Forever Yang for McDo

“I like to get people fired up, fill them with zeal for McDonald’s, and watch the results in their work.” — Ray Kroc

It’s been 41 years since George Yang launched the fast-food phenomenon in a joint venture with the US-based McDonald’s Corporation. Since 2005, the business has become a fully-owned Filipino enterprise under the Golden Arches Development Corporation (GADC) of which he is the chairman. But behind the business headlines is the personal journey of a determined entrepreneur, a journey peppered with inspiring episodes of self-understanding and realization, and a journey from whose twists and turns are culled priceless lessons in entrepreneurship.

Having come of age under the influential shade of his grandfather’s entrepreneurial venture, George Yang had been keenly aware of the joys of growing a business, as well as the infinite rewards of being captain of your ship, well before joining the international McDonald’s community. After completing his MBA at the Wharton Business School, and after returning from a side trip to Europe that doubled as a honeymoon, George returned to Manila, settled in to start a family, and began a two-year juggling act of working as a marketing manager of a tobacco company called Bataan Cigarettes; consulting for a manufacturing company; and selling a variety of things on the side — from insurance, to nicotine guards and imported cosmetics; and teaching finance management and marketing at De La Salle University along Taft Avenue in Manila.

As a wide reader he had come across news and trend reports on a growing American fast-food chain called McDonald’s, a company whose premium on high-quality fast-food products and service were being extolled in business reviews in many other countries. And so, he wrote the McDonald’s headquarters and expressed interest in the Philippine franchise. But in 1974, the Philippines was, as George puts it, “very far from their radar” and they returned his letter, declining his offer. They were not ready to come to the Philippines.

Although the Philippines did not have as flourishing a quick-service restaurant industry as it does now, it was George’s contention that the environment at that time was ripe for it. In the years prior there had been a number of American restaurant franchises brought into the country that were well received. It was no secret that the Philippines, given its four-decade history as American-occupied territory, was still, to a large extent, a fan of American culture and its prime exports — music and movies, fashion and technology, food and beverages. George Yang was certain and willing to bet his fortunes that McDonald’s, a growing brand that was sweeping across the world and meeting overwhelming success, was going to fare even better than its predecessors had in the Philippines.

Rather than wait for the Americans to acknowledge the Philippines as a potential area for expansion, George Yang decided to take charge of their education and elected to bring the Philippines’ growth to their attention. “I would send them clippings of economic news, so that they would realize that the Philippines was ready for this business,” he says, then adds an almost winking afterthought: “Or sometimes I would just write in to say hello, make sure they didn’t forget about me.” And he did just that for the next two years.

In 1976, a team of McDonald’s executives from the mother company in Oakbrook, Illinois arrived in Manila to explore business possibilities, and to assess several candidates for a master franchise. Anyone looking for proof of progress and vibrancy in Manila was sure to find it in electric proportions that year — for instance, as host of the 1976 International Monetary Fund conference, the city’s skyline changed drastically with the rise of 14 new hotels slated to accommodate hundreds of dignitaries from around the world. George Yang was one of those the McDonald’s team had arranged to meet with. Although he had been diligently keeping contact for the last two years, George knew he wasn’t the only one who had expressed a desire to bring McDonald’s to the Philippines. Other bidders included well-established holding companies looking to diversify or expand their portfolios; still others were businessmen whose last names rang of well-established roots in the fast-moving consumer goods industry, or whose network of political connections could inspire snappy salutes. George realized soon enough that he was, in fact, up against the big guys.

After the McDonald’s executives were received at the airport, billeted at an expensive hotel and chauffeured around town in a limousine care of one of the other bidders, it was George’s turn to play host. It is a virtue of both the wise and the seasoned entrepreneur to hope for the best and expect the worst, and it is a virtue that proved essential to George Yang on the day he met with the McDonald’s team. He took the McDonald’s executives on a tour of Metro Manila’s dining establishments, and around the metropolitan area’s different commercial centers such as Makati and Cubao, in a borrowed old Mercedes-Benz with his brother-in-law behind the wheel. The car broke down in the middle of the street, and the air-conditioner conked out, giving the Americans what they hadn’t expected to experience — a good serving of real tropical heat. But the opportunity to make his pitch had not disappeared; it was, in fact, still sitting in the backseat of the Mercedes, melting under the sweltering heat. And so, despite the inconvenience on their part and mild embarrassment on his, he soldiered on.

It also helped that he had attended an American business school, one widely acknowledged as one of the best in the world, and that afterwards, he taught what he had learned at his own alma mater, De La Salle University. He was a person who could speak their business language, and he was a person whose instincts and keen sense of observation had given him a deep understanding of the local culture. In the period of deliberations that was to last four years, George Yang refused to let the brief encounter in less than favorable circumstances with the McDonald’s team dampen his determination to win the franchise. Until it had been officially awarded to a local partner, anything was possible.

So determined was he that he took the initiative to learn the business during the long wait. He contacted a friend, Daniel Lee, a Hong Kong-based businessman who held the McDonald’s franchise in what was then still British territory, and enlisted as a McDonald’s crewmember. Whether it was proof of his foresight, or that he simply needed the company, George took with him his eldest son, Kenneth, who was then 15 years old the summer they flew to Hong Kong. Forty years later, after approximately 33 years at various posts within the organization — from a part-time summer crewmember to purchasing officer for 10 years — Kenneth is now the company’s chief executive officer.

The year was 1980, and the self-assigned mission was to work at the McDonald’s branch on Granville Road in Hong Kong’s Kowloon district. From their rented New World Apartments unit along Victoria Harbour, father and son would wake up at the crack of dawn in order to be at their stations as early as six in the morning in time for the day’s opening. They would then don their uniforms — back then, a brown polyester shirt-and-pants number topped with a paper hat — and join the ranks. Kenneth, because he was a minor, worked a maximum of four hours, often manning the counter with a Mandarin-speaking buddy and assembling orders on a tray. George, because he was eager to learn the system from top to bottom, worked the whole circuit for much longer hours, mopping floors, wiping kitchen counters, flipping burgers, and ringing up the cash registers. Kenneth thrived on the simple rewards of a daily Big Mac meal; George flourished on the whole idea of learning something new, on top of the promise that in the likely event that he would get the franchise, he would already know exactly what to do.

News of George’s stint in Hong Kong reached Oakbrook, where McDonald’s executives wondered what he was up to. He assured them that he was making the effort for his own education. “I also wanted to show them how serious I was about getting the franchise.” But in late 1980 — six years after he first made contact with McDonald’s headquarters, four years after he first met with the American executives in Manila, and just months after voluntary immersion in one of the fast-food giant’s Hong Kong outlets — the Americans returned to Manila and met with him again, this time to deliver the good news: from a pool of bidders that included a successful conglomerate and at least one taipan, he was being awarded the franchise. It came as little surprise. “Somehow I was confident that at the end of the day, I would get it.”

The first McDonald’s store in the Philippines opened in 1981 in Morayta. It had been an arduous one-year trek from the time he had won the franchise to the day the first store opened. It was during this time that one of his tenets of entrepreneurship has crystallized, one that he had passed on to his children when they began to helm their own enterprises, and one that his managers in McDonald’s come to appreciate. “Invest in good people,” he likes to say, repeating the hard-won credo as one of the secrets of his success.

The continuing innovations of McDonald’s show a brand that, 40 years after opening its doors and first meeting the Filipino customer, has never lost touch with the people it caters to. From two stores in 1981, to over 655 nationwide in 40 years of breakthrough innovations in our food, menu as well as service offerings. The changing times have inspired changing needs, and McDonald’s in the Philippines has always been up to the challenge of giving customers what they want and need. It turns out that an entire generation craved not just the food, but a definition as well, a continuing relationship with a brand that they had grown up with. This might explain why McDonald’s has made such an indelible mark on local culture.

For starters, it is perhaps only in the Philippines that McDonald’s has been given a nickname by which it is most commonly referred to: “McDo.” And many catchphrases in McDonald’s commercials have found their way into the local lexicon. After Sharon Cuneta, one of Philippine cinema’s most beloved leading ladies, casually sang the words, “Kita-kits sa McDo” in a 2002 television ad, “kita-kits” instantly became the shorthand for “See you there” or “see you around.” When a group of boys needled a friend with “Pa-Cheeseburger ka naman!” in a more recent commercial, the phrase again became such an enormous hit that it continues to be part of colloquial language, carrying with it such a nuanced world of meaning. After George Yang sang to a packed Araneta Coliseum, the crowd cheered then chanted, “Burger! Burger!” You know you’ve done something revolutionary when the very thing that you start becomes far bigger than yourself, takes on a life of its own, and creates its own personality. This is the personality of McDonald’s in the Philippines, one that is forever and quite deeply embedded in the local culture… thanks to one visionary George Yang.