Do Your People Measure Up?
Applying metrics to the "people" side of franchising
As franchisors, it's your primary responsibility to make operational decisions based on the franchise system as a whole. Being a strategist comes with responsibilities, such as determining the level of your organizational health, monitoring channels of potential threats, and developing action plans that tackle and solve applicable problems and solutions. Sounds somewhat erudite, doesn't it? Based on this thinking, selecting the right franchisee sounds like the least of a franchisor's worries. Wrong. Actually, it's what will make the rest of the workload that much lighter.
The power of personality
As CEO of a firm that creates behavioral metrics and benchmarks, I'm constantly conducting research into the behavioral patterns of successful people. The question that always provokes the most telling information for a franchisor is: "If you had a do-over and could re-select any of your current franchisees, how many of them would remain part of the company?"
We asked this very question to hundreds of franchise executives in the form of a survey. The results stated that an average of one third would be kept as franchisees, one third were mediocre at best, and one third were outright failures. Clearly, this was a telling conclusion about room for improvement in the franchisee selection process.
Perhaps it's the perceived ambiguity of measuring a job candidate's personality that discourages franchising from applying metrics to the hiring process. If franchisors are on the fence about investing in a new piece of equipment, they are well-served by calculating the potential return on the investment. Or, if they're having trouble reducing sales cycle time, they might analyze their sales margins. A variety of monthly and weekly reports help franchisors make decisions with greater confidence. Yet there's never been strict emphasis placed on measuring the financial impact of people decisions.
Franchising is all about metrics: royalties, growth, conversion percentages, net promoter scores, etc. Although often overlooked, the most important metric is the quality of work franchisors can predict or expect from their franchisees. Ultimately this leads to the quality of work franchisees can expect from their employees. Productivity drives revenues, and sound productivity drives profits and royalties. It's all about people.
Fortunately for franchising in general, the benefits of personality testing are being realized at an increasing rate. It's been only 10 years since the industry began looking at behavioral assessments as a cornerstone of its operational definition. Now franchisors' eyes are open wider to the stunning impact the right personality makes when placed in the right position.
The people metric
So what happens when a franchisor has five franchisees with virtually identical situations (all paid the same fee, have virtually identical build-outs, similar locations, and the same training), yet three are performing at much higher levels?
This type of scenario screams personality mismatch, which helps explain the challenge that comes with hiring the right franchisee. Really learning who franchisee candidates are is paramount to learning almost anything else. Behavioral analysis measures personality by looking at four basic factors: dominance, sociability, relaxation, and compliance. The table lists each personality factor, showing typical styles of communication and behavior.
Each personality type renders a completely different franchisee. Take one trait for example: relaxation. The scale for relaxation (or work pace) runs the gamut, from the tortoise to the hare. Scoring on the high side of relaxation (the tortoise) tends to coincide with franchisees who are calmer, more methodical, and patient professionals who can do repetitive tasks and never get anxious. However, go to the opposite side of relaxation (what we call "drive") and you'll find franchisees who work with a high sense of urgency, enjoy multi-tasking, and feed off pressure.
Getting the people side right
When it comes to getting the people side of your business right, there is a better way: to measure the personalities of the applicants or incumbents, as well as the job roles. As a loyal proponent of sampling, I extend this offer: Send an email to email@example.com and write "I am a member of the 3% club" in the subject line. You'll receive two complimentary personality assessments. (They will arrive as links by email.) The first will specifically measure the behavioral requirements for any position you have in mind, and the second will measure your own personality.
Surely you must wonder how I can make this offer. It's like this: I know the value of this process and I know that only three percent of you will have the curiosity to follow through. Hence, the "3% club."
For those of you with any question about the value of personality assessments, remember that the people in your organization making the least amount of money have the greatest impact on the retention of your customers.
Bill Wagner is CEO and co-founder of Accord Management Systems Inc. Based in Westlake Village, Calif., the firm assists franchisors, and other industry professionals get the people side of business right through behavioral assessments. Contact him at 800-466-0105 or firstname.lastname@example.org.
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