” I learnt the power of purpose. The transformation in how the business feels and how it is performing has been extraordinary”
A UK wide franchise business had a problem. The business had grown fast, fuelled by a rapid expansion of franchisees. To power its growth the business model relied on the capital injection new franchisees made at entry – and the income they generated as they matured. But in recent month this growth had slammed into reverse as increasing numbers of seasoned franchisees were leaving the group.
Social responsibility and personal growth
What made this business unusual was the exceptional focus it had always placed on ethics and social responsibility, and on the personal as much as the financial growth of its franchise Partners. The loss of these Partners was particularly distressing to the founding directors.
Of course, the business conducted regular research into its franchise base and particularly exit interviews. Yet it was unclear what was causing this dropout, when the feedback about the organisation was generally strong. If the leadership was honest, they had also grown so fast that they had not always been able to devote the time needed to really understand this most fundamental aspect of their business.
Reading about some new research from Cambridge University made the leadership team think that a new approach to understandthing their franchise and employees might be helpful. They used the Cambridge research team and their commercial partner Contexis to conduct a survey of the beliefs and behaviours of everyone in the business, whether directors, employees of franchise Partners. The results were illuminating.
A hidden persepective
While most people were highly motivated by, and connected to, the business, there was one group, previously hidden, who had a very different perspective. Franchise partners who had been involved in the business for between three and five years were dramatically less positive than either their more recent or more established peers. And this disconnection presented itself in a fundamental confusion about, and disconnection from, the direction and strategy of the business. They felt alienated and disenfranchised. And at the root of that was a fundamental loss of trust in the purpose the business served.
In short, this key group of lucrative and highly influential franchisees were both confused by, and distrustful of, the business because they had lost their connection to its purpose. And this loss of connection could be traced by to some specific events in the growing pains of the business some three years previously.
The business was haemorrhaging its strongest revenue generators not because of dissatifaction with the terms of trade, or a loss of confidence in the brand, but because of a loss of faith in its purpose and a consequent disconnection to its future direction.
The solution to the problem was simple. The founding fathers of the business conducted a series of Retreats where they told the story of the foundation principles of the business and reminded Partners of their fundamental beliefs. They spent time engaging the whole community with understanding and articulating a purpose both in terms of their social principles and their strategic ambitions. In doing so they rebuild trust and transformed levels of clarity and engagement across the franchise community.
“I learnt the power of purpose” says the business’s Founder “we thought out purpose was so obvious it did not need to be stated. But we had left many people behind in our growth. The research made this clear for the first time. And told us exactly who to engage with and what needed to be said. The transformation in how the business feels and how it is performing has been extraordinary.”
If you are interested in reading more about how an activated purpose can impact business performance try the following articles:
It’s not about having a Purpose, it’s what you do with it
Purpose transforms performance. But if you can’t measure it how can you implement it?