How to Build a Massively Valuable Franchisor, Part 3: Trust Versus Control In Leadership

In any given business, trust is cheaper than control.

Both actions require the same amount of emotional labor, the only difference is, when you trust someone, they don't resent you.

But when you try to control them, they feel disempowered. Because you're robbed them of their sense of agency. You've shut down their inner compass. And that's where the expensive part comes in. Resentment is toxic to any business relationship.

Particularly when it comes to executive leadership.

Now, there are as many approaches to leadership as there are people to lead. It’s not a black and white issue, rather, it sits on a spectrum. In our experience working in every corner of the franchising ecosystem, the vast majority of leaders can be put into two opposite archetypes.

1. Leaders who place value on trusting people
2. Leaders who hold a vice grip on power and decisions

Which one do you think is more profitable for your franchise? Autocratic or democratic? Today we’re going to do a case study to help you understand the difference.

Business Insider recently published an article about a billionaire franchisor whose leadership turned out to be a core part of the company's failure. (We'll spare you the details on which franchise it was!)

For the purposes of this writing, we’re going to extract various notes people gave about that particular franchisor's leadership style, which was deeply based on control. It’s not about the person, but the behavior. And for each one, we’ll make recommendations for what you can learn from their errors. We’ll show how your leadership team might consider leading through trust instead of control:

FEAR

According to reporters, the founder refused to relinquish power and control, convinced that only he and his lieutenants could run the company. He said he didn’t want somebody who's gonna stand up to him.

Classic controlling leader. Someone who runs the company like a titan of industry from a movie. A founder who maintains a tight grip on the company operations and surrounds himself with employees who loved and feared him.

Are employees at your franchise organization terrified of its leaders? Working in a system where they’re fearful of being cut out of the family? 

HIDING

Another memorable insight was how the leaders was the brilliant center of the universe, nearing godlike status for many franchisees and employees. He created a secretive, complex multibillion dollar enterprise, and ensured no one knew the company the way he knew the company.

This autocratic style certainly gets things done, but leaders who remain obsessively hands on are ultimately unsustainable. When every decision has to go through the big cheese, it’s not scalable if the franchise grows.

Are your leaders unwilling to surrender the reins when economies of scale require it? Will they stubbornly hold onto the same mindset that got them into the business when the brand was smaller and its needs were different? 

SUCCESSION

Here’s a huge issue we see many franchisors get wrong. This leader failed to set up a functioning succession plan. His death left his family floundering as the new chief executive, and left insiders baffled by his lack of planning.

There was no involvement. Many of the team members and franchisees never hear from them anymore. There's no evidence that they even still own the company, said one frustrated team member.

Are you avoiding thinking generationally about your brand? If you retired, got injured or died tomorrow, would legacy employees and industry veterans still not have any clue how to run your company? 

DISRESPECT

According to former associates, the founder’s socializing could cross professional boundaries, making numerous female employees uncomfortable. Nude pictures of executives circulated.

We’re as shocked as you are to hear such stories. But these kinds of results happen when you’re leading from a place of fear and control, rather than trust and empowerment.

Do your leaders behave in uncouth ways that would get them cancelled if the whole world knew about it? And are the people who surround them too scared to report unethical or illegal behaviors towards team members?

# # #

There’s no reason any other franchisor couldn’t fall victim to the same. We hope our recommendations that favor trust over control will equip you to become massively valuable, the right way.

In conclusion, here’s a story that has nothing to do with franchising, but everything to do with the difference between trust and control.

My dog was intensely afraid of walking down the stairs when we first adopted her. Our hunch was, she developed the fear because of a lack of early exposure, having been raised outside on a farm. But since we lived in a third floor walkup, her fear wasn't something we could just ignore.

During those first few days, we tried everything animal behaviorists and dog trainers recommend:

Clear off the steps, distract the dog, praise efforts with positive reinforcement, reward each step, carry her down the whole flight, buy a padded stair runner, bribe her with a favorite toy, and of course, lure your dog with a trail of treats to incentivize progress.

All of these proven tactics failed miserably. My wife and I were convinced our dog was never going to leave the house. She was going to start peeing and pooping all over the furniture and eventually have to be airlifted by drone out the window and back to the shelter.

But then a dog lover friend of ours recommended a counterintuitive approach:

“Don't force her. Just leave the apartment door open and start walking down the stairs. The dog will follow you.”

It sounded too simple. That's all we have to do? No way that will work.

Sure enough, my wife and I opened the door and just left. Didn't look at the dog, didn't say a word, didn't give any treats. And by the time we got to the second floor, our dog came enthusiastically running after us. She hesitated for a half a second with one of those adorable tilted head gazes that only a dog can give, but somehow found the courage to proceed despite her fears.

We were astounded. Couldn't believe that it worked. Our dog hasn't been afraid of the stairs ever since.

Who at your company resents you for not trusting them? When you feel the controlling instinct welling up inside of you, how do you keep it at bay?

If you've ever worked for a micromanager or autocratic leader, you know how frustrating it is to be on the receiving end of this behavior.

And so, keep reminding yourself that trust is cheaper than control. It's the same amount of work, so you may as well favor what's most life giving for the relationship. 

Scott Ginsberg is Head of Content at FranchiseHelp. He is very control averse.