by Jason Harris, Head of Clients at Salt Flats
Recently I saw the new Ray Kroc biopic The Founder. The film was great.
Acting was solid by Michael Keaton, and the storytelling is directionally accurate as to how Ray Kroc, a then 52-year-old milkshake equipment salesman and longstanding “idea man,” came across the McDonald Brothers and took their hamburger concept global.
What underlies the story—and Kroc’s true brilliance as what we would call a “technology scout” today—is all the innovation that McDonalds brought to the world.
The movie starts in 1954, when a despondent Ray Kroc, who struggles to get restaurant owners to see the value in purchasing even one multi-milkshake mixer, gets an urgent order for eight multi-mixers from the McDonald’s burger restaurant in San Bernardino, CA.
Baffled as to why one small restaurant would need so many mixers, the salesman hops into his car and drives 2,000 miles to discover what he hopes will be the secret to increased mixer sales.
When Kroc arrives at the burger shop, he’s amazed as the number of people lined up at the counter and the speed with which the line moves.
What Kroc sees is a remarkable innovation in how restaurants serve food that leads him to look past the mixers and pursue the expansion of an incredible business model: An operating platform that applied assembly line mechanics to make 15-cent hamburgers, 10-cent fries, and 20-cent shakes.
There is a brilliant scene in the movie, based on a true story, of the McDonald Brothers using a tennis court to test the layout of the kitchen equipment and service model. It is portrayed in the movie as “rapid prototyping,” where they test various models over and over until they get it right.
Ultimately, the application of Henry T. Ford’s auto assembly line theory to standardize food service creates the Speedee Service Model, which initially caught Ray’s eye … and ultimately transformed how we eat food.
Add in macro factors of mobility, suburbia, incentivized local owner operators and terrific branding, and McDonalds was off and growing. And on the corporate side, the insight to own and leverage the real estate by choosing locations and constructing the restaurants for the franchisees, became the economic innovation engine that allowed the entire enterprise to prosper.Charles Duhigg, the author of Smarter, Faster, Better states in his book that innovation becomes more likely when old ideas are mixed in new ways. He calls those that do it well, “Innovation Brokers.”
What Kroc and his leaders did better than anyone was to take existing information, answers, and resources, and apply them as solutions to new problems. The innovation brokerage at McDonalds has a long history:
- When families needed a place to eat comfortably, the dining room was introduced
- When a military man couldn’t enter the restaurant because he was dressed in uniform which was a no-no in those days, a hole was broken into the side of the kitchen and the first”drive thru” was born
- When franchisees created new menu items to compete in their local markets, the most popular menu items were born: The Big Mac, Egg McMuffin and Filet-O-Fish
- When a marketing agency bundled and advertised a children’s meal plus a toy, the Happy Meal was born
- And thousands of other innovations, large and small, have influenced how we consume food, many of which were behind the scenes in areas such as supply chain, food safety, real estate, finance, franchising, and marketing
McDonald’s, like many innovators, wasn’t always the first to an idea, yet their ability to scout an idea, rapidly test in market, and then scale across their established system became THE brand differentiator.
Underlying all of this was the fundamental belief of freedom within a framework, a mantra that is as relevant in today’s fast moving, networked society as ever.