By Benjamin J. Gomez, CFE, and Joel Worthington, CFE, Mr. Electric

So, why is it not working? In a recent study conducted by the Gallup Organization, only 32 percent of the of the US workforce is engaged, while 50 percent are not engaged and 18 percent are actively disengaged. This has a direct relation to profitability. Disengaged employees in the US cost their employers $450 billion to $500 billion annually. And companies with a high level of engagement are 21 percent more profitable. Finally, 75 percent of employees who quit do so because of their supervisors, costing $1.1 billion in replacement costs.

Leadership is an integral part of business success, yet, as you can see from these statistics, while leadership is a popular topic, the bridge between knowing and doing is down. These findings force us to take a pause and reexamine what it means to cultivate leaders within an organization and question whether we are truly equipping potential leaders with the tools to create engaging work environments. Now, we, as franchise professionals, are uniquely positioned to serve as a catalyst for change in the most widespread function of our economy: small business.

A Story of Leadership

To briefly illustrate the effects of good leadership, let’s contrast the following franchise owners Bob and Nick. Bob, a corporate high-flyer, and Nick, a blue-collar worker, both ventured into franchise ownership. Bob had ample resources and grand ambitions, while Nick, with limited business knowledge, just met the minimum franchise requirements. Nick was a tenured franchise owner but struggled to maintain profitability, morale and operations. He micromanaged decisions and lacked strategic vision and cultural awareness. This resulted in underperformance, low trust, attrition and lack of direction. In contrast, Bob was confident and charismatic investing heavily in infrastructure and achieving impressive initial sales at the onset of his opening. Bob exuded all the right traits of a leader and showed significant promise to the entire corporate team.

Fast forward eight years — Nick emerged as the most successful franchise owner in the system. Why? The crucial difference was relinquishing a limiting belief — believing the success of the business was dependent upon his own production, and not the collective impact of the team. When this mindset shift occurs, the epiphany that all our success can be attributed to others rises to the surface and we begin to ask the question, “How do I get the most out of my people?”.

Nick began investing in his own leadership development and prioritizing the development of his team. Operationally, he decentralized decision-making, improved communication, humanized his relationship with his direct reports, and aligned them with responsibilities that fit their strengths. In the subsequent years, Nick built a robust organization achieving a 30 percent market share, multiple layers of management and high engagement. His journey underscores the impact of investing in leadership.

Our story of Nick and Bob should resonate with you. It accentuates the effects of leadership in the context of traditional business performance. When corporate leaders and franchise owners invest in strengthening their leadership, it has a trickle-down effect. When we focus on intentionally developing leadership at the corporate level, it’s much easier for our teams to develop their owners who can, in turn, develop their teams. One of the most rewarding effects is the influence leadership has on employees, families, and the community – better attitudes, higher wages, more harmony and less discord. By leading effectively, we can not only create more profits but multiply the impact we have on the lives of others.

Everyone is born with unlimited potential but most never realize it. Why? Because most never believe in themselves and/or encountered a true leader who inspired them to believe. Leaders inspire others to push the limits of their own possibilities. A franchise owner once related the story of his success. As an aimless young man he had the opportunity to work with a true leader. The owner describes his mentor as “the man who believed in me.” Apparently, no one had believed in him before. Because his mentor believed in him and demonstrated it through developing him as a leader, he is now a successful business owner, husband and father who’s making a difference in the lives of many. We must all ask ourselves if we truly understand leadership — if we’re leading effectively, and if we are intentionally developing leaders in our organization. If we do this well, the results can be profoundly life changing as we help others release their unlimited potential.

It is imperative now, more than ever, to invest in unlocking the unlimited potential that franchise owners, their staff and our corporate employees possess. Leadership is the key to unlocking this potential, driving engagement and setting up our businesses to thrive against the competition. Leadership truly is the ultimate competitive advantage. We encourage everyone to examine how well your business is executing leadership with your most valuable resource, your people. This article calls for a state of emergency in the workplace and a deteriorating supply of leaders who desire to make an impact. Help us sound the alarm.

Benjamin J. Gomez, CFE, is a franchise business coach with Mr. Electric, LLC, a Neighborly Company, with nearly five-years of experience in franchise operations supporting a multitude of owners at various stages of growth.

Joel Worthington, CFE, is president of Mr. Electric, LLC, a Neighborly Company, and a leadership enthusiast with more than 30 years of experience in mentoring, coaching and multiplying leaders.