Why Millennials Are the Make or Break | International Franchise Association

Why Millennials Are the Make or Break


As new generations occupy greater segments of the population, franchisors must pay attention.


By Dr. Ben Litalien, CFE and Jamie Notter


Franchising is already feeling the effects of the Millennial generation, yet we’re not adapting fast enough to this new reality. Instead of complaining about “kids these days,” franchise leadership teams need to start making strategic shifts in their business strategies and operations to address this disruption.


Armed with a research-based understanding of how Millennials are impacting the work world, you can leverage this change to your advantage. According to Deloitte, by 2030 almost two billion more consumers will join the global middle class, and they will be a different type of consumer, not as brand-centric as generations past, with limited loyalty to existing brands. They did not grow up in a Levi’s vs. Wrangler, Tide vs. Cheer or Chevrolet vs. Ford household with preconceived notions of brand preference. Rather, they are fertile vessels for brand adoption based not on traditional marketing and instead on social influence from their peers, and increasingly through response to social media inquiries.



“It’s not them being ‘entitled,’ it’s simply their natural reaction to the times in which they grew up.”



This is good news for emerging brands with limited resources, a new strategy to circumvent the high cost of major media mediums previously needed to build loyalty.  And for established brands, it could mean significant declines in growth if they fail to develop strategies to reach these new entrants into middle class.


Generational drivers


Franchisors and franchisees must understand the powerhouse group driving this disruption, referred to as Millennials (those born between 1982 and 2004). Many authors complain about the Millennials – “Entitled! Impatient! Too many trophies!”– but it just doesn’t help. The Millennials did what every generation before them did. They grew up in a time where things were different than the generations before them, so they see the world differently.


Yes, the world was different. Most notably, in the social space, where they can reach out to their networks and get just about anything done, on their own. Millennials also grew up in a period of significant material abundance (the U.S. spends more on trash bags than 90 other countries spend on everything), where diversity became the norm, and a period where children got a lot more attention and focus than in previous generations.


As we mentioned above, that last one gets mentioned a lot as a source of complaints about Millennials – the “everyone gets a trophy” generation. In fact, it just means that they grew up with access to people higher in the hierarchy (adults), so when they show up in our organizations, they will be expecting the same access. It’s not them being “entitled,” it’s simply their natural reaction to the times in which they grew up. Kind of like any generation, actually.



4 Key Capacities


So, what does this all mean for franchising? It means we need to shift. The Millennial generation is the largest in U.S. history – around 100 million people. And the Millennials are aligned with broader changes happening in leadership in management. In our research, we have identified organizations that better reflect this emerging “future of work,” and we found them all embracing four key capacities:


1. Digital Mindset

This means not only mastering the technology, but embracing a digital mindset, where the users come first, everything is customizable, and innovation is constant. If that sounds like hard work, it is – that’s what we need to do to stay relevant. Most organizations design their workplace around the needs of the organization or the few people who lead it. We need to shift and design it around the needs of the users, which include your customers, but also, and perhaps more importantly, your employees.


2. Clarity

We also need to be much more transparent. Being clear is about making more of your operation visible to everyone in the system to improve decision-making. Yet people in different departments rarely know what the others are working on, and no one knows what goes on at the senior leadership level. We need to find ways to make more details about our business decisions visible to everyone in the organization, so they can make better choices.


3. Fluidity

Decision-making systems in most organizations are too rigid, which means the people who are closest to the problem often don’t have the authority to solve it. Fluid systems, however, still maintain a hierarchy with the ability to inject some flexibility into it. The right people can make the right decisions at the right time. This is critical for dealing with a dynamic and complex environment.


4. Speed

The world is moving faster and changing more rapidly than ever before, yet our work processes are becoming more complex and cumbersome. Millennials simply cannot understand why it takes us so long to change, and at this point, neither should the other generations! We need to figure out how to move more quickly in our decision making to match the speed of what’s happening around us.


“‘Winging it’ is a strategy, but is it worth the risk?”


Franchise leadership teams that fail to dig deeper into the realities of generational shift and ascertain its potential impact on their brand and business strategies will fall perilously behind, with diminishing relevance to this advancing consumer base. They are increasingly the customers and workforce of today and the franchisees of the future. “Winging it” is a strategy but is it worth the risk? Franchisees are counting on franchisors to understand the impacts of generational shifts on their business models and provide them with leadership on how to intercept this powerhouse of economic opportunity for the future.


“They are increasingly the customers and workforce of today and the franchisees of the future.”


Dr. Ben Litalien and Jamie Notter will be conducting a one-day workshop on Generational Shifts in Franchising on Oct. 24 in Washington, D.C. For more information, visit franchisewell.com/workshops.


Dr. Ben Litalien, CFE, is Founder and Principal of Franchise Well. He also teaches at Georgetown University and is a Contributor for Forbes.com. Jamie Notter is co-founder of Human Workplaces and co-author of two books (When Millennials Take Over, and Humanize). Learn more at franchise.org.