TIME: Almanac 1993/TIME Almanac 1993.iso/time/062992/0629200.000

Text File | 1992-09-23 | 9.3 KB | 190 lines

                                                                                BUSINESS, Page 66

America's Hamburger Helper


McDonald's gives new meaning to "we do it all for you" by
investing in people and their neighborhoods

By EDWIN M. REINGOLD/LOS ANGELES


    When the smoke cleared after 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. Within hours after the
curfew was lifted, all South Central's Golden Arches were back
up and running, feeding fire fighters, police and National Guard
troops as well as burned-out citizens. The St. Thomas Aquinas
Elementary School, with 300 hungry students and no utilities,
called for lunches and got them free -- with delivery to boot.

    For Edward H. Rensi, president and CEO of McDonald's
U.S.A., the explanation of what happened, or didn't happen, in
South Central L.A. was simple: "Our businesses there are owned
by African-American entrepreneurs who hired African-American
managers who hired African-American employees who served
everybody in the community, whether they be Korean, African
American or Caucasian."

    The $19-billion-a-year company has often been the target
of those who disparage everything from its entry-level wage
structure to the aesthetic blight of its cookie-cutter
proliferation. But the Los Angeles experience was vindication
of enlightened social policies begun more than three decades
ago. The late Ray Kroc, a crusty but imaginative salesman who
forged the chain in 1955, insisted that both franchise buyers
and company executives get involved in community affairs. "If
you are going to take money out of a community, give something
back," Kroc enjoined. "It's only good business."

    As a result, 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. Both its
franchise operators, who own 83% of all McDonald's restaurants,
and company officials sit on boards of local and national
minority service organizations, allowing the company to claim
that its total involvement in everything from the Urban League
and the n.a.a.c.p. to the U.S. Hispanic Chamber of Commerce may
constitute the biggest volunteer program of any business in the
nation.

    Because their original prosperity came from hamburger
stands in middle-class suburbs, McDonald's managers were at
first reluctant to move into inner-city markets. But company
executives say their first tentative steps in the '70s showed
those fears to be unfounded. The policy practiced in the
suburbs, which dictated that McDonald's stores reflect the
communities in which they operate, was applied to the new urban
markets. As a result, nearly 70% of McDonald's restaurant
management and 25% of the company's executives are minorities
and women, and so are about half its corporate department heads.
This year McDonald's will nearly double its purchases from
companies that are minority or female owned, from last year's
$157 million to $300 million. Several of the biggest are owned
and operated by former McDonald's managers or franchise holders.

    The spawning ground for many of the new ideas and programs
designed to integrate the franchises into neighborhoods in which
they operate has been the company's moral and intellectual
McCenter, Hamburger University, set in its own 80-acre nature
preserve near Oak Brook, Ill. Since 1979 the company has held
affirmative-action seminars for its executives and managers
there, as well as in many of the company's 40 regional offices,
on such topics as how to manage the changing work force and
handle career development for women, blacks and Hispanics. Each
year 3,000 employees complete affirmative-action training
programs that last 1 1/2 to 3 days. Ideas originated at
headquarters and by individual franchisees have led to programs
such as McJobs, which takes on mentally and physically impaired
employees, and McPride, which keeps students in school and
rewards them for academic achievement while they work.

    Through a program devised by its store owners, the company
has helped establish 153 Ronald McDonald Houses, named for the
chain's trademark clown, where families of seriously ill
children can stay while the child is undergoing extensive
medical treatment, such as chemotherapy or bone-marrow
transplants. Each house serves an average of 15 families who pay
from $5 to $15 a night, if they can afford it. The local
projects are supported by local fund drives, and all the money
collected goes directly to the houses; McDonald's pays all
administrative costs of the program, which extends to Canada,
France, Germany, Holland, Australia and New Zealand.

    But McDonald's broadest impact has been through its basic
job-training system. Its 8,800 U.S. restaurants (there are an
additional 3,600 overseas from Beijing to Belgrade) train
American youth of every ethnic hue. "Sending a kid to the Army
used to be the standard way to teach kids values, discipline,
respect for authority, to be a member of a team, get to work on
time, brush your teeth, comb your hair, clean your fingernails,"
says Ed Rensi. "Now, somehow, McDonald's has become the new
entry-level job-training institution in America. We find
ourselves doing things in that role that we would never imagine
we would do." Among them: paying kids to study, rewarding them
for staying in school, hiring physically and mentally
handicapped youngsters and adults and giving sensitivity
training to co-workers. In a program called McMasters, older
people, usually retirees, are hired to work alongside young crew
members to give the workplace a sense of family and to set an
example of caring, courtesy and responsibility.

    In conjunction with the vocational-rehabilitation services
of several states, nearly 7,000 disabled and handicapped people
have been trained to function as full McDonald's employees by
job coaches drawn from within the company. Before these less
fortunate employees take their places, company trainers often
put young able-bodied workers in blindfolds, gloves or dark
glasses to demonstrate the kind of handicaps their new
colleagues have to deal with in doing the same jobs.

    At Pat Newbury's McDonald's restaurant in Renton, Wash.,
some young employees earn an hour's pay not for flipping
burgers but for studying an hour before their work shift begins.
In a Chicago-area restaurant, Hispanic teenagers are being
tutored in English. In Tulsa, a McDonald's crew is studying
algebra after work. At a Honolulu restaurant, student workers
get an extra hour's pay to study for an hour after closing. In
Colorado, Virginia and Massachusetts there are Stay in School
programs offering bonus money for employees who receive good
grades. Reading-improvement classes frequently take place at
restaurants in Kansas and New Jersey.

    Despite the initial skepticism of educators, McDonald's
programs have managed to allay the fears of many that work and
school could not mix. In February the National Association of
Secondary School Principals passed a resolution commending the
company for "exemplary and motivational efforts to support
education, students and assistant principals."

    Bob Charles, the owner of a McDonald's in Boulder, has
seen some of his employed at-risk students begin to get A's
after joining his McPride program, which limits them to a
14-hour workweek and pays bonuses for improvement and school
attendance. Many of them have a very low level of self-esteem,
says Charles. But once they come to work as part of a team and
gain a sense of confidence, "you'd almost never believe the
change in these kids."

    Mark Brownstein's company owns 13 restaurants in Orange
County, Calif., and hires elderly and handicapped workers
aggressively. "They are people who need work, and we need people
to work. You wonder why everybody makes a big deal about it,"
shrugs Brownstein. "Besides, the seniors and the special-ed kids
in our stores create a sense of humanity." Owner Jonah Kaufman
has 26 handicapped people, mainly with Down syndrome, on the
payroll in his 12 Long Island stores. One of them, Joe King,
trains new employees. Kaufman says the key to his success with
the disabled is "to try not to treat them differently."
McDonald's has used Braille and its own kind of sign language
as aids for impaired employees. At McDonald's Oak Brook
headquarters, staff workers are sought from specialized schools,
such as Gallaudet University and the Rochester Institute for
Technology, which has an educational center for the deaf.

    Senior vice president Robert H. Beavers Jr., who gave up
plans to become an electrical engineer 19 years ago to stay with
McDonald's, says the company's socially minded business
practices have made the company stronger: "Our energy level and
our understanding of the market today are much better because
of the cultural diversity we have." He points out that in the
inner city, where he grew up, they say, "If you talk the talk,
you better walk the walk."

    In Los Angeles, they talked and they walked -- and they
didn't burn. So Rensi and his team intend to keep on keeping on.
After all, it's only good business.