by Cooper, Doug
With McDonald’s being such a behemoth, no amount of charity or community service on their part could change the public’s perception. Any good they did, they should because they have so much, and what they did do still probably wasn’t enough. Any favorable situation they had over another, regardless of how legal or just, was simply another example of their greed and abuse of power. Max Doler Industries, on the other hand, was relatively unknown. He could portray himself as the scrappy upstart, a company just trying to get by and help the community along the way. The beauty of his plan was that once McDonald’s saw his face card ace and the threat of negative publicity was real, much like the down card under an ace in a potential blackjack hand, it didn’t matter what the card actually was; it only counted that McDonald’s believed it was a strong enough card to beat them if he played it.
Max developed an elaborate strategy and communication plan to change the image of his company from the widely successful international seller of the Lapkin, Max Doler Industries, to the community-focused Max Doler Investing. When he first launched the company, he had used his image and personality to market and sell the Lapkin, but over time, after spending several hundred thousand on a high-dollar consulting firm to create a new marketing and branding strategy, he had distanced himself from the company image. With the new more innocuous MDI brand, he was behind the scenes rather than leading the charge. The consulting firm suggested by putting the products first, they would set the company up for more long-term success as he phased out of the business over time. Their contention was that if he was MDI and he pulled out of the business to focus on other interests, there would be nothing remaining. But Max was learning that people didn’t care just about products, they cared about individuals, and if he didn’t give them a reason to care, there would be no long term.
The first major action after the name change and the marketing and advertising campaign necessary to promote the change was the relocation of the Oasis to the Western. And it wasn’t so much the physical move that was important, it was the press release that was drafted well before the move for Max to take to his meeting with McDonald’s.
In the meeting, Max acknowledged upfront his failure to produce only 3.5 of the 4.5 million units, citing labor issues. It was another move he had learned early in his life: point out your own failures first and take away the opponent’s ammunition. With the problem stated and out of the way, he transitioned to the solution by sharing the projections of how the deficit would be made up with an additional 333 thousand every month in addition to the million already promised.
The McDonald’s team consisted of Jesse Cash, their chief brand and strategy officer, and Vicky Case, senior VP of product development, and several underlings whose sole purpose was to watch and learn. They all listened attentively to Max’s presentation. Max could see restrained anxiousness in their eyes; they were just waiting for a chance to pounce. What they didn’t realize was that Max had stacked the deck. He already knew their cards and the ones coming off the top.
After Max had given them the bait, he paused his delivery. He was by no means done talking yet. He was just giving them the opportunity to make their first anticipated play. Vicky jumped at the chance to finally speak. “Well Max, as usual, that’s certainly an impressive presentation. It’s really unfortunate that you weren’t able to meet the quota and deadline as agreed. We know how difficult staffing challenges can be. But the bottom line is that you didn’t honor your side of the contract, and if we were willing to renegotiate—and I’m not saying we are, but if we did—why should we believe you can produce one-point-three million in a month when you couldn’t do a million before?”
“I’m glad you asked that, Vicky,” Max said, ready to make his next move. “Definitely a valid question and one we put a lot of thought into.” Max flipped to the next slide, titled Recovery Plan. “One of the exciting moves we have planned to help shore up our labor issues and elevate the awareness of what we’re doing in the community is to relocate an existing homeless mission to an unused portion of our facility. We believe the combination of the mission guests who are ready to re-enter the workforce, plus the informal and formal publicity we’ll get to attract new employees, will enable us to easily meet our employment needs and run all three lines for three shifts to meet our elevated production goals.” He nodded to Amanda, who passed out copies of the new proposed facility and a draft of the press release. “We haven’t announced this to the public yet, and before we do, we want to get your input.”
Since branding was Jesse’s main focus, he immediately read the press release. Vicky, still in attack mode and ready to turn Max’s failure to their advantage, just glanced at the drawing and ignored the press release. She said, “While what you’re proposing is a great and noble gesture, we’re losing focus on the core issue, which is that you have failed to deliver as promised. We had a rollout plan based on 4.5 million units. If we’re under that, we’ll have to rework our plans, risking successful delivery to our stores. All this additional work and risk is going to cost us. I’m afraid the only way we could even consider renegotiating is at a lower price per unit. I’ll have to discuss with the team and get back to you, but I’m thinking it will be somewhere around ten cents cheaper, at $1.40 per unit.”
When preparing for the meeting, Max had run three scenarios. He thought McDonald’s might go for as much as fifteen cents or as few as five, with the ten as the middle ground. That reduction meant for the 7.5 million units to be produced over the full term of the contract, their revenue would drop from $11.25 million to $10.5 million, approximately 7 percent. Sacrificing $750,000 to make over $10 million wasn’t unreasonable. Max knew that, and Vicky certainly did too. The problem for Max was that the margins were already slim, and he knew that it wasn’t just about the 7.5 million units. It was also about all the ones potentially after. If he set the price now at $1.40, that would be the starting point for all future negotiations. It wasn’t just about what he would lose on this deal, but on all future ones. Once the price had been lowered, it would be an uphill battle to increase it going forward. The estimate to update the facility, relocate the Oasis, and subsidize the operation was only $225,000, much cheaper than reducing the price per unit, and with the additional labor and publicity associated with the Oasis relocation, they at least had a chance to meet the increased production numbers.
Max listened to Vicky intently, although there was nothing unexpected in her words. He was really just waiting for Jesse to finish reading the press release. Because Max’s leverage was based on how the McDonald’s brand would be perceived, he knew it would be Jesse, not Vicky, making the decision. Once Jesse looked up from the press release, Max interjected. “While I appreciate your offer to keep the deal by reducing the price per unit, I think we have to look past the dollars and cents. You can see in the draft of the press release that we give our partnership with McDonald’s recognition as a driving influence for why we are able and want to relocate the mission. With all the positive work you do around the world, you are a shining beacon to smaller companies like us, inspiring us to do more and be more in our communities. Our margins on the Lapkin are already extremely thin. If we were to cut them further, we wouldn’t be able to make this move and help those in need of help. While I understand you will incur additional costs in revising and adjusting the rollout schedule, won’t you make that up in the positive press you’ll get supporting us in this plan?” Max was careful not to mention the negative publicity they might get if they didn’t. He didn’t want his pitch to come across like an ultimatum. If they felt backed into a corner, they would fight without regard to cost or collateral damage, if for no other reason than just to prove they were in control. Max said, “We’re not asking for any additional money than what we previously agreed to, just redistributing the volume over the time period.”
At that point there was no was no reason to flip over rest of the cards and see who actually had the best hand. Max had
already won. Vicky didn’t want to admit it yet, because she wanted to go back to her boss with the $750,000 profit. Jesse was more than happy to back away from the table with exactly what they started with, plus the additional publicity for the brand. He leaned over and whispered to Vicky. They went back and forth a few times, then sat back in their chairs.
Jesse said, “At McDonald’s we believe in being active in our communities and encouraging our partners to do the same. Provided you would be open to some suggestions on the verbiage of the press release, we fully support your efforts and are open to revising the contract to accommodate.”
After they hammered out the terms and the McDonald’s contingent had left, Max exited the meeting room feeling as good as he could remember. The past month had been busy with Les accepting the deal and relocating the Oasis to the Western and ramping up the production to meet the new targets.
All three lines of the second shift hummed along; forklifts scooped, carted, and stacked pallets of boxes of completed product ready for shipment; and through the glass wall separating the factory from the mission, he could see mission guests finishing up their evening meal.
He walked toward the door to the dining area, which also served his workers as well. In addition to the obvious cost savings, Max wanted his workers interacting with the mission guests as much as possible. In that way, they would be role models and examples of the opportunities available to the guests. It was also why he insisted on the glass wall between the factory and the mission areas. He wanted both sides to always be able to see the fine line between the two worlds and how easily one could cross over, forward or backward.
Stopping for a moment, Max looked across the production floor then back at the dining area. Les and Bill were sitting at a table talking to three men while they ate. At another table, Penny assisted two women filling out job applications. For the first time in months, he relaxed, feeling like he was finally on the other side of the problem. With the positive press and buzz they had already received in July, announcing the Oasis relocation and the first group of Oasis benefactors starting employment, they were able to have all three lines running for the first two shifts, and one of the lines running for the third shift. Production was still estimated to come in under the 1.3 million target, but with all the good publicity and the positive trend, he knew McDonald’s wouldn’t push back. In a few weeks, when an additional line would be operational during the third shift, they would be able to correct the deficit and meet the promised quota by the end of the month. By the beginning of September, they would have enough employees to run the last remaining line during the third shift, so for the first time, the facility would be operating at full capacity. The forecasts showed they would not only easily meet the McDonald’s target, but they’d also be able to start accepting outside orders again and fill those on backorder.
Dow Jones Close: 16,569.28
Chapter Fifty-One
Date: Wednesday, September 10, 2014
Dow Jones Open: 17,016.05
Crystal was living up to her end of the agreement for the free room and board with Bill. She was staying clean and working full-time at the Oasis. Throughout the negotiation and subsequent construction and relocation of the Oasis, she noticed the relationship between Max, Les, Bill, and Penny seemed to be strengthening. They were slowly warming to him as he followed through on, often far exceeding, everything he promised. Crystal, however, still didn’t trust him and avoided him as much as possible. When the others persuaded her to be more open, urging her that he had changed, she said, “I’ve seen the real him. People like that don’t change. Just wait. He’ll want something at some point.” What they didn’t realize was that he had already got what he wanted when he salvaged the McDonald’s contract at the original price. They had already given him a great deal. He was merely trying to give back.
It wasn’t like she was completely blind to the good he had done. She recognized that the Oasis’s transition from the Arts District to the Western had been seamless, and Max was the main reason for the success. He had fulfilled his commitment to build out the facility at the Western with all new equipment: beds, kitchen appliances, dining tables, an office and live-in suite for Les, and even a van to replace the old truck. All of which were desperately needed because, working there, she knew firsthand that the stuff at the Oasis was well past its expiration date. Replacing everything also allowed no disruption in service. They were able to close the Arts District location after breakfast on August 1 and open for dinner that evening at the Western. Despite continually reminding the guests at the Oasis and posting signs all over and around the old location, a line still formed each morning and evening outside the door. To make sure everyone was looked after, Les had Bill or Crystal drive there every day and scoop up any stragglers in the van to bring them to the new location. Each day the number dwindled, and after a week, the van was coming back empty, so they stopped.
For continuity, they all agreed it was best to keep the Oasis name, with the addition of “at the Western,” to distinguish it from its previous location. With all the publicity they received, there was some confusion exactly what type of place the Oasis at the Western was. Crystal had answered the phone on more than one occasion for people wanting to make reservations at what the callers assumed was a new resort property in the downtown area. Les didn’t change the legal and nonprofit structure. He was still the sole shareholder. Max didn’t even want to be part of the management team or on the board, which surprised Crystal because she expected him to want to have his greedy paws all over it. But he really did keep his distance. He was simply the property owner, leasing the space to the Oasis for a paltry $2,500 per month, and also a major donor.
On this particular evening Crystal was at the sink, scrubbing a pot from dinner. She wore capri jeans and a white apron that covered her front from her neck to her knees. Her gray T-shirt underneath was pulled up and knotted around her waist, exposing the small of her back from behind. A wide, white turban headband held back her thick, black hair bouncing in all directions as she sang “Rolling in the Deep” by Adele, pretending the spray nozzle was a mic. “Baby, I have no story to be told. But I’ve heard one—” She felt someone watching her. Glancing over her shoulder, she noticed Max behind her by the food serving line. Startled, she dropped the pot into the sink. “Geez, you scared me. I didn’t hear you come in.” She picked up the pot and continued rinsing it, this time in silence.
“Don’t stop singing on account of me,” Max said. He had on a seersucker suit with a white shirt and red tie. “That was beautiful. Who was that?”
Crystal put the pot in the drying rack and started on a new one, her back again to Max. “It was Adele.”
“Never heard that one before. Guess I’m out of touch with what’s popular.”
“That song came out four years ago,” Crystal said. Her head remained down, her arm buried inside another large pot.
“Sounds like I’m worse off than I thought.” Max fetched a bottle of water from the cooler and walked over to the counter so he was at least talking to her side and not her back. “Can I give you a hand? I could at least dry or something.”
“No, I can manage. I’m almost finished. Wouldn’t want you to mess up your fancy suit anyway.” She rinsed the pot and stacked it next to the other one on the counter. “You know, you really shouldn’t creep around spying on people, even if you own the place.”
“I’m sorry. I didn’t mean to surprise you,” Max said. “I was just taken aback by your singing. Wasn’t aware you had those kind of pipes.”
“Well, now you are.” Finished with the pots, Crystal took the stopper out of the sink and let the water drain. She removed a towel tucked into her back pocket, dried one of the pots, and put it away, moving around Max like he was just another piece of furniture.
Max said, “You know, I’m not such a bad guy if you get to know me.”
“Never said you wer
e.” Crystal whisked by him to retrieve the other pot.
“Well, what is it, are you embarrassed by what happened between us before?”
“Me? Embarrassed?” She laughed, shaking her head. “Typical. You should be the one embarrassed.”
“Well, I’m different now. I’ve changed. We both have.”
Crystal stopped on her way back to the sink, turning and facing him for the first time. Regardless of how hard she tried, even in this environment, with him in a nice suit and knowing all the good he had done for Les, she couldn’t see past the drunk, obnoxious asshole she had experienced in the club so many times. “No, that’s where you’re wrong,” she said. “We haven’t changed. We’re still the same people. We’re just doing different things.”
“But good things,” Max said, widening his eyes. “That has to count for something.”
He looked sincere, but Crystal had seen people fake it before. She said, “I think it’s great what you’ve done here, and how you helped Les and all the people who need the Oasis, but I’m sure you’re getting more out of it than what you put into it. People like you always do. Just like there has to be a reason why you’re talking to me right now. It can’t be just because you want me to like you and us to be friends. So why don’t you save us both a lot of time and get to the point. What do you want from me?”
Max didn’t respond. He just stood and stared.
Crystal said, “What, no witty comeback? No counter move to regain control?”
Max emptied his lungs, taking a long, slow breath to refill them. “You’re right. I should just be honest with you. I heard what happened at Dino’s and with the show and with your mom.”
“Thought you said you didn’t know I could sing! So you’re a liar now, too. Not a very good start.”
Max’s voice rose in frustration. “God! Will you just be quiet for a second and let me speak? I wasn’t lying. I did know you could sing, but I had no clue that you were so good. I just want to help you if I can.”