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Table of Contents
About the Author
Copyright Page
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My wife, Joni, shares with me the enjoyment of dedicating this book to all
our friends in the McDonald’s family who have helped so greatly in this
enterprise.
He searches through his competitors’ garbage cans—he scolds his San Diego
Padres over the P.A. system—he either enchants or antagonizes everyone he
meets. But even his enemies agree there are three things Ray Kroc does damned
well: sell hamburgers, make money, and tell stories.
Preface
“Opportunity is dead in the United States!” “The tax structure has destroyed all
incentive!” How often we have heard such laments during the past thirty years,
when in fact greater fortunes have been made and higher living standards
achieved than ever before on earth!
Those of us who teach courses at graduate schools of business, courses with
titles like Entrepreneurship or New Enterprise Management, know that such
gloom is unfounded. We have case studies based on true examples of individual
success and corporate growth to prove it.
Every now and then a unique and vibrant personality like Ray A. Kroc comes
along, a flesh-and-blood example of a Horatio Alger story, who illustrates in
practice what one is preaching and who repudiates the lamenters entirely.
Grinding It Out, Ray Kroc’s autobiography and the history of McDonald’s
Corporation, is a dramatic refutation of all who believe that risk takers will no
longer be properly rewarded. It reminds us that opportunity abounds, that all one
needs is the knack of seizing the chances that exist, of being in the right place at
the right time. A little bit of luck helps, yes, but the key element, which too
many in our affluent society have forgotten, is still hard work—grinding it out.
Ray Kroc visited our classes at the Amos Tuck School of Business
Administration on the Dartmouth College Campus in 1974 and returned two
years later in March 1976, bringing with him several key members of his
corporate team including Fred Turner, McDonald’s President and Chief
Executive Officer. (The very circumstances of that second visit proved the
quality of energy and determination that has marked his business career, for
when a major snowstorm closed down the airports in our area, the undaunted
Mr. Kroc commandeered a McDonald’s bus from his Boston headquarters to
drive the stranded executives through the storm.)
With his utter frankness Ray Kroc thoroughly disarmed his audience of
sophisticated MBA candidates. On both visits he regaled students with the story
of his life and the history of McDonald’s, reporting in capsule version all that is
spelled out in fuller detail in this autobiography. He fielded all questions that
students put to him, exhibiting in his lectures and discussions the qualities which
have made him a present-day commercial legend: his tough-minded business
philosophy; his virtually compulsive adherence to the fundamental operating
strategies designed to attract the family market; his emphasis on such basic
qualities as courtesy, cleanliness, and service; and his abiding loyalty to his
associates, particularly to those who have served McDonald’s since its fledgling
years. His talks displayed his humor, competitive zeal, dedication to hard work,
and his firm belief that in the United States a person can reach or exceed any
reasonable goal. Mr. Kroc is one of the rare individuals who possesses both the
charisma of an extraordinary leader who is a great salesman and the passion for
detail of an able administrator.
You do not need to hear Ray Kroc speak for long before realizing that
Grinding It Out, the title he has chosen for his autobiography, is not a humorous
reference to the preparation of McDonald’s most famous product. Instead, the
title brings to mind the long apprenticeship of over thirty years during which Mr.
Kroc worked for others as a salesman and sales manager and later in his own
small business. For the great opportunity of his life did not come until 1954
when he was fifty-two, an age when some executives are beginning to
contemplate the greener pastures of retirement. Grinding It Out also
appropriately reminds the reader of the staggering investments of time, energy,
and capital that were required to develop McDonald’s to its current preeminence
in the fast food service and franchising industries.
This historic year of 1976 will see McDonald’s Corporation surpass one
billion dollars in total revenue for the first time. Casual students of business
history may not realize the significance of the fact that this milestone will be
reached during the twenty-second year of the company’s history. To put this
accomplishment in some perspective, the reader should be reminded that IBM,
highly renowned as a growth company, did not achieve the one-billion-dollar
sales mark until its forty-sixth year, 1957. And Xerox, another corporation
famous for its growth, took sixty-three years before making the billion-dollar
club in 1969. Polaroid has yet to attain annual sales of a billion dollars although
the corporation was founded in 1937. Despite the changes in price levels since
Xerox Corporation was founded in 1906, these statistics on sales or total revenue
do provide some sense of proportion to the corporate history of McDonald’s and
its unprecedented growth.
Though the business history of McDonald’s is fascinating in and of itself, it is
only one facet of Grinding It Out. For the practices pioneered or perfected by
McDonald’s under Ray Kroc’s leadership have revolutionized an entire food
service industry, changed eating habits throughout the world, and raised
customer expectations. Who among us is not now less tolerant of slow service,
overpriced meals, soggy french fries, or a lack of cleanliness in eating places?
Mr. Kroc’s book is not only a fascinating memoir, it is a welcome addition to
the literature available to students of business in general. Grinding It Out will be
uniquely valuable to those who aspire to build their own enterprise, whether the
potential founder is in his or her late teens, early fifties, or at any age in between.
—Paul D. Paganucci
Associate Dean and Professor of Business Administration
Amos Tuck School of Business Administration
Dartmouth College
Hanover, New Hampshire
June 29, 1976
1
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
—Shakespeare, Julius Caesar
I have always believed that each man makes his own happiness and is
responsible for his own problems. It is a simple philosophy. I think it must have
been passed along to me in the peasant bones of my Bohemian ancestors. But I
like it because it works, and I find that it functions as well for me now that I am
a multimillionaire as it did when I was selling paper cups for thirty-five dollars a
week and playing the piano part-time to support my wife and baby daughter
back in the early twenties. It follows, obviously, that a man must take advantage
of any opportunity that comes along, and I have always done that, too. After
seventeen years of selling paper cups for Lily Tulip Cup Company and climbing
to the top of the organization’s sales ladder, I saw opportunity appear in the form
of an ugly, six-spindled milk shake machine called a Multimixer, and I grabbed
it. It wasn’t easy to give up security and a well-paying job to strike out on my
own. My wife was shocked and incredulous. But my success soon calmed her
fears, and I plunged gleefully into my campaign to sell a Multimixer to every
drug store soda fountain and dairy bar in the nation. It was a rewarding struggle.
I loved it. Yet I was alert to other opportunities. I have a saying that goes, “As
long as you’re green you’re growing, as soon as you’re ripe you start to rot.”
And I was as green as a Shamrock Shake on St. Patrick’s Day when I heard
about an incredible thing that was happening with my Multimixer out in
California.
The vibrations came in calls from voluntary prospects in different parts of the
country. One day it would be a restaurant owner in Portland, Oregon; the next
day a soda fountain operator in Yuma, Arizona; the following week, a dairy-bar
manager in Washington, D.C. In essence, the message was always the same, “I
want one of those mixers of yours like the McDonald brothers have in San
Bernardino, California.” I got curiouser and curiouser. Who were these
McDonald brothers, and why were customers picking up on the Multimixer from
them when I had similar machines in lots of places? (The machine, by this time
had five spindles instead of six.) So I did some checking and was astonished to
learn that the McDonalds had not one Multimixer, not two or three, but eight!
The mental picture of eight Multimixers churning out forty shakes at one time
was just too much to be believed. These mixers sold at $150 apiece, mind you,
and that was back in 1954. The fact that this was taking place in San Bernardino,
which was a quiet town in those days, practically in the desert, made it all the
more amazing.
I flew out to Los Angeles one day and made some routine calls with my
representative there. Then, bright and early the next morning, I drove the sixty
miles east to San Bernardino. I cruised past the McDonald’s location about 10
A.M., and I was not terrifically impressed. There was a smallish octagonal
building, a very humble sort of structure situated on a corner lot about 200 feet
square. It was a typical, ordinary-looking drive-in. As the 11 o’clock opening
time approached, I parked my car and watched the helpers begin to show up—all
men, dressed in spiffy white shirts and trousers and white paper hats. I liked that.
They began to move supplies from a long, low shed at the back of the property.
They trundled four-wheeled carts loaded with sacks of potatoes, cartons of meat,
cases of milk and soft drinks, and boxes of buns into the octagonal building.
Something was definitely happening here, I told myself. The tempo of their work
picked up until they were bustling around like ants at a picnic. Then the cars
began to arrive, and the lines started to form. Soon the parking lot was full and
people were marching up to the windows and back to their cars with bags full of
hamburgers. Eight Multimixers churning away at one time began to seem a lot
less far-fetched in light of this steady procession of customers lockstepping up to
the windows. Slightly dazed but still somewhat dubious, I got out of my car and
took a place in line.
“Say, what’s the attraction here?” I asked a swarthy man in a seersucker suit
who was just in front of me.
“Never eaten here before?” he asked.
“Nope.”
“Well, you’ll see,” he promised. “You’ll get the best hamburger you ever ate
for fifteen cents. And you don’t have to wait and mess around tipping
waitresses.”
I left the line and walked around behind the building, where several men were
hunkered down in the shade baseball-catcher style, resting their backs against the
wall and gnawing away on hamburgers. One wore a carpenter’s apron; he must
have walked over from a nearby construction site. He looked up at me with an
open, friendly gaze, so I asked him how often he came there for lunch.
“Every damned day,” he said without a pause in his chewing. “It sure beats
the old lady’s cold meatloaf sandwiches.”
It was a hot day, but I noticed that there were no flies swarming around the
place. The men in the white suits were keeping everything neat and clean as they
worked. That impressed the hell out of me, because I’ve always been impatient
with poor housekeeping, especially in restaurants. I observed that even the
parking lot was being kept free of litter.
In a bright yellow convertible sat a strawberry blond who looked like she had
gotten lost on her way to the Brown Derby or the Paramount cafeteria. She was
demolishing a hamburger and a bag of fries with a demure precision that was
fascinating. Emboldened by curiosity, I approached her and said I was taking a
traffic survey.
“If you don’t mind telling me, how often do you come here?” I asked.
“Anytime I am in the neighborhood,” she smiled. “And that’s as often as
possible, because my boyfriend lives here.”
Whether she was teasing or being candid or simply using the mention of her
boyfriend as a ploy to discourage this inquisitive middle-aged guy who might be
a masher, I couldn’t tell, and I cared not at all. It was not her sex appeal but the
obvious relish with which she devoured the hamburger that made my pulse begin
to hammer with excitement. Her appetite was magnified for me by the many
people in cars that filled the parking lot, and I could feel myself getting wound
up like a pitcher with a no-hitter going. This had to be the most amazing
merchandising operation I had ever seen!
I don’t remember whether I ate a hamburger for lunch that day or not. I went
back to my car and waited around until about 2:30 in the afternoon, when the
crowd dwindled down to just an occasional customer. Then I went over to the
building and introduced myself to Mac and Dick McDonald. They were
delighted to see me (“Mr. Multimixer” they called me), and I warmed up to them
immediately. We made a date to get together for dinner that evening so they
could tell me all about their operation.
I was fascinated by the simplicity and effectiveness of the system they
described that night. Each step in producing the limited menu was stripped down
to its essence and accomplished with a minimum of effort. They sold
hamburgers and cheeseburgers only. The burgers were a tenth of a pound of
meat, all fried the same way, for fifteen cents. You got a slice of cheese on it for
four cents more. Soft drinks were ten cents, sixteen-ounce milk shakes were
twenty cents, and coffee was a nickel.
After dinner, the brothers took me over to visit their architect, who was just
completing work on the design of a new drive-in building for them. It was neat.
The building was red and white with touches of yellow, and had snazzy looking
oversized windows. It had some improved serving area features over those being
used in the McDonald’s octagonal structure. And it had washrooms in back. In
the existing building, customers had to walk to the back of the lot to the long,
low building that was a combination warehouse, office, and washrooms. What
made the new building unique was a set of arches that went right through the
roof. There was a tall sign out front with arches that had neon tubes lighting the
underside. I could see plenty of problems there. The arches of the sign looked
like they would topple over in a strong wind, and those neon lights would need
constant attention to keep them from fading out and looking tacky. But I liked
the basic idea of the arches and most of the other features of the design, too.
That night in my motel room I did a lot of heavy thinking about what I’d seen
