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A guide to setting long-term goals for your business.
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Words by Robert Stidham, founder and CEO of Summa Franchise Consulting and founder of Franchise Dynamics
As the world continues to manage the COVID-19 coronavirus pandemic, it is clear that most franchisors and their franchisees are not going back to the way things were. We speak to a lot of franchisors that continue to talk about the “good old days” and returning to the way things were before they were faced with a new reality of business.
Within our firm, we currently spend a great deal of time talking about the “next normal”. Perhaps better expressed, we talk about the importance of re-imagining your franchise business: how does it remain relevant as we get through the event and what does your franchise company and franchisee’s business look like in the future?
Change for people is stressful and difficult. Most of us don’t like dealing with the unknown, rather we find comfort in routine. Perceived risk comes from what is new, rather than what is known. Generally, people find comfort in what is known rather than what is unknown, and people fear what is new. It is stressful. Simply put, people do not like uncertainty – especially in business.
“Change is continuing and it’s inevitable”
Within a company, change creates organizational stress for the franchisor and franchisee. Often, every part of your organization will have to do more work with much fewer resources. The perception of challenge and difficulty creates real operating issues for everyone. However, change is continuing and it’s inevitable.
We spend a lot of time talking to franchisors who are trying to figure out what the next normal is for them and their organizations. Many of them face real frustration, trying to run their business every day while trying to look above their business at the marketplace and figure out where they need to be to ensure their long-term viability.
Cost-cutting is not strategic planning. It’s a short-term tactical approach to solving a specific problem; generally, a business needs to reduce expense. Strategic planning is a longer-term management activity that allows leaders to set priorities, create focus, align resources, strengthen operations, and ensure that everyone is working towards common goals. A simple six-step process for planning could be defined as follows:
• Identify your current business strategy • Gather your key stakeholders and as much data about your current business as is possible and appropriate to the problems you’re trying to solve
• Perform a SWOT analysis (strengths, weaknesses, opportunities, and threats)
• Formulate and test a strategic plan, based on your resources, capabilities, human capital and desired outcomes
• Execute your strategic plan
• Consistently monitor your performance against your desired outcomes and measure everything
In our experience, franchise organizations need to involve franchisees in this process as your planning will impact them directly. You will need their support in executing your plan effectively. Your plan needs to be written, shared, and measured constantly within your organization against your projected goals. Leadership should be communicating openly and honestly with all stakeholders, providing honest updates as to organizational progress as the plan is executed.
The other challenges that organizations face in trying to develop a strategic plan fall into several areas. First, is the individual associate (or franchisee) agenda. People tend to act in their own self-interest and struggle to see a bigger picture. Often, they are more concerned about the impact that change may have on their individual roles and responsibilities in a company than the company’s need to continue to operate.
Second, managers often have their own agendas for their organizations that may not fit well into the broader need of a company and the franchisee organization.
Third, franchisors and franchisees often have a different perspective on the problems and challenges – along with where the entire organization needs to position itself in the future for long-term success.
“Strategic planning is a longer-term management activity that allows leaders to set priorities, create focus, align resources, strengthen operations, and ensure that everyone is working towards common goals”
The simple fact of the matter is that every stakeholder is subjective from their point of view. The way in which that problem can get solved is to bring in an outside resource, such as a consulting firm, to assist and coach your organization through a process of objectively conducting an analysis of the business, using the stakeholders (including franchisees) to facilitate a broad dialogue about both where the business is and where it is going in the future.
In some cases, the consultant can bring franchise industry expertise, marketplace information, and share case studies to create confidence in the proposed plan. They can also objectively assist in the ongoing measurement of the performance plan.
Albert Einstein once said that “insanity is doing the same things over and over again and expecting a different result”. Doing what has made your organization successful in the past may not ensure a successful future.
AT A GLANCE
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