By Beth Kowitt, writer-reporter

French fries do not reflect actual earnings-per-share gains.

FORTUNE -- Jim Skinner, CEO of McDonald's, is inspecting the kitchen of one of his restaurants in Oak Brook, Ill., with the rigor many of his peers might reserve for financial reports. He examines the food-preparation area as he explains, in great detail, the "review of the hash browns" that McDonald's initiated a few years ago -- and admonishes me to not touch anything. "Unless you feel like you want to have a job," he adds. McDonald's, after all, is one of the few places hiring these days. Skinner isn't a micromanager. He's simply intensely focused on the efficiency and performance of McDonald's (MCD) 33,000 restaurants worldwide and the enormous, complex infrastructure that supports them, a managerial trait that has resulted in nothing short of a Golden Age for the Golden Arches. Since Skinner, 66, became CEO in 2004, the company has delivered an annual growth rate of 5%, with revenue topping $24 billion last year. Same-store sales, a closely watched industry metric, have climbed each of the seven years of his tenure, and in that time the stock has returned more than 250% -- even after the early-August equities selloff -- vs. 16% for the S&P 500 (SPX). [Click here to read our 2005 story about how McDonald's got CEO succession right.] If you haven't been in a McDonald's lately, you might assume that the company simply has been the beneficiary of the struggling economy in the U.S. and elsewhere in the world, and that costconscious consumers are flocking to fast-food eateries instead of sit-down restaurants. But to post the kind of impressive numbers McDonald's has -- and to weather the current turmoil -- Skinner has had to find ways to attract new diners while retaining the hard-core Big Mac-and-fries crowd. And so

today, along with burgers and shakes, you can stroll into a McDonald's and pick up a snack wrap or a fruit smoothie or a decent latte (much to Starbucks' chagrin), all of which translates into higher sales per location. Last year average per-store sales jumped to $2.4 million, from $1.6 million in 2004. Now think of all the things that have to go right to pull off that kind of global transformation: Test kitchens need to churn out winning recipes (no more McPizzas!), the company must line up suppliers who can handle big orders, the crews have to be trained to prepare new items, and marketers must figure out a way to sell them -- all while fending off the food police who, not without merit, dog the company about the nutritional value of its fare. Luckily for McDonald's, Skinner is an operations whiz who has turned the restaurant giant into a well-oiled machine, insisting on planning and accountability throughout the company -- even hash browns are subject to review. "McDonald's has been an execution wonder," says UBS analyst David Palmer. That's why Fortune has named Skinner to the starting lineup of our first Executive Dream Team, an all-star roster of top-performing executives. Yet few at McDonald's ever expected the publicity-shy Midwesterner, who never graduated from college, to become CEO. "I've been a walk-on in everything; nobody was thinking, 'Get the little guy from Davenport, Iowa,'" says the 5-foot-6 Skinner, who rarely talks about himself in interviews. His transition from supporting player to team captain in November 2004 came under tragic circumstances: Former CEO Jim Cantalupo died of a heart attack that year, and Cantalupo's successor, Charlie Bell, resigned as he underwent treatment for cancer after just seven months on the job. He died in January 2005. But Skinner's leadership has been utterly self-assured -- it is as though the walk-on had been quietly practicing for his big shot all along. Employees and analysts say he's guided by a zeal for satisfying customers, even if it comes at the expense of his own ideas and preferences. A few years ago the company did extensive testing on new coffee-cup lids and rolled out a version that consumers liked - and that Skinner, who happens to drink a lot of coffee, really didn't. Rather than overrule the masses, Skinner came up with his own solution: He keeps a stash of the old lids on hand.

Skinner returned to the U.S. business in 2002 to a McDonald's that was floundering. The company was hooked on expansion; in 2001 it was opening more than three restaurants a day. The quality of the food and service had deteriorated as a result, along with the stock price and profits. Long-time McDonald's man Jim Cantalupo came out of retirement to run the company and elevated Skinner to vice chairman. The new executive team implemented a back-to-basics turnaround strategy -- the Plan to Win -- with a focus on growth through increasing sales at existing stores rather than by opening new locations.