Connect with us

Franchisee Advice

Strong Company Culture Fattens The Bottom Line

Variables to consider when planning company culture in the South African context.

Pieter Scholtz

Published

on

Company-culture-advice

Ideally, any organisation wants to create and maintain a culture that recognises and encourages the shared values, standards and attitudes that characterise the organisation’s ethos. A good company culture suits the very best people in your organisation and makes a positive impression on others within or outside your business, including suppliers, customers and shareholders.

But how does one create a great company culture from scratch? Even more puzzling, how can one culture be efficiently replaced with a better one, especially in a context as diverse and dynamic as South Africa?

If you’re going to design a great company culture, you need to be able to do it differently. Here are the three main variables to consider when planning organisational culture.

1. Is it practical?

The recent surge of publicity and importance placed on good company culture can be chalked up to Google. Google’s well publicised and over-the-top efforts to instil a winning company culture are well known to almost any office worker today, but before you go investing in popcorn machines and indoor running tracks, remember one thing: Your company is not Google.

Related: 5 Inexpensive Ways to Create a Company Culture Like Google’s

Maybe you don’t have the budget, maybe it’s inconsistent with your company’s ethos or public image (you probably wouldn’t want fireman poles in a law firm, for example), or maybe it’s just not appropriate when you consider the diversity of people the average South African workplace contains. You also need to justify the allocation of additional time and resources.

Culture can be lucrative in attracting the right talent and getting the attention of investors, or even potential buyers for your company. It must be developed internally with your staff at all levels, but it must also be deployed externally when it comes to your suppliers and clients, as part of a holistic marketing strategy that can drive real value and a return on investment.

2. What are the cultural touch points within your organisation?

Customers, suppliers, employees, leadership and shareholders are all different audiences that have to be considered when designing company culture.

It is important to consider what message your culture is sending to each of these groups, and tailor it to be consistent, holistic and wildly appropriate.

In the South African context it is vital to create an atmosphere of diversity, inclusion and cultural sensitivity, and it would be extremely unwise to fail to take our local legal, political and cultural climate into account.

Company-culture-decisions

3. Are you prepared to make tough decisions?

A culture change needs to start at the top — it won’t work unless key decision-makers in the company are actively encouraging (not to mention funding) these efforts. An organisation-wide mind-shift is necessary, and inevitably some employees will show themselves to no longer be an ideal fit for the culture you are trying to establish. Are you willing to cut such people loose in your pursuit of a cohesive team?

Another tough decision is the allocation of funds and other resources to the company’s culture-transition. It is important to make it clear why you are effecting a culture shift, and be prepared for people to criticise and challenge your plans.

Related: Don’t Let Expansion Ruin A Great Company Culture

For example, while a popcorn machine or team building outing will be well received by employees, your shareholders will not see value, unless you demonstrate the effect they have on productivity and profits.

By honestly reviewing the current state of a company’s culture, forward-thinking entrepreneurs can better judge the status of the organisation. An action plan can then be implemented based on the shared values of all involved, with an eye to removing dysfunctional, outdated or ineffective practices.

Culture is a living and ever-changing entity that affects all aspects of business — from the way performance reviews are undertaken, to the way your staff deals with customers. It is a vital part of your infrastructure that no business can afford to ignore.

Pieter Scholtz is the Master Licensee for ActionCOACH South Africa. ActionCOACH is the world’s largest executive and business coaching company with operations in 41 countries. It is also on the list of the top 100 franchises globally. As a highly successful Business and Executive coach, Pieter is a master of teaching business owners how to turn their businesses around and accelerate their growth. Email him at pieterscholtz@actioncoach.com or phone 082 8813729.

Advertisement
Comments

Franchisee Advice

Factors To Consider Before Signing Up As A Franchisee

Franchising is a brilliant way to get into business with not many entrepreneurial skills as it comes with a roadmap to follow for success.

Diana Albertyn

Published

on

signing-a-franchise-contract

You’ve been considering entrepreneurship for a while, and now that you’ve finally raised some money and been approved for a loan, you’re ready to quit your 9-5 job to run your own business. You may even already have your eye on a particular franchise, but while franchising is considered an easier and more low risk way to get into business, are you suited to being a franchisee?

“The question is not ‘is franchising right for you’, but rather, are you right for franchising? Because if you don’t have the right attitude and skill set, it can be a very expensive mistake,” says small business expert and author Steve Strauss.

Franchising may seem like an easy way into entrepreneurship, but along with an established name and proven systems, come rules, regulations and little room for creativity. If you’re not ready to become a franchisee, but want to go into business for yourself, you may find yourself struggling to operate within the system’s blueprint.

Ask yourself these three questions before proceeding with the process of franchising:

1. Will you be able to follow the directions of the franchisor?

You’re buying into an existing and proven concept so it’s safe to assume that the franchisor knows best, and so you have to be open to learning and following guidelines for business success. If, for example, you have experience in advertising and think you have an improved technique of marketing the franchise, you may want to change the advertising material provided by the franchisor – don’t.

Related: 3 Ways You Can Innovate And Improve As A Franchisee

“Being a franchisee means following the directions of the franchisor, even when you think you know a better way,” advise experts from strategic and tactical advisory firm MSA Worldwide.

“In addition to initial training, you need to be prepared to accept coaching and advice from the franchisor on how you operate or market your location.”

2. Do you have the need to experiment?

Lou Groen may have had success in launching a new menu item that McDonald’s approved of in 1962, but not all franchisees are that lucky. Stick to the plan and limit deviations to the menu or anything that involves the customer experience.

If the franchisor’s concept doesn’t involve deliveries, offering them to your customers may cause issues for others within the franchise system. “If it’s not part of the franchisor’s concept, you’re deviating from the concept and therefore, no longer running your store as a franchise,” according to MSA. Franchising arguably limits innovation opportunities, so if you’re prone to implementing creative ideas and evolving business offerings based on said ideas, rather start your own independent business.

Related: 3 Pricing Tactics To Recession-Proof Your Franchise

3. Are you a team player?

These first two questions you address should already lead to the realisation that everything you do affects everyone in the franchise chain. One bad experience at your establishment and suddenly, all the stores are affected by bad press or unsavoury social media attention.

“Other franchisees are relying upon you to offer to the consumer a consistent level of service, product quality, and brand message. You are going to have to work with others in the system in making decisions,” advise experts.

Remember that as part of a chain of other business owners, you may have to accept that majority rules when it comes to decisions where franchises do have a say.

Continue Reading

Franchisee Advice

3 Ways You Can Innovate And Improve As A Franchisee

Although your role as a franchisee isn’t really to innovate, there’s room for creativity if you go about it the right way.

Diana Albertyn

Published

on

franchisee-advice

When you signed on the dotted line after reading and agreeing with the franchise agreement, you knew that you were buying into a proven system where everything has already been thought out for you, and all you have to do is follow the formula for success.

But you’re a franchisee longing to put your own imprint on your business, and it may be frustrating to feel boxed in by a formula, while you’re bursting with new ideas.

“Franchising, by its nature, discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures on exactly what they will sell, how they will make or deliver it,” notes Randy Myers, contributing editor for CFO and Corporate Board Member magazines.

Related: Types Of Funding Available For Franchisees

This doesn’t mean your ideas will never see the light of day though. But before you approach your franchisor with your brilliant insight, consider the following steps that may well lead you down an innovative path:

1. Get the basics right first

Franchisors know that customers like consistency as it makes them comfortable and trust every location of their franchise they choose to visit. But, even the strictest franchisors get hungry for new ideas. It’s the timing that’s vital for your idea to even be considered.

“Most good systems don’t want new franchisees to even think about innovations until they learn the existing system inside out and prove that they can execute it like a star,” said Jeff Elgin, CEO of FranChoice, a network of franchise referral consultants. “At that point, they have become successful, their base is secure, and they have earned the right to consider innovations.”

It’s wise to ensure you’ve learned your franchisor’s existing business model before you suggest any improvements.

2. Do your homework

So, you’re doing well and you’re sure your idea will be welcomed as a crucial innovation to the franchise system – but research your proposal, suggests Kim Stevens, VP of Regional Development and Director of Franchise Awarding at Woodhouse Day Spas. “Especially if you’re suggesting something that would impact all franchisees, create a business plan before approaching your franchisor,’ she says.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

It’s also good to have another look at the franchisor’s policy for accepting new ideas to ensure you’re prepared for tough questions before you propose your idea.

3. Speak to the right people

Elgin recommends you first identify the person at the franchisor’s head office who’s responsible for receiving new ideas. “Many of the ideas a franchisee comes up with will already have been proposed by another franchisee,” notes Elgin.

To avoid wasting your time, no matter how great you think the idea is, present it as early as possible before spending anything developing the idea.

Continue Reading

Franchisee Advice

3 Pricing Tactics To Recession-Proof Your Franchise

As consumers tighten their belts, how can you ensure your franchise is their first choice in the midst of strict budgeting and curbing of spending?

Diana Albertyn

Published

on

recession-proof-your-franchise

Whether or not there is a dip in the economy, you have stock on shelf you need to sell. But, if consumers are cash-strapped, you have to make every effort to ensure that your franchisees aren’t running at a loss.

“There’s no doubt that shoppers are more discerning about what they need and how they shop. However, quality remains significant and brands that continue to delight their customers will reap the benefit of being chosen,” says Ailsa Wingfield, executive director marketing and communications: Africa, at Nielsen.

Why not give customers the best of both – value for money at a competitive price – by applying one or more of the following pricing tactics in tough economic times:

1. Consider a greater focus on your house brand

“The days of in-house retail brands being treated with a fair amount of disdain by South African consumers have come to an end,” says Wingfield.

Related: What Makes Franchises Recession Proof?

The global performance management company’s research has found that R38.4 billion of the amount consumers spend at hypermarket and supermarket tills – or R10 out of every R50 – is spent on private label products. South African consumers are beginning to feel that the quality of these house brand products is as good as that of established name brands.

Since research indicates consumers are further likely to shift between branded products and retailer private label offerings, it would be of benefit to your franchise if your in-house products are perceived as viable value alternatives of similar or better quality.

2. Sell products in bundles

This the method combining various products and selling them together as one bundle for a lot less than if they were being sold separately. This method is great for moving items that might be selling slower but also great for achieving a higher value perception in the minds of consumers.

CEO of GuruShots, Gilon Miller, says there are several bundling techniques you could apply, including:

  • Pure bundling, where you offer a group of products that are only available as a bundle and aren’t sold separately.
  • Mixed bundling, where you offer products that are sold both as bundles and as individual units.
  • New- or lesser-product bundle, where you bundle a successful product with a newer or less successful product – the stronger product will help the other product find its way into a new market.

Bundling results in cost efficiency, more competitive pricing and might also encourage customers to regard a single store as a source for several solutions.

Related: How To Recession-Proof Your Business

3. Add even more value

When you price your product in alignment with the value your customer sees in it, you’re preventing both you and your customer from the possibility of losing out on value.

Calculating your optimum price, involves asking yourself these questions:

  • Will your customers save money or time by using your product or service?
  • Is your product or service is unique?
  • Will your product or service help customers gain a competitive advantage?
  • What does the competition charges?

“Value-based pricing ensures that your customers feel happy paying your price for the value they’re getting,” says Patrick Campbell, co-founder and CEO of Price Intelligently. “Pricing according to the value your customer sees in your product prevents you from short-changing yourself while creating an experience for customers that’s most aligned.”

The more value your customers see in your product, the more they will be willing to pay for it, ultimately improving your bottom line. When your pricing is reasonable, they won’t need much convincing to make the purchase at your franchise instead of your competitor’s.

Continue Reading

Trending

FREE E-BOOK: How to Build an Entrepreneurial Mindset

Sign up now for Entrepreneur's Daily Newsletters to Download​​