Four vital principles that all leaders should understand
In these trying economic times, strong leadership seems elusive. But even during times such as these, there are principles that you can adopt to help you become a better leader — whether it’s in the office, in your community or at home. There is no better place to learn about these principles than McDonald’s, one of the most highly regarded, well-run corporations in the world. Even during this recession, McDonald’s stood out as one of the few companies to post gains.

To learn more about the principles that define leadership, Bottom Line/Personal talked with management consultant Paul Facella, who spent the first 34 years of his career at McDonald’s, rising from behind-the-counter cashier to regional vice president. There he developed an understanding of the company’s culture and the principles of leadership underlying it.

LEAD BY EXAMPLE

At McDonald’s, I learned that effective leaders model the behavior that they want to see in others. This started first and foremost with Ray Kroc, McDonald’s founder. I saw humility and graciousness the first time I met Ray. He was known for visiting with regional employees whenever he came to town.

Because I was the highest-ranking staff member in the New York franchise where I worked, it was decided that I would dine with him. I was a director of operations at the time, and so this was quite an honor for me. In the limousine, Ray insisted on taking the small “flip seat,” offering me the most comfortable seat because I was his guest. Having the head of one of the most successful businesses in the world put me at ease made a huge impression on me. I have never forgotten his efforts to make an ordinary employee feel special. I vowed to adopt this mind-set in my own life.

Even today, I always try to remember the impact I have on others. When new members join an organization that I belong to, I go out of my way to interact with and welcome them. It was not unusual at McDonald’s to see leaders, such as Ray himself, demonstrate what needed to be done. No task was too humble, even for the boss. During a visit to one New Jersey restaurant, Ray picked up cigarette butts in the parking lot, setting the tone for cleanliness. When executives were out in the field, they always made a point of pitching in. If there was a problem, they would jump behind the counter and help out. The influence of Ray Kroc and others at McDonald’s has always stayed with me. Even though I am a senior member and former officer of my local volunteer fire department, I always try to be the first to pick up a mop or a broom. When junior fire department members see me doing this, they invariably pitch in as well.

FOSTER RELATIONSHIPS

Integrity is valued above all else at McDonald’s and permeates the culture of the company. Everyone is treated as a partner. Some even say it is like a surrogate family. There was an unprecedented level of trust between people involved in all aspects of the business. We called it the “three-legged stool.” This meant that the relationship between the three interdependent partners — the franchisees, the suppliers and the corporate staff — was understood to be vital to the company’s success. Making the “three-legged stool” work often required taking gutsy steps that might have seemed counterintuitive.

Example: There were times when Ray told suppliers to raise their prices. He figured that for these companies to become long-term partners, they needed to succeed, and they wouldn’t if he forced them to accept profits that were too low. This worked. When vendors increased profits, the result was stronger loyalty to McDonald’s. Vendors had so much faith in McDonald’s that they actually helped bail out the company in 1959, when it was in trouble because of a real estate deal gone bad. This culture of trust was so strong that important agreements often were made with a handshake rather than a written contract. Many suppliers, now second- and third-generation ­businesses, haven’t had a formal contract with the company for 50 years. The high level of trust also reaped rewards for the company. Because they felt such loyalty, suppliers, franchisees and employees often suggested some of McDonald’s most successful products and concepts.

Example: Herb Peterson, a franchise owner, was the creator of the Egg McMuffin in 1973.

RAISE THE BAR

At McDonald’s, the company mantra is “Never be satisfied.” We always were looking to break our records, whether it was increasing the number of customers or lowering costs. To raise the bar as high as possible, we used metrics, or measurements, to determine whether we had reached our goals. We measured everything from hourly sales to how many bags of potatoes were used each day. We made goals measurable. This especially helped team members know what they were working toward and gave them a sense of ownership. It also encouraged an environment of friendly competition.

Example: When I was a manager, many cashiers were coming up short each day, so I put up signs showing just how over or under each cash register was. Within 24 hours, every person’s total was perfect. No one wanted to be the lowest performer in the store.

PROVIDE RECOGNITION

At McDonald’s, recognition is everywhere. The company makes it a way of life, encouraging managers to recognize employees regularly. Ray knew that there is no better way to inspire people. Even front-line employees were recognized. You might think of a crew job at McDonald’s — working the kitchen — as menial, but if you worked hard, you were noticed and rewarded. For many, that meant being promoted and advancing from crew to operator to the corporate office.

Result: About 42% of the current worldwide leadership at McDonald’s started out as crew members. Whenever possible, employees at McDonald’s are recognized in public with fanfare.

Example: To acknowledge a McDonald’s staff attorney who had joined a national Hispanic organization, the company president addressed the entire floor of the office to congratulate him and then gave him an all-expenses-paid week at a corporate retreat. The move also encouraged other employees to join similar organizations. At McDonald’s, recognition always is sincere, meaningful and tailored to the individual — whether it is a bonus, concert tickets or time off. When I was an assistant manager, I was out one evening with my future wife at a restaurant that I could barely afford. I saw the owner/operator of the franchise where I worked. We waved to each other. When I was ready to pay the check, I found that he had paid for our dinner. At times such as these, I felt as if I would do anything for the company.

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