#178 My Favorite Ideas From Ray Kroc (McDonald's)
What I learned from reading “Grinding It Out: The Making of McDonald's” by Ray Kroc.
Today’s Chapter is based on the book “Grinding It Out: The Making of McDonald’s” by Ray Kroc.
Ray Kroc was an American entrepreneur who transformed McDonald’s from a single California drive-in into the world’s largest and most profitable fast-food franchise. After discovering the McDonald brothers’ efficient restaurant in 1954, he founded McDonald’s System, Inc. in 1955, bought out the brothers in 1961 for $2.7 million, and revolutionized the industry through strict standardization and franchising.
Here’s what I learned:
Keep Grinding
“I’m a great believer in luck, and I find the harder I work, the more I have it.”
— Thomas Jefferson
Ray Kroc rejected the notion that success or failure is caused by external forces or luck. Instead, he operated under the firm conviction that individuals are the sole architects of their destinies. For Kroc, he believed that happiness was not stumbled upon, but actively constructed through hard labor and the courage to seize opportunities when they come up. As he explains, “I have always believed that each man makes his own happiness and is responsible for his own problems.”
As a matter of fact, Ray Kroc is a perfect example of how entrepreneurs can succeed even if they start at a later age. Kroc was 52 years old when he partnered with the McDonald brothers. Nonetheless, his story is not one of overnight success but of relentless effort over a lifetime. Kroc started his career working over seventeen years at the Lily Tulip Cup Company climbing the sales ladder. Yet, when he encountered a multi-splinded milkshake machine known as the Multimixer, he was not afraid to abandon everything to focus on it. He writes, “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.”
Furthermore, when he saw the spectacular high-volume operation of the McDonald brothers, his instinct was not to merely sell them more mixers, but to envision a national chain and offer himself to work with them for that expansion. He was ready to jump onto this opportunity despite his illness setbacks. He mentions, “I was a battle-scarred veteran of the business wars, but I was still eager to go into action. I was 52 years old. I had diabetes and incipient arthritis. I had lost my gall bladder and most of my thyroid gland in earlier campaigns. But I was convinced that the best was ahead of me. I was still green and growing, and I was flying along at an altitude slightly higher than the plane.”
“For me, this was the first phase of grinding it out—building my personal monument to capitalism. I paid tribute, in the feudal sense, for many years before I was able to rise with McDonald’s on the foundation I had laid. Perhaps without that adversity I might not have been able to persevere later on when my financial burdens were redoubled. I learned then how to keep problems from crushing me. I refused to worry about more than one thing at a time, and I would not let useless fretting about a problem, no matter how important, keep me from sleeping. This is easier said than done. I did it through my own brand of self-hypnosis.”
— Ray Kroc
Finally, it is clear from reading his story that Ray Kroc was extremely hard working. He would often worked for 12-14 hours per day. He writes, “Others marveled that I could work twelve or fourteen hours a day at a busy convention, then entertain potential customers until two or three o’clock in the morning, and still be out of bed early, ready to collar my next client. My secret was in getting the most out of every minute of rest. I guess I couldn’t have averaged more than six hours of sleep a night. Many times I got four hours or less. But I slept as hard as I worked.”
To recap, Kroc’s life philosophy can be summarized with the idea that one should become a perpetual learner and to work hard in order to seize all opportunities that come to you. As he once said, “As long as you’re green you’re growing, as soon as you’re ripe you start to rot.”
This reminds me of Chung Ju-Yung’s mentality who once said that “timing and action are the keys to success or failure.” In fact, in Hyundai’s founder’s opinion, luck is all about understand when to seize the right moment and that good or bad luck depends on how one manages time. He also believes that everyone, poor or rich, all have roughly the same amount of time to develop themselves to be prepared to take full advantage of a great opportunity.
The difference is that people who work hard are better apt to take advantage of good timing in contrast to lazy people. As a matter of fact, diligent workers, even during bad times, understand that they still need to make continuous effort in order to minimize or avoid adverse consequences. Whereas, lazy individuals will miss the opportunities presented to them during good times and are oblivious to dangers during bad times. ****Thus, hard working people are deemed to be always lucky compared to others.
“And within our lifespans, I believe each person also undergoes roughly equal amounts of good times and bad times. Self-development is contingent on one’s ability to make the most of the good times through hard work and diligence. When times are bad, all we can do is assess our situation and carry on. By doing so, we can overcome the bad times without needing to rely on luck. The course of one’s life is not determined by the timing of one’s birth, but by the choices he or she makes in both good times and bad.”
— Chung Ju-Yung
Focus on Details
“It’s the little details that are vital. Little things make big things happen.”
— John Wooden
When Ray Kroc first visited the McDonald brothers’ restaurant in San Bernardino, he was impressed with the restaurant’s radical simplicity, standardization, and process mechanical efficiency. The brothers stripped their menu down to hamburgers, cheeseburgers, french fries and basic beverages and executed each step like if it was an assembly line. This level of operational focused allowed for absolute control over quality, speed and consistency.
In fact, even the layout of the restaurant at the first McDonald’s location was set up in a way to improve speed and consistency. Kroc explains, “Mac and Dick had a tennis court behind their house, and they got Art Bender and a couple of other operations people up there to draw out the whole floor plan with chalk, actual size, like a giant hopscotch. It must have looked funny as hell—those grown men pacing about and going through the motions of preparing hamburgers, french fries, and milk shakes. Anyhow, they got it all drawn, just so, and the architect was to come up the next day and copy the layout to scale for his plans.”
As such, Kroc recognized that McDonalds’ success is based on the system behind it which focused on details, particularly in elements that other restaurants treated as afterthought at the time. For example, he observed firsthand how the brothers handled their french fries operations, treating a simple side dish as a highly precise science. He writes, “The McDonald’s french fry was in an entirely different league. They lavished attention on it. I didn’t know it then, but one day I would, too. The french fry would become almost sacrosanct for me, its preparation a ritual to be followed religiously.”
Similarly, Kroc mentions that “It requires a certain kind of mind to see beauty in a hamburger bun. Yet, is it any more unusual to find grace in the texture and softly curved silhouette of a bun than to reflect lovingly on the hackles of a favorite fishing fly? Or the arrangement of textures and colors in a butterfly’s wing? Not if you are a McDonald’s man. Not if you view the bun as an essential material in the art of serving a great many meals fast. Then this plump yeasty mass becomes an object worthy of sober study.”
“We agreed that we wanted McDonald’s to be more than just a name used by many different people. We wanted to build a restaurant system that would be known for food of consistently high quality and uniform methods of preparation.”
— Ray Kroc
By consequence, when Kroc obtained control of the licensing rights and opened his first experimental McDonald unit in Illinois, his primary focus was to replicate and to preserve the operational uniformity across hundreds of locations around the world. He understood that the key to maintain a national brand was for customers to receive the exact same hamburger, cooked to the exact same specifications, whether they are in Chicago, California or a small town in the Midwest.
This eventually led to the implementation of McDonald’s four core values: Quality, Service, Cleanliness, and Value. These values were rigorously drilled into every crew members working at the company. Kroc used to say that “If I had a brick for every time I’ve repeated the phrase QSC and V (Quality, Service, Cleanliness, and Value), I think I’d probably be able to bridge the Atlantic Ocean with them.”
This focus on excellence in the details reminds me of what we have learned from John Wooden who believed that excellence comes from one’s character through the little details. In fact, for Wooden, character is revealed not in grand gestures but in small, consistent actions. He once said, “I believe in the basics: attention to, and perfection of, tiny details that might commonly be overlooked. They may seem trivial, perhaps even laughable to those who don’t understand, but they aren’t. They are fundamental to your progress in basketball, business, and life. They are the difference between champions and near champions.” This focus on the little things—whether it’s keeping your word, showing up on time, or treating others with respect—demonstrates the depth of Wooden’s commitment to integrity.
Furthermore, Wooden recognized that character is about actively cultivating one’s positive qualities. He encouraged individuals to focus on developing their inner strengths emphasizing that these are within everyone’s reach. He once said, “Take a moment and draw a circle around the following personal characteristics that you possess: confidence, poise, imagination, initiative, tolerance, humility, love, cheerfulness, faith, enthusiasm, courage, honesty, serenity. I hope you circled them all because all are within each of us. It is simply up to us to bring them out.”
“There’s nothing wrong with having faults so long as you work conscientiously to correct them. How hard you work at correcting your faults reveals your character.”
— John Wooden
Delegate
“No person will make a great business who wants to do it all himself or get
all the credit.”
— Andrew Carnegie
While Kroc was quite obsessive in terms of his employees following the company’s standards, he was surprisingly generous with autonomy. In fact, Kroc understood that the best executives were the ones who hired well and got out of the way. He explains that “if you hire a man to do a job, you ought to get out of the way and let him do it. If you doubt his ability, you shouldn’t have hired him in the first place.“
This philosophy also extended to the way Kroc treated McDonald’s franchisees. He famously refused for the company to become the supplier to his own operators, even though that would have been enormously profitable in the short term. Rather than to treat his franchisees as customers, he made sure to make himself aligned with them as partners. He writes, “One of the basic decisions I made in this period affected the heart of my franchise system and how it would develop. It was that the corporation was not going to get involved in being a supplier for its operators. My belief was that I had to help the individual operator succeed in every way I could. His success would insure my success. But I couldn’t do that and, at the same time, treat him as a customer. There is a basic conflict in trying to treat a man as a partner on the one hand while selling him something at a profit on the other.”
“I was not in the hamburger business. I was in the people business.”
— Ray Kroc
Similarly, he understood that all franchisees were small business owners whose collective energy made McDonalds’ a valuable brand and, by consequence, it would only be fair for them to be rewarded properly. As such, Kroc mentions, “We recognize that it would be unwieldy and counterproductive for the corporation to own more than about thirty percent of all stores. Our slogan for McDonald’s operators is “In business for yourself, but not by yourself,” and it is one of the secrets of our success.”
As such, it is not surprising that McDonalds’ had created more millionaires out of franchisees than any other company in history. While Kroc takes a genuine pride in the wealth his company has created for others, he believes that the success lays not on him but on the individuals who were courageous enough to take up on the opportunity given. On the subject, he mentions, “ I’d rather say I gave a lot of men the opportunity to become millionaires. They did it themselves. I merely provided the means. But I certainly do know a powerful number of success stories.”
“McDonald’s doesn’t confer success on anyone. It takes guts and staying power to make it with one of our restaurants. At the same time, it doesn’t require any unusual aptitude or intellect. Any man with common sense, dedication to principles, and a love of hard work can do it.”
— Ray Kroc
This reminds me of how Les Schwab succeeded in business based on the belief in profit sharing as a mean to empower employees. In fact, Schwab firmly believed right from the beginning that when employees are treated as partners, they become more invested in their work. As such, Les Schwab first started by sharing 50 percent of the profits of each new store with its manager, and later on, they changed their profit sharing structure to share over 49.51% of their profits with employees working in the stores. The logic is simple; when workers see a direct link between their efforts and the company’s success, they are more likely to go above and beyond in their roles.
Les Schwab once said, “I never could understand why more business people don’t share with their employees. What nicer thing can they do with their profits? You can’t take it with you. Naturally you should look out for your family, but you can always come out better for your family if you look out for your employees first.”
This approach not only fosters loyalty but it also creates a culture of accountability and motivation. By sharing profits with his employees Schwab cultivates an environment where employees feel valued and recognized for their contributions. This sense of ownership translates into higher productivity and morale, which ultimately benefits the entire organization. As he once said, “I encourage you to share profits with your employees. I encourage you in every way possible to ‘Build People.’ This is good for America, it is good for you, and it is good for your employees.”
“If you make people under you successful, what happens to you? Aren’t you also then successful?”
— Les Schwab
Furthermore, while money is a strong incentive in itself, Les Schwab also made sure to build an environment where his employees could enjoy individual empowerment. As a matter of fact, he advocated for treating employees like partners, fostering an environment of open communication, and providing them with the tools and knowledge to make impactful decisions.
Les Schwab explains that “I really do think that young men who work for the Les Schwab Company for three or four years is almost as good as taking three or four years of business schooling. The reason for this is the complete openness of the company. Every employee in every store is encouraged to read and study the Profit and Loss Statement of his store. Each store has a monthly meeting around the P&L Statement. They are encouraged to ask questions.“
This complete transparency on the company’s profits fostered a sense of ownership among employees. They were fully invested in the success of their store, their team, and the company as a whole.
Beyond the Book
Read "The Power of Incentives: The Hidden Forces That Shape Behavior" by Farnam Street
Listen to "[Outliers] How McDonald’s Took Over America | Ray Kroc" by The Knowledge Project
Listen to " The Making of McDonald's: The Biography of Ray Kroc" by Founders Podcast
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