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Putting People Before Money

It's the idea behind relationship-based franchising, says Service Brands franchisor David McKinnon.
December 3, 2001
URL: http://www.entrepreneur.com/article/46706

Maybe it's the influence of his parents, who were missionaries, or maybe it's just his personality, but for David McKinnon, people come first, period. People come ahead of the bottom line and contracts at Service Brands Int'l, the franchisor of Molly Maid, Mr. Handyman and 1-800DryClean. This relationship-based management style is such a part of Service Brand's culture that McKinnon doesn't doubt its lasting impact on the company's culture. "It's an inherent part of my personality, but it's also now a key part of the company," says the 44-year-old CEO. "If I were to be hit by a bus tomorrow, [this management style] would continue here."

Franchise Zone spoke with McKinnon about why relationship-based leadership is a key factor in the success of his franchise.

Franchise Zone: How would you describe relationship-based leadership?

David McKinnon: It's where people will follow you to places almost without reserve or caution, because they believe in your integrity, your experience, your style.

How do you apply this in your franchise?

I hope it's applied by the example of myself and other members of our executive team, and then down through the line of command. One of the values we have is relationships matter. That often causes us to make decisions others probably wouldn't. If we had an issue that contractually we were obligated to, but felt it would damage our relationship, we would put the relationship ahead of the contract. We have to protect the relationships we have with everyone. When we have meetings and [are] trying to create consensus on direction, we're able to say things we wouldn't be able to say if we didn't have strong relationships with each other. We spend time not just at the business place, but with our families, because we believe that's important.

How does your management style affect your franchisees?

It creates a culture that permeates the company. Franchisees come to know the company is open and we're easy to communicate with, and that starts with my style but ultimately becomes part of the culture.

How important is a franchisor's management style to its franchisees?

[Prospective franchisees] consider not only the business opportunity, but whether they can see themselves being a part of this company. I think the culture, the philosophy, is a big part of why people choose one company over another, and that comes back to the leader's management style.

How can a franchisee find out what kind of culture the franchise has?

By talking to other franchise owners who have been in the system for a while, visiting the home office and meeting with the executive teams on a discovery day, doing some research on the company's litigation history. Basically, by being in situations where you can see how the company reacts to its partners.

The Downside

Are there any drawbacks or problems with this management style?

Sometimes we're probably a little softer than we should be when people don't perform at their peak or doesn't deliver the results they agreed to deliver. Typical corporate America wouldn't like this style-they'd be more demanding on the results for the quarter and for the year, whereas in a relationship-based organization you tend to be a little more lenient and more tolerant of someone [falling short of a] plan. Our first focus is not on the dollar. Someone might see that as a drawback. But we believe, in the long run, there's paybacks that can't be accounted for, that aren't seen right away, in terms of lower turnover and sticking it out in tough times.

Is there anything the company does to compensate for that, or do you feel you have to?

I try to have a management team made up of strong, relationship-based people who are demanding of performance, where maybe someone isn't as warm and fuzzy as I might be but appreciates the culture [and] also tries to point out that these results need to be met. I think we do have a good balance of that in our company.

How do you ensure this management style is consistent throughout the company?

I don't know that you can ensure it. Managers who are reluctant to adopt that style feel uncomfortable over time in the organization. A few people have left because they've just felt they didn't belong here. It's sort of a self-managing style.

If you knew one of your franchisees was putting the bottom line ahead of people, would you do anything to correct that?

No. This is a leadership-by-example approach, and people can choose to follow it or not. A franchise owner is an independent businessperson. Each franchisee owns his or her own business and territory and can run the business in a way that best suits his or her personality.

Does this management style makes you a better franchisor?

Absolutely. Because we've gone 12 years without a single piece of litigation. Because when prospects talk to owners, they find out this is a good place to be. Because people are looking for more than just money-they want to be in a place where they feel they're going to be accepted and able to contribute. There are lots of examples of companies, despite how good the opportunity might be, where it's clear the franchisees aren't happy. That's not the case here. Obviously I don't mean to suggest there are never issues-there are always issues-but it's how you approach the issues and how you treat the people who have the issues and how you ultimately resolve them that matters. And that's what we take great pride in doing.