Demonstrate Strategic Thinking Leadership Characteristic – Best Practice #18
Great franchisors need to demonstrate a number of important characteristics as part of their leadership. We believe Sound Strategic Thinking is one such critical leadership characteristic – and that franchisors should strive to provide franchisees with confidence in this area.
While one could argue strategy and change (given today’s dynamic environment) have never been more important, research also tells us that one of the aspects attracting franchisees to buying a franchise is the concept of having an established and proven business model – encompassing direction for the future. Franchisees, in turn, sign long-term franchise agreements and it follows can rightly expect a franchisor to provide great strategic leadership.
A franchisor then would do well to ensure that great strategic thinking and planning is conducted for the franchise system – long-term.
We assert that franchisors would do well to foster their reputation for sound strategic thinking – adding to franchisee respect for the franchisor and, adaptability to future changes.
Examples to consider include the franchisor:
- Ensuring consistent and comprehensive planning cycles. Ensuring they have great planning cycles and that they have great input, be that from themselves, franchisees, the FAC, customers and, potentially specialist advisors, an Advisory Board and Board of Directors.
- Involving franchisees, where possible, in aspects of the planning cycle. Franchisees after all are the ones who take the business model and apply it to local circumstances, and thus may have local learnings and insights valuable to the franchisor. At the very least, the franchisor should have a mechanism for actively asking franchisees for insights, be that through field visits, calls, surveys, strategy groups, regional meetings, conferences, FACs etc. History tells us (e.g., consider many of McDonald’s blockbuster advances) that many of the best ideas originate from franchisees.
- Comprehensively testing and piloting new initiatives. Considerable emphasis should be given to the likes of the development and piloting of new strategic ideas (ideally in company and franchise locations) and the continual communication of progress to the franchise network including issues, solutions, further testing and implementation plans.
- Communicating strategically with the network. Here, the franchisor needs to think about how they communicate with and gain franchisee confidence in the planning they are undertaking, changes, and the direction the network is headed.
There many other examples, several of which will form future Best Practices, such as:
- Identifying relevant Key Performance Indicators (KPIs) and working with valid data
- Franchisors being very specific rather than talking in vague generalities and potentially misquoting information
- Being scientific in approaching exploring and testing system changes
Today, more than ever, sound strategy and adaptability are vital for long-term franchise system sustainability. Franchisees not only need franchisors with Sound Strategic Thinking, they also need confidence in that thinking. It follows that franchisors need to ensure that they are both a) undertaking Sound Strategic Thinking and b) providing franchisees with confidence of the same.
About the Franchising Best Practice 500 Series
This is part of a series of franchising best practices. Franchize Consultants is sharing and publishing these best practices weekly for the betterment of franchising. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses.