Gregs Blog

The Sigmoid Curve And The Story Of Life

Fri, 27 Apr 2012 01:32:00 GMT

I'm just back from a few weeks in North America. On the plane I particularly enjoyed a movie called Moneyball because of its focus on reinvention and the pursuit of excellence. Brad Pitt's character is based on the real life Billy Beane who is experimenting with a new way to build a winning baseball team, and he finds himself up against scepticism and resistance from within the club. While these will always be a challenge for anyone looking to change the status quo, the biggest challenge is often managing the disappointment of poor initial results. In Billy Beane's case, there is a series of disastrous early results before his radical strategy starts to work.

Success seldom starts in a blaze of glory

I liked the movie because it is a reminder that success with any new project seldom starts in a blaze of glory. The pattern works like this. Initial hope and enthusiasm are inevitably met with wobbly beginnings as we work out the kinks. If the idea is sound, and we are persistent and open to learning, small wins eventually build into strong growth and success. But nothing lasts forever, and ultimately this heartening growth will plateau, leading into decline and decay.

This is the story of life. Think of a tree, a person, a business, a product or a career. The initial struggle to survive followed by growth and prosperity, then maturity and decline. The business philosopher, Charles Handy, refers to this as the Sigmoid Curve. He advises us to think about reinventing ourselves when we are in the growth stage, well before the inevitable plateau sets in. This is because, at this stage, we have the resources to invest in trying out new things and the energy to absorb the initial hiccups. Also, trying to reinvent yourself when you are declining is problematic because you now have other things to worry about.

The trouble is we often don't see the need for reinvention when we are in the growth stage because we're too busy enjoying our success or too arrogant to look ahead and see the plateau coming. This principle applies as much to business as it does to personal relationships and careers.

Reinventing the FRI office

Here's one example of how we've implemented the principle of reinvention in our business. We recently decided to close our Brisbane head office and go "virtual". The FRI office has been a hub of energy, creativity and fun for staff and clients over many years. But we felt, to take the business further and serve our clients better, having quality people is more important than a physical office. So now we have 12 talented people working independently all over Australia.

Initially some of us struggled, not having colleagues physically around to chat with and bounce ideas off, and we did lose a few staff. We also had some inevitable teething problems with technology. However we have since smoothed these out and found new ways to use online tools for fun and collaboration. We are also investing more time in organising events to keep that important face to face interaction with staff, clients and colleagues alive. A lot of people have asked why we made this move. The answer is, it’s a strategy to stay ahead of the Sigmoid Curve, and I am pleased to say it is all working well.

In summary, new personal or business initiatives often have a shaky start, so don’t get discouraged. When success does kick in stay vigilant and plan on reinventing yourself sooner than later. And when you do launch your new personal or business initiative, remember... new initiatives often have a shaky start, so don’t get discouraged…and so the process continues.

Good luck until next time,

Greg Nathan

Encounters With Operational Excellence

Mon, 26 Mar 2012 00:23:00 GMT

I've just spent an interesting two days at the franchisee convention of one of our USA clients, Taco John's. This is a classic, privately owned franchise system that has been operating for over 40 years with many second and even third generation franchisees. And they’re still managing to achieve strong year on year sales growth.

Because I am fascinated by what successful people do, I made a point of catching up with three of their top operators who run 11 stores between them. Below are three attributes these people shared. I think you’ll find this useful.

A thirst for learning

Despite their success there was no complacency. In fact it was the opposite. One operator said she'd taken five pages of notes from my talk and had then spent a morning planning how she was going to apply these with her team.

The second operator said she constantly asks for feedback from her franchisor, business partners and staff on what can be done to improve the business. "I don’t see it as criticism" she said. "It's a way of getting honest information on how I can do better".

The third operator sought me out before the session to get some tips on how she could improve her public speaking ability as she was increasingly being asked to deliver talks to local community groups. Which brings us to the next shared attribute.

Giving opportunities to others

The focus of these people on giving opportunities to others was so strong you could call it a philosophy. One lady had left school to work as secretary for a multi-unit franchisee in this system. After 15 years of assisting him and learning from him she noticed he seemed to be running out of steam. Pulling him aside one day she suggested maybe he had run his race and needed to do something different! Instead of getting defensive, he agreed and she offered to buy him out if he would help her. They set up a deal and 12 years later she is going stronger than ever, having opened two more stores. She has also taken to heart this philosophy of giving opportunities to others and is constantly on the lookout for new talent to nurture and develop.

Another franchisee enabled her most loyal and talented managers to buy a 40% stake in some of her stores, and has been rewarded with record sales growth in these stores. By retaining knowledgeable, skilled and committed staff, these franchisees are investing in their own future as well as contributing to the health of the franchise system’s brand and culture.

Sharing data

Finally all three operators talked with enthusiasm about the importance of sharing key performance indicators with their teams. Two of them shared full P&Ls with their store managers and ensured all staff were equipped with up to date information on sales, cost of goods and how they were tracking against specific targets such as add on sales. "You've got to keep the team informed if you want them to take ownership of their performance" was the common message. Regular team meetings were also held where data was shared, fresh targets set and ideas explored on how breakthroughs could be achieved.

By the way, you may have noticed all three operators were women. This is a trend we are noticing in our work with franchisees, with women increasingly making their mark as top operators.

Operations Excellence Summit

Speaking of operational excellence, I have an exciting new initiative to announce – FRI’s Operations Excellence Summits! These informative and inspiring events will share research findings on excellence in franchising and deliver practical strategies to improve the operational performance of your network. Franchisor executives will be able to participate in one the Operations Excellence Summits in Brisbane, Sydney or Melbourne throughout June. We will keep you posted.

Until next time,

Greg Nathan

A Moving Experience

Sun, 25 Mar 2012 23:45:00 GMT

I have just had a moving experience, literally. Last week we pulled up stumps in Brisbane and moved to Melbourne. As I write this tip sitting at my beautiful old kitchen table in our new home I am thinking about the 26 or so suppliers of personal and professional services we have used over the past few months, a mixture of franchised and independent operators. Some were outstanding, most were mediocre and a few were, let’s say, hopeless.

In hindsight, there are two reasons why only some of these people delivered an outstanding service which I would unreservedly recommend. The first is they used a good process. The second is they delivered it with a high level of zeal and care.

Several of the franchised systems we used obviously had a process, but the person delivered it in a sloppy or half hearted manner. For instance one started off well but failed to follow through on his promises. Another had a mindless approach that left us feeling more like a number than a customer. On the other hand several of the independent business operators were highly enthusiastic and full of good intentions, but were all over the place because they weren’t following a process. This resulted in frustrating inefficiencies for them and us.

Being rigid for a reason

All the excellent performers combined a proven process with enthusiasm, care and attention to detail. Take Reuben, the young real estate agent who sold our Brisbane house. His initial sales presentation was delivered to my wife face to face in our home while I participated virtually on Skype from the Denver airport. I tried a number of times to speed him up or get him to jump ahead, but he stuck to his process, explaining patiently and with good humour why it was in our interests that he take us through each step. Reuben consistently combined this commitment to using the process developed by his franchise system with enthusiasm and dedication to keeping us satisfied.

We had a similar experience with Sue, our mortgage broker. At times she was almost rigid in how she took us through her process. However she always explained why she insisted on certain things and regularly took the initiative to ensure we felt supported. Again it was good process with a human touch.

The process and the passion

Not all the great performers were part of a franchise. Take Karin, an independent buyers advocate we used to find our Melbourne home. We used her because she was highly recommended, and I wasn’t disappointed. Karin got it right because she followed a process she had obviously developed through trial and error. For instance, after each house we inspected she would give me a detailed report on the house and the area. Whenever I asked to see this report prior to visiting a house, she insisted on sticking to her process, explaining that she has found it best that I first gather my own impressions of the house before being influenced by hers. Similar to the other excellent performers, she clearly enjoyed her work and was always cheerful and available when we needed her.

Whether you are part of a franchise system or not, a good process implemented with passion and care is what creates a truly moving customer experience. And as we all know, this is what ultimately drives referrals, growth and profitability.

Until next time,

Greg Nathan

Nightmare In The Guitar Shop - A Cautionary Tale

Wed, 08 Feb 2012 00:26:00 GMT

Last week I visited my local guitar shop to buy some guitar strings and enquire about an effects pedal. The guy behind the counter was friendly and after a brief chat he got my strings and started to look for the pedal. I surveyed the glass counter filled with all sorts of seductive guitar accessories and was getting a little excited as he placed the pedal on the counter.

Then he dropped the clangor. “You’re probably best to go online as they’re cheaper.”

I blinked, slightly stunned. I was hoping he was going to say “Would you like to try it out and see how it sounds?” I looked at the pedal, then at him, then back at the pedal. “Oh…umm…okay…” He picked up the pedal and put it back in the counter. “Anything else I can help you with?”

“Ah, no thanks.” I took my strings and left.

The Real Reason People Buy

I love going into that guitar shop. I love the smell. I love asking about the products, picking them up, hearing what they sound like. I love chatting to the repair guy downstairs. I reckon I’ve spent a thousand dollars there over the past year. And I would probably have walked out with the pedal in my hand if that employee (obviously not the owner) had not killed the sale.

Here’s the lesson. Most of the things we buy today are not necessities in the true sense of the word. What we are buying is enjoyment or the promise of a happier future. The true art of retailing is not about the product, it’s about the experience. If a customer can get a better experience online than in a store, why would they bother going to a store? Never before in the history of retailing have those little things that make customers feel better about themselves been so important.

“But” I hear you say, “what about the price?” Let’s go back to marketing 101. People buy value not price. Here’s an important equation worth committing to memory:

Value = Convenience + Enjoyment + Quality
Price

In other words we can increase value, without dropping the price, by making the shopping experience more convenient or enjoyable, or by enhancing the perceived quality of the purchase. The challenge when comparing a store with a website is the website can usually offer an equivalent quality product with greater convenience at a lower price. The jury is out on who wins in the enjoyment stakes. If the in-store experience is nothing to write home about, the web site is going to win hands down.

But what if we could get a physical store and a website working together to increase convenience and enjoyment. Wouldn’t that be a winning combination of bricks and clicks! For instance, two respected Australian digital media consultants, Matt Forman and James Horne, tell me that retail chains with a well thought out website can expect to attract 20% to 30% of their online visitors into one of their stores. This is why business commentators are urging retail groups to get serious about reengineering their store strategies to accommodate the growth in online activity.

Some Facts About Bricks And Clicks

So how fast is online retailing really growing? Because we are hosting a Bricks and Clicks Forum for franchisor leaders at the end of the month I have been collecting data on this topic from a range of research reports and articles. While the percentage of online to physical store sales is still relatively modest (5% to 10% for those with a credible bricks and clicks strategy), the online component is growing exponentially.

Consider these stats:

Spending by Australians with online retailers is expected to grow by 15% a year over the next three years. In the USA it has been growing 20% a year since 2000.
This Christmas, some of the larger online retailers reported sales increases over last year of 45%.
Online retailing is predicted to be one of the five fastest growing business sectors and employment in this sector grew by 40% last year.
By the end of this year 85% of mobile devices will be web-enabled and these devices will overtake traditional computers as a means of going online.
Sales of tablet devices, like iPads, are growing at around 30% a year. These are known to stimulate online purchasing behaviour
In 2011 there was a 111% increase in the use of mobile apps to access retailer websites.
Around 25% of customers now look up product prices online when they are in a bricks and mortar store.
More than 65% of purchases in bricks and mortar stores involve prior online research.
Food companies who have embraced online ordering are rapidly growing their sales. In the USA Domino’s recently topped 1 million digital orders in a week for the first time in its history.

The message for franchisors is, keep a close eye on what is happening in the online world and consider carefully how this will (not might) impact on your business model. For this reason I hope someone senior from your brand has booked into the

Bricks and Clicks Forum to be held on February 28th. (While you can access the program and registration details please be quick as the event is nearly full).

By the way I did buy my guitar pedal online. After some browsing I decided to pay a little extra and purchase it from within Australia. Well sort of - I ordered it from a store in Tasmania!

Until next time,

Greg Nathan

How To Build Trust With Potential Franchisees

Mon, 26 Mar 2012 00:24:00 GMT

Happy new year and thanks to the hundreds of people who responded to the last tip “My Father the Mensch”. Some shared their personal reflections on what it means to them to be a dad, a son or a daughter. I love people disclosing a little of themselves because it builds trust (this works at the corporate level too – we call it transparency). And trust is of course a critical ingredient in successful franchising, which is the theme of this tip.

A recent article posted on LinkedIn by a colleague in the USA, Joe Mathews, has also generated a massive response. Joe is an expert on helping franchisors to sell franchises. You may have met or heard him as we have had him as a speaker at some of our events. In his article Game Changing Trends for Franchise Sales Lead Generation Joe reports for the first time in the history of an annual franchise industry survey, the top lead source for new franchisees was referrals from existing franchisees.

Franchisors Wasting Money

We all know the power of word of mouth marketing. It’s cheap and it’s effective. But it’s by no means easy because advocates (people who like to say great things about you) are created by the quality of their experience with you. This is just as true for franchisees as it is for customers

There has always been good evidence that positive referrals from existing franchisees results in higher conversion rates and delivers better quality future franchisees. What is “game-changing” about this new USA finding is that franchisors in the USA market have traditionally relied on expensive advertisements with online portals, costly stands at franchise expos and heavily commissioned franchise brokers to sell their franchises. Now they are getting back to what they should be doing, ensuring their existing franchisees are satisfied.

Joe also believes prospective franchisees increasingly value referrals from existing franchisees because there is a now a widespread lack of trust in large organisations as a result of the GFC. He is particularly critical of superficial marketing guff pumped out by franchisors in online portals and websites, as well as pushy phone tactics by franchise sales people. What potential franchisees want is good quality, credible information about your business opportunity.

New Research Into Franchisee Referral Behaviour

Given how important it is to ensure existing franchisees are advocates I will now share some powerful findings from our most recent Franchisee Success Study where we looked at why an existing franchisee will or will not recommend your franchise concept to others.

If you think it is how much money the franchisee is making you’d be wrong. And if you think it’s how much they enjoy running their business you’d also be wrong.The three biggest predictors of advocacy are whether they think the franchisor is trustworthy in its business dealings; whether they think senior executives have a credible direction and plan for the future; and whether they think the franchisor team genuinely cares about their success.

Of course if you are to have your franchisees believe this, you need to have cultivated certain values, attitudes and behaviours in your franchisor executive team. For instance, you will need to have communicated clear strategies around issues they care about, such as how your franchise system is dealing with the rapidly changing world of online retailing. (Speaking of which, I hope someone senior from your company has registered for the Bricks and Clicks Franchisor Forum on February 28. The growth of smart devices and online retailing makes this a compelling event).

In future tips we will continue to explore what franchising excellence means in practice based on solid research and our work with franchise systems around the globe. To view the existing Bricks and Clicks program and registration details click here.

Until next time,

Greg Nathan

My Father The Mensch

Mon, 26 Mar 2012 00:24:00 GMT

My dad, Victor Nathan, died on Christmas day. He basically just wore out after 82 very active years. His approach to life is reflected in the following George Bernard Shaw passage:

“I rejoice in life for its own sake. Life is no `brief candle' to me. It is a sort of splendid torch which I have got hold of for the moment, and I want to make it burn as brightly as possible before handing it on to future generations.”

Dad certainly burned bright with a natural sense of fun and adventure. He was also a genuinely good person. In the Jewish tradition, there is a special word for this. It’s called being a mensch - someone with an honourable character who is, by their nature, a role model for others.

Qualities of a mensch

As a tribute to my dad here are six of his special qualities. They spell mensch. I hope you find it thought provoking and useful.

Moral - It’s appropriate this comes first because morality is the foundation of healthy relationships. To dad this meant being honest, admitting it when you had stuffed up and not manipulating others for selfish ends. His favourite saying was “Do the right thing”, so much so, the family wrote and performed a song about this for his 70^th birthday bash.

Enterprising - Life is work and dad loved to work. On the day of his final hospital admission he had been out working as a part-time automotive insurance assessor. A few months earlier I had the privilege of driving him around to some repair shops. It was fun hearing the staff yell out with a mixture of fondness and mischief, “Hi there young Victor!” as he hobbled in with his assessment pad. He had a reputation as a tough but fair negotiator and the repairers respected him for this.

Neat - Dad was a neat guy in more ways than one. He understood how a tidy, well organised environment focuses the mind. His perfectionism drove me and my brother nuts! Everything had to be in its place. On reflection I now understand why he was one of the most productive people I have known - running a business with over 40 staff, always being there for us and the extended family, contributing to community committees and, at one stage, personally supervising the building of an entire scout hall.

Spiritual - My dad was not a religious person in the traditional sense. You could say he was a sceptical participant in the rituals of his own Jewish religion. But I know he drew great joy from the splendour of life and a feeling that he and all things are connected by an all pervading spirit. This made him a gentle and generous person with a deep care for people, animals and the environment.

Cultured - The mark of an evolved person, or society for that matter, is not financial wealth, but an appreciation of culture. We admire our artists, architects, musicians and sportspeople because of their commitment to excellence, beauty and truth. As a youth my father was an elite athlete and later in life became an accomplished artist, giving people a lot of joy through his paintings. He also wrote my mother a poem every year on her birthday expressing his love for her, and encouraged my brother and me in our pursuits of music, fine woodworking and writing, for which I am especially grateful.

Humorous - It has been said that the defining difference between animals and humans is our ability to laugh at ourselves. There is nothing like humour to bring balance and perspective to a stressful or uncomfortable situation. Dad would regularly lighten up a room with his wisecracks. One could say he perfected the art of taking the Mickey out of himself and others. He was a child at heart right to the end, and the nurses loved looking after him.

I don’t know about you, but I’d say being a mensch like my dad, is a worthy aspiration.

Until next time,

Greg Nathan

Why is Online Retailing an Elephant in the Room?

Wed, 04 Jan 2012 23:12:00 GMT

An elephant in the room is a metaphor for something blindingly obvious, but for some reason is being ignored. I reckon online retailing is franchising’s elephant in the room. It is clearly the most important issue facing the sector today, but it is not getting the quality discussion it deserves.

Online retailing is of course where customers order or purchase goods or services online. And we all know the blindingly obvious. People are doing it at an increasingly rapid rate. Exponential growth like this is usually exciting. But if you have a chain of retail stores and customers are choosing to buy from alternative distribution channels, the alarms in your strategy room should be ringing loudly.

Rather than bore you with statistics, such as over 70% of Australia Post's parcel volume is now coming from customers shopping online, I’ll share a couple of personal anecdotes which have turned the lights on for me.

Why shop at Indooroopilly when Paris is just a click away?

I recently noticed my wife wearing a new pair of shoes. She’s not a keen shopper and dislikes going to the local Indooroopilly shopping centre, so I asked her where she’d bought them. “Paris” she replied with a sheepish smile.

It turns out her favourite shoes were a pair she’d bought a few years ago in Paris. So she Googled the shop and ended up buying two pairs from their online store, which were delivered, hassle free within four days. A significant point. My wife is conservative when it comes to technology. For instance, she rarely turns on her mobile phone which is a tiny old Nokia that you can barely text on.

Half the price, zero the weight!

As an avid reader I’ve been buying books on and off from Amazon for years. No big deal here. But last Friday I was in an airport bookstore about to buy a newly released psychology tome called Thinking, Fast and Slow. As I held it, weighing up its size (over half a kilo) and price ($32.50), I had the exciting idea to go online and buy it as an e-book, which would be a first for me.

Ten minutes later I was sitting in the Qantas club “flicking” quietly through the pages of this very book on my iPad. It had cost me $12, had been a breeze to purchase and it weighed nothing at all. This is what you call a paradigm shifting experience.

As I recounted my online book adventure to Karli Furmage, our CEO, who is far more tech savvy than me, she shrugged. “Get over yourself, I buy everything online these days.”

“Everything?” I quizzed a little skeptically.

“Well, everything I can. I bought a new bed a couple of weeks ago – it’s awesome. And a car this morning.”

“A car! Online?”

“Yup. A brand new Audi.”

Making your online presence a profitable partnership

I am sure you have plenty of your own anecdotes. The question is, as a franchising sector, what are we doing to make this online phenomenon a profitable partnership for franchisors, franchisees, suppliers and customers?

While many of our franchisor clients are feverishly experimenting with “bricks and clicks” strategies (combining a physical retail presence with an online service) it’s time we came together to shine a light on the elephant, share lessons learned and explore the emerging opportunities.

With this in mind the FRI team have decided to pull together a high level Bricks and Clicks Franchisor Forum where CEO’s, business leaders and invited experts can come together to discuss the impact online sales are having on franchise systems. We’ll be using case studies, interactive panels and expert presentations to explore the following:

How franchisors can protect themselves and their franchisees from losing market share.
Opportunities to use online sales and service strategies to complement your retail presence.
How to deal with the fear factor and take your franchisees with you on the online journey.
Alternative models for distributing revenues from online sales.
Important legal, commercial and moral implications of having an online presence.
And most importantly, lessons from franchise systems at the front line of online.

This Bricks and Clicks Franchisor Forum will be held all day in Melbourne on February 28th. The investment to participate is $495 (plus GST). It’s important we maintain a high level of quality discussion so we are limiting numbers. To reserve your place please email our events manager, Rob Camm, straight away on rcamm@franchiserelationships.com or call him on 0401 045 959.

We are committed to doing what we can to support franchise networks in these interesting times. Let’s shoot this elephant and get on the front foot.

Until next time,

Greg Nathan

Doing LESS And Being MORE

Mon, 26 Mar 2012 00:24:00 GMT

It must have been thirty years ago that I read the following anonymous saying:

“There are three types of people - those who make things happen, those who watch things happen, and those who wonder what happened.”

It struck me at the time as one of those basic truths, and it still does.

While the message here is “don't just sit there, do something” I am not advocating we all do more. In fact many of us would be happier and more productive if we sat quietly a bit more often and reflected on who we are, rather than what we have done. A sort of “don’t just do something, sit there!” As a friend once pointed out, we are human beings, not human doings.

Our mental state of being in particular probably has more impact on the quality of what happens in our lives than any other factor. For instance, being observant of what is going on around us and how we are impacting on others, rather than behaving like the proverbial bull in a china shop. Being careful to listen to what people are saying rather than projecting what we want to hear and missing the point. Also being fully engaged in what we are doing, whatever this is - sitting in a meeting, checking a spreadsheet, making a sandwich or writing a report. There is a pay off for this because it is amazing how enjoyable almost anything can be when you really put your mind into it. It is also the only path I know to excellence. Look at a master of anything and you’ll see they do more with their mind than their hands.

Pure genius

I was once at a facilitator’s conference where 180 people were asked to work in small groups and come up with a definition of what a good facilitator does. As each group shared its findings the usual boring stuff emerged, such as “improving communication” or “helping groups to achieve their goals”.

But one guy in the room absolutely nailed it without saying a word. It was pure genius. He walked purposely across the room and onto the stage. He then eased himself down behind the back of the stage and just lay there on the floor quietly where no-one could see him. Of course the rest of us were thinking “What the?” After a minute or so he stood up, climbed back onto the stage and with a smile, simply said, “I was invisible!”

There was an initial stunned silence as we got it. Then the laughter spread across the room. It was a perfect explanation of what excellent facilitators do. They ensure the group does most of the work and they only intervene when they absolutely need to. Facilitation is a great example of making things happen by being rather than doing. So is great coaching, great leadership, great friendship and great parenting.

Thanks for being

Speaking of being invisible, I hope you are able to disappear for at least a few days over Christmas. And on behalf of the team at the Franchise Relationships Institute thanks for your interest in our work and we look forward to being with you next year. We will be launching 2012 with our “Bricks and Clicks” Franchisor Forum on February 28th which will address the hottest issue in franchising today - how to integrate online sales with a physical distribution network. This is going to be a corker.

See you there,

Greg Nathan

Politics, Religion and Sex in Franchising

Wed, 14 Dec 2011 06:34:00 GMT

I have been advised more than once not to talk about politics, religion or sex. But the purpose of these tips is to raise issues that impact on the success of franchise systems. So I should probably apologise up front because I am going to talk about all three!

Let’s start with politics, or what could be defined in this context as the use of power or information to influence others to your point of view.

Why politics is bad for business

Politicians are in the business of power - accumulating it, wielding it and holding onto it (often desperately). The problem is, power is addictive and it almost always corrupts the mind, which is also why it causes people to operate from short term self-interest. Little wonder politics is often such a cut throat, ugly profession. This is why I warn franchisees and franchisors not to draw on political models in how they communicate and run their affairs.

For franchisors this means not disguising bad news with “spin” and not avoiding unpopular decisions that are vital for the long term viability of the business. For franchisees it means not forming divisive factions or using meetings or committees to push personal agendas. For both parties it means staying focused on legitimate business goals, especially maintaining happy customers and a healthy brand.

When franchisors with a difficult message to give ask me what they should tell their franchisees, I usually suggest they just tell it like it is, but always with respect and empathy. Franchisees appreciate straight talking which, by the way, also builds trust and credibility.

Killing sacred cows

Next I want to touch on religion or, to be more precise, faith. I believe that faith is one of the most beautiful things in the world. But yes, there is a but. Faith and business can be difficult bedfellows and I do not believe franchisees should be expected to follow a franchisor’s leadership on faith alone.

Unfortunately, some franchisors run their networks more like religious cults than business communities, expecting staff and franchisees to toe the line otherwise they risk public shaming or intimidation. Once a franchisor starts justifying policies and decisions by saying “You have to do this because we say so”, you probably have a case of sacred cow disease. Sacred cows are mindless rituals that preserve the status quo, are protected out of habit and serve no useful purpose.

Decisions should be based on the best evidence available and franchisors should share this evidence with their franchisees. They should also be prepared to change their minds in the face of sound evidence that offers a better solution (probably a good philosophy for all of us.) I particularly like the advice that one of our franchisor clients regularly gives to his management team and franchisees. “By all means hold strong opinions, just hold them loosely”.

Let’s talk about sex

Finally let’s talk about sex. This topic actually came up in an open forum at our recent Field Manager Summits when we were discussing what should go into a Code of Ethics for field managers. No, sex wasn’t one of the recommendations. Rather it was suggested that sexual and business relations can also make difficult bedfellows. In fact several companies said they have a stated policy of actively discouraging this type of relationship between franchisor executives and franchisees because it tends to damage professional credibility and often ends in unforeseen complications.

So let’s not confuse our franchise networks with religions, political parties or dating agencies.

Until next time,

Greg Nathan

Are You Mad ? And Why You Should Be!

Wed, 16 Nov 2011 04:49:00 GMT

Are you MAD or are you just going through the motions? I often ask myself this question. In this context MAD stands for “making a difference!” Three qualities in particular I would suggest are important for anyone serious about making a difference are fearlessness, focus and generosity.

Having a focused mind

Last week I attended a private screening for psychologists of an inspiring documentary called “Yes Madam Sir”. It's about Kiran Bedi, India’s first woman to join the Indian police force and who later made her mark as a fighter for social justice. What struck me most was her fearlessness in the many challenging situations she has faced, whether it be saving people from a burning building, creating community schools in the slums or running India’s toughest prison with 10,000 inmates. In one situation, where angry rioters brandishing swords had run amuck and her own police regiment had scattered, Bedi armed with just a baton, single-handedly faced off the rioters. When a BBC reporter later asked her “Were you scared?” Bedi responded “Not at all...because my mind was focused.”

At the film screening we had the opportunity to talk with the makers of the movie, mother and daughter team, Laraine and Megan Doneman. They explained the project involved them living with, and following Bedi around intermittently over a six year period. Megan, who has worked on movies such as Lord of the Rings, had been inspired by Bedi since childhood. When asked what she was like up front and personal, Laraine said that while Bedi had a larger than life personality, she also seemed able to put her ego aside and act with absolute fearlessness and generosity of spirit in the pursuit of her goals. (At the end of this tip I have provided a link to a short talk by Bedi where she discusses her 90/10 theory of life and a link to the film trailer).

Brand passion in action

While most of us do not have the vision and drive of a Kiran Bedi, every encounter we have with others provides opportunities to make a difference. This of course includes encounters with customers. For instance, as a long term Qantas customer, I have been feeling cynical lately about their brand due to the handling of recent events. But yesterday a small act of kindness from a Qantas employee changed that.

A few weeks earlier I had seen some two-for-one vouchers, promoting the film “Midnight in Paris”, in the Qantas Club Lounge. Yesterday while in the Lounge I casually asked a staff member if they had any vouchers left as I wanted to take my wife to the movie. She said she’d heard it was a great movie and went off to find me one. A few minutes later she emerged empty handed and disappointed. I thanked her for trying. Then she lit up as though remembering something, grabbed her handbag and pulled out a voucher with a flourish. “Here take this and make sure you take your wife out to dinner afterwards!” she joked.

At that moment, this simple act of spontaneous generosity somehow changed my jaundiced view of the Qantas brand. It again reminded me of the power each individual has to make a positive difference.I recommend you look out for the “Yes Madam Sir” movie which will be on limited release throughout Australia in early December. You can see Kiran Bedi’s short talk here and the movie trailer here.

Until next time I hope you keep well and truly MAD!

Greg Nathan

What’s Hot in the USA and Lessons for Us

Mon, 24 Oct 2011 03:12:00 GMT

I’ve just returned from conducting a number of workshops in the USA with around 250 franchisor executives from 40 different brands. As part of each workshop I asked the question, “What is hot for you that you would like to talk about?

Here are six topics that kept recurring. These highlight some interesting similarities and differences between the two franchising markets.

1. How to get franchises to re-engage with the business. The USA has a higher proportion of multi-unit franchisees and wage rates are relatively low. When times were good franchisees tended to put managers into their businesses and took things easy. But the GFC put an end to that. So we discussed a lot about the need to reestablish mutual expectations with franchisees – especially around them mentally and physically reengaging with their businesses.

2. How to run effective group meetings. Most USA conferences are still one-way presentations by managers and guest speakers. Where they do attempt two-way communication they tend to use “town hall” meetings with poor results as these usually degenerate in hostilities. They thus loved learning about alternative facilitation techniques such as our “Group Scoop” and other ways to constructively involve franchisees in meetings.

3. How to have productive financial discussions. Gathering and sharing financial data and benchmarks with franchisees is a more common practice in Australia. So there was a lot of discussion around how to most effectively share KPIs with franchisees in ways that promote informed action planning, and increased motivation and performance. Interestingly most USA companies have better technology than us but are not using it as much for this purpose.

4. How to increase franchisee commitment to new initiatives. There were big “Aha” moments around this topic when we discussed the power of transparent, two-way communication and the fact that you can have franchisee trust for an initiative without commitment to implementing it. In other words, “Yes I can see it’s a good idea” does not mean “Yes I will put this into practice in my business.” In depth one on one conversations are the key to gaining commitment. This is a hot issue for both Australian and USA franchisors.

5. How to maintain morale with mergers and multiple brands. Multi-branded franchisors and ongoing changes in franchise system ownership are common in the USA. This raises interesting challenges for maintaining a healthy culture and a high level of brand passion. Franchisees who feel under threat typically hire attorneys to protect their interests and close ranks using Franchisee Associations. We talked about the emotional significance of the culture and brand to franchisees and how to engage people in conversations on issues important to them in non-confrontational ways

6. How to insist on compliance without damaging the relationship. This was a popular topic with the field managers and is relevant to all franchising markets. We explored the importance of asking franchisees their reasons for deviating from the system and explaining the “why” of compliance in terms of brand protection. Also the value of connecting compliance to efficiency and profitability, and the importance of making standards clear and easy to follow.

By the way we will be exploring these and other hot topics at our Australian Field Manager Summits, which commence in Sydney, Melbourne and Brisbane next week. If you haven’t yet registered all I can say is we have hundreds of smart operations people from nearly 80 leading brands coming. And the program will deliver meaty, practical information that can immediately be put to use. Click here for details. If you have registered I look forward to seeing you there.

A final thought. We are all busy – it’s a fact of life. But how can we urge our franchisees to work ON their businesses if we are not doing this ourselves.

Until next time,

Greg Nathan

Secret Weapon for Attracting New Franchisees Is Under Your Nose

Fri, 14 Oct 2011 05:06:00 GMT

We are all affected in some way by events around us. So you may have been concerned about the impact of recent gloomy economic forecasts on both the morale of your existing franchisees and the likelihood of prospective franchisees investing in your system. I am writing this tip from the USA where I am working with hundreds of local franchisor executives and I can tell you it’s worse over here. But I am pretty confident I can offer a solution below. I also have some news I wanted to take this opportunity to share with you.

Every franchise system needs high calibre new franchisees if it is to grow and replenish itself. As you probably know, the best way to attract new franchisees is to have existing franchisees actively recommend the business. With this in mind we have just analysed some statistics from our current Franchisee Success Study to see which factors most likely lead to this type of advocacy, or what is popularly referred to as a high Net Promoter Score or NPS. A solid NPS is critical to the growth of any business, especially in a cautious market.

The four beliefs that predict a high NPS

Looking at this new data from over 2,000 franchisees, we discovered that competent leadership, especially in the field, counts big time. Below are the four beliefs by franchisees that best predict whether they will have a higher NPS.

They believe the franchisor team are competent.

They believe the franchisor team are trustworthy in their business dealings.

They believe the franchisor team genuinely care about their success.

They believe the franchisor team has a clear direction for the future.

(Note that satisfaction with financial performance did not make it into the top four. It came in at number five.) These four beliefs create a feeling of optimism in the franchisee which we have also discovered has a huge impact on financial and customer service performance.

Field managers, through the relationship of trust they build with franchisees, can have a significant impact on these beliefs. They do this by discussing goals, following through on commitments, communicating new initiatives and supporting franchisees with day to day challenges. However they do need to show the right type of leadership. For instance, an optimistic field manager who feels confident in their abilities will naturally infect franchisees with this sense of inner confidence. Optimism is caught not taught. On the other hand a field manager who feels neglected, burnt out or who is struggling with the demands of their role is not going to be able to inspire their franchisees in this way.

Leadership in the field

Now here’s the rub. If field managers are to stay on top of their game they need consistent professional development and support. This is because of the unique pressures of their job where they are interacting so intensely with franchisees on a number of fronts. It has been my direct experience that if they are properly supported they will deliver superior results in spades. The benefits to the company are more optimistic franchisees, more franchisee referrals, and ultimately, better financial returns for both franchisees and franchisors.

Now please forgive me, as I would like to give a little plug at this point for the annual Field Manager Summit which was developed for this reason. If you would like to see which companies so far are sending their teams click here. If you have already registered your team, nice work. If you haven’t I encourage you to do so. Not only is it an entirely different program to last year, but we have also included a new innovation, an action learning process called The Learning Map, to ensure your team arrives focused and also puts its good ideas into action. It includes a very cool diagnostic and goal setting tool. To check it out click here and watch the short video.

Your field managers. I bet you never thought of them as a secret weapon to help you attract fresh, new franchisees. But they are.

Some news at FRI

Now finally the news I mentioned. I am pleased to announce that we have brought some new people into the business as part of a merge with a company called Go Global, originally developed by ex-Gloria Jean’s Global Capability Manager, Karli Furmage. Karli and her team of Jason Travis and Rob Camm will bring additional high level franchise operations and strategic learning expertise into FRI, which we believe will help us serve you even better. As part of this restructure, our existing CEO, Anthony Cannell, will be leaving the business and I want to take this opportunity to acknowledge and thank him for the excellent work he has done in his time at FRI. We wish Anthony the very best.

I look forward to soon introducing you to our new expanded team.

Until next time,

Greg Nathan

Adventures in Passion and Excellence

Fri, 23 Sep 2011 04:12:00 GMT

This is a story about three people - a smart retail food consultant, a remarkable school teacher, and the man who invented the world’s most loved electric guitar.

The Secret to Retail Success

Given the current concerns around slow retail sales I watched in awe last week as retail consultant, Kate Poulter, presented an array of retail shop front photographs to a group of Pie Face franchisees at their annual conference. We wowed, laughed and groaned together as we looked through the eyes of an industry expert at some of the best and worst of Australian food retailing. Because of Kate’s wide ranging experience, I asked her what personal attribute she thought contributed most to the success of people who run the most successful retail businesses.
“Having a passion for their business” she replied almost instantly.

Bingo! This rang a bell because it linked directly to something I had spotted the day before while reviewing fresh data from our Franchisee Success Study, a global research project analysing the drivers of performance in over 2000 franchisees. It looks like one of the most important differentiators of successful franchisees is a passion for the brand, measured on what we call a “brand passion” scale.

When I asked Kate what someone could do to feed this passion for their business, she thought for few seconds before giving the following considered response. “Have an absolute commitment to excellence in everything you do.” Bingo again! Because another significant finding from our data is that franchisees who show strong levels of intrinsic motivation, what we define as an “inner commitment to excellence”, also enjoy significantly higher levels of success.

The Original Guitar Hero

The benefits of having a passion for what you do, and a commitment to excellence, are of course not restricted to franchising. If you watched the movie “Mrs Carey’s Concert” the other night on the ABC, you will have seen a remarkable women who radiates these qualities. Every two years Mrs Carey, a Sydney music teacher, inspires a hundred or so young school girls to deliver an amazing, world class musical performance at the Sydney Opera House - and have loads of fun doing it! If you haven't seen this documentary, do yourself a favour and get hold of the DVD.

After watching Mrs Carey do her thing I flicked channels to ABC 2, and there to my delight was Jimi Hendrix in his full glory, delivering his famous Woodstock performance. Hendrix, a passionate innovator devoted to excellence, was playing what I consider to be one of the best designs of the last hundred years - the Fender Stratocaster. The creator of this masterpiece, Leo Fender, was a quiet electrical engineer obsessed with making the most comfortable, easy to play, best sounding and best looking guitar in the world. The fact that his original 1954 design has not been improved on, and is still today the world's best selling guitar, suggests he succeeded. Just ask any guitarist with a Strat to tell you about their guitar and watch their eyes light up.

I get quite moved when I see this passion and commitment to excellence in a person. To me it’s the most beautiful thing in the world. Is there a person or a product that inspires or moves you? We’d love to hear your thoughts. Please go to the FRI Facebook page and tell us by commenting on our wall.

Until next time,

Greg Nathan

How to keep your MOJO working!

Thu, 22 Sep 2011 02:20:00 GMT

In recent weeks I’ve given several presentations on what could best be referred to as, “how to keep your mojo working”. It’s a great topic because the stress and pressure of running a business in these tough times has definitely been taking its toll on many franchisees and franchisor executives.

Mojo. We heard about it in the Austin Powers movies, but to understand the true meaning of the word I consulted my in-house literature consultant (aka wife) who informed me it’s simply an abbreviation for motivation and joy. These are possibly two of the most beautiful words in the English language because they hold the secret to what we all seek - a successful and happy life.

Three techniques that promote mojo

So how can we keep our motivation and joy alive? Here are three simple techniques.

1.Practice the attitude of gratitude. Parents regularly remind their kids to say thank you, and so they should, because this is encouraging an attitude of gratitude. Appreciating what we have puts the mind in a positive state and helps us to feel good about ourselves and the world. It also boosts our immune system, stimulates energy and promotes constructive relationships. By showing gratitude, such as thanking a colleague, sending a kind note to a friend or paying a genuine compliment to a staff member, you are not only helping to make their day, you will also be doing yourself a favour.

2. Talk to someone who cares. This Thursday it’s R U OK? Day, an Australian mental health initiative that encourages people to connect with someone they care about and help stop little problems turning into big ones. It’s true, a problem shared is a problem halved. Talking about our concerns helps us to think issues through and can give us the courage to take action when we need to. For instance, our research into high performance franchisees consistently shows that those with strong family and social support outperform their peers hands down. When we ask franchisees who they find it helpful to talk to, they mention a range of people - parents, siblings, friends, grandparents, neighbours, fellow franchisees, accountants, field consultants, staff and, of course, partners. So who do you talk to?

3. Set yourself BEST goals. In 1966 John F Kennedy inspired the Western world by stating, “I believe that this nation should commit itself to achieving the goal before this decade is out, of landing a man on the moon and returning him safely to Earth”. The now famous moon landing occurred ahead of schedule on 20th July 1969. It is often used as an example of a BEST goal because it was Believable, Exciting, Specific and Time-bound. People thrive when they set BEST goals because the mind functions best when it has something meaningful to work toward. Not sure where to start? Ask yourself this question. “If everything fell into place and was going as well as it reasonably could, what would be happening?” This should help you to start setting some of your BEST goals!

In this tip I’ve shared three techniques you can use to keep your mojo working. What makes them so attractive is they are based on good psychological research and they are free. So if you find yourself feeling a bit jaded, tired or miserable, (and who doesn’t from time to time), give them a go. They really do work. I particularly like the attitude of gratitude.

Until next time,

Greg Nathan

How to Achieve Excellence in Local Area Marketing

Mon, 05 Sep 2011 03:29:00 GMT

Something happened yesterday at our Brisbane office that sent the team into raptures. A guy in a smart black Polo shirt with a hot pink heart on the sleeve, turned up with a big smile and two large ice-cream cakes. His name is Steven Widener, he’s a Wendy’s franchisee and he was practising, what I have since learned is called, a “random act of Yum!”.

After we all fed our faces and shared our bounty with the physiotherapists next door I headed off to a client meeting over the other side of town. On arriving I chatted with two of the reception staff about our morning ice cream cake experience. What amazed me was they both simultaneously cried out loud “Yum!”. At that moment it occurred to me that Steve’s random act of Yum! was vicariously spreading across Brisbane. The fact I am telling you now is also a testament to the power of a well executed local area marketing initiative.

Is traditional marketing dying?

I think it’s fair to say the use of traditional marketing media such as television and print is fragmenting and being replaced by new forms of media. This trend means franchise systems will increasingly rely on each franchisee to show leadership in promoting their brand and business in their local market.

Local area marketing is of course nothing new. Small business people have always promoted their wares to their local customers. Show me a high performing franchisee and I’ll show you a passionate local area marketer. Whether it’s working with local schools and sporting clubs, sponsoring a community radio show, supporting a local charity or teaming up with other local businesses who serve similar customers; you’ll inevitably find successful franchisees investing time and money in their local markets. Their goal is to be known as a valued contributor to enriching the lives of their local customers and community. People appreciate this and will reciprocate with loyalty.

This highlights an important and valuable opportunity for franchisors to support and equip their franchisees with tools, guidance and encouragement to get involved in their local communities. But is this happening?

Research highlights a gap in local area marketing skills

Last year we conducted a research project investigating the competence of field managers and the value they add to their franchisees. We looked at data from over 300 field managers who had assessed their own skills and abilities in eight key support areas such as training, compliance, business analysis, local area marketing, and so on. We also looked at franchisee ratings of the value their field managers were delivering in these eight areas. The area that both field managers and franchisees rated the lowest was, you guessed it, providing support in local area marketing. (Incidentally, the area rated the highest by both groups was compliance).

This highlights a high value opportunity for franchisors to be doing more to support field managers and franchisees in this area. It is also why we have dedicated two Masterclasses to this topic in our forthcoming Field Manager Summits.

91 free tips on getting franchisees more engaged with marketing

If you are interested in some great tips on getting franchisees more engaged with local area marketing I’m happy to share the findings from a fantastic Franchise Marketing Forum we ran a few years ago. Click here for 91 very practical tips on a range of hot franchise marketing topics. You’re sure to find something useful here.

Finally, a friendly reminder, the early bird registration for this year’s Field Manager Summit ends in just 10 days. It look like the Melbourne Summit in particular will soon be full so I encourage you to visit the website and book your team’s places.

Until next time,

Greg Nathan