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Jan, 01 2007

Effective leadership, long-term success

THERE have been hundreds of theories and books written on what constitutes effective leadership. My work with many franchise companies, both good and not so good, has led me to the conclusion that effective leadership is the single most important factor i

THERE have been hundreds of theories and books written on what constitutes effective leadership. My work with many franchise companies, both good and not so good, has led me to the conclusion that effective leadership is the single most important factor in the long-term success of a franchise network. When you strip away the apparent cause of every significant achievement or problem there is always one driving force - effective leadership or a lack of it.

Unique challenges

Yet, our franchise leaders face significant and unique challenges. They must, first and foremost, fulfill the traditional corporate leadership role of ensuring their organisation delivers on its promise to its customers, behaves in a responsible manner and makes money. But they must also play another role that is far less defined in its responsibilities - the franchisor role.

Franchising requires them to diplomatically coordinate the talents and ambitions of their franchisees people who are mini-franchise leaders in their own right. As one CEO said to me, "I don't manage franchisees, I coordinate the energy of 120 Managing Directors!"

Defining effective franchisor leadership

In coming to grips with the skills of franchisor leadership, perhaps we should start with a simple definition.

`Leadership is about getting people involved and committed to turning a worthy vision or an idea into reality.`

In thinking about some of the good, and not so good, franchise leaders I have known, I have concluded that in our current economic and social environment, there are essentially six elements to good franchise leadership. These elements are not meant to be a formula for success, or to be definitive traits that you either have or do not. Rather, they are guidelines and principles which all of us in leadership roles should acquire. Take a look at these elements.

Having a clear vision: This is not just a glib mission or vision statement about being the best or delivering great service. It requires a precise mental picture of how you want all aspects of your franchise system to evolve.

Maintaining believability: Sustained success is possible only if the people on whom your business depends, especially franchisees, feel they can trust and respect you. At this point it is interesting to note that at the Australian Franchisee of the Year Awards held earlier this month, three of the five finalists stated that the main reason why they valued their franchisor so highly was because of their franchisor's integrity.

Ensuring intelligent strategy: We could define this as ensuring your organisation's goals remain in sync with the needs of its customers, franchisees and the broader market in which it operates. The answers to important strategic questions are not always clear and intelligent strategy includes being able to make sound decisions when the available information seems to be conflicting or ambiguous (which is most of the time).

Building commitment to change: Social and economic changes mean that franchise systems must be increasingly adaptable in the way they do business. Also as a franchise system grows and develops, structural changes will be needed to maintain adequate levels of support to its franchisees. The franchisor should not only be able to identify important shifts in direction but also get others to come along - easier said than done!

Managing conflict: While people have a natural inclination to cooperate and help each other, they also have their own individual needs, expectations and approaches. This is particularly so in a franchise network where there can be several agendas operating at once. Therefore, another element of good franchise leadership is the ability to identify and manage conflict.

Developing personal mastery: The final element of franchise leadership involves the sensitive and responsible use of power. A franchise leader's power comes from a combination of strength of personality and the formal authority that comes with their role. However, this poses a problem because power tends to corrupt the human psyche.

Greg Nathan is an organisational psychologist and managing director of the Franchise Relationships Institute. He is the author of the best-selling book "Profitable Partnerships" and can be contacted at gregnathan@franchis erelationships.com

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