Training for Leadership: New responsibilities require new types of preparation

Profits are nonnegotiable in the world of business. Imagine the potential for growth and success in multi-unit operations where the owners and managers hold the key to driving these profits. Yet, why are they often the least prepared to drive profitable growth? 

The disconnect is not just a concern; it’s a pressing issue for franchise owners. They find themselves grappling with low profits and being trapped in the day-to-day operations with little time to focus on the bigger picture. This is a clear sign of a critical skills gap in the multi-unit franchise business model that demands immediate attention and action.

The problem

Some people are just great operators. They run a tight ship, pay attention to detail, embrace the ops manual, and know exactly what it takes to run a great location. These individuals rise through the ranks based on their success in managing a single location. Overseeing multiple locations brings new challenges requiring new skills and financial know-how. Unfortunately, these owners and managers are often elevated to multi-unit responsibility without the necessary preparation, leading to frustrating disconnects for managers, their direct reports, and the investors who expect them to build profitable operations.

Of course, there is a financial and leadership skills gap. We prioritize training for frontline employees and single-unit managers, preparing them to master the required tasks responsibly. Then, we assume these skills will make them good at managing others. 

News flash! It is a common misconception that task mastery automatically translates to effective leadership. The reality is that without comprehensive training, we’re setting up our multi-unit managers for failure. The short-term cost-saving measure of not providing this training leads to long-term inefficiencies and operational challenges, which can significantly impact the bottom line.

A systemic issue

Multi-unit owners and their managers ensure consistency, quality control, systems compliance, and employee engagement across multiple locations. Most importantly, they must orchestrate those elements to drive profitable growth. This requires resources, strong communication, a structure of goals and accountability, and coaching skills. Without proper training and resources, these overwhelming responsibilities lead to burnout and high turnover, destabilizing field operations and compromising profitability. We repeatedly see great operators fail as multi-unit managers. 

One or two bad experiences may lead you to believe you hired wrong. Sorry. The recurring nature of this problem underscores a systemic miss within operations: promotion without preparation. Effective multi-unit management requires:

• A strategic mindset that combines operational expertise with coaching, communication, and leadership skills

• Basic financial acumen, including breakeven analysis, profit-driven goal setting, and knowing how to align KPI targets with desired financial outcomes

• A strong organizational culture that motivates managers to drive profitable growth because profit is not optional

The solution

Shift how you approach your resource allocation, recognizing the critical role of multi-unit managers. Invest in training to fill the knowledge gaps, provide information to keep people on track, and invest in employee development platforms to support efficient team development. Here are my three must-haves for enhancing multi-unit manager effectiveness:

1. Comprehensive training programs

• Operational training. Use the best logistics and time management practices and rely on strong processes and systems that drive operational controls and quality assurance.
• Leadership and management training. Focus on strategic thinking, coaching techniques, and team development.
• Financial training. Equip multi-unit owners and managers with the skills to use KPIs, financial statements, and budgets to lift profits and get financial control over their operations.

2. Advanced data analytics and reporting tools

• Business intelligence software. Aggregate data from all units, providing robust benchmark insights into sales trends and operational efficiencies.
• Real-time reporting. Get instant access to KPIs, enabling remote oversight and informed decision-making.
• Predictive analytics. Forecast trends for proactive inventory management, staffing, and marketing efforts.

3. Employee development platforms

• Learning management systems. Provide ongoing training opportunities to ensure consistent service quality.
• Performance management tools. Track employee performance compared to goals and facilitate regular feedback and development discussions.
• Onboarding programs. Ensure new hires are quickly integrated and trained to maintain high operational standards. The first day is the most important day of any employee’s tenure.

A proper mindset

To make a shift, assess your organization’s appetite for change. Dissatisfaction with the status quo is a force that drives change. Well-trained, well-resourced multi-unit managers are the secret sauce for unit profitability. 

Adopt a continuous improvement culture. The best knives require sharpening when they get dull. Let’s face it: A group of dull knives in your operation is a sure recipe for failure.

If profits are not optional, neither should the comprehensive training and preparation of the key players responsible for driving these profits. Investing in the education and development of multi-unit owners and managers is not just a smart strategy; it is essential for sustainable success.

Larry Layton, CFE, is the newest Profit Soup team member. His insights as a hands-on operations executive, business consultant, and business owner bring new depth to the Profit Soup team.