Case Study: PostNet International's Development Culture

PostNet International Franchise Corp., which turns 20 this year, entered franchising with a development culture firmly in place. "We started as an independent consulting firm back in the '80s," says CEO and founder Steve Greenbaum, so a strong development culture was critical to its growth and success.

"When the business is dependent on growth, you learn very quickly," he says. "Ten years later, when we began franchising, we already had a very effective method of growth and knew how important it was to the culture of the business."

For Greenbaum, having a "development culture" means an organization supports, encourages, and embraces the idea that growth fuels the company and creates positive momentum. "Fundamentally, the idea is aligned with how important development is to the organization. Bringing in new people, ideas, and perspectives creates new opportunities to grow the business and revenue."

When franchise development and system growth are part of a company's DNA, he says, everyone understands that they play an important role in the company's success - from administrative positions through operations. That includes executives and other team members at headquarters, franchisees in the field, and even outside suppliers. "They see that the brand supports growth, which creates enthusiasm around the brand," says Greenbaum.

One difference today from his consulting company in the 1980s is that, as a franchisor, the company has two revenue streams: 1) adding new franchisees, and 2) increasing revenue and improving the profitability of every franchisee in the system. "Every franchise organization has that responsibility," he says.

"Some franchise organizations are focused on ensuring that profitability is not only achievable, but a critical, viable part of the company," says Greenbaum. "Growth should be the same, and franchisee growth is right up there. It becomes cultural, not aspirational, in the same way you'd support inclusion and profitability."

Everyone is important

One way PostNet creates buy-in to its development culture is by involving the corporate team beyond their departments, or "silos." For example, at discovery days, candidates not only spend time with the heads of different functional areas, they also meet every other support team member at headquarters.

"At the end of discovery day, everyone from the company welcomes the new franchisee into the system. Even if you're an administrative support person behind the scenes, you're a part of the team," says Greenbaum. One result: each person on the team feels valued for what they do for the organization.

"We're talking about culture, which lives within the organization. We're saying team members are important and valued as a member of the PostNet franchise family," he says. "It's as important for your organization and your organization's culture as it is for the new franchisee coming in."

Corporate employees and franchisees alike must understand "why growth is so important to us, why it's culturally ingrained in everything we do," says Greenbaum. "Great franchise companies are committed to franchisee inclusion. We know and understand that, and we want to provide opportunities for franchisees to have a voice, to be heard."

Internally, everyone must understand how important their role is in the organization and its culture. "It doesn't matter if they play a secondary role - it's important," he says. And it inspires the rest of the organization. "When franchisees see or experience growth and see people investing in the business and the brand, it creates a tremendous momentum."

That momentum, says Greenbaum, is contagious. "People are investing in a franchise because they expect you to build the brand. 'Growth happens,' and when it does, it inspires people to see that's why they invested in the brand. Nobody buys a franchise unless they believe the organization will grow."

Making a development culture happen starts with communicating to everyone why development is important to the system. "It's not just about collecting another franchise fee or adding royalty revenue; it's also about bringing fresh ideas and innovation into the organization," says Greenbaum. New franchisees bring new ways of thinking that can constructively challenge how a brand has been doing things, resulting in improvements system-wide.

Next Month, Part 2: Awareness vs. integration, change vs. innovation.

Eddy Goldberg is the Managing Editor at Franchise Update Media Group. Contact him at eddyg@franchiseupdatemedia.com or 800-289-4232 x204.