All businessmen have a thousand and one stories that they have lived through the years side by side with their company, they are one; but at some point they must let her go.
Great Leaders are not the best at “everything”. They find other leaders who are great at ONE thing and put them together on the same team. When hiring an outstanding new leader remember Steve Jobs classic advice: “You hire smart people to tell you what to do, you don’t hire them so you can tell them what to do.” Jim Sullivan’s 10 Laws of Leadership.
Great leaders are not the best at everything. Our job is to find leaders who are excellent at one thing and get them to play together as one team. When hiring and motivating new leaders, remember Steve Jobs’ advice “Hire smart people so they can tell you what to do, not so you can tell them what to do.”
“The master’s eye fattens the horse” goes the popular saying which states that the owner of a property or the person in charge of a business must be super aware of it, if he wants it to work well. Or as a client said many years ago, if you want things to be done right, you have to do them yourself. The saying advises us to take care of our own, instead of entrusting our goods or businesses to the care of other people’s hands, which will not be as jealous and diligent as ours. Implicitly, it also alludes to the idea that workers tend to make less effort when the boss’s eye is not there to watch over them or, as another popular maxim mentions, when the cat is not there, the mice have a party; I have my doubts about all these popular sayings which are subject to interpretation and time.
However, it seems to me that times have changed as generations and markets change. Today the changes are faster and the competition is increasing, in addition to the fact that the client has substantially modified the way he buys, staying behind the box with a single store does not seem like a good idea. The owner of a store has been forced to become an entrepreneur, a multi-unit operator, and eventually a licensor of his brand, and this entails a total change in the way of managing his business, in his vision of life, and in the acquisition of new and different skills, that is, a total paradigm shift. The presence of a family generation that is not willing to follow in the footsteps and the way of life that their grandparents inherited from their parents leads us to think about what will be the fate of the company when we are no longer here?, and eventually about the possibility -never thought- of leaving it in the hands of non-family third parties.
All successful entrepreneurs have a thousand and one success stories and why not, one or another of terror, they have lived side by side with their company over the years, they have spent years together, they have made countless sacrifices to be together and They have shared the best years of their lives together, they are each other’s confidants; but at some point they must let it go, the company is not your son, the company is not your owner; The company is a means that provides satisfaction to you, your family, the collaborators and that should have a fundamental role in society, which is to preserve the jobs of all those who collaborate in it. It is a business, not self-employment, and like all business plans it has a beginning and an end. The company is there to give us happiness and to enjoy the honey it produces, not to take away our time and health. The owners must become true businessmen who live from their company and not by and for it, become leaders that generate leaders capable of leaving their prominence and their dictatorial way of directing and institutionalizing their company so that it transcends and persists, so that it generates well-being. to your family and your community, and create happiness.
Julio C. Morales, president of the Crepelandia franchise in an interview for the program La Formula de la Franquicia mentions that he was always the son of table 8. All the time his father was in the restaurant, he remembers that his day was from school to the restaurant and vice versa, holidays and birthdays are remembered in the restaurant, the case of many of the children of restaurant colleagues with whom I have had the opportunity to talk. That is why over the years he has developed the franchise with the vision that the owner does not have to be in it, does business and grows with several units. It is in the process of institutionalization, it has developed a supply chain, implemented systems and tested an operating method that helps its franchisees to manage the business long-distance, yes, keeping an eye on it so that it grows fat, but keeping an eye on monitoring activities , control and development of winning work teams, not suffering the business behind the box on a day-to-day basis.
Another vision.
Did you know that Colonel Sanders, creator of the secret recipe for Kentucky Fried Chicken, sold his company because he did not have the skills and knowledge to take it to the next level? Because business skills didn’t come naturally to him and he lacked an obvious or willing heir in his family, Sanders decided it was time to retire from the company, which already had 600 units and only 18 people in corporate. , which had surpassed those who worked in it. He eventually sold KFC to a group of investors. Under the ownership of the buyers, the chain quickly began to expand internationally. The group acquired the company in January 1964 (one year after KFC opened its first restaurant in Monterrey, Mexico) for $2 million. The contract included a lifetime salary for Sanders and the agreement that he would be the In charge of quality control of the company and the brand. The company went public in 1966. In July 1971, the company was sold to Heublein, already with 3,500 restaurants, for $285 million. Today it is the best-known chicken restaurant chain in the world and has more than 25,000 restaurants distributed in 145 countries around the world and is owned by YUM Brands. Until the age of 90, the colonel continued to be the omnipresent character of one of the most powerful fast food companies in history.
Another story of institutionalization and sale is that of McDonald’s. In 1954 Ray Kroc met brothers Richard and Maurice McDonald, owners of a San Bernardino hamburger joint called McDonald’s. Kroc reached an agreement with the founding brothers for the national expansion of McDonald’s through franchises. Maurice and Richard preferred to focus on their restaurant because they had already granted six franchises that did not work, so they turned over management of that matter to him in exchange for royalties. In 1961, Kroc struck a deal with the McDonald brothers to gain control of McDonald’s for $2.7 million in cash and 0.5% of annual profits. McDonald’s surpassed a thousand restaurants in 1968, with a presence in every US state and international expansion plans. Kroc ran the business until 1974, by which time the burger joint had become the world’s largest fast-food chain.
If the colonel, passionate about cooking; or the McDonald’s brothers, passionate about the operation, had not sold the company and changed their paradigm, surely the world would not know about these two companies. According to Interbrand’s Best Global Brands ranking for the year 2022, McDonald’s ranks number 11 among the most valuable brands in the world and according to Forbes, McDonald’s is the most valuable fast food chain in the world with a value of 81,162 million dollars (mdd) who are followed by chains such as Starbucks, Subway and KFC with a value of 12,649 million dollars (mdd).
Salvador Zetter mentions in his book The Twilight of Business Man: “Having built a productive company, putting it in the hands of a capable and reliable team that gives me time for myself, gives me the chance to share everything: my happiness, my experience and my welfare. The company is not my life, and I am not of it. After me, it will continue to be directed by whoever wants and can do it, and it will continue to provide jobs and services for a long time, because that is what companies should be used for; They must be institutions beyond the ego and the name of the people to be a source of well-being, prosperity and work fully inserted into the community.” And it is that the employer’s obligation should be that the company transcends even at the cost and / or when the founder is no longer there. We must be responsible and understand that we are not eternal and that many families depend on our company and that we must keep those jobs. The era of man-business has ended. Is your company prepared to move forward in the event of an early succession due to death?
We cannot expect to grow our business through the franchise model without a legal and fiscal structure that provides certainty of permanence to our franchisee partners in the long term. It would be irresponsible to invest in a franchise that does not have a corporate government and a board of directors that guarantees that decisions are not made at the whim of a single man and/or woman. According to data from the Latin American Franchise Institute, less than 20% of the companies that grant franchises in Latin America are or have started and/or are in some process of institutionalization, or have clear succession rules. The franchise is a long-term relationship, the average duration of a franchise contract is approximately 8 to 10 years. Would you like to invest in a franchise where tomorrow the decisions will be made by the son with a career as a painter, who lives abroad and has never set foot in the company?
Founding a company is to acquire a commitment that is not only from its owner with himself, but is a social commitment.
Salvador Zetter.
The Twilight of the Business Man.
I hope this weekly column is useful for you and your business. Remember to visit my YouTube channel “FranchiseZar” where you will find a great collection of business, franchise and entrepreneurship issues. Listen to me on the FB channel of LA FORMULA DE LA FRANQUICIA every Wednesday at 5:00 p.m. cdmx. Interested in acquiring a franchise? Ask FranchiseZar® and #notedejessoprender. Your friend the Czar of Franchises says goodbye to you, see you in the next one.
Jorge Valencia L.
President of the Latin American Franchise Institute.
CEO Interfranquicias Group Latam.