This was a sad week in Australia as we remembered one of our worst industrial accidents. Fifty years ago, on 15 October 1970, a 367 foot span of the West Gate Bridge, known as span 10–11, collapsed during construction. Two thousand tons of steel and concrete subsequently came crashing down into the muddy banks of Melbourne’s Yarra River, taking 35 bridge workers to their tragic deaths, leaving a legacy of havoc and pain for a traumatised community.
As it happens, my wife went to University with the engineer in charge. He had only completed his studies a couple of years earlier and was relatively inexperienced. At the time of the collapse this dedicated young man had been trying to fix a fundamental problem – the two spans of the bridge were about four inches out of alignment and not meeting in the middle. He and some workers were trying to engineer a forced fix by realigning the bolts. He also perished in the collapse. A Royal Commission identified bad design, compounded by ineffective management and poor communication, as the main causes of this tragedy.
But this was not an isolated event. Months earlier, on the other side of the world in Milford Haven, Wales, a similar type of box girder bridge collapsed during construction. Within three years, a total of four bridges around the world using this design would collapse.
I recounted this story several years ago in a keynote address to the American Bar Association’s Forum on Franchising, which had the theme Engineering Healthy Franchising Relationships. My point was, there are many parallels between designing and constructing bridges that can withstand the forces of gravity, and building franchise relationships that will withstand the pressures of franchising. Both serve a purpose - bridges help people reach their destinations, often travelling over difficult conditions. Franchise relationships assist franchisors and franchisees to achieve their mutual objectives, often under difficult circumstances.
Franchise relationships, like bridges, need to be constructed and maintained with care or the consequences can be catastrophic. In my address I spoke of eight specific areas, identified by FRI through extensive research, that significantly impact on the health of franchise relationships. Consider these as foundational design pillars on which strong franchise networks are built. I list them here as opportunities for continuous monitoring and improvement while we work our way through our current challenges.
# 1 Help franchisees to manage their stress. Our research shows franchisees are the most stressed they have ever been, largely driven by relentless change, economic and social uncertainty, and financial pressures.
# 2 Manage the change process. As franchisors work to implement essential changes at an unprecedented rate, they need to also use proven methods to effectively gain franchisee buy-in and commitment to these initiatives.
# 3 Improve two-way communications. While we all know good communications are essential for success, franchisors typically rate their communications as being twice as effective as their franchisees do. Enough said.
# 4 Maintain credible leadership. Confidence in leadership, driven by a culture of transparency, competence and care, is a powerful predictor of high franchisee satisfaction, whereas low confidence is associated with high disputation and low advocacy to recommend the franchise.
# 5 Focus on franchisee profitability. Sound financial management processes such as benchmarking, business planning and performance groups, combined with effective field support, can make a significant difference to the success and satisfaction of franchisees.
# 6 Use sound franchisee recruitment practices. Despite the high stakes for both franchisees and franchisors when entering into a long-term franchise relationship, both parties often rely more on emotion and gut feel, than on solid recruitment practices.
# 7 Regularly clarify mutual expectations. Because the franchise relationship is unique and complex, it is not uncommon for franchisees and franchisors to become confused about their respective roles, needs and obligations, feeding dissatisfaction on both sides.
# 8 Manage the Franchise E-Factor. This is the name of a model I developed in 1992 to explain how the quality of the franchise relationship moves through distinct stages, starting with a state of “Glee”, then to the parties wanting to break “Free”, and finally embracing a philosophy of “We”.
If this has piqued your interest, later this month I am leading a Franchisor Excellence Masterclass where, over five weekly 2-hour sessions, I will explore these eight areas in some depth with a group of franchisor leaders. If you value quality peer conversations, and learning proven strategies to engineer healthy franchise relationships, we welcome your participation. You can register here. The fee is just $495.
Until next time,
Franchise Relationships Institute
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