Franchise Rage: Keeping it too simple

I get to meet with Texas business owners trying to decide if they should grow or sell their business. The answer generally lies in knowing how to value the business and deciding if that's sufficient for future plans or not.

If growth through franchising appears to be attractive, we then get to work preparing the business for it. This involves defining and documenting their proven and successful business model. We also represent the most successful franchise operations, so in time we are able to bring qualified operators to the business and the operation grows territory by territory.

It would seem to be a simple thing, just follow the proven plan and success will be yours. This should be a KISS, Keep It Simple Stupid, approach to making money; however, life proves success is never that simple. The danger in a franchise strategy for growing a company is the potential for an adverse relationship to develop between the  franchisor and the franchisees. Here is how it can happen.

A franchisee's operation is struggling and the franchisor recognizes that they are trying to operate  outside the proven plan. Warnings about this issue are repeatedly given; however, the operating problems persist and eventually the new franchisee begins to attribute the problems to the franchisor's inability to help them. The two sides continue to blame each other creating a vicious cycle of further bad business. What we have is an example of a sound system being destroyed as a result of the fundamental attribute error.

This everyday error occurs whenever we think an action is being caused by the actor instead of the stage. In traffic a car suddenly cuts in front of us. Our reaction is to think that happened because there is a bad (or rude) driver in front, when in fact that driver could be skilled and polite and narrowly averted an accident by quickly changing lanes to clear a road hazard. As long as all the driving incidents are the cause of other bad drivers, better driving skills that anticipate road hazards are never developed. Instead, we develop road rage.

Blaming problems on fundamental personal attributes of either the franchisor or franchisee is not a simple answer, it's a simplistic answer. Oliver Wendell Holmes said "I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity." It is the difficult responsibility of both sides to go one step deeper into the situation and ask "Why is the proven method being altered?" What if the issue is not personal character but is the situation? It means a willingness to suspend judgment and get deeper into the complexities of the specific situation and how the model applies to it. Only after passing through this complexity it is reasonable to get back to keeping it simple.

In our process of guiding Active Investors into purchasing a new franchise, we have them contact other franchise owners to learn about their experiences. The alert Active Investor is going to ask how they handle difficulties that might make them question the plan. Is there any evidence of franchise rage?

If you are considering franchises, you want a successful system; but you also want a happy family.

Photo credit: star5112

A Puzzle or a Mystery?

Malcom Gladwell's What the Dog Saw is the source for this post, although anything by him can be equally inspiring. Malcom asserts there is a difference between a puzzle and a mystery. And what a difference that makes to the Active Investor!

I love Sudokus, especially when trying to relax. They are classic puzzles. As you work with them, more knowledge is developed which leads to the solution. That's how all puzzles work. You keep developing more information until the solution emerges. A mystery is the opposite. You may have all the information up front. You're unable to solve it because of the way you are looking at it. More data only further obscures the answer because there is now more being incorrectly viewed. A mystery is only solved by finding the correct way to look at the existing situation.

Our western educational systems present the world as a big puzzle and they offer the promise that if we just get enough education we would be able to solve our  problems with the data we would now be smart enough to collect. There is no doubt to the value of an education; however, it's not this simple. Life is a mystery not a puzzle.

Sherlock Holmes solved mysteries. It wasn't only that he collected more data (which he did). In the Sherlock Holmes stories, he connected all his observations to solve the mystery. These connections catch most readers by surprise because we are still collecting more data in our minds when Sherlock has been eliminating dead ends and arriving at the unseen answer. Perhaps the single Sherlock quote that best sums up all of these time-honored tales is his comment to Watson, "When you have eliminated the impossible, whatever remains, however improbable, must be the truth."

In a mystery, we quickly get to a point where more data only causes more confusion.  A solution only begins to evolve when we disregard our training to collect more information and begin to realize the problem is that we are looking at it the wrong way. When we change the way we look at things, the things we look at change.

Business is also not a puzzle and more analysis often leads to more frustration. Like life, business is a mystery. The successful business owner or professional doesn't need more information than the competition. The successful Active Investor needs insight. The key to the information age isn't more information. It's developing better ways to connect what we may already know.

As an example, we still hear of business people viewing sales and marketing as a numbers games. There is goal setting that encourages mindless activities repeating a minimum number of daily "fishing" activities. The idea is that if any number of data points get high enough, success will be forced to happen. Success can never be forced. Look at what's already going on. Eliminate the impossible and whatever remains, however improbable, must be your truth. That is, the truth of what you are about, where you need to take your enterprise. Actively invest in those things. Success evolves from those activities that are working and that you believe in.

How can you determine if you are seeing a possible solution to your mystery? One clue is if the resulting activities are in harmony with the Active Investor blog theme: growth follows activities that are repetitive, powerful, and gentle. If they are, you may have your insight.

Developing business insight is the mystery. There is no puzzle.

image credit: Egan Snow

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A Disease of Choice

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If we focus enough on the potential of contracting a certain disease, we will increase our chances of actually getting it to the point where we are actually sick. What if that were a good thing?

House M.D. is a television show about an obnoxious doctor who ingeniously cures patients with exotic conditions in spite of his offensive manners. In one episode his staff was impressed with the positive attitude of one of their patients, who in spite of having a condition they couldn't cure was always kind and caring. This was a personal challenge to House who begins his relationship with the patient by trying to make the patient react badly. That never happens and a frustrated House suddenly considers the possibility that maybe this patient isn't upbeat and positive in spite of his disease, maybe he's that way because of the disease. This insight leads to a diagnosis and cure. The episode ends with the cured patient still being kind and caring, which was something of an annoyance to the lead character.

We believe many of our short-comings may be the result of medical conditions. For example, Attention Deficit Disorder (ADD) makes it difficult (perhaps impossible) for sufferers to focus and therefore succeed in areas that require study. This is  serious condition that should be treated and not ignored.

Now if something exists, then it's possible that its opposite also exits. What would a life be like if we could also suffer from an opposite brain condition, Inattention Deficit Disorder, IDD? The symptoms would be an inability to be thoughtless and distracted which would require the sufferer to live a life of complete awareness. That would be a great disease! If we were obsessively worried about contracting it, we might actually get it! To obsessively worry, one would continually imagine what life would be like with a medical inability to suffer from your perceived short-comings.

Every personal investment has its elements of self-doubt and reservation. These can control and derail us from our purpose in life. What if we had a medical condition that made it impossible for this to happen to us? What if we had the insights, confidence, and courage we need because of a medical condition that just made us that way? If we have a purpose in life, isn't it reasonable to be able to contract it?

While suffering appears to be an unavoidable consequence of living, there is both productive and unproductive suffering. Why not choose the former?

When Giving-up is a good thing

Over the past year this blog has evolved to become the application of methods that are Repetitive, Powerful, and Gentle to the practice of making money. Simplistic approaches to business issues frequently pass the the Repetitive and Powerful tests; however, truly effective practices must also qualify as Gentle and here is where many, like traditional selling, fail.

The largest consumer of motivational materials and methods is the US Sales and Marketing industry. Care to guess who might be number 2? It's the US military. This leads us to wonder, what is it about our traditional approaches to sales that is like the military? Do Sales Departments require a constant infusion of outside motivation because, like the military, they are organizations built around the acquisition and application of force? For those in sales that are drained by its continual churn, or those being pursued by smiling, manipulative salespeople, it seems the answer seems to be YES.

Poor observers of successful salespeople have concluded that they are master of Persuasion. This isn't really the case; however, it's a business myth that is relentlessly taught. Persuasion is verbal manipulation and not at all what we feel comfortable in calling gentle. This is the connection to motivational methods. When I hear a sales professional using them, I have to leave (at least mentally, if I can't physically).

More accurate observers of successful salespeople have started to realize that they have a talent in Qualification, rather than Persuasion. They have a heart for who really needs their products and services (it's never everyone!); and a sensitivity in understanding their prospects enough to know if there is a basis to beginning a sales process. It's time consuming and complex enough to work with someone qualified to be a customer (that is, they actually need, understand, and can afford the product). The efforts spent "selling" someone not obviously qualified is counter-productive.

Working with sales prospects is no different than traders working with options or gamblers with their games. Over and over again studies in these two areas have shown most traders and gamblers win about the same. The successful ones are those that lose the least. They continually qualify their positions and when it doesn't look like a win, they accept a small loss and simply leave. If a sales prospect doesn't qualify, the successful salesperson leaves them alone. The motivated loser keeps on.

Giving up trying to serve is completely different from giving up trying to sell. The highest use of our lives comes from service and we often can serve those who do not qualify as clients by helping them solve their problems in other ways. This can be anything from a simple expression of empathy to a referral to one of your strategic partners. If your intention is to always finish strong, a way to do that will always appear.

Photo credit: bk2204