Building a Franchisee-Centered, Results-Oriented Culture, Part 2

Last month, in Part 1, Joe Mathews introduced the theme of a franchisee-centered, results-oriented culture. He began by discussing the different types of management styles and cultures that exist in franchising - or at any company, for that matter. He started with a discussion of the "Bureaucracy" style. This month he describes the "Benevolent Dictatorship." Next month he takes on "Command and Control."

Benevolent Dictatorship

Benevolent Dictatorships are typically informal, folksy, low-stress companies where much attention is paid to making people feel good. "Feeling good," "being appreciated," and "loyalty to leadership" are more important than bottom-line results. This culture is commonly found in small, privately held franchisors where the founder or owner places friends and family in key management positions, not because they are the most qualified people for their jobs, but because they can be trusted to do the owner's bidding without pushback.

Unless an employee possesses the right last name, marries into the family, or plays poker or golf with the owner, there often is little room for advancement. The owner isn't really out to build a powerhouse brand, but a little fiefdom where employees, friends, and franchisees are taken care of.

If you were a franchise candidate attending a Discovery Day, at first glance this culture seems informal, unassuming, and perhaps attractive to a new entrepreneur. But the dysfunctional, undistinguished underlying belief of leadership that perpetuates the existing culture is, "Employees and franchisees aren't capable of producing exceptional results on their own. They need to be taken care of." - as opposed to "Franchisees and employees are highly capable individuals who need the tools, resources, and freedom to win."

This attitude creates a top-down, paternalistic culture. While interpersonal relationships are held up as important to the organization, these relationships are skewed as they aren't marked by the typical characteristics of an adult relationship. These relationships more closely resemble the parent-dependent child relationship than a fruitful employer-employee relationship.

Impact on employees and franchisees

Because the founder or CEO has so little faith in the capabilities of managers, staff, and franchisees, power, money, and authority are concentrated at the top. The founder or CEO is the puppet master, pulling the strings and making employees and franchisees dance to a tune only they can hear. As long as employees of the franchisor keep dancing and don't ask a lot of questions like, "Why are we dancing? What is the song we are dancing to? What other dances could we be doing?" or Heaven forbid, "Can we pick our own song and dance moves?" they will survive.

As in bureaucracies, information mostly flows downhill, instead of up and down the organization. In this type of company, the founder or CEO makes decisions from the ivory tower and leaves middle management the role of town squire to announce decisions to the franchisee citizens of the fiefdom.

Think of what happens to talented and upwardly mobile employees or talented franchisees in this kind of organization. The founder or CEO calls 100 percent of the shots. Those who want to see their own ideas implemented, who wish to collaborate in the decision-making process, or who are unwilling to consistently do the bidding of the Benevolent Dictator will not remain. They will find a culture that values performance and initiative. Think again of the type of leader or employee who would survive in such an environment... and those who survive often stay forever. Where else other than the Department of Motor Vehicles can they find such a secure job where superiors have such low expectations of personal performance and results?

Now watch the vicious circle that forms. You start to see that group behavior is always designed to reward the existing group behavior. Carrying this observation forward means "Your existing corporate culture is always designed to survive intact."

Impact on results

Now think about the quality of training and ongoing support these surviving low-skilled officers and employees can offer franchisees. Will it be sufficient for results and action-oriented franchisees to win, or will they find it necessary to go outside the organization for tools and support? If these franchisees complain about either the quality of support or not being invited to participate in decisions affecting them, their comments aren't often heard in a commercial context. The franchisor will often respond with, "Don't these unappreciative franchisees know how hard we work? Don't they realize we are just trying to help them?" In such a scenario, intentions and appreciation are more important than performance and results.

Benevolent Dictator founders or CEOs do not give officers and department heads annual operating budgets. They make decisions on how their money is spent on a case-by-case basis. While they execute their own financial plan, they seldom share what that is with others, keeping department heads guessing.

In addition they regularly move employees around to different departments without consulting with department heads or the individuals being redeployed about what they want and need. These CEOs believe they know best, and that their employees and franchisees will understand over time.

Next month: Command and Control

Joe Mathews is a founding partner of Franchise Performance Group, which specializes in franchisee recruitment, sales, and performance. This article is from his free, downloadable e-book, "The Franchise Sales Tipping Point: 10 Keys to Creating a Franchise Sales Breakthrough." Contact him at 860-567-3099 or joe@franchiseperformancegroup.com.