mcdonalds-founder-ingenuity-innovation

Michael Keaton as Ray Kroc (IMDB)

McDonald’s Story ‘The Founder’ Illustrates Yankee Ingenuity’s Fall and American Innovation’s Rise

Though the word "innovative" is spoken only once in The Founder, this plot point is just one example of how the film deftly skewers the hollow nature of American Innovation, a meretricious form of late capitalist creativity that currently exerts outsized influence on American society.

In John Lee Hancock’s The Founder (2016), the turning point for anti-hero Ray Kroc (Michael Keaton) occurs two-thirds of the way through the film, when Kroc and financial consultant Harry J. Sonneborn (B.J. Novak) sit in a cramped office and concoct a classic business innovation. At that point in the narrative, Kroc has comfortably settled into his role as the head of franchising for McDonald’s, a former single location hamburger stand he’s helped grow into a multi-location business spanning several states.


Despite his successes, the purposefully restricting contract he signed with the restaurant’s eponymous founders, the McDonald brothers (Nick Offerman and John Carroll Lynch), is hindering his ability to expand at the accelerated rate he craves and turn a reasonable profit for himself. As a result, he finds himself out of capital and on the verge of financial ruin, having already mortgaged personal assets to jumpstart his ambitious expansion plans.

Sonneborn has just the solution. He encourages Kroc to establish his own real estate company, Franchise Realty Corporation, and use the entity to lease land to new franchisees. Doing so would give him a proprietary income stream and the opportunity to attract outside investors to his new corporation. It would also give him a desired level of autonomy, since oversight of Franchise Realty would fall outside of the purview of the McDonald brothers, who retain final say over all business decisions regarding new McDonald’s locations but have no such authority over outside ventures. Kroc bites, and the rest is soon history.

The establishment of Franchise Realty Corporation represents Kroc’s greatest innovation in that it doesn’t invent something new so much as take advantage of a technicality not covered in his original contract—Kroc is free to create a separate corporation and use that entity to do business with McDonald’s, the company that employs him—to create a bountiful revenue stream for himself. It doesn’t improve how the business is run or enhance the product it provides but it eventually makes Kroc far wealthier than the McDonald brothers, giving him the power to buy the brothers out of their own company and take McDonald’s in the direction he sees fit.

Though the word “innovative” is spoken only once in The Founder, this particular plot point is just one example of how the film deftly skewers the hollow nature of American Innovation, a meretricious form of late capitalist creativity that currently exerts outsized influence on American society. A biographical drama about Kroc, a one-time milkshake machine salesman who, in 1954, stumbled across a thriving hamburger stand in San Bernardino, California and was so taken by both the quality of the food and the efficiency of the kitchen that he joined the company—and subsequently wrested control of the business before transforming it into a global fast food empire—The Founder may strike some as just another entry into the “dog-eat-dog / greed is good” genre of filmmaking about business, where the greatest spoils always end up in the hands of the pettiest person. While that’s not an inaccurate description of the film’s primary narrative thread—Kroc’s desperate hunger for success coupled with his willingness to stoop to any means necessary is revisited time and again throughout the story—what makes the film more interesting than other entries in this particular sub-genre is the way it deftly shows how Kroc’s business innovations ultimately trump the McDonald brothers’ facility for ingenuity, thus allowing him to remake someone else’s business in his own image.


(IMDB)

Ingenuity is not as common a word as it once was, whereas innovation has become a recurring part of the American lexicon and a favorite watchword of the thought leaders and tech doyens who use the Ideas Festivals/TED Talk circuit to salivate over corporate America’s latest “game-changing” trends. The decline in cultural value of “ingenuity” marks a break from America’s past, when it was not uncommon for people to place the word after the term “Yankee” to connote a somewhat vague yet clearly identifiable combination of technical inventiveness and can-do spirit. Yankee Ingenuity was said to be a defining trait of 19th century New Englanders and, much later, the American troops who helped win World War II. In more recent times, the concept of ingenuity has receded from mainstream culture, while the snazzier sounding “innovation” gets bandied about by entrenched private sector elites and the acolytes who wish to join them at the top of the late capitalist pyramid.

Trying to differentiate between “ingenuity” and “innovation” may, upon initial consideration, seem like a pointless rhetorical exercise or a quintessential illustration of a distinction without a difference. After all, the two words hold similar meanings: both suggest a creative approach to either solving problems or creating something new. Merriam-Webster defines innovation as “the introduction of something new” and “a new idea, method, or device”; it defines ingenuity as “skill or cleverness in devising or combining” and “cleverness or aptness of design or contrivance”. The words’ historic usages differ in subtle yet important ways, and each word says something essential about the ethos of their respective eras.

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On account of its historic linkage with New England Yankees and the role this subset of early Americans played in the country’s industrial revolution, as well as its later association with World War II combat troops, whose penchant for coming up with resourceful solutions—like affixing hedgerow cutters to tanks—earned them great renown, ingenuity has long connoted the creation of tangible, often tactile solutions to pressing, real world problems. The products and inventions that tend to fall under the category of ingenuity serve as a reminder that America rose to the status of superpower on account of its manufacturing prowess and engineering creativity. Most importantly, ingenuity’s past usage has always implied a sort of can-do communal spirit put in service of creating material things or inventions that benefit the greater good as opposed to a select subset of individuals.

Innovation, on the other hand, became a vogue descriptor of the business class during the ’90s and ’00s, a time when the American economy took more cues from the still burgeoning tech sector as opposed to manufacturing titans of yore. As Jill Lepore noted in a much remarked upon New Yorker article Clayton Christensen’s 1997 tome The Innovator’s Dilemma helped cement the word’s place in American culture and linked it to the concept of disruption. Lepore writes “‘Innovation’ began to seep beyond specialized literatures in the nineteen-nineties, and gained ubiquity only after 9/11.” This was an era in which American business was enamored with “globalization” and “synergy”, similarly cunning phrases that relished the creative destruction aspect of capitalism while barely paying lip service to the idea that a free market should, in theory, benefit all members of society.

Innovation continues to be the buzzword of the tech industry, as well as every industry and corporation that seeks to emulate the profitability and significant power big tech now enjoys. Although the tech industry admittedly manufactures tangible products that require incredible engineering prowess to come to fruition, it also seems more interested in disrupting specific market segments, consequences be damned, than fortifying the greater economy. The innovations achieved by contemporary tech titans often comes at the expense of others; the financial windfall achieved by the Apples and Facebooks and Amazons of the world tend to trickle upwards rather than outwards.

Indeed, while the tech world’s products can represent manufacturing ingenuity at its finest, many of these products do little more than provide flashy updates to existing ideas rather than offer revolutionary solutions to vexing problems. As Lepore writes, the concept of innovation “skirts the question of whether a novelty is an improvement: the world might not be getting better and better but our devices are getting newer and newer.” Higher resolution cell phone cameras and more effective social media sites certainly offer users innovative experiences. But whether these innovations constitute real progress is the sort of question past inventions tagged with the ingenuity label were rarely, if ever, asked—because the answer was always assumed to be yes.

The Founder depicts the original McDonald’s as a model of Yankee Ingenuity. When Kroc first eats there, he’s amazed by the speed with which he receives his food and the quality of the food itself. The restaurant is nothing like the mediocre fast food joints his gig selling milk shake machines has forced him to patronize. It’s fast and clean and serves a higher quality product. Kroc is so wowed by the experience that he takes the McDonald brothers, Richard “Dick” (Offerman) and Maurice “Mac” (Lynch), out to dinner just so he can learn more about how they came to create such an ingenious restaurant.

Page 2 (link below): The Value of “Community” and “Values”

The Value of “Community” and “Values”

The brothers happily reveal the secret to their success: a proprietary food preparation method they have dubbed the “speedee service system”, which applies principles of assembly line manufacturing to a kitchen. In one of the film’s most memorable scenes, the McDonalds recount the origin of the speedee service system, which, according to the film, involved drawing a model of the restaurant’s kitchen on a tennis court so that the staff could simulate the process of preparing burgers and fries and the brothers could test modifications to the process to see whether or not they would increase efficiency without sacrificing quality. The exercise resulted in a reconfigured kitchen layout complete with the specially made tools required to make the speedee system possible.

Moments like these portray the McDonald’s brothers as personifications of Yankee ingenuity and the earnest, homely, gosh-darn American integrity so lovingly associated with post-World War II America. There’s something slightly yokel-ish about their aww-shucksy demeanors and the clear pleasure they take in simple virtues like hard work and casual politeness—not to mention their willingness to share trade secrets with a complete stranger like Kroc. But they never come across as fools. Instead, <i>The Founder</i> depicts the McDonalds as two Americans with above average intelligence and a profound appreciation for the rewards making an honest living affords a person. They use their gift for ingenuity to parlay a series of humble ambitions into a thriving local business, which provides customers with better food and shorter wait times and offers stable employment to a staff the brothers can’t help but shower with paternal fondness.

Kroc, on the other hand, is a character that trades in pure business innovation. As played by Keaton, he comes across as a hybrid of Willy Loman and Gordon Gekko. At the start of the film, he’s just an unsuccessful milkshake machine salesman far more interested in crafting the perfect pitch than understanding how the product he’s peddling works. After his initial visit to McDonald’s and subsequent dinner with the brothers, he implores them to let him franchise the restaurant. They inform him they’ve already ventured down that path but decided not to pursue it aggressively for the simple reason that it became too difficult to maintain quality control in dispersed locations. This concern doesn’t even register with Kroc. All he sees is money to be made.

He eventually sells the brothers on his idea by convincing them that by opening franchises throughout the country, the McDonald’s Golden Arches, a bombastic architectural flourish concocted by Dick, could become ubiquitous symbols of American community and values. But it’s clear from the onset that all he wants to do is make money and achieve influence and that his marketing spiel is only intended to sell the McDonald brothers on his franchise scheme. For Kroc, community and values are nothing more than buzzwords to be used in an effective presentation.

Once he becomes head of franchising, Kroc begins examining new ways to make an extra buck. He asks the McDonald brothers if he can sell sponsorship space on the menu boards, but is rebuked by Dick, who emphatically tells him that he and his brother have no “interest in indulging in that sort of crass commercialism. When one of his franchisees tells him that all McDonald’s locations could significantly reduce operating costs by making milkshakes using a powdered mix that doesn’t require refrigeration, Kroc is gung ho on the idea. He floats the new strategy past Dick, the brother who clearly calls most of the shots, only to be told, “If phony powdered milkshakes is your idea of progress, you have a profound misunderstanding of what McDonald’s is about.”

To his credit, Kroc makes a legitimately brilliant managerial decision early-on: rather than try and sell wealthy retirees on the benefits of investing some of their disposable income in a McDonald’s franchise, he recruits working class people with a real desire to better themselves to run the new restaurants. This results in a series of truly dedicated franchise owners. But every other contribution he makes does nothing to improve the product his franchises are selling and everything to put more money in his pocket and more control in his corner.

The Founder ends on a stridently depressing note, with Kroc buying the McDonald brothers out of their own company and charting a course that will take the business in a direction never imagined by its creators. Kroc’s willingness to substitute powdered milkshake mix for real ice cream prefigures the well-detailed shortcuts the chain would later take in pursuit of greater profitability. In one of the final scenes, Dick asks Kroc why, after his initial visit to McDonald’s and ensuing dinner with the brothers, he didn’t just take the speedee system concept Dick and Mac had shown him and open his own restaurant. Kroc tells him that the reason he chose to pursue a takeover of McDonald’s instead is that what he really wanted was the name, McDonald’s, a name he says emanates such a warm, welcoming, all-American vibe that affixing it to any business would just about guarantee success.

The answer contradicts everything Kroc has previously said makes McDonald’s special while proving he truly does believe the idea that innovative marketing rather than ingenious production processes is the real key to success. Soon after, Kroc hands a reporter a business card that lists him as the “founder” of the company. And in one sense, Kroc’s new title is not a lie: he is the founder of the new McDonald’s, which will quickly cease to resemble the original hamburger stand from whence it sprung.


John Carroll Lynch as Mac and Nick Offerman as Dick McDonald (IMDB)

Like all films based on real events, The Founder takes great liberties with the historical record. The fictionalized McDonald brothers are portrayed as exemplars of a painstakingly virtuous strain of capitalism; they are upright citizens, defenders of food purity, restaurateurs whose top priority never extends beyond maintaining their original location’s lofty standards. They turn the keys of the franchise operation over to Kroc early in the film but don’t in any way share his relentless quest to boost the bottom line through any means necessary.

The real McDonald brothers were not quite as commerce averse. Prior to meeting Kroc, they had already pursued franchising with significant aggression, suggesting they too had a desire for maximizing profits. But the disconnect between the historical record and The Founder‘s fictional portrayal is not nearly as interesting as the way the film subtly uses its main characters to depict how the Yankee Ingenuity of the McDonald brothers fell prey to the business innovations of Kroc, while implying the former never stood a chance of triumphing in this battle of competing ideals.

The McDonald brothers exemplify the engineering ingenuity and dedication to pioneering techniques that yield perceptible improvements and better quality. Kroc prefers the sort of innovative gimmicks that result in ideas and processes that are different but not necessarily better. Kroc is the anti-hero to the heroic McDonald brothers. His innovations, unlike their ingenuity, aren’t concerned with achieving real progress so much as rehashing something new out of existing parts and extracting as much money as possible.

To say American culture currently truckles before the alter of innovation would be a gross understatement. Publications as different as Time, Better Homes and Gardens, and Fast Company, just to name a few, have published entire issues devoted to innovation. We now have the Presidential Innovation Fellows program, courtesy of our former technocrat-in-chief Barack Obama. Even the National Endowment of the Arts has embraced the innovation agenda, informing past grant applicants that “innovative projects are strongly encouraged”. The last three decades have brought the proliferation of neat financial innovations like credit defaults swaps and derivatives, as well as various technologies, from iPhones to the social media sites their users crave, that arguably do little more than accelerate convenience. Recent examples of Yankee Ingenuity are much harder to come by, and those that exist tend to be much less publicized and celebrated.

What The Founder does so well in the course of its two-hour run time is argue that America has transformed itself from a society of ingenuity to a morass of innovation. We’re no longer a country that underwrites pioneering public works projects like the interstate highway system or sends its best and brightest to work on truly ingenious initiatives like the space program; ivy league grads are more likely to end up working for the tech sector or on Wall Street then in the halls of NASA. Americans today seem more concerned about higher resolution smart phone screens and better network connectivity than easily affordable zero emissions cars or faster and more efficient airplanes.

The Yankee Ingenuity practiced by the fictionalized McDonald brothers is simply not as fashionable as the American Innovation favored by Keaton’s Kroc. (And no, the swell of artisanal foods and farm-to-table restaurants, tactile as those establishments and their fare may be, does not represent a resurgence of Yankee Ingenuity.) The tangible, progress-abetting ingenuity of years past has been replaced by the buzzy, empty, stylized innovations of the contemporary tech and financial services dependent economy. As The Founder makes clear, this shift in cultural mores favors the less scrupulous among us at the expense of those who would use their talents to create things of lasting value. Whether or not America will ever revert to its previously ingenious ways is an open question. But at the moment innovation is kicking butt and taking names, while ingenuity has faded into the margins.

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