Culture is often an afterthought or something that is not well understood. You can often hear someone speak about team meetings, lunch and learns or other transactional events. Yes, these can be part of how culture is defined but they are not what builds culture and they are not a strategic design for building or supporting culture in the business.
The reason culture is more important in a franchised business is because these franchise partners will want to have some level of independence, rightfully so, but have to be part of the brand the franchisor has launched. How culture is defined, in what level of detail it is and how it is part of the strategy are all essential aspects.
What does defining culture, and what I often refer to as “operationalizing culture” do in a franchise business?
A franchise company is one team working together on parallel goals. They are all working to provide great products and services to the customer. They are rewarded and are measured through the profit generated. This all takes effort, resources and time. A strong culture supports this whereas a negative culture actually takes away from this.
The time spent managing conflict, disengagement and course correcting is time not spent generating more sales and as a result, profit.
Partnerships and working relationships (and franchise systems are both of these) have to start from a position of trust. Trust is the foundation and the base of any relationship and when everything starts from a position of trust, everything is better. Culture supports and builds trust.
How can you possibly operationalize culture?
Think about this for a moment? Operationalizing something means to build a step by step process or to detail how exactly you can do something. Culture is the essence of the brand, it is the shared beliefs and it is the way in which we do things. To operationalize this, companies need to create step by step detailed expectations that support the way in which we do things.
To demonstrate, I will share one of dozens, if not hundreds, of examples where culture can be operationalized.
If a company culture was to be collaborative, progressive and supportive of one another (as they should be), you can operationalize that in part by ensuring that virtual meetings support this rather than take away from it. In this example, the organization will insist that participants are logged in 3 to 5 minutes before the meeting starts, have their screens on, are in an office or professional home office workspace and, depending on the meeting size, participate a minimum of once during each meeting. This simple but extremely important approach will support team meetings being productive and culture building rather than destructive and culture damaging. Let’s face it, no one likes being in a meeting when they are being ignored (ie. screens are off).
Franchisors and franchisees have parallel but conflicting needs
Franchisors work to ensure their franchisee locations are profitable and successful, which then supports the build of the brand and the contribution provided through royalties which then funds the support and brand growth.
Franchisees work to ensure their location is profitable and successful, which then supports the growth of bottom line profit which they can then reinvest or use to diversify their portfolio.
Both are working in parallel for the same purpose. Both have conflicting needs. However they aren’t really conflicting, they are complimenting needs. Culture is important so that the franchisee understands that part of their role is to ensure profitability of the franchisor. When you build a culture of collaboration and understanding the needs, less friction is experienced.
This simple yet powerful example is easily resolved by operationalizing culture. It is also essential for the success of the brand. Teaching franchisees about how important franchisor profit is and what royalties are used for is part of the recipe for operationalizing culture. In addition, setting up a Franchise Advisory Council (FAC) with the mandate to improve franchisee profitability and franchisor profitability adds to supporting this culturally.
Disengagement is a systemic issue in franchising, but it doesn’t need to be
I will touch on disengagement in franchising but watch for a future article just on this very topic. Disengagement is a major issue in the franchising industry, but not by design, rather by lack of design. If you were to ask any prospective franchisor if they wanted to grow their company by opening up locations and many of which would be owned by disengaged franchise owners, they would unequivocally say no.
Culture is about trying to get people to be engaged. It is about having that as an expectation, it is about measuring engagement (more on this later) and it is about operationalizing it and making it part of your strategy rather than hoping that your team can improve it over time.
During my business and franchise life, I have seen culture that is everything from incredible to somewhat destructive. As a founder, leader or CEO, you control culture and you owe it to yourself and your team to make this a critical part of your strategy.
