A methodology known as Appreciative Inquiry (AI), developed in the early 1980’s may be relevant and impactful to reduce the number of franchisees that cease operations and reduce non-renewals.
AI may also have the ability to reduce the number of franchisees terminated or reacquired by the franchisors.
Let’s explore the viability of AI as an investment not only for franchisors and franchisees, but as a sound model for all levels of business relationships, because the AI model is a scientifically proven strength based approach to interpersonal communications. AI has increased the bottom line in a variety of industries; a well-known case study is Green Mountain Coffee. When four major business processes were focused on, they raised employee productivity, and achieved a 7% reduction in their gross cost of coffee production. This AI method raised the bar for establishing quality relationships that many of us overlook, minimize, or rationalize away as a lower priority.
Today, more than ever, good business communications is a vital part of achieving a successful business. In a recent speech on 6/16, Warren Buffet told aspiring entrepreneurs and small business owners that the best piece of advice he could give them, was to engage in “delighting their customers”. But in order to delight our business associates we have to know them well. AI is the best solution to this end, because at its core, relationships are enhanced and deepened via a connection of mission, purpose and meaning through dialogue and sharing about what is most important to stakeholders. In a typical AI activity, customers and staff share highpoint stories of what most connects them to the service or product a franchise may offer.
Further significant evidence of the quality of business relationships to customers comes from Mark Bonchek, founder and CEO of Shift Thinking, who wrote in the Harvard Business Review 4/16, advising businesses to “Focus on Keeping Up with Your Customers, Not Your Competitors”. Mark outlines the importance of this method and mindset as a company’s greatest challenge, but also a source of its greatest profit in this digital age of profound disruption and accelerated change.
AI guides organizations to weave a business strategy with personal meaning, connection, and people’s values; and in the process, eliminates an environment of finger pointing and defensiveness. Many times a franchisor may not appreciate and recognize the challenges of a franchisee. For this reason, it is advantageous for an independent third party to conduct short story inquiries to capture the true feelings of people. This process increases innovative ideas, new products and services, references, testimonials, and referrals. When the four-stage process below is followed with the commitment of senior level management, bottom line revenues and profits of the franchisors and franchisees are enhanced.
The AI model includes the following four stages: Discovery; Dream; Design; and Destiny built around a positive core, which is the organization at its best, and includes people’s collective wisdom about the organization’s strengths, capabilities, and potential. The 4-D process unleashes the energy and ideas of the positive core for transformation and sustainable success.
Discovery: Discover and appreciate expectations that have been met or exceeded in your organization.
Dream: Envision what might be with the people who are performing their jobs and know first-hand what is desirable.
Design: The ideal enhancements that can increase revenue and satisfaction with customers, Partners and employees.
Destiny: Organize to innovate, improvise, and get results -by delivering what is needed and wanted by all parties.
Harvard Business Review 8/15 featured “Build Your Capacity for Empathizing with Others”. The article states, “Understanding people’s wants and needs is essential to winning them over. …Listen carefully to the stakeholders and make sure you understand what’s being said. When people feel listened to, they become more receptive to your message. Best of all, empathizing with other people can help them empathize with you in return, laying the groundwork for a lasting relationship.”
AI focuses on what comes naturally to organizations, where they are most alive and vibrant, and what they already do well. When short story inquiries are used in the Discovery and Dream stages, they are customized to your needs with the questions being meticulously crafted in a positive way to bring out the best in people, who will feel appreciated for what they do well. A very high rate of completed interviews is obtained, providing a wealth of valuable information when the remaining stages are applied. Although our focus is on the positive, any challenges or problems that arise are dealt with, but not dwelled on. It is human nature for people to want to talk about their experiences. The customer base can be expected to grow when franchisors listen to their franchisees and understand their needs, wants, and new ideas (and vice versa); as well as when franchisees listen to their own customers.
Organizations change most readily when they focus on, study, and engage in dialogue about strengths, patterns of success, and who they are at their best. Peter Drucker, management thought leader, has espoused, “focus on your strengths so that your weaknesses become irrelevant”. A process for positive change and the study of what gives life to people, teams and organizations when they are at their best, results in competitive advantage and increases revenue and profits.
Appreciative Inquiry –is it necessary? It is! When we can see the impact of positive dialogue; strengths-spotting and innovative ideas emerge between franchisors and franchisees during this activity. Something we now realize is necessary in this digital age, where connection can foster collaboration and customer engagement.
Paul and Pat Ruggeri are Co-Founders of Appreciative Insights. Pat is an Operations Manager, with a background in psychology and HR experience. Paul is Founder and President of icelighter, with a teaching degree and over 40 years of experience, primarily in sales, marketing and management roles in the IT industry, with IBM, Wang Labs and other.