Fireside chat Peter Ritchie

I have the delight of sharing my colleague Jemma’s (RedBalloon’s GM) insights from the former CEO of McDonald’s Australia, Peter Ritchie. Peter started back in 1973 as McDonald’s Australia’s first ever employee and the first employee outside of North America. He shared with Jemma his long journey (32 years with the brand) and the lessons he learned along the way.

Jemma tells me he had a wonderful and very simple story about the growth of the brand in Australia and how investing in people was key to their success. He shared his three key lessons.

When he chose to bring McDonald’s to Australia he had no idea how it was going to go. He had backing from the US Chairman at the time in 1973 but it took him seven years of losses before McDonald’s Australia started turning a profit and were accepted as a brand.

He said very early in his career he learned his first most valuable lesson in business: “There ain’t no such thing as instant success”.

Pressured from the US executive teams he on many occasions wanted to give up. But then he built a great relationship with the chairman at the time, who told him that it took the American operation more time than that to turn a profit. Something not widely discussed.

In 1985 the Australian McDonald’s chain was starting to show signs of potential but still nowhere near where it needed to be. They have a measure that at any time in any McDonald’s store globally, they can compare the number of customers served directly to the number of staff rostered on in the store. Australia at this time ranked in the bottom 5% for productivity.

After a trip with his team to investigate the best of the global McDonald’s operations he realised that the Australian stores could never compete at the same level as the efficiency of stores in Asia, where the labour was more accessible and cheaper and they had three staff on the restaurant floor to Australia’s one.

So in 1986 he made the decision to invest 30% of the company net profit into training. And the results were dramatic. In 1987 Australia went from being ranked in the bottom 5% to being #1 in the world on the customers served to staff ratio and it still is. Not only did productivity increase but the profitability went up dramatically. He believes they are still in this position because he created a culture of training which leads to his second most valuable lesson “training is absolutely vital in any organisation”.

His third lesson was about how training can really turn people into leaders and he has watched plenty of fresh faced 15-year-old go through the McDonald’s training program. He’s watched them grow in confidence and trust in their own abilities. He believes that “you can absolutely learn to be a leader” and that “if you think you are a good leader now, have another think and ask yourself, ‘what is being a leader really about? What do people think of me and what do people expect from me?'”

It’s a simple set of lessons from a former CEO who’s seen a few things in his time.

I found this story fascinating – the absolute commitment to the team. When McDonald’s came to Australia I was a child – one of the first restaurants was not far from our home in Nunawading. My sister and I wanted our parents to take us there. It is hard to believe now, but these fast food restaurants had to convince Australians (over a long period of time) to change eating habits. The only option for a cheap meal we had until this was the local fish and chip shop. If McDonald’s had not have arrived then I suppose someone else would have created this mid-market.

Naomi Simson is considered one of Australia’s ‘Best Bosses’. She is an employee engagement advocate and practices what she preaches in her own business. RedBalloon has been named as one of only six Hewitt Best Employers in Australia and New Zealand for 2009 and awarded an engagement scorecard of over 90% two years in a row – the average in Australian businesses is 55%. RedBalloon has also been nominated by BRW as being in the top 10 Best Places to Work in Australia behind the likes of Google. One of Australia’s outstanding female entrepreneurs, Naomi regularly entertains as a passionate speaker inspiring people on employer branding, engagement and reward and recognition. Naomi writes a blogand is a published author – and has received many accolades and awards for the business she founded – RedBalloon.com.au.