McDonalds Secret-Seek to achieve the triple win.

MCDONALDS HAS A SECRET SAUCE. And it is not what you think. Its about how
McDonalds keeps their three key stakeholdersthe company, restaurant owner/ operators, and
their suppliersin balance with a Systems First mindset based on trust, loyalty, and fairness to
ensure no stakeholder wins at the expense of others. Kroc famously said, None of us is as good
as all of us.
Kroc often referred to McDonalds Corporation, the owner/operators of the restaurants, and
suppliers working together to build his vision as the three-legged stool. If one leg did not grow in
capabilities and profitability, it weakened the stool. Kroc turned his vision into an established
ecosystem based on trust, loyalty, and fairness that motivates suppliers to invest in McDonalds
business. For suppliers and restaurant owner/ operators, being in the System means not being
afraid of investing heavily in the McDonalds System to create a competitive advantage. It also
means everyone even suppliersare highly motivated to bring innovation to McDonalds.
In fact, suppliers are credited with creating the Big Mac secret sauce, perfecting the frozen
French fry and inventing the Chicken McNugget, along with developing manufacturing patents
that drive productivity improvements. Kroc established relationships with McDonalds suppliers
on a simple handshake built on trust, loyalty, and fairness. They know we base our partnerships
on mutual trust, respect, and financial success.
How has McDonalds sustained this culture for 60 years? The worlds most successful business
relationships have several things in common: everyone involved in the enterprise collaborates
through innovations and sharing value to produce the long-term win-win. These successful
relationships follow five principles: 1) Focus on outcomes not transactions; 2) Focus on the
what, not the how; 3) Agree on clearly defined and measurable outcomes; 4) Optimize pricing
model incentives; and 5) Governance structure should provide insight, not merely oversight.
These rules create competitive advantage and are a key to how companies work together to
inspire innovation, create value, and reward success. From the start, Ray Kroc used an outsource
model for operations. He and McDonalds engaged suppliers who were entrepreneurs, who
invested in the McDonalds System. He worked with them to develop products and processes
that served owner/operators and brought profit and growth to the suppliers bottom line.

Kate Vitasek and Karl Manrodt, (October 2012), McDonalds Secret- Seek to achieve the
triple win, Leadership Excellence, Page-8