Business leaders are looking for a new edge. Their companies may be just barely alive, having made cuts they never thought they would have to make. The workers have been beaten down and overworked. The energy, the buzz, and satisfaction are dead.
What’s left that hasn’t been tried before?
Management consultant and author Martin O’Neill says, “Turn your company into an Internal Franchise. If you want to maximize your profits, teach each and every employee to act like they own the business.”
His new book, The Power of an Internal Franchise: How Your Business Will Prosper When Your Employees Act Like Owners, lays out the steps for creating the kind of culture where people become “internal franchisees”—they take personal ownership and see the company’s success as their own.
O’Neill says that business leaders need to bottle their company formula so it can be taught to others. He offers a three-step process:
1. Define your operating model: How do you do things? How do you go to market? How do you cost, price, market, sell, serve, manufacture? Get clear on all these points.
2. Find entrepreneurial employees who will learn, execute, teach, challenge, and improve your operating model. Engaged employees whose personal success is aligned with their organization’s success are key to successful Internal Franchises.
3. Build a culture of ownership. Create and nurture the cultural attributes and beliefs where everyone acts as a steward and even an owner of the business.
“Your people are the company,” O’Neill says, “and when they are handed the opportunity to take responsibility and succeed, they will do it. Maximum growth and business development occurs when you empower each and every one of them to think and act like an owner. This single transformation can renovate and invigorate everything you see and do like nothing else.”
His new book takes the concept of franchising, which is one of the strongest and fastest-growing sectors of our economy, and explains how to internalize it and leverage it.
“A franchise is a complete and proven way of doing business,” O’Neill explains. “The hardest part of running a business is building a successful system. In franchising, this step is already done for you, and once you get licensed, you simply have to learn the procedures and follow the steps. In an Internal Franchise, you create your operating manual; give it to your employees; and then coach, mentor, train, motivate, inspire, cajole, and even entice them to operate the business at the highest level possible.”
Here is a list of Dos and Don’ts of Creating an Internal Franchise suggested by O'Neill:
Don’t 1. View this process as a way to manipulate the workforce 2. Try to do any of this without building some consensus 3. Start and then stop any of the change initiatives—you will lose credibility as a leader 4. Delegate the initiatives—leaders have to be engaged and involved 5. Ignore the signs of growth of an Internal Franchise
Do 1. Engage your next generation of leaders 2. Be as transparent as possible when building your operating model 3. Be explicit on the extent of the possible rewards 4. Make your operating model the focal point of your company 5. Listen to your workforce—they have many answers (even though it sometimes hurts to listen) 6. Create a sense of urgency—any change initiative that lingers without progress will die
“Creating an Internal Franchise may seem like a big decision to make, but this is untapped channel is the most powerful way you can find to energize your organization and achieve new ways to distribute your products and services,” says the management guru.
A company that has created an Internal Franchise has a strong, empowered culture where people will act with the best interest of the company in mind. All the people in the organization feel like they own their franchised operation and act accordingly. This strong sense of ownership is what drives success, writes O'Neill. It creates a bond that is cast in trust among the all the members of the organization.