Page Count: 200
Chapters : 10
Time Taken: 2 Hours

Keith’s Take

Kenneth is a seasoned operator who has experienced the pressure and privilege of serving as McDonald’s Chief Executive for China and Division President for the Greater China Region. He also served as the Managing Director for McDonald’s Singapore.

This book is extremely tactical for founders and corporate leaders. As I am working on growing Front Row Media as a company, it has forced me to think seriously about the impact I want to create.

It’s a short read.

(It took me an hour to complete the book and another to think about the implications of his ideas.)

Another huge plus is that he also featured other Asian killers like Belinda Wong, Chairman of Starbucks China (whom Howard Schultz said was the single most important person for Starbucks’s efforts to grow into China), and Wern Yuen Tan, CEO of Pepsico APAC.

I recommend treating his questions as journaling prompts to get the most value out of Kenneth's book.

Revisit the book as you need.

Keith’s Notes

The Asian Gap

Why then do MNCs continue to fly in expats to do the job? Because there is a dearth of senior local Asian talent that is entrusted to take over the leadership mantle. This trend will unfortunately continue, and more effort and steadfast commitment will be required to develop and entrust Asian leaders with these positions, be it in the emerging Asian markets or even in the more developed ones. Clearly, all of us in Asia need to play our part. This cannot be an entitlement. There remains a gap in awareness of how Asian leaders behave and what we can do to help develop more well-rounded leadership and stewardship skills.

This appears to be a lagging indicator of how corporates will hire. I truly believe that the Asian Century is upon us. This doesn’t mean we will displace Western corporates. I think it means the MNC phenomenon will no longer be American or European.

We will see giants emerge from our part of the globe. This could appear as a) rapidly growing Asian startups or b) the modernisation of family-owned conglomerates. (Think about how the chaebols in South Korea became MNCs. I think many other of their Asian peers will emerge in the coming century.)

Kenneth is right that we cannot act entitled.

Anti-Hierarchy

In McDonald’s, our crew and their managers in the restaurants are closest to the customer, not those of us working in the HQ office. Each restaurant unit has a Restaurant General Manager who is competent and well-trained, and in charge of their million-dollar business (we don’t think of it much, but the revenue in our restaurants make our employees small and medium enterprise (SME) operators). Each restaurant employs crew from all walks of life, operates the “daily miracle” of opening the restaurant, offers consistent and high-quality food and service, and almost always does so at a level of efficiency we take for granted.

I have a saying to my office folks, as a constant reminder that our job is to face and fully support the restaurants: “We don’t see a single customer in the office, and we don’t make a single cent in the office. It’s all at the restaurants.

Focusing on hierarchy breeds loyalty and risk aversion. Management would take the option that ruffles the least amount of feathers. However, if one focuses on where value is created, management will focus on clearing the path.

Strategic Thinking

You can’t think strategically without deconstructing the reality in front of you.

The best strategic thinkers champion first principles thinking.

First principles thinking is a problem-solving approach that involves breaking down complex problems into their most basic, fundamental elements. This method encourages thinkers to question assumptions and approach challenges from a fresh perspective.

Half of the battle is won when the problem has been properly diagnosed.

Here I break down how Kenneth approached the challenge.

Opportunity: China’s Rapidly Rising Middle Class.

The notion then was that since China was such a massive country with a population of 1.3 billion people, the biggest opportunity to offer our unique food and services to the growing middle class was to aggressively open more restaurants in the right locations.

Problem: Not Focused Enough.

We were expanding at a much slower pace than our key competitor, KFC. We had 26 McDonald’s offices located all over China – trying to capture the opportunity in the different tier markets – but we were not winning in any one of those cities.

Most of our money was made in the four key Tier 1 cities (Beijing, Shanghai, Guangzhou and Shenzhen) and yet our market penetration in those huge cities was low. There was also lesser consideration on building a proper infrastructure for restaurant development and to leverage supply chain, talent, marketing, and technology.

Pivot: Double down on Tier 1 Cities.

We would be in the top 11 cities in China first. We made a deliberate choice to pause our openings in any other cities until we had those 11 appropriately populated with the right number of restaurants. The reasoning behind this strategy was that those cities were where most of the middle-class consumers were. It also led to efficiency on various fronts.

The easiest thing to do would have been to suggest throwing more money at the problem or increasing advertising revenue. However, Kenneth's advocacy for a strategic pause and a focus on winning 11 cities first highlighted a thought-through strategy.

It also reveals how important focus is. Even McDonald’s, the huge behemoth, had to grapple with opportunity costs and focus on where they could secure early wins first.

Grappling with Insecurities

A huge theme I am uncovering in my interviews is that Singapore (or maybe Asia) has not yet been fully intellectually decolonized.

We have this latent insecurity whispering into our ears - somehow, folks from the West are more enlightened than us.

Kenneth faced the same demons too, but here is how he learnt to counter it:

I have since learnt that all these insecurities were very much in my mind. If you exude the right qualities as a leader, are competent, take care of your people, and always remain fair, most people will naturally follow you. But if you are indeed all those things, and issues remain, then recognise that the problem may not necessarily lie with you.

It takes time and practice to gain confidence in leading colleagues of other nationalities, so the earlier you get exposed to this, the better you will get at it. Eventually you will be able to extend the same support and fair and confident leadership to all.

Treat confidence like a muscle.

Train it, and you will get stronger!

Steward Mentality

In Asia, the tendency is for leaders to take the narrow and more structured lane of achieving the KPIs set out for them. All that is well and good for one’s performance rating, and for any organisation to stay focused. It’s important that there is always a clear plan and a consistent view of targets that can be aligned through the enterprise so that proper execution can take place.

Where we need to elevate our thinking as leaders of the enterprise, however, is beyond KPIs and targets. We should aspire to think of ourselves as stewards of the business – always meeting our necessary short-term goals, but at the same time flexing in and out of the key issues and megatrends to be able to dynamically shape the organisation towards a longer-term vision.

This goes back to the need to invert our traditional labelling of bosses at the top of the hierarchy.

When companies continue to put the bosses' views first- at best, they will end up mercenaries who only care about their short-term interests and compensation.

But if bosses are seen as people who will unlock resources and clear obstacles, everyone will adopt the owner mentality, seeing themselves as stewards of the business.

Note: When I hire or work with talents, I must see them as teammates.

Selling Your Idea

The key to effective communication, then, is not just about disseminating the idea; it’s about elevating the messaging and delivery in terms that the audience can relate to, be inspired by, and want to act on. Because many Asians don’t tend to show up with big personalities or strong showmanship skills, it might take more time to craft our messaging.

Why was LKY such a great orator?

It wasn’t just because he knew how to pause at the right time or had sufficient conviction in his message.

He learnt how to elevate his message to inspire. The audience has to feel they are aspiring to something greater.

I like the speech LKY gave at the Liquor Retailers' Association's 28th anniversary celebrations in 1965. (The transcript is found here)

He didn’t just congratulate them on their longevity or a bland re-hash of some talking points. He spoke to them about how Singapore would be a multicultural society for the next thousand years and a model that Southeast Asia could aspire to.

(Remember, this is not a National Day Rally speech. It’s just an anniversary dinner for alcohol merchants!)

The Most Important Type of Diversity

Is a diversity of viewpoints.

This is what generates creativity.

We need to create a culture in Asia that drives the idea that we should never be static. And to move forward, every opinion counts. If it is a flat idea, call it out! That is what is needed. We need people who can point out that the emperor has no clothes, that it is just a mediocre idea and that we can do better.

Kenneth highlighted that the leadership team was planning to run a BTS K-Pop promotion right at the peak of a COVID-19 outbreak.

The Singapore government at that point in time was limiting interactions and gatherings to curb the rising daily cases. It just so happened that the launch date for the promotion happened to be right smack in the middle of this crisis and could not be pushed out any further due to contractual requirements.

He thought that the only way to safely execute this was to do so via drive-thrus or delivery. But, much of the discussion centred around how they were going to manage the long lines during the in-person launch.

As he later recalled,

I was just waiting for someone to say something to the contrary. It was not the right action to take, and we were going to get killed by the media and by the authorities and by all the negative press for causing crowds at every McDonald’s restaurant. But because one of the project leaders said, “Let’s discuss how we are going to get the full suite of execution done at the restaurants”, everybody simply followed suit.

After the circular discussion had gone on for 45 minutes, I could not sit with my mouth shut any longer. I asked if anyone thought what we were doing was a bad idea. And then I sat back and watched what happened next. Folks finally began speaking up, claiming that they, too, were not confident that they could control the ungated crowds, and that we might get in trouble with the authorities if these crowds then led to a super-spreader event.

Why didn’t anyone speak up earlier? It is because they thought that was what the boss wanted, so they would try fervently to execute it.

The greatest value of diversity is that not only do you have more creative ideas, but you also have an effective antidote to the herd mentality.

If you are an Asian and want to improve your Leadership skills, I recommend buying this book.