Grinding It Out

by Ray Kroc

  In addition to the major recipients, I made contributions to Harvard Congregational Church in Oak Park, where I went as a boy, and to the Public Library in Rapid City, South Dakota, of which Joni was a trustee. When I added it all up, my birthday gift list totaled seven and a half million dollars. I’ll tell you, it felt mighty good to be able to announce that kind of present!

  As I said at the time, I had seen McDonald’s become a national institution. America is the only country where it could happen, and I took genuine pleasure in sharing my good fortune with others.

  My friends and business associates demonstrated in their birthday gift to me that they understood exactly how I felt. They established the Ray A. Kroc Environmental Fund at the Field Museum of Natural History. I was speechless with delight when it was announced by Leland Webber, director of the museum, that the fund had received more than $125,000 to provide educational programs such as film series, field trips, and workshops for young people.

  To cap the celebration of my three-score-and-ten years, Joni threw a wonderful party for me in the Guildhall of the Ambassador West Hotel in Chicago. I was looking forward to seeing the faces of my closest friends, including many McDonald’s employees—secretaries, field personnel, executives—that night, because I wanted to see their reaction to my birthday cards. They were in the form of gifts of McDonald’s stock I had arranged for them to receive in the mail that day. In some cases the stock was divided between a man and wife and their children. It took a lot of undercover work to come up with all the social security numbers of spouses and children that were necessary to convey the stock and still keep the plan secret. But we managed it, and the surprise helped lift the spirit of the party to cloud level. I was particularly pleased to make the stock gifts to the wives of some of our executives, not only because they’d become my friends but because a McDonald’s wife has to be a very patient and understanding person. I know that all of them make great sacrifices to allow their husbands to succeed, and I wanted to be sure that these women knew my concern and appreciation.

  Talking about gifts and my philanthropies reminds me of one of the high points in my life. I have received a lot of awards over the years. My office in Oak Brook is a showcase for all these plaques and ribbons and trophies. Some people think it’s kind of corny for the chairman of a large corporation to display such an array of mementos. But I’m proud of each one, from the rough, handmade tribute from a Boy Scout Troop to a goldplated Multimixer. But none of these awards gave me a bigger thrill than to be honored as Ray A. Kroc, Philanthropist, Outstanding Chicagoan of Today at a banquet given in 1975 by the Chicago Chapter of the National Multiple Sclerosis Society. With Joni’s approval, I put my money where my mouth was in acknowledging the honor with a gift of a million dollars to the organization.

  A few years ago, McDonald’s operators in Philadelphia helped establish one of the most useful benevolent programs I know about. In cooperation with the Philadelphia Eagles football team, they set up a home away from home for parents of children who are being treated at Philadelphia Children’s Hospital, and they called it Ronald McDonald House. I attended the opening and thought it was great.

  The idea was picked up in 1975 by parents of a child who had received treatment for leukemia at Children’s Memorial Hospital in Chicago. With the help of Dr. Edward Baum of the hospital staff, these parents got the project rolling. The Association of Chicagoland McDonald’s Restaurants pledged $150,000 toward the $400,000 program and the Chicago Bears football team helped publicize it. More than 150 individuals and businesses contributed services and materials at cost, or, in many cases, free of charge.

  Ronald McDonald House in Chicago is located only two blocks from Children’s Memorial. It has accommodations for eighteen families, many of whom live more than seventy miles away. They are charged $5 per night (if they can afford it). They can cook their own meals, do their own laundry, and be together as a family as much as hospital visits permit. They also can get spiritual support from other parents who are there facing similar situations.

  With the opening of the Chicago facility, McDonald’s began getting involved as a corporation, and we are putting out manuals and holding workshops to show McDonald’s operators across the country how to go about setting up Ronald McDonald Houses in their own communities. Projects were started in several cities, including Denver, Seattle, Los Angeles, Atlanta, Pittsburgh, and the Boston/Providence area.

  My friends knew how proud I was of these activities, so for my 75th birthday they surprised me by establishing the Ray A. Kroc-Ronald McDonald Children’s Fund with $225,000. The purpose of the fund is to provide seed grants for Ronald McDonald Houses from coast to coast, and I couldn’t think of a better present.

  One thing I flatly refuse to give money to is the support of any college. I’ve been wooed by some of the finest universities in the land, but I tell them they will not get a cent from me unless they put in a trade school. Our colleges are crowded with young people who are learning a lot about liberal arts and little about earning a living. There are too many baccalaureates and too few butchers. Educators get long faces when I talk like this and accuse me of being anti-intellectual. That’s not quite right. I’m anti-phony-intellectual, and that’s what too many of them are. I’m definitely not anti-education. As a matter of fact, I have an advanced degree. Dartmouth College made me an honorary Doctor of Humane Letters in June, 1977. The citation recounts my career as an entrepreneur and concludes:

  You have always been a dreamer, but the reality of 4,000 McDonald’s dispensing billions of hamburgers and french fries all over the world has exceeded even your wildest dreams. You have created a uniquely American insitution. Today a student choosing a college will look for three essential ingredients: An outstanding faculty, a good library, and a McDonald’s nearby.

  You have captivated two generations of Tuck School of Business Administration students with the story of your achievements, and we all feel that “you deserve a break today.” Therefore, I take pleasure in adopting you officially into the Dartmouth Family by awarding you the honorary Doctorate of Humane Letters.

  That fits right into my philosophy of what education should be, and it is expressed perfectly in McDonald’s own Hamburger U. and Hamburger High. Career education, that’s what this country needs. Many young people emerge from college unprepared to hold down a steady job or to cook or do housework, and it makes them depressed. No wonder! They should train for a career, learn how to support themselves and how to enjoy work first. Then if they have a thirst for advanced learning, they can go to night school.

  We have thousands of success stories in McDonald’s that followed exactly that pattern. There have been lots of unusual approaches, too. Take those nine sailors who came down from Great Lakes to see me about getting a McDonald’s franchise in 1959. They formed a company called Careers, Inc., in Portland, Oregon. Careers, Inc., now has five McDonald’s restaurants and is building a sixth. Ollie Lund has left Careers, Inc., and now has two McDonald’s of his own. One of the original nine is dead, but the rest have prospered from their association with McDonald’s. “I guess,” Ollie Lund says, “McDonald’s has been the making of all of us.”

  When I said thousands of success stories, I meant that literally. I couldn’t begin to recount them. Some, like Lee Dunham, a former New York City policeman, have received a lot of public attention. Time magazine did an article on Lee and how he fought to keep his store open in Harlem. Other publications covered him, too. But the great majority of our winners are known only within the company, and they’re all heroes to me—guys like Frank Behan, our Eastern zone manager, who had to be both father and mother to his children while struggling to get his store going. He did everything himself—his total maintenance bill the first winter was $4. These men and women join McDonald’s from just about every conceivable calling. We’ve had college professors become operators, like Ed Traisman, who taught at the University of Wisconsin; Don Smith of Cleveland had been a judge; Jo
hn Sirockman of Atlanta was a banker; Joe Katz of Detroit had been a practicing rabbi before he joined us; Eli Shupack of Chicago was a CPA; John Kornblith of New York City was in the men’s clothing business; and Dr. R. C. Valluzo of Baton Rouge, Louisiana, was a dentist. We have several former military leaders like Colonel Marion MacGruder of Phoenix, Arizona, and professional athletes such as Jumping Johnny Green and Wayne Embry the basketball stars, and former pro football players Brad Hubbard of Atlanta, Tommy Watkins of Detroit, and Ben Wilson of Houston. McDonald’s is a real melting pot.

  The key element in these individual success stories and of McDonald’s itself, is not knack or education, it’s determination. This is expressed very well in my favorite homily:

  “Press On: Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

  That’s the spirit that built 4,000 McDonald’s hamburger restaurants. We dedicated number 4,000 in Montreal in September 1976, and it was a stirring experience. The celebration was tinged with sadness by the death of the husband of one of our stalwart operators. As if in keeping with that mood, the weather turned gray and rainy on the day of the ribbon-cutting ceremony. Nostalgia was keen among a theater full of top McDonald’s operators and key corporation executives that morning. We saw a slide show that recapitulated our company’s history in terms of past advertising campaigns and TV commercials. What memories! I felt for an instant as if I were back grinding it out, building the business all over again.

  Then we went to the new store, which is across the street from the Montreal Forum. It’s a beautiful building, this number 4,000. Strictly a city location—no parking lot—but the seating is on three levels, plus an open patio, and the modern lines with huge round windows in the mellow brick walls are just gorgeous.

  The really breathtaking thing here, however, is the way the kitchen runs. It’s like watching one of those movies where they speed up the film to make people move in a blurring rush. Of course, folks in that store have had plenty of practice in handling monster crowds. The unit opened during the Canadian Olympic games and did a phenomenal business during that trial-run period. In one week it grossed $74,000! By contrast, our first store grossed $6,969 in its first two weeks.

  As George Cohon, President of McDonald’s of Canada Limited, and Fred Turner and I got ready to cut the ribbon with 4,000 printed on it in great big numbers, the rain stopped. Maybe it was a good omen for the store. At least it pleased the newspaper and television cameramen. I told one of them, “We do it all for you.”

  Dedicating that restaurant was quite a milestone for those of us who could remember when we had four stores and were working like galley slaves to get number five. Now we’re shooting for 5,000, and our confidence is so high that we even took a vote in Montreal to decide where number 5,000 will be built. Japan won. Personally, I’m thinking about number 10,000. A lot of people would say I’m dreaming. Well, they’d be right. I’ve been dreaming all my life, and I’m sure as hell not going to stop now.

  I’m dreaming of a World Series title for the Padres.

  I’m dreaming about new things for McDonald’s International operations. Steve Barnes, who has directed our growth overseas, keeps coming up with exciting plans, and people everywhere—from Japan to Sweden—are welcoming the Golden Arches. Americans will be hearing a lot more about our hamburger diplomacy.

  I’m also dreaming of some terrific new plans for McDonald’s. My wife thinks I should take more time off and just sit in the sun; yet she knows I can’t do that. I still work for the company every day at the jobs I know and like best—developing new menu items and new real estate projects.

  In October 1976 I hired Renée Arend, former chef at the Whitehall, to be Executive Chef of McDonald’s. His job is to study ways to make our menu more nutritious, get more fiber into it, and so forth, and also to help me refine recipes for new menu items.

  Renée is a Luxembourger and his skill in the kitchen is the result of rigorous European training and lifelong dedication. He’s concentrating all his talent on our simple menu, and the results will be culinary art in fast-food form. There are lots of things Renée and I will be working on. For openers, a new item I have in mind to help build our supper-hour trade. Renée is testing it, and if it turns out to be as good as I think it is, it will make the Colonel himself forget about fried chicken.

  Our menu development, aimed at filling out a three-meal day plus snacks for our restaurants, has a parallel in our real estate planning. I mentioned the “nook and cranny” notion of real estate development and that’s a good way of thinking of it. But the philosophy behind it is that we want to bring our restaurants to the people. We want to be where people live, where they work, and where they play.

  Urban real estate is a different ball game than the one we play in suburbia where McDonald’s grew up. This is especially true in commercial districts where people work. There, traffic patterns and eating habits create some unusual opportunities. For example, we can create vertical “rub-off” stores. Take Sears Tower in Chicago, one of the tallest buildings in the world; we could have put three McDonald’s there, one in the basement, one midway, and one on the upper floors. All three would have done well, with the trade from one rubbing off to the others and not encroaching at all. We didn’t do that for various reasons, but we might try it somewhere in the future.

  I was delighted when we made the decision that we would begin developing in downtown Chicago; it was a return to the old stomping grounds for me. I know every worthwhile location in the city, the delivery routes to it, and the kind of pedestrian traffic it gets. I also usually know who has the lease and for how long. What the hell, as I told Jack O’Leary, our district manager for the area, you can’t peddle paper cups and Multimixers in a town for thirty-five years without learning something about it. And if you’re sincere about serving your customer better, you learn the layout of his basement, what kind of alley access he has, and so forth. You might be able to suggest a better way for him to handle his stock or deliveries. That’s what I always did, and now it’s paying off for me in detailed knowledge that helps McDonald’s. If you have this kind of attitude toward your work, life can’t get you down, and that applies whether you are chairman of the board or chief dishwasher. You have to learn to know the joy of “working and being let work.”

  Too many young Americans these days don’t get a chance to learn how to enjoy work. Much of this country’s social and political philosophy seems aimed at removing the risks from life one by one. As I told a group of business students in one of the talks I gave at Dartmouth, it is impossible to grant someone happiness. The best you can do, as the Declaration of Independence put it, is to give him the freedom to pursue happiness. Happiness is not a tangible thing, it’s a byproduct of achievement.

  Achievement must be made against the possibility of failure, against the risk of defeat. It is no achievement to walk a tightrope laid flat on the floor. Where there is no risk, there can be no pride in achievement and, consequently, no happiness. The only way we can advance is by going forward, individually and collectively, in the spirit of the pioneer. We must take the risks involved in our free enterprise system. This is the only way in the world to economic freedom. There is no other way.

  Afterword

  As I finish writing this book, I am painfully aware of the names I have not mentioned in it. Men like Reub Taylor, Commander Alexander B. Dusenbury, Ben Lopaty, Carl Reed, and a great many others who contributed significantly to the making of McDonald’s. I can only ask all those who have been omitted to forgive me.

  McDonald’s had 4,177 stores in the United States and 21 other countries at the end of 1976, a year in which we broke through several boundaries to new levels of business activity and profitability. In 1976, for the first time, our to
tal system-wide sales exceeded $3 billion: the revenue of McDonald’s Corporation exceeded $1 billion. Our net earnings after taxes were more than $100 million, and our net worth was $500 million. The company is still green and growing and so am I. In fact, my 75th birthday party made me feel greener than ever. It was a terrific celebration that brought together a lot of the old McDonald’s team. It was great to see them all, especially June Martino and Harry Sonneborn. There was a time when Harry and I were convinced we would never speak to each other again, so it was wonderful to have him put his arm around my shoulder and tell me, “Ray, you’re the best friend I ever had.” Everything seems to be coming up roses. I’ll be able to tell you more mañana … mañana …

  Ray A. Kroc

  La Jolla, California

  Afterword

  From the time he completed this book in 1977 until he died of heart failure on January 14, 1984, at age 82, Ray Kroc never stopped working for McDonald’s. Even in his last few years when he was confined to a wheelchair, he still went to the office in San Diego nearly every day.

  As senior chairman, he scrutinized a first-day sales report from every new restaurant the day it opened, and he watched with approval the moves made by Fred Turner and other executives he’d left to run the day-to-day operations of McDonald’s. The results were astonishing even by Ray Kroc’s standards.

  During 1983, McDonald’s grew to nearly double the 4,000 restaurants it had when this book was first published. Its 1983 sales, systemwide, approached $9 billion. And in December of that year Esquire magazine saluted Ray Kroc as one of fifty individuals who had made the greatest contribution to the American way of life in the twentieth century. He was ranked with psychologist Abraham Maslow, theologian Reinhold Niebuhr, and civil rights leader Martin Luther King, Jr., in the category of “visionaries.”