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The Wealthy Franchisee

There Are 5 Types of Innovative Personalities. Which Are You and What Does It Mean for Your Chance of Success? When it comes to change, we need to lean in. As risky as change might be, not changing is deadly.

By Scott Greenberg Edited by Dan Bova

Key Takeaways

  • Consumers gravitate toward new things, so franchisees need to provide that novelty before their competitors do.
  • Failure is a necessary ingredient in the recipe of success. You have to try things to create great things.

Opinions expressed by Entrepreneur contributors are their own.

This is part 1 / 4 of The Wealthy Franchisee: Section 3: Mastering the Wealthy Franchisee Skill Set series.

Franchisors are very familiar with this bell curve:

It's always on their minds, and rightly so, since their business model is vulnerable to changes in the marketplace. Even if they do everything right, there's bound to be disruptions. It could be a new competitor (consider what Netflix did to Blockbuster), a new technology (consider what cell phones did to pay phones), or a new way of delivering products (consider what Amazon has done to everyone). Economies can change dramatically due to world events (as they did in 1927, 2007, and 2020). Franchisors are also aware that consumers gravitate toward new things, so they need to provide that novelty before their competitors do.

Related: Most Franchisors Fail to Scale Because They Don't Realize This

Franchisors also want to boost efficiency and reduce costs. That might mean a new point-of-sale system, new goods, new procedures, or new vendors. And if new leadership comes on board, you can expect them to implement their own ideas. With new ideas comes debate. That's not just true for franchising— that's human nature. People tend to fear anything that threatens what they're comfortable with. If they're used to doing things a certain way, disrupting that triggers the amygdala. Often there's pushback before they will even consider new ideas, even when there are potential benefits to switching things up. Change is an extremely sensitive topic in the franchise world, especially when it's required, and even more so when it costs money. Most franchisees don't like being told what to do, and certainly not what to spend, although they will welcome new ideas when the benefits are obvious. Sometimes franchisees request changes to the model and complain that corporate is dragging their feet. But when they're unsure about a change, they can be reluctant to accept it.

Related: Why You Should Buy a Franchise Instead of Starting Your Own

Sometimes corporate is right, and sometimes they are wrong. But remember that failure is a necessary ingredient in the recipe for success. You have to try things to create great things. The popular Post-It note is the result of an adhesive that failed to tightly bond. Thomas Edison conducted thousands of experiments in order to create his alkaline storage battery (often misattributed to the development of his lightbulb). And that spray in your garage is called "WD-40" and not "WD-1" because it took them 40 tries to get it right.

When I do speaking engagements for franchisees, the message I want to deliver is this: When it comes to change, we need to lean in. As risky as change might be, not changing is deadly. As a collective, we can't rely on the status quo. We must ask questions but keep an open mind and trust the people with the track record and the data. We need to allow for a certain margin of error to encourage ongoing innovation. Mostly, we need to follow the lead of wealthy franchisees. They have good instincts and clear heads, and they're engaged with the franchisor. There's a good chance they were involved in creating the new idea. Wealthy franchisees are excited to be at the forefront of innovation and frequently volunteer to be trial stores.

Related: Franchising Isn't for Entrepreneurs, It's for Systempreneurs

Diffusion of Innovations

Social scientists have studied the way members of a population embrace change. Some of the most interesting work came from Bryce Ryan and Neal Gross, rural sociologists at Iowa State University. In their 1950 report, titled "Acceptance and diffusion of hybrid corn seed in two Iowa communities," they examined the rate at which farmers in Iowa adopted the use of hybrid corn seed. Later, in his book Diffusion of Innovations (Free Press of Glencoe, 1962), communications professor Everett Rogers expanded the discussion to other industries. He classified people within a population into five different groups based on how rapidly they embrace an innovation.

  1. Innovators are the risk-takers who jump on board as soon as something's available. These are the folks who spend the night in front of a store so they can be the first to own the latest cell phone or gaming console.
  2. Early Adopters are among the most influential people in society when it comes to accepting innovations. They notice what the innovators do and take a slightly more calculated risk. They still come on board before most people, but they want a little information first. This group has a lot of influence over the rest of the population.
  3. The Early Majority joins in once the innovation is proven. They follow the leadership of the early adopters.
  4. The Late Majority comes in behind the curve. They're skeptical about change but realize they probably don't have much choice if they don't want to get left behind.
  5. Laggards are the last to get on board. They cling to tradition and only change when they absolutely must. That's my grandmother, buying a touchtone phone only after it was no longer possible to use her rotary dial telephone.

Related: Making Your Community The Secret Weapon in Rapid Franchise Expansion

Like all models, it's not an exact science. It does, however, provide a pretty good general idea of how groups of people adopt new ideas. Wealthy franchisees are generally among the innovators and early adopters. Their desire to keep getting better opens their minds to experimentation. They also speak up assertively (but respectfully) when the change seems flawed. As top performers, they have influence with corporate. Often they're especially quick to embrace new ideas because they're the ones who came up with them.

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