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    Ray of Insight

  • Industry News January 1, 2000
    The Kroc philosophy comes to the forefront once again at McDonald's—this time in a new award for managers.

    By Eric Larson

    McDonald's USA president Alan Feldman never met Ray Kroc, his company's founder. (Kroc died in 1984. Feldman came on board in 1994.) But Feldman certainly knew Kroc's legacy and what it stood for—industriousness, ingenuity, and first-class service, the things that made Kroc's company the forerunner in a young quick-service industry. So Feldman recently decided to bring Kroc back—as the namesake of an award that honors McDonald's USA's top restaurant managers.

    McDonald's Alan Feldman: "In today's marketplace, you can never do too much on the people side."

    "We have always held managers in high esteem. For years we had awards at the regional level and recognized them at manager conferences, but this is the first time we've done this on a national level," says Feldman, who came up with the idea. "Restaurant managers are the most critical link in our management team. It was just natural we name the honor after [Ray Kroc]."

    The late Kroc has been described by one Harvard Business School professor as "the service sector's equivalent of Henry Ford." Kroc was a fifty-two-year-old distributor of milkshake machines when he acquired franchising rights from the McDonald brothers, the owners of a San Bernardino hamburger chain. Kroc founded McDonald's Corporation in 1955 and bought out the brothers six years later for $2.7 million.

    Feldman envisioned the Ray Kroc award not only as a method of honoring the most stand-out managers in the company, but also as a way to create a benchmark for management excellence. At a recent two-day (February 28-29) rally to honor its 125 winners, McDonald's took the time "to talk with the winners about what makes them so good," Feldman says. What the company learned from those conversations will be compiled and highlighted in McDonald's internal communications and publications over the next year.

    The award took months of planning and coordination. Managers were nominated by McDonald's three thousand franchisees (they call them owner/operators) from among the company's 12,400 managers nationwide. The nominees had to demonstrate for the awards committee (made up of corporate and regional personnel) three qualities: operational excellence, superior people skills, and/or exemplary business-building initiatives.

    In February, McDonald's flew the 125 winners and their spouses to the company's Chicago headquarters for two days of festivities and fine dining. "It turned out to be more of a rally than anything else," says Bill Whitman, a McDonald's spokesman. "It came off very well." Each manager received a trophy and a check for $2,500. Among those attending the banquet for the winners were Feldman, chairman and CEO Jack Greenberg, and vice chairman and president Jim Cantalupo, along with several division presidents.

    "It was a really fun time, and it was neat how the senior management were interested in our ideas," said Laura Kowal, a Ray Kroc winner who manages a corporate store at the company's headquarters in Oak Brook, Illinois. "They want to take our knowledge and share it with other restaurants, to help them develop the same systems and mindsets." All 125 Ray Kroc winners are required to "adopt" two other managers from within their restaurant marketplace and share with them management skills. (Kowal was already doing that as part of her recent promotion to performance consultant for the Chicago South Region stores.)

    Kowal, thirty-five, has been with McDonald's twenty years and been a manager seventeen of those years. She credits the continuity of McDonald's training practices and flexibility with family schedules for keeping her at the company so long. For her, the Ray Kroc accolade is just a bonus. (The cash didn't hurt. She bought her family a new computer with the award money.)

    What makes Kowal a Ray Kroc winner? Kowal thinks it might be her ability to spot and hire good people, combined with "leadershipÉbeing able to lead a team." Company personnel will got another chance to learn what its Ray Kroc winners are made of the McDonald's worldwide convention in Orlando in April. All Ray Kroc winners have been invited. A dozen winners will present a panel discussion on restaurant management. Kowal will be there, running an on-site kitchen.

    Feldman hopes the award will have the corollary effect of helping to retain the company's best managers in a competitive employment market. "Regardless of what industry you're in, having enough high-quality people to run your business is a challenge, especially given such low unemployment," he says. "Being able to hire, retain, and motivate people is a challenge that wasn't as tough five years ago, so managers have to be better managers." Feldman points to several initiatives designed to attract strong employees, such as an Internet website (, a national advertising campaign featuring crew members, and an image campaign targetting the nation's educators.

    "If you just work for money, you'll never make it," Ray Kroc was known to say. "But if you love what you're doing and you always put the customer first, success will be yours." By developing an award program that puts restaurant managers high among priorities, Feldman hopes the customer will be served better in the end. Next year will likely see a new league of Ray Kroc winners, as the ideas for what makes an award-winning manager filters through the company.

    Says Feldman: "We're getting fabulous feedback. Could we do more? Yes. Are we planning to do more? Yes. In today's marketplace, you can never do too much on the people side."

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