Creating A Positive Franchise Culture
Culture can be defined as shared beliefs within an organization. In the best organization cultures, these beliefs lead franchise team members to behave in ways that benefit the entire franchise group.
By Roger McCoy
Corporate culture is often thought of as that “touchy-feely” stuff that is difficult to understand and handed to the Human Resources Department to manage. In fact, it is a critical business issue that has a direct impact on productivity and profit. Culture is defined as "the identity and personality of an organization." It's not fun and games, but a creation of leadership which includes structure, hierarchy and shared values.
Whether carefully supported or random, every organization has a culture. Unlike financial performance, which is measured and reviewed regularly and is considered a key to success, culture is rarely measured and effectively viewed. A deeper look may identify a company's culture as its biggest asset or greatest liability.
Culture begins with leadership. One measure of perpetuation are stories of company events and people that illustrate an entity’s core values. The strongest cultures will: distinguish an organization in its marketplace, lay a solid foundation for achievement, enable productivity, allow the capture and retaining of top personnel, facilitate high team engagement, and perpetuate brand awareness.
Culture creates alignment of team behavior and organization values as well as aligns individual employee goals with those of the enterprise. It enhances team cooperation and coordination allowing greater successes. It can be perpetuated by examples of openness and trust.
A positive culture significantly and positively impacts business productivity and profitability by enhancing team commitment to the goals of the enterprise. Negative cultures disrupt the “team spirit” and significantly reduce cooperation among team members, increases turnover and reduces productivity.
Culture in franchising
In many ways, franchise organizations are even more dependent upon a positive culture than other business models. The franchisee group is composed of independent business owners, often with entrepreneurial spirit, and less inclined to follow instructions than typical employees and managers. They, and their employee teams, must be persuaded to conform to the franchise model because it’s the right thing to do for the underlying brand and benefits the franchisee. A strong, positive culture with a commitment from the entire franchise organization will make franchise model compliance more likely, and enhance the entire franchise group.
Franchising is culture. The same attitude, the same behavior, the same tools, perhaps even the same words used in each location delivering consistent customer service. Each location may have some flexibility in how it delivers service, but it can't be so far from the standard to undermine the underlying franchise brand "culture" as perceived by its customers.
The only way to achieve consistent behaviors across the entire franchise organization successfully is to have a powerful culture that motivates each franchisee and each of their employees to behave in the prescribed manner because they want to, they see it as best for the organization and themselves. That is the magic of success.
Integrity and values
Well-thought-out brand, customer-focused, empowering, motivating, insightful, employee-respectful, integral core values are the foundation of the culture. Integrity is the key. These values set the standard for behavior for every individual and team within the network. What’s right and what’s wrong. They serve as a template for each decision made within the group. They’re not “chains” controlling behavior, but empower team members to provide innovative customer service within the overall constraints of the organization’s culture.
The best cultures attract and retain the best people into the organization. Similarly, a clearly defined culture with enhanced integrity and a company differentiating message, will attract the best franchisees to the franchise organization. Financial success may be a primary goal, but providing great and consistent benefits to consumers will inspire the best potential franchisees.
These values must respect the team members and motivate open communication within the franchise group and each location. There must be commitment to treating employees and customers ethically through an open relationship among the four key stakeholders in the organization: franchisor, franchise owners, employees and customers.
The core values serve to support the creation of the mission statement: “who and what is the franchise today?” And the vision statement: “where does the franchise want to go?”
All must be reviewed and updated regularly to keep them valid and useful. Most importantly, they must be communicated and trained continually and become the “core” of the organization’s beliefs and behaviors. When asked, each team member must be able to outline these values and statements. They should be “lived” by each member of the organization. The leaders of the organizations must serve as behavioral examples.
Compliance is best gained when the members of the organization have a say in the development of the culture. But the franchisor has the ultimate responsibility for the creation of these values. And must overcome franchisee resistance through effective communication, not negotiation. Some of the best value statements will challenge organization behavior to ensure system integrity. That is a goal of the values.
Positive franchise culture recommendations
Establish the creation and maintenance of a positive culture at the head of franchisor priorities.
Franchisor leadership must take the lead in cultural development using an effective model. There is no useful “standard” set of core values. They must be created specific to the needs and goals of the organization.
The franchisor should focus on values that support the brand. These are the values that should be communicated and monitored throughout the franchise organization. Use your culture and values to differentiate the franchise organization from your market competitors.
Use the mission and value statements and core values as guides in all important franchise decisions. Typically, decisions that contradict these values should be avoided, as challenging as that may be. Core values are intended to make the wrong decisions more difficult.
The franchisor shouldn’t get tied up in the “little stuff” that isn’t brand-essential.
Create a franchise culture that allows the alignment of the goals of the franchisor, the franchisee and their team members.
Owners and managers must “live” the core values by their behavior, not only their words.
Practice openness and respect with all team members. Help them understand their roles in maintaining the culture of the organization. Show them how they impact the organization and their input is welcomed and valued.
Celebrate successes within the franchise organization and communicate the challenges and seek advice on how to improve. Frequently, the best ideas come from the field.
Continually communicate the organization’s values to all franchisees and their team members to facilitate all working in the same direction.
Build a culture for the long-term. Leadership should continually monitor culture effectiveness and ensure the entire team is engaged and dedicated, and working in the correct direction.
Culture can be defined as shared beliefs within an organization. In the best organization cultures, these beliefs lead franchise team members to behave in ways that benefit the entire franchise group. The members realize that this behavior also benefits themselves through valued compensation and their recognition of self-satisfaction and actualization. The best leaders motivate these behaviors by ensuring all parties get what they want from the relationship. That is the essence of a positive franchise culture.
Roger McCoy is a Certified Franchise Executive and Senior Franchise Business Consultant for the Direct Energy franchise organization. He’s held leadership roles in franchising since 2004. He is working toward his Ph.D. in Management with an emphasis in franchising and is a U.S. Army veteran. This article is a condensation of a completed Ph.D. research paper.