Film

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

Michael Keaton as Ray Kroc (IMDB)

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.

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