From Russia with Love: Big Mac entrepreneur recounts bringing McDonald’s to Moscow during Cold War with SFU MBAs

By Jevta Lukic

While every business venture brings forth its own set of unique challenges, one Canadian visionary knows particularly well the tribulations of conducting business amidst a politically tense environment – both at home and overseas. The founder of McDonald’s Canada and McDonald’s Russia, George Cohon, visited with Beedie School of Business MBA students at SFU’s Segal Graduate School in downtown Vancouver on June 16 to discuss the launching of the McDonald’s restaurant chain in the Soviet Union during the Cold War; as well as his more recent global business ventures.

With a mix of humour, charisma and entrepreneurial acumen, he recounted anecdotes about Canada-Russia politics and his many business adventures abroad. The fearless and determined pioneer and entrepreneur also explained the term “hamburger diplomacy,” which he coined to describe the 14 years it took to launch a McDonald’s restaurant in Russia, and the impact it had on economic and political relations for the Soviet Union.

Navigating a difficult and ever changing political landscape, Mr. Cohon’s decision to enter the Soviet Union market at a time when US president Ronald Reagan described the country as the “evil empire” was bold – but not reckless. Cohon’s instincts were proven right, as the first restaurant was a soaring success – with over 34,000 customers served on opening day. More importantly, there are over 245 McDonald’s restaurants operating in Russia today.

Mr. Cohon’s career has also been marked by a longstanding commitment to corporate social responsibility. As a corporate philanthropist, he is well known for his leadership in founding the Ronald McDonald House Foundations in Canada and Russia to support families of children who require hospitalization.

Speaking to Beedie School of Business MBA students, Cohon discussed the responsibility he held towards Russian communities as McDonald’s entered the market. “We didn’t go in to make a quick buck,” said Cohen.

During the Russian ruble crisis of 1998, when many international firms abandoned the Russian market, Mr. Cohon made the business decision to continue his commitment to the Russian communities that had so overwhelming supported McDonald’s. “As situations like the ruble crisis come up, you have to do what you believe is the right thing in the situation,” advised Cohon. “I always followed my gut feeling.”

Cohon’s entrepreneurial successes have garnered a global following. His McDonald’s foray into Russia eventually became a case study at Harvard Business School – a case taught by Cohon himself.

His presentation to the MBA class was followed by questions from the students. Cohon addressed a wide range of issues surrounding McDonald’s — including critiques from some quarters over the nutritional value of some menu items. He also discussed his current venture that sees him organizing the Cirque du Soleil performances in Russia for the first time.

When asked by one student how to achieve the same level of entrepreneurial success he did, Cohon replied: “Don’t be timid. You’re going to make mistakes – make sure you learn from them.”

“Get into something you like,” he added. “Be persistent and determined.”

Cohon was honoured at this year’s Beedie School of Business convocation with an honorary degree of Doctor of Laws for his many achievements in the realms of business and corporate social responsibility.

Among other awards, he has received the highest public service awards from three continents: he is an Officer of the Order of Canada; he was also awarded Russia’s Order of Friendship and the Israel Prime Minister’s Medal. He has received the Woodrow Wilson Award for Corporate Citizenship, an honourary doctorate from University of Haifa, and is a member of the Canadian Business Hall of Fame.