Tag: Southwest

Case 4: McDonald’s

The case:

Founded in 1940 by two brothers, Richard and Maurice, the McDonalds corporation, our focal company for today was sold to Ray Croc in 1955. What started as a hamburger stand is now probably one of the most recognised companies in the world. As of 2018, McDonalds was reputed to serve over 69 million customers daily in 100+ countries and just under 40,000 outlets. The revenues of McDonalds corporation come from rent, royalties and franchise fees as well as direct sales to customers at company-operated restaurants.

Apart from burgers and milkshakes, McDonalds, the second largest employer in the world does its share in contributing to the economy and has even been documented as positively influencing culture. A group of anthropologists in a study entitled the “Golden Arches East” reported that when McDonalds opened in Hong Kong in 1975, it was the 1st restaurant to always have clean restrooms, causing customers to demand this of other restaurants and improving quality across the region of East Asia and Hong Kong. Such impact is the reason why McDonalds has remained successful.

In this series, I analyse two key aspects of McDonalds, and as usual, draw life lessons from them.

1. First, the business model. Many say McDonalds is more a real estate company than a fast food chain. It owns all the properties of its franchises and makes money from rent. Understanding the true source of your advantage is essential in thriving. Questions such as “Am I a writer or do I write?” can be invaluable in positioning yourself. Using myself as an example, I am a teacher who writes. Therefore, in determining what skills to exploit, teaching always comes before writing.
2. Secondly, three words synonymous with McDonalds: consistency, simplicity and speed. I remember going on holidays with my kids when they were much younger. The frustration of them not eating anything served in the hotel restaurant was often dispelled by sighting of the golden arches. I was sure that if all else failed at least we had a familiar place to go. In relation to our personal life, it is essential to embrace consistency. People relating with you should know what to expect as this builds trust and ensures that they continue to call on you with lucrative propositions. Additionally, realise that simplicity is always an advantage. The brain naturally gravitates towards simplicity and to ensure we remain prominent and of worthwhile value, we must continuously practise the 3 characteristics of simplicity, consistency and speed.

In conclusion, Simon Sinek in his ‘Golden Circle Theory’ said success comes with the clarity of WHY (purpose); the discipline of HOW (process) and the consistency of the WHAT. This is what McDonalds does well and what we must do well to be successful.

Case 3: Southwest Airlines

The case:

A couple of months ago, one of the founders of Southwest Airline, Herb Kelleher sadly passed away. Many articles have been written about his legacy, but most importantly, his revolutionization of the airline industry, with Southwest Airline. When Southwest Airline took to the skies in 1971, the mission was simple – “to democratize the skies”. It sought to open up the skies to the everyday American so they could enjoy the luxuries of the rich. It was a decision to create vast economic value based on genuine and generous human values. Even at the lowest point of airline travel in the US – the period just after 9/11, while many airline operators were suffering with loss of revenue because of lack of passengers, Southwest enjoyed loyalty from its customers with some even sending them money and choosing to receive credit instead of refunds. Despite Southwest’s unconventional choices, including allowing passengers to change or cancel flights up to 10 minutes before departure, to giving refunds to those afraid to fly after the 9/11 attacks, it is noteworthy that they have never had a money-losing year and have been ranked by Smartmoney as the best performing stock over 3 decades with a 1000% return on every dollar invested.

So how exactly did Southwest achieve this feat? They kept their operations simple and humane, they kept their staff happy, and when there was a choice between business or people benefits, they always chose people. I remember my own personal experience flying Southwest from Maryland to Houston in 2004. It was such a relaxed and friendly atmosphere and the announcements were particularly colourful.

Life Lesson:

As I reflected on Southwest Airline’s success, one thing was clear: I can build a very successful life while looking out for the needs of others. In fact, the success I build when being humane is the best sort of success.

At times, the notion of success can be laced with thoughts of needing to put others down in a bid to thrive, which as we can see from Southwest, is unnecessary. As you make your plans for the top, ask how you can help lift others up too? Ask what problems you can solve? Ask how you can make the lives of those around you better? In doing so, you will not only be blessed monetarily, but you will have raised an army of supporters who will have your back in every circumstance.

The power to make a difference lies in us all. We can choose to make a change and to be the answer to the ills of our world. When we step in and take that place, we too will thrive. As Oprah Winfrey said in her book “what I know for sure”, true power is purpose aligned with personality to serve a greater good. “Exercise true power today!