Positioning For Success - Looking For The Optimal Manager If you’re a franchise owner aspiring to build a strong, profitable, and sustainable operation, it’s natural to continually consider how to bring additional customers through the door and increase profitability. As necessary as this is, a strategy built only on increasing revenue through marketing efforts and owner hard work alone will produce growth only up to a certain level, and unless material efforts are undertaken to expand other resources and act upon ancillary components (staff and equipment upgrades, for example), your franchise is not going to break through that growth ceiling created by limiting the marketing and expansion strategy. Economies of scale are realized when a business operates through and surpasses levels of critical mass. What this means is that appropriate steps need to be taken to ensure that the building of the franchise (growth) has a good foundation, which can propel the franchise through these levels of critical mass. What does this foundation look like? Building A Franchise Machine Invariably, the long-term growth and sustainability of any franchise is going to be determined by the quality of the staff on hand. Other things matter, yes; however, as a variable in the solution to realize a flourishing and profitable franchise operation, having the right staff with the component attributes required to build the franchise is absolutely necessary and strategically indispensable. This series, therefore, discusses the importance of the main staffing areas of the franchise. Each staffing area has uniquely identifiable yet mutually exhaustive roles in elevating the franchise to the level of maximum profitability. These are not mere jobs where one is fulfilling repetitive tasks (although they do constitute part of every job). a. The Office Manager In this our series on optimal franchise staff, we begin with the manager. What makes a champion manager? They are individuals who display an ability to organize and shepherd a group, provide leadership amid multiple operational scenarios and with conflicting personalities, and after dealing with these things, continue to smile, shepherd, and present professionally. Impossible to find? They’re out there, but just because they have the component parts you need of a champion manager, there are many reasons why they’re unable to perform to their maximum potential. What we have found is that their greatness in this position flourishes in the right environment. It’s the franchisees’ responsibility to provide that environment. So what do you the franchisee have to do to provide that environment? 1. Give Them Autonomy The most successful managers we’ve seen are the ones who are allowed to exercise autonomy and who are given the freedom to execute the operations of the franchise. Once the right person is found to fill this role, you’ll begin to enjoy running the franchise more, will find it easier to grow the franchise, and possibly be able to expand to additional units. Good managers want the operation to grow – and so do you. Growing the franchise unit correctly means inserting the right talent where their talents can be optimally utilized. This means that the right person for the job must be motivated and capable of managing people. You the franchise owner should only get involved in extraneous personnel matters, and if it gets to this point, the person in conflict with your prize manager may very well be the one who needs to leave. 2. Give them responsibility The franchise owner needs to oversee the following: a. Overseeing financial health of the franchise – you control the finances b. Overseeing top level personnel c. Overseeing local franchise unit strategy (or multiple unit strategy) Everything else should be delegated to the staff, and the one responsible for getting the staff online with duties and for disseminating the benefits of operating as a cohesive group is the manager. The purpose here is to excuse you the owner, to the extent possible, from operational and administrative matters outside of fulfilling your 3 duties. You don’t have to do everything just because you are the owner. Other people have great skills – some greater than you. All other components of the franchise should be reported to you during weekly meetings, and the staff responsible for reporting these things to you should be identified at those same meetings, so that there’s no confusion as to who is responsible for reporting on certain components of the business. The purpose of staff reporting on operational areas to you is twofold: 1. Enable you to be aware of all aspects of the operation and identify weaknesses that may encroach on the franchise’s ability to meet strategic goals. 2. Provide you with an opportunity to assist in rectifying problems rather than, in a controlling fit of rage, take over problematic situations and in the process foster a defeating, hierarchical environment of mistrust, conflict, and divisiveness. Most performers don’t want a boss who looks over them to ensure that they’re doing a good job. Assessing their performance should be done in the form of reports and occasional, informal meetings. If you have staff who are comfortable pleasing you and doing exactly what you say, they may be the weak link preventing the franchise from realizing it’s full potential. Many years ago executives at the Dupont Corporation devised a high-level process of ratio analysis to determine the operational health of the corporation. At the heart of the ratios was the implicit understanding that, if a ratio was within established parameters, then there was no need to investigate further. Only those areas of weakness revealed through outlying results were followed up on. There were enough ratios in the analytical process to satisfactorily cover all operational metrics that required monitoring, and this allowed company executives to maintain control over the component parts while keeping responsibility and autonomy in the hands of their employees. This process of managing facilitates an environment of accountability, trust, and productivity, but only if the right people are inserted into that environment. The franchise should be operated no differently. Find the right people, put them in positions where they can utilize their strengths (which are identified at the interview stage and during observation) and give them autonomy. However, finding them, inserting them into, and providing them with an environment in which to flourish is the direct responsibility of the manager. When you find the right one who can do this – yes, they should be compensated well. The manager is the quarterback of the office. On multiple occasions we’ve witnessed that the impairment of a particular franchise to grow in profitability is due not to an underperforming operation or inferior product, but rather an overwhelmed, misplaced or incapable manager. A good, champion manager will provide you with the opportunity to expand operations, will consider the feasibility of short- and long-term strategy options, and facilitate a positive working environment. If you find the right person to quarterback your operation, either let them do it or count the days before they leave, because they will take their strong talents elsewhere. 3. Give Them A Reason (or Reasons) To Come To Work And Be Happy No one knows the problems others are going through; so don’t judge anyone -because you’re working with incomplete information about them. What you can do is give them an environment in which they can excel, and when they can succeed at work, the positive feelings and emotions that emanate from that success can permeate to other parts of their lives. Work is powerful – people spend a third of their lives there. You the franchise owner have immense power to influence the lives of your staff. If you agree, and agree with the rest of the above, you can see just how important it is to facilitate a positive working environment for your manager. With the exception of you the owner, the one person who is most instrumental in coagulating the component parts of the operation to realize success is your manager. In conclusion, you need to delegate all parts of the franchise operation that don’t require your immediate attention. We circle back to the above 3 aspects of the operation that the franchise owner should concentrate on: a. Overseeing the financial health of the franchise – you control the finances b. Overseeing top level personnel c. Overseeing local franchise unit strategy (or multiple unit strategy) Hierarchical chart As a point of reference, the hierarchical chart of the franchise sees the owner at the top, and the manager directly below. If the owner is the coach of the operation, the manager is the quarterback, responsible for executing daily operations. The owner doesn’t have time to oversee all aspects of the operation. There should also be no reservation in relieving from employment those individuals who don’t work out, for whatever reason. By retaining individuals in a job that they are unsuitable for, you not only delay growth prospects for your franchise and possibly endanger a positive working environment, but you also impair that person’s ability to get on with their lives and find their true calling. If you’re an aspiring manager reading this, take heed. Assuming you can quarterback the marketing and operations of the operation, delegate tasks and reporting, and devise, create and maintain an efficient operation, then you need to disclose to the owner what potential there is in deploying a growth strategy. However, to reciprocate, you need to team up with an owner who has the unique skill set of high-performing and quality-emphasizing franchisee with amenable social and leadership skills. Such a combination is not easy to find. In the ongoing pursuit of growth and sustainability in the franchise operation, there must be a rudder that guides the operation. To place this responsibility squarely on the shoulders of the franchise owner impairs growth and unit sustainability by reducing otherwise highly talented individuals to that of task workers. Nicholas Kilpatrick is a partner at the accounting firm of MacKenzie Burgess Kilpatrick in Vancouver, B.C. He specializes in franchises, restaurants and business development, and has worked with franchise and restaurant owners to increase profitability at all stages of their businesses. He can be reached at nkilpatrick@mackenzieaccounting or at 604-327-9234.
Posted on: Mon, 21 Jul 2014 22:00:40 +0000
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