The Saturday Interview: The big boss eats his own words: PAUL PRESTON

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The Independent Online
Paul Preston, 46, is president and chief executive officer of McDonald's Restaurants in the UK. He has worked for the company since the age of 16. An American citizen, he came to the UK to help set up the first British McDonald's in 1974. He is charged with doubling its 526 UK outlets over the next 10 years. He lives in west London with Mary Grace, his wife, and daughters Gemma, 18, and Joanna, 13. Gail Counsell talked to the man who would be the UK's burger king.

PAUL S Preston is a true believer. For more than 20 years barely a working day has passed without him munching his way through a random selection of Big Macs, Filet-o-Fishes and Chicken McNuggets. And still he comes back for more.

By rights he should be sick of the sight of McDonald's food, yet the mere notion prompts a ringing refutation: 'NEVER'. His faith in the infinite variety of the McDonald's menu is absolute.

'Our menu is made up of meat, chicken, fish, salad. What we serve in McDonald's is nothing different from what you serve in your home,' he says with utter sincerity.

Mr Preston may be president of McDonald's in the UK, but like all its executives he mingles with the product on a regular basis. Most days include an incognito trip to the workface.

His commitment is more than merely gastronomic. If a coachload of unexpected customers descends while he is paying an unannounced visit, he will throw off his jacket and serve. His wife has lost count of the times he has come home with his shoes ruined with grease.

McDonald's sees nothing unusual in the idea of periodically finding its top executives behind its counters. It practises a management philosophy that most companies only preach. The mantra is teamwork: the sum of the parts is always greater than the whole.

It works because there is a counterbalancing stress on responsibility. There is no pay round: from counter staff to chief executive, salaries are under continual performance-related review. If something is wrong, staff are encouraged to think through their own solutions.

'If you want something fixed not only for now but for the longer term you'd best make an impression on the management group that this can be better, that this isn't good enough,' drawls Mr Preston, in tones that have lost none of their Midwestern force despite two decades in the UK.

He pauses: 'Or that this is fantastic, more of the same please] If you are going to do one, you have to do the other. And if I say so myself I'm pretty good at that.'

For his part he is given considerable freedom in the way he runs the UK operation, which made pre-tax profits of pounds 19.6m on sales of pounds 586m last year. Once the US was overwhelmingly dominant, but the international side is growing fast; it now accounts for half of McDonald's dollars 23bn worldwide turnover and a third of the outlets.

An Ohio blue-collar background and an enthusiastically gregarious, can-do personality make Mr Preston a perfect fit with the McDonald's corporate style, best described as American Egalitarian.

Everyone who works for the company, from slick lawyer to slithery PR man, is expected to spend time working in a McDonald's, trying out all the muckiest jobs.

On 'Founders Day' each year the executives 'celebrate' the birthday of company patriarch Ray A Kroc by helping out in the local McDonald's. Though the excesses of its enthusiasm for the product may at times be rather difficult to swallow, it is hard to quarrel with an organisation that successfully persuaded the crusty Sir Bernard Ingham, Baroness Thatcher's eminence grise and a non-executive, to join his fellow directors serving behind the counter of a McDonald's in London.

There is one share option scheme for everyone from president to lowliest server. Mr Preston has a company car (a bottom-of-the range Mercedes with a driver when he needs one) but he often prefers to take the tube.

All employees are eligible for a performance bonus of up to 20 per cent. Exemplary employees - not necessarily executives - receive the 'president's award', which entitles them for one year only to a bonus of up to a third of salary.

About his own salary, Mr Preston is coy. The accounts show the highest paid director took home pounds 141,000 last year but they also note that seven directors also received unspecified pay from the US company.

But he points out that Jim Cantalupo, head of McDonald's International and one of the group's top five executives, earns less than dollars 1m a year - modest by US standards.

A typical day often starts as early as 5 am. By 6.30 am, having showered, breakfasted and walked the dog, he might be in his office, organising a meeting of the Employers' Forum on Disability, which he chairs.

He is almost always at work by 8 am, unless he is on a flight to the Continent - he is the 'responsibility partner' for northern Europe. After sorting out group matters, the afternoon will find him doing the rounds of the restaurants. He estimates that he spends less than a third of his time in the office.

Each Monday he meets with his 'McCabinet' of half a dozen senior executives. They spend 20 minutes running over key issues of the previous week, and then receive a presentation on any subject from public affairs to excess property. The aim, he says, is 'cross functional management' - exposing people to areas they need to consider when they make a decision in their own field.

Born in Ohio, Mr Preston's first encounter with the company came in 1964, when he took a part-time job, while still at school, at a local McDonald's in Cleveland. In his own words, a 'doer, a risk-taker who isn't afraid to make a mistake or admit to it,' the 16-year-old took instantly to the McDonald's culture.

'The teamwork, the camaraderie, the mental and physical challenge,' he enthuses; 'I loved it.'

He found himself working for Bob Rhea, later to become one of the company's most successful franchisees. Mr Rhea was a key influence. 'He was like a father to me - even more than a father.'

He went on working for McDonald's when he moved to university in Cincinatti. His father worked for the local telephone company, his mother was a housewife and he had to pay his way.

'My family was not blessed with a silver spoon,' he says, but adds: 'You appreciate much more that which you put your heart and soul and back into.' However, after three years he failed to graduate and moved back to Ohio and a full-time job with Mr Rhea.

Mr Rhea was to be the dominant force shaping Paul Preston's life and career. When McDonald's decided to set up in the UK in 1974 it chose Mr Rhea as its joint venture partner. He in turn sought the help of the 36- year-old Preston. The joint venture was dissolved in 1983 and the UK operation became a full subsidiary. Mr Preston took over from Mr Rhea as chief executive when he retired in 1986.

He is a fervent preacher of the gospel of continual change. 'Think of the first Caribbean holiday you ever had. The second one was not so exciting, was it? And the third one even less so. Everything has to be re-packaged and re-marketed. People live in a world of rising expectations.'

To meet them, he takes only three weeks' holiday a year. He likes to spend it fishing - preferably for Atlantic salmon in the cold waters of Iceland or Canada. Presumably the resulting catch makes for a pleasant change of diet.

(Photograph omitted)

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