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The Surprising Link Between McDonald's and the Hong Kong Riots
Following weeks of civil unrest in Hong Kong, friends have been checking in to see how we’re managing. It’s fine, for now, but experiencing it first-hand reveals the importance for leaders to lead cultures from the shop floor and not the ivory tower of executive office.
I was only a child yet the image on the evening news would haunt my dreams as four police officers brutally beat Rodney King to within an inch of his life. The public response was strong condemnation and yet the following year the LAPD acquitted all four officers involved. This was the trigger for the violent riots across LA.
It feels much the same each week in Hong Kong as police continue to arrest hundreds of protesters, whilst the out of touch scrabble of leaders only serves to further galvanise the community to come out in greater number and force. Flying out to Singapore, I was faced with nearly every train station closed, roads blocked by protestors, and hundreds of flights cancelled by a workers' strike.
The lessons from Los Angeles are within the same generation, we know them, and they must be headed with 53 deaths, over $2 billion in damage from 3,600 fires and the destruction of more than 1,200 buildings. 4,000 National Guard troops were called in to quell the unrest and enforce the law - all in a city only half the size of Hong Kong. Everyone in the US and certainly all of LA was impacted in some way, all that is, except for its McDonald’s restaurants.
McDonald’s were located in the very heart of all that destruction, yet curiously untouched by the rioting. After the riots, local schools could rely only on McDonald’s for catering whilst regular suppliers could no longer fulfil orders to feed school children. When you consider that 95% of the buildings targeted were commercial and of those, 74% were retail stores owned by African-American, Korean and other culturally diverse community members, it’s quite remarkable that McDonald's stores were untouched. So remarkable in fact Time magazine ran a special report on the peculiarity.
‘When the smoke cleared after the mobs burned through South Central Los Angeles in April, hundreds of businesses, many of them black owned, had been destroyed. Yet not a single McDonald’s restaurant had been torched.’
Edwin M. Reingold, June 29, 1992, TIME
Remember that these stores were not underground shelters, they were not bomb-proof safe-rooms, they didn’t even have a security guard at the door. They were simple Macca’s stores just like you’d find on any street corner.
So what saved them?
Strap in because this is where the story gets even weirder. You’ve likely heard ‘the pen is mightier than the sword’, well that was Edward Bulwer-Lytton back in 1838, and 200 years later McDonald’s proved him right. McDonald’s founder Ray Kroc was planning the company’s first-ever expansion. Kroc’s operating philosophy was that ‘none of us is as good as all of us’ and this informed his approach to that first attempt at expansion in a model he defined as the ‘three-legged stool’.
One leg represented McDonald’s, another the suppliers and the third leg represented the franchisees. Kroc insisted that each of these three legs must be strong and profitable in order for the enterprise to be successful. For the franchisee leg, this meant that local communities should own their stores. However many African-American, Asian or Latino franchisees, who even though they were eager to purchase a franchise, could not secure the required finance from conservative lenders.
Kroc stepped in on their behalf to broker funding agreements and much to the surprise of the lenders, defaults were low and repayments were high, so the policy continued and expanded as even more LA McDonald's stores were opened and operated by culturally diverse members of the local community.
Kroc not only created opportunities for budding entrepreneurs but consequently, job opportunities where they did not previously exist. McDonald’s took on the mantle of community pillar were even in that manic state of riot, people had enough sense to leave McDonald’s well alone. Reingold goes on to state that: “McDonald’s stands out not only as one of the more socially responsible companies in America, but also as one of the nation’s few truly effective social engineers.”
So let’s pull these disparate threads of ideas together. Community leaders like Ray Kroc got close to his stakeholders, really close to truly understand them, to even fight on their behalf and create genuine opportunities with influence that reached far beyond the individual to the wider community. In response, when the community is in crises, it recognises McDonald’s as one its own and protects it.
Unfortunately, Hong Kong city leadership does not engage with its people, appearing only insulated press briefings within confines of government. This only serves to further disenfranchise the people, to reinforce the battle line between us vs them, and a critical lesson for us as leaders of people and organisations.
Do you have the courage to get into the trenches with your people? Do you have the growth-mindset to accept another’s opinion, understand, and respond with genuine intent? Will you demonstrate that you fight the good fight for your people, that you have their backs and will do not what is easy - but what is right? Will you foster a culture of trust where stakeholders become ‘one of our own’ and we face the challenges of the world and the market together?
That is to say, will you foster a culture where ‘none of us, is as good as all of us’?