XXX XXXXXXXXXXXXX (XXX) identifies themselves as a “one stop-one source resource for all things entrepreneurial.” They specialize in two broad areas: providing no-cost coaching to people exploring franchise ownership options and conducting business coaching to existing small business owners. Business coaching addresses sagging sales, eroding profits, constant case-flow anxiety, poor work-life balance, and marketing/advertising misfires. XXX is organized as a franchise. That is, each one of the 250+ offices nationwide are independently owned and operated. The company began operations in 1984 and started awarding franchises in 1998. They have a corporate staff of 12 people supporting the 250+ franchisees. In addition, the support staff is responsible for providing support to four other “sister” franchise brands accounting for an additional 229 franchisees.
Current Culture
Cultural Type:
The primary cultural style associated with XXX is Power, scoring in the 98th percentile. Just one point lower and scoring the same 98th percentile are two secondary styles: Competitive and Conventional. The weakest style displayed by XXX XXXXXXXXXXXXX is Affiliative - only scoring a 1 percentile.
I totally agree with the primary cultural style of power. The organization is still managed daily by the founder who is a very dominant type leader and person. His behavior style is transferred to the rest of the corporate structure. In addition, all franchisees are independent business owners looking out for their own interests, which accounts for the secondary style of Competitive. Also, the organization has the secondary style of Conventional. The corporate office believes they know best and franchisees are expected to follow the rules. Not surprising is Affiliative scoring the lowest. Although it is best for franchisees to be highly Affiliative, the corporate office is not very friendly or sensitive to the satisfaction of its franchisees.
Behaviors Associated with the Current Cultural Type:
I’ve been a franchisee of XXX for four years. During that time I’ve seen first hand many behaviors associated with the primary style of Power. The founder must run everything personally. He has teams helping to run the business but he has his hands in them at all times. The corporate staff never wants to relinquish control to the franchisees. In addition to the corporate staff, our regional developers seem to enjoy using the authority of their position. I’ve also seem many, many examples of people playing “politics” to get ahead. All of these behaviors are not only accepted but are encouraged by the corporate staff and regional developers.
Behaviors associated with the weakest style Affiliative are cooperation with others, thinking in terms of the group’s satisfaction, being open, warm, and tactful. Unfortunately, the organization doesn’t display nor do they encourage this kind of behavior. In fact, they are quite the opposite and looks at a franchisee displaying Affiliative behaviors as being weak.
Two targets I would identify for cultural change are Humanistic and Conventional. Humanistic shows the greaXXXt gap at 82 percentage points difference with the organization showing a Current Score of 3% to an Ideal Score of 85%. The second greaXXXt gap between Current Score and Ideal Score is Conventional with a difference between the two of 80 percentage points.
To close the two culture gaps, XXX leadership should consider franchisees a vital part of the organization and include their thoughts and ideas into developing the organization. They should offer open and honest communication on a regular schedule to inform us of where the organization is going and why they are making the decisions. They should show a sincere concern for the success of their franchisees. Finally, XXX should seriously take into consideration suggestions made by franchisees.
Potential Benefits & Risks of Cultural Change
As a franchisee, I see two areas where XXX will benefit from a change in their culture. The major benefit is less franchise failures. By conveying less of a culture of Power and at the same time displaying more of a Humanistic culture, franchisees will become more involved in the organization. Franchisees will feel they can freely offer suggestions that can improve their businesses. By listening to existing franchisees, XXX will learn what is causing owners to fail and work hand-in-hand with franchisees to find ways of helping them succeed.
Another major benefit to changing the culture at XXX is the prospect of adding more franchisees to the system. As they say, “A rising tide raises all ships.” However, since many franchisees fail and many others struggle to make a living with their XXX franchise, most current franchise owners will not recommend the XXX franchise to prospects. By becoming a more Humanistic culture and less of a Power culture, existing franchise owners will enjoy the relationship with XXX corporate structure. Franchisees will become more successful and will freely promote the XXX brand and recommend the franchise to clients considering franchise ownership options. In the end, everyone wins since XXX collects more upfront franchise fees as well as increased brand building and royalty fees. Part of those fees will be invested back into the XXX brand to drive more business to each franchise owner. There is no doubt that once cultural changes occur, XXX will be a much better organization for franchisees to be a part of. They will feel like their ideas count and they are an integral part of the success of the organization. As far as risks are concerned, I don’t see any to the organization as a whole. The CEO may feel like he is losing complete control over the organization. Certainly, the CEO will be the most difficult, but most important, person to convince a culture change is needed.
Conclusion and Reflection
The OCI exercise was a very valuable exercise to me. It confirmed and clarified what I have noticed over the past couple of years about XXX. I now have a clear picture of the culture of XXX and, more importantly, ways in which XXX can change its culture to improve their franchisees’ businesses as well as that of the XXX corporate organization. Culture change is certainly not easy, but identifying those items most important to change and understanding ways to make changes is a great start.
I will use this newly acquired information to help my regional develop notice where the organization’s culture has gaps, and attempt to help him institute small changes in his region. Then, he in turn, can reach other regional developers to make small changes in their regions until the culture changes reach the top levels of the organization.
Personally, I’ve been aware of behavior styles in individuals, but never made the connection to organizations having behavior styles. This exercise has broadened my thinking and given me another tool to use in my management career.
