Quality of leaders determines competitiveness
Support for leadership training should be a core value of any company – especially in the political, social and economic times in which we now live.
In the last article we introduced the premise that franchisors should strongly favor investment in the development of the leadership potential of its management, employees, franchisees and employees.
Amid reductions in force, cutting of services and increasing costs of basic items, this premise may still appear to be an anathema to many, especially in the franchise community. Such development is, however, not only an investment for the future, but in the short-term, it is an investment in a franchisor's or franchisee's ability to successfully survive and transcend the current business environment.
Leadership training is training provided for achieving the qualities of leadership that give your organization a competitive advantage and assists your employees in the more effective performance of their roles. More often than not we do not recognize the need for such training unless we have experienced the advantages provided by it. Support for leadership training is a core value of any company. Alice Elliot, CEO of Elliot Group and preeminent executive recruiter in the hospitality industry, emphasizes "leadership is the essence of what drives an organization and companies that get it right are poised for greatness."
Vicki Medvec, executive director of the Center for Executive Women at the Northwestern University's Kellogg School of Management, echoes this point. "Franchisors seek a competitive advantage in their sites, in their marketing and in their products. It would be inconsistent to not seek a competitive advantage in the most valuable of assets, the people representing the brand. Companies make a mistake when they think of their business as the products or services offered or the trademark identifying them. Rather, franchisors are not in the product or service business they are in the human capital business. The strongest point of differentiation for any business is the quality of the customer's experience with that business."
Franchise companies serving the public should know this better than anyone – this is much more than customer service or brand identity, it is more than any scripted service message or anything else tangible that a franchise employee may offer. It is about the person the customer comes in contact with, the person who makes the decisions about that customer experience and the person who implements those decisions. The quality of the leadership will be the competitive difference for the brand.
A core value
"No one succeeds alone" is a foundational principle among the leaders of Keller Williams. Mark Willis, CEO, Keller Williams Realty Inc., explains that "succeeding through others means our franchisees must have great leadership at the local level, which requires a repeatable model for developing talent inside our organization. Without great leadership we would not have been able to develop the vision and tools to impact the lives of our associates and help them grow their businesses. Without great leaders, no one would have joined our organization in the first place. People seek out great leaders; if you lack leadership, you don't have an organization....Although many of our competitors are being victimized by the recent downturn in the economy and the current real estate market, we are surging forward. This is an achievement due to our focus on leadership."
In a different industry, another franchisor similarly commends leadership training to other organizations. Peter McCue, senior vice president of human resources for Papa Johns, says, "We believe leadership development can be a differentiator in a very competitive industry. Leadership is a great driver in any culture and culture – the right culture – drives engagement. Get people engaged in the culture by supporting and encouraging them – two behaviors even a new leader gets intuitively – and success will follow. If this isn't in place, everything essential to the success of an organization is negatively affected. Turnover becomes high, customer service suffers, product quality decreases, marketing gets more expensive, etc."
Alice Elliot reinforces this theme: "We are approached by a number of organizations that are anxious to learn how they can 'cross train' their executives so they are more readily able to be promoted internally."
Strong leaders effect profitability, retention
The benefits of growing leaders in your company can be seen, felt and measured. Willis believes the biggest value to developing great leaders is that – like attracts like and this bears true in the Keller Williams organization. "We have the privilege of working side by side with talented, passionate individuals. Because of the people we work with, we've regularly been named as a great place to work in several surveys. Our Mega Achievement Productivity Systems (MAPS) alone has increased our local franchisees profit, associate count, and production across the board. In one six month period, offices that were coached were 23-percent more profitable."
Developing leaders creates increased productivity notes Rick Woods, vice president of operations services, support and training for Papa Johns. "Leadership training facilitates accelerated development of our people at all levels of the organization and at the same time, resulted in decreased time spent on overall training, so there is a savings on the total costs associated with development."
Joleen Flory, president and CEO, Elliot Leadership Institute, an organization dedicated to the development and advancement of leaders in the foodservice and hospitality industries, explained how a company can measure success: "We suggest evaluating the employee's knowledge base before and after training; then surveying 90 days out on the impact on the employee's job; plus surveying supervisors on the return on the investment in the employee."
Investment made in human capital
So what are the principles of leadership that normally form the foundation of any leadership training program? Medvec says "the leadership skill set most sought after by companies include performance management, decision-making, financial acumen, managing teams and strategic thinking. Training can be customized for a wide range of potential leaders from the executive suite to front of the house."
Willis describes various leadership initiatives at different levels of the Keller Williams organization. "At the local level, as part of our Leadership Institute, we pay for an internationally recognized trainer to travel to the field to offer training to all of our associates who might be interested in leading one of our local offices. At our annual and semi-annual conventions, we have had some of the greatest leaders and teachers of leadership speak to our company about becoming a better leader. Our MAPS coaching and consulting program has over 20 coaches whose sole focus is to improve the leadership and productivity of our field leaders. It was one of four finalists for the Prism, an award given by the Georgia Association of Coaches for the top coaching organization of 2008."
Papa John's uses mentoring circles to develop leaders. This involves senior leaders investing time and effort in top talent, says Helene Tracey, senior director of organizational effectiveness. "We realize the great value in having a leader and mentor coach emerging leaders by discussing their strengths and determining the development that will take them to a higher level. We determine the participants for the mentoring circles by senior management recommendations and management inventory outcomes. Our management inventory process allows for thoughtful discussions about our talent and because it is done annually we always know the talent we have and the talent we need to execute our strategy. Management Inventory also assists us in ensuring that each leader gets the right development at the right time in the right way. In this, we follow a strategy we call "The Three E's" regarding development. This means development is driven through Experience, Exposure (to new leaders, ideas, teams) and Education. We also have a dedicated team and facility for our franchisees at Papa John's University. The curriculum is tiered to meet the franchisees' needs. For example, one of our core competencies is speaking authentically. We've partnered with Vital Smarts, a training firm in Utah, to certify us in their Crucial Conversations program.
Not all organizations or small businesses can afford a university curriculum or an in-house leadership development team. In our next article, we will explore various leadership training resources available so you can see how a leadership development program can work in your company.
Joyce Mazero, a partner at Haynes and Boone, has served in numerous leadership roles in the International Franchise Association, Women’s Foodservice Forum, Women Corporate Directors and ABA Forum on Franchising. She can be reached at Joyce.Mazero@Haynesboone.com. Debra Nelms, president of Network Search Inc., a consulting firm specializing in board readiness and executive development initiatives, contributed to this article. She can reached at email@example.com.