25 years of care and nurturing

Getting laid off by United Airlines in the 1982 recession was perhaps the best business move Regina and Jerry Lillie ever made (even if they didn't actually make it themselves).

"Gina's brother, who was already associated with Supercuts in Texas, was very impressed with the franchise," says Jerry. "In trying to help our situation, he recommended it to us." Since they were living in California near the founders, in they went for a chat. They liked the concept and the people behind it, but the Supercuts brand was so hot at the time that all the territories in California were taken. That's when it paid off to be a former airline employee.

"We could still fly with United, so as long as we could fly there we didn't care where it was," says Regina. They ended up with Spokane, where they had been only once, to visit the World's Fair in 1974. They finally moved there in 1993, but have kept a condo in San Francisco.

"It was the result of needing a job and buying a job. Obviously, we did some due diligence," including getting their hair cut, says Jerry. "We ended up putting together a partnership of our brothers and sisters." They called it Sisbro, LP.

"Fortunately it's a business where you're not in the stores every day," says Jerry. "We don't cut hair, as do virtually none of the franchisees. You're sort of in the way if you're in the store. Other than making sure they look good and checking things out from time to time, there's nothing much to do there if you don't cut hair."

The brand wasn't nearly as well-known in Spokane. When they advertised for employees, many thought they were applying to work in a butcher shop. Regina recalls the chaos of interviewing amidst the renovation of a former plumbing supply store, with jackhammers and carpenters banging all around while they showed pictures to applicants of what the salon would look like when done.

"The whole place was really trashed and had to be gutted," says Regina. "We chose it because the store was so extremely visible from the street and near a highly populated residential section and had good car traffic. We were told by successful franchisees that was what you looked for in a successful location."

They were looking to hire 8 stylists and had 42 applicants; for 3 receptionist positions they had 300. Amidst the clatter, they interviewed them all. One of the eight stylists they hired was a 20-year-old named Sally, fresh out of beauty school. Today she's their regional manager and her daughter is now an employee too, cutting hair.

"As a consequence of mentoring her and working for us all these years, she is really capable of representing us in management situations," says Regina. "Of course we call each other and talk all the time." Having her in that capacity has allowed the Lillies to expand the business and focus on customer service and continually improving the organization.

"The key to calmness in managing a large organization is to have super people at the top with you on whom you rely for insight, creativity, and feedback. We are very blessed with these," says Regina. However, she also says, "It would be a joke to think that this business is not triple full-time. You don't leave it at the door at 5 o'clock. It's 9 to 9, on weekends, and around the clock."

Regina, with a degree in business administration, is a big fan of how other people have done things in business. She has a huge collection of business books (see below), probably 90 percent related to customer service. "Whenever we talk to a franchisee who says they just read a great book, we go out and read it. You have to get out of your own box, especially with customer service. The great companies are really great customer service companies," she says.

This attitude has led to an ongoing connection with Ken Blanchard, author of The One-Minute Manager. As Regina tells the tale, Blanchard was in Spokane for a lecture with Tom Peters. She was attending with two of her managers. "Ken Blanchard has hair but it's real fine. At the end, he was going to sign his book, but said he couldn't stay too long because he was dying to get a haircut." Regina told him to stay put and she'd take care of it. "I had no idea I would do that! I made a couple of quick calls and Sally came in and did it right there. We have wonderful pictures. He put that in his newsletter!"

Over the years, their careful attention to customers and employees has garnered several awards from Regis Corp., including Franchisee of the Year twice for their Supercuts operation and once for their Cost Cutter stores. In 2006, they won the Supercuts "Over 10 Stores" Franchisee of the Year award. They also got involved with the Supercuts organization. Jerry currently is a director on the franchise association board, and Regina was secretary for six years.

The Lillies won the community service award three years in a row for their commitment to finding a cure for multiple sclerosis. This year (2007) will be the fourteenth year as title sponsors of the Multiple Sclerosis Walk in the Spokane area, which is reported to have the second-highest rate of incidence of MS in the nation.

One of the accomplishments they're clearly proud of is that, after opening their first store in 1982 with $150,000, they've grown to 19 salons without ever having to return to the Sisbro partnership for additional funding.

And to show they believe in their product, they make the ultimate commitment, they say, laughing. "We make it a habit of getting our hair cut by brand new employees," says Regina. "It is such a shot in the arm for the owners to trust the employees when they first start. If you're the owner of any business, you should take part in it."

As they continue to need more hair cutters, they've had to do some educational (perhaps even evangelical) work on behalf of the industry. "The old stereotypes parents have regarding not encouraging their children to become hair stylists is outmoded. In this economic environment a person who can cut hair can make as much money as most other specialized professionalsâ€"and no one can get a haircut on the Internet, ever," says Regina.


Name: Regina and Jerry Lillie, owners

No. of units: 15 Supercuts and 4 Cost Cutters in eastern and central Washington and the panhandle of Idaho

Customers/month: 30,000+ (est.)

Years in current position: 24

Years in franchising: Supercuts franchisees since 1982; Cost Cutters since 1999

Key accomplishments: 1) paying our bills on time and 2) investing very special mentoring time in a few loyal employees who, by their own initiative and tenacity, have stayed the course with us for almost a quarter of a century.

Biggest mistake: Whenever we take ourselves too seriously and think we know too much, we make a mistake. This is easily a daily occurrence. Once in a while we see improvement by not making the same mistake over and over. (We invite someone to collaborate with us in writing our version of "Franchising for Dummies.")

Smartest mistake: We learned the hard way that macro management was not the best way to run the salon business. No one can possibly care (and rightly so) about your business more than you do. Paying attention to details and being involved in all aspects was the best way to go for us.

How do you spend a day, typically? Even though we are equal partners, we separate responsibilities and have changed activities when burnout sets in. Presently Regina is involved in marketing, advertising, training, general administration, public relations, and contests. Jerry oversees salon operations, bookkeeping and finance, real estate, expansion, and sometimes Regina.

Favorite activity: Travel is a fun one; we also like to indulge in fine dining and wine when we can, and we like to go to zoos.

Exercise and fun: In our mind's eye, we are Olympically fit and follow a regime of physical endurance and maintenance that rivals Achilles'. In your eyes, we could stand to lose 20 pounds, replace our treadmill with a rowing machine, and eat raisins for dinner. We do really love to play golf with each other and friends. We use the cart.

Reading: Guerilla Marketing Attack, Jay Conrad Levinson; McDonald's: Behind the Arches, John F. Love; Iacocca: An Autobiography; 1001 Ways To Reward Employees, Bob Nelson; The Invisible Touch, Harry Beckwith; The 7 Habits of Highly Effective People, Stephen Covey; Thriving on Chaos, Tom Peters

Family facts: Jerry is 59, Regina 56; no children, but 130 (carefully nurtured and mentored) employees

Management method: We try not to let our people fail no matter where they are in the organization. The foundation for this is based on trust. The most important person in the entire organization, however, is the customerâ€"who is our boss.

How do you do it? 1) Don't set them up to fail by not being clear with your expectations, or by not giving them the time and training to do what you ask of them. 2) We believe that if we let them help create what they want to accomplish, they take ownership of the outcome. 3) Try to match their strengths with the task. For example, many of our stylists tell us they do not want to be a salon manager. If that's the case, we don't put them in the position even if we need someone desperately. 4) Check in with them often and along the way so that we and they are committed to their final success. 5) We reward generously and often based on a management by objectives approach to evaluations and goal setting. 6) We try to have as much fun on a daily basis as we can come up with.

How will you continue to do it? We have a regional manager who started as one of the original eight stylists in 1982 and a business manager who started with us in 1984. These incredibly able people continue to embrace our philosophy daily, thereby multiplying the effect throughout the organization. They continue the legacy.

Greatest challenge: Having enough stylists in our salons, because of so much copycat competition in our markets. (Actually, anyone who can cut hair is our competitor if they aren't working for us!) The demand is far exceeding the supply of qualified stylists and is an industry-wide problem.

Personality: We both think we are very popular, great golfers, and sophisticatedâ€"just like we think we are in great shape.

How do you hire and fire? For many years, Regina did all the hiring based on a tried-and-true interview process and hours of training. Now our regional manager does the hiring, and on a selective basis some salon managers who are trained the same. Many business owners forget that it all starts in the hiringâ€"and why they turn the activity over to someone who does not necessarily share their same values and business philosophy is amazing to us. We rarely fire anyone because we try very hard to train them and mentor them for success. Giving up on them is not an option. If we hire right and properly train, there is less chance for them to fail.

Find good people? Are there bad people, or is it a training issue?

Train them? One of the many incredible pluses of owning a Supercuts franchise is the extent to which the licensed cosmetologists we hire have to be further trained in the Supercuts technique before they serve the first customer. Since the haircut is the product, Regis ensures that this training, called Hairstylist Academy, is state of the art. Moreover, every six months, these same stylists have to pass recertification.

Retain them? People know when you mean what you say, when what you ask of them you would do yourself, and if you are trustworthy and committed. If your business is built on these four cornerstones, people rarely want to leave you. Add to this a workplace that is clean and fun to be in, making the employee feel important by doing little things for them (we send them flowers on their first anniversary, for example), and putting the customer first creates an organization where people want to stay if they can.

"Growth meter" (how do you measure your growth?): Like anyone elseâ€"percentage increases in service and retail sales over same time last year, etc., and all the other financial models owners use to watch these trends. However, if you do the right thing by your customer, your bottom line tends to take care of itself. Spending our time watching our customer service and asking the customers by way of questionnaires and walking around, is often more accurate than financial models, because what the customers tell you is a better reflection on the state of your business than a column of numbers.

2007 goals: To have a really wonderful 25th Anniversary party. Everyone is invitedâ€"after they stop in for a haircut! (Jerry says an increase in same store sales wouldn't be bad either.)