Harrowing Start for The Joint's CEO Led to Cultural Do-Over
"The fish stinks from the head down," as The Joint CEO's mother-in-law told him, so Peter Holt said he started re-building culture from the ground up.
Suppose you join a franchise system as COO and within a handful of weeks the CFO leaves, the CEO leaves, the VP of ops resigns, the training team resigns and the director of IT says goodbye.
Meanwhile, your 250-some franchisees feel ignored as you’ve poured time and treasure into building corporate stores, and your cash on the balance sheet has dwindled from $16.8 million to $6.1 million in just six months.
Oh, and you’re publicly held, having done an IPO to fund the buying or building of all those corporate stores, and Wall Street is breathing down your neck.
If you’re Peter Holt, who joined The Joint Chiropractic 18 months ago and today is CEO, you believe “if you can stomach this you have an incredible opportunity to build your company’s culture from the ground up—if you can survive.”
He shared the true story of his brutal introduction to The Joint at the International Franchise Association Emerging Franchisors Conference in Phoenix today. Most emerging franchisors (by definition those under 100 units, but realistically more likely under 15) probably gaze at brands like The Joint with envy. The chiropractic franchise today has more than 400 units in 40 states. But look behind the scenes and you’ll see a tale that could hearten any franchise struggling to grow, and those who follow Holt’s playbook could get their systems on more solid ground.
Holt began by calling a three-day mission, vision and values meeting, held off-site and using an outside professional facilitator. He included the entire board, all corporate employees and key franchisees, “even the most complaining,” so the culture could be “brought from the ground up.”
As his mother-in-law told him when he was newly married, 32 years ago, “the fish stinks from the head down,” he said, so he advises avoiding corporate exercises that generate ideas from the top.
A mission statement, he said, is “a short statement of purpose identifying what you do and who you’re doing it for.” A vision statement is “putting into words our preferred future together.” And the values piece is “the matrix we use for decision-making. They’re aspirational.”
Anyone can write these statements, and then the goal is to spread them through the organization. To do so, Holt will hand out cash prizes for those who can recite the mission statement or the values, for example. For another example, employees now nominate other staff members for putting values into action.
It’s starting to work at The Joint, he said, although he feels they have a long way to go. Average tenure for corporate employees when he started was under 9 months; now it’s 22 months. Franchisee satisfaction, however, as revealed by a first-time survey taken earlier this year, showed a long way to go. “We’re below every benchmark out there. There are bad,” he said of the franchisee satisfaction numbers. “But you have to start where you are.”
Holt has a few lessons to pass on. “Franchising is the business of forced listening,” he said. “The power of franchising is you are forced to listen to your franchisees.” Emerging franchisors can help themselves by listening, too, to the true stories told by franchises fighting to grow through Wednesday this week at the Sheraton Grand in downtown Phoenix.