To Grow, Reinvest in Infrastructure, Technology, and People

Many franchise leaders are slow to embrace the idea that the best time to grow is in uncertain times. Even those who may reluctantly agree are often constrained by the demands of stakeholders for bottom-line performance, and use the excuse of the "bad economic storm" to cut expenses to meet those bottom-line expectations. Historically, however, the fact remains that the strongest companies are those that create working systems to grow during all economies, and that see the opportunity in bad times for accelerated growth.

In my experience as the CEO of a national early childhood education franchise, while the majority of others in the field experienced difficulty securing new franchisees to continue growth, our reinvestment and leadership speaks well of the brand, and has allowed us to see exceptional growth during recent economic tumult: more than 410% growth since the 2008 recession.

When tough economic times hit, several growth principles are needed to fuel success. These include continuing to reinvest in infrastructure; remaining entrepreneurial to find new ways to fuel growth; modifying business models to combat the impact of the economy while staying on plan; being a leader who drives a culture of believing in the positives; and not narrowly focusing on the bottom line.

Many executives forget from whence they came and ignore what made them successful, rather than pushing through adversity, looking toward the future, and driving results. Companies undoubtedly see the most success when driven by focusing on objectives, never allowing external economic factors to be an excuse not to continue to grow and reinvest.

Finding money in a bad economy is admittedly more difficult, but seasoned CEOs constantly seek alternative capital during bad economies. While it may be more of a challenge for public companies (which tend to be more driven by quarter-to-quarter results than private companies), realizing the importance of investing in infrastructure, technology, human capital, and overall brand initiatives during uncertain times takes prudent cash flow planning and a leader with a clear vision.

The selling point to key decision-makers is: while many companies cut research and development in an attempt to ride out the storm, companies that continue to reinvest will have the upper hand - always.

Let's consider the importance of R&D to a corporate infrastructure under normal outside economic circumstances. It involves investigating the best practices and latest technologies in the field, and applying those that are relevant to the company. These processes are essential to staying ahead of the industry, and to creating and constantly updating a stellar product or service that is original and proprietary.

A company's greatest asset often is its employees. But in bad times, you will require more from your current staff. This cannot be accomplished unless you provide the tools, vision, and leadership. Investing in human capital must also include training team leaders throughout the enterprise to create a synergistic environment for the business organism to grow, shielding the entire team from outside negatives and encouraging them to believe in their brand.

Entrepreneurial business leaders drive innovation, mold and maintain company culture, and maximize the use of resources wisely. CEOs who are entrepreneurial know that difficult times are not only the time to "watch the pennies," but also the best times to grab market share. While careful cash flow management is important in all economies, when economies fluctuate there should be an even greater emphasis on applying systems that focus on effective operations and counter the effects of bad economic climates.

Part of a successful top-down approach requires clear corporate leadership and vision, not burdening franchisees with demands that don't work or are not tested. CEOs must be able to put their egos on the shelf -and, if a mistake is made, own it, correct it immediately, and move on. In the end, losses are short-lived and felt by few, while the benefits of success are rewarding to all. In my experience, such an approach is rare. But in the long run, it's noteworthy to avoid excuses and push the company model to run in any economy.


Richard S. Weissman is President, CEO, and Director of The Learning Experience Holding Corp., one of the country's fastest-growing early learning academies for children 6 weeks to 6 years old. By motivating people and creating lasting business concepts, he has led TLE to achieve rapid growth despite the economy and credit market tightness. Under his leadership, at only 8 years, TLE now has 188 system-wide centers, 120 operating and an additional 68 in development, with an average of two new centers opening every month. For more information, call 888-865-7775 or visit www.thelearningexperience.com.

Published: June 5th, 2013

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