likes the Jacuzzi’s rolling, 100-degree waters, not so much because they are relaxing and feel good on his arthritic joints, but because they stimulate ideas on how to make McDonald’s more efficient or more profitable. His jet is leased to the corporation for business use at $1 per year.

In any case, chronological age is a misleading measure with Kroc. He is the oldest active executive in the corporation, but he is probably its youngest thinker. McDonald’s president Ed Schmitt believes this is because Kroc invariably takes a positive approach.

"The oldest executive in the company, Kroc is probably its youngest thinker."

“Suppose someone comes up with a proposal that McDonald’s should serve turkey sandwiches,” Schmitt says. “Everyone on the board of directors can think of nine good reasons why turkey sandwiches would be a bad thing for us. They would blow the idea out of the water immediately. But Ray would say, ‘Wait a minute; let’s examine what this might do for us. Maybe we could make it work. If not turkey sandwiches, maybe we should try turkey hash.’ He wouldn’t let go of it until all possibilities had been considered.”

Kroc’s enthusiasm is infectious. Perhaps that’s the secret of his sales ability. On a trip I made with him to an operators’ co-op meeting in Michigan he gave a talk about menu items he’d been testing for McDonald’s. One of them was a new dessert, the McSundae, and his boyish delight in relating the texture of the “frozen product” and the richness of the toppings (“the best we can buy”) had the audience unconsciously smacking their lips. I have listened several times to a tape recording I made of that talk, attempting to analyze what it was that made his words so evocative. In fact, there is nothing special in the words themselves. Moreover, his delivery is uneven, broken by dangling phrases. Yet the enthusiasm comes through, and it’s persuasive.

When Kroc first talked to the McDonald brothers in San Bernardino, Calif., in 1954 about opening a series of restaurants similar to theirs, it never occurred to him that he really didn’t need their agreement in order to copy their procedures. Others had done it. But he was too honest to even think of it. The result was that he was able to follow the brothers’ system exactly, using their well-tested production-line techniques. The imitators invariably got parts of the formula wrong and couldn’t make it pay. Had Kroc been less honest his restaurants would have been less successful.

Ray Kroc has been called the Henry Ford of the fast-food industry, and some management theorists like Harvard’s Theodore Levitt believe he has pioneered our society’s successor to the Industrial Revolution—the Service Revolution. If so, history will recall his innovative organizational skills long after the Big Mac has been forgotten and (as Ray would say, God forbid!) the Golden Arches have become museum pieces.

The elements of Ray Kroc’s character that I’ve described here are, in my opinion, the mainsprings of his success. To summarize, they could be given the acronym HOPE. It stands for Honesty, Organizational skill, Positive thinking, and Enthusiasm.

There are many other aspects of this complex, personable, exasperating, and awesomely dynamic man, of course. Some are more charming than others. But of this you can be sure: Where there’s Kroc, there’s HOPE.

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