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Behavioral metrics is just a fancy way to say, "Measuring the people side of business."
If the concept is unfamiliar, it's because behavioral metrics rarely make it to a P&L. Sure, in most well-run organizations we measure the costs of turnover, employee engagement, and leadership development, but let's take it a step further. For example, think about measuring the difference between the personality profiles of high-performing franchisees and those unable to make the grade. Why are some capable of meeting or exceeding expectations, but others aren't?
By knowing the financial and behavioral gaps that exist between best and worst performers, franchisors can improve their selection of the right franchisee--and influence the performance of existing franchisees. Whatever can be measured can be managed.
Since entering the New Millennium, franchisors have become more interested in applying tools that measure personality and behaviors. This is especially true for franchisors that fall prey to Pareto's Principle, otherwise known as the 80/20 rule. Here, franchisors want to know why 80 percent of royalty income is often generated by the top 20 percent of franchisees. As frustrating as this is, it becomes even more so when the mechanics that cause or predict this elude our grasp. Franchisees make the same investment, receive virtually identical training, are given similar locations and build-outs, yet royalty revenue is all over the place. This gap can be summed up in one phrase: the power of personality.
Consider this simple exercise. First, list about 20 qualities that would make for an ideal franchisee, or work from this list if it fits:
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Second, look at the list of qualities and determine which ones are skills and which are behaviors. The difference: skills are learned in school and behaviors come from our personalities. More than likely, the majority of the list will include behaviors. Going through these two simple steps makes it easier to see why behavioral metrics are helpful. Most of what franchisors seek in franchisees lies in the essence of their personality.
This five-tier performance pyramid represents a cognitive process for determining who you need to be to achieve results in a particular role or on a given project.
By creating a cognitive approach to succeeding in the role of a franchisee, people both with and without the preferred personality for the position can accomplish similar results. Just remember : If you can't measure it, you can't manage it.
Bill Wagner is CEO and co-founder of Accord Management Systems in Westlake Village, Calif. The firm works with franchisors and other franchising professionals to get the people side of business right through behavioral assessments. Exceed your own expectations: send an email to info@accordmanagementsystems.com with the subject line containing the title of the position you want to measure. We will send you a link for an online assessment. Enjoy the ride--and Master the Gap!