How Do We Move Forward?
BY MICHAEL JORGENSEN, EXECUTIVE VICE CHAIRMAN, NCASEF
When our current President and CEO returned to 7-Eleven 14 years ago to take the helm of the organization, he began a campaign to break down the “silos” that existed within the company. The online Business Dictionary defines a silo mentality as: “A mind-set present in some companies when certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce the efficiency of the overall operation, reduce morale, and may contribute to the demise of a productive company culture.”
I was a Field Consultant in New York at the time our CEO presented his goal of breaking down silos on a Tuesday NCC (National Conference Call), and the excitement in the room and the organization was palpable. It was a new concept then, and we believed the company needed to maximize information to make the most of its opportunities and generate ideas that would not otherwise come to light.
What I have fully realized since then, as a franchisee, and as a vice chairman of the National Coalition, is that the biggest silos, and the ones with the most potential to impact the organization, are the silos that exist between 7-Eleven and its franchisees. These silos have always existed, and they sometimes cast a small shadow and at other times they cast a larger shadow, but over the last several years these silos have grown and are casting shadows over much of our business.
Over the years SEI has attempted to address information sharing and garner franchisee feedback through various committees including ZLCs (Zone Leadership Committees), the NBLC (National Business Leadership Council), the FAC (Franchise Advisory Committee), and the CEO Roundtable. Taking nothing away from the work of these groups, there are many dedicated franchisees and 7-Eleven stakeholders that have made many improvements to our system based on involvement in these committees, and this work continues. However, as each of these groups, by their very definition, are merely advisory, they are limited in scope of what they can accomplish. These groups are carefully controlled by SEI, since they choose the individual franchisees who participate, prepare and control the agenda and schedule, and control the prepared communication out to the general franchise body.
Reception of and reaction to feedback is one of the most important attributes to ensure a franchise business remains successful. Franchisees are the backbone of 7-Eleven. We have direct contact with the customer, run the day-to-day operation and make the whole franchise collectively successful. But franchisees do not only run stores, they have also invested a significant amount of money (cumulatively over $1 billion) in 7-Eleven and are stakeholders in the company.
SEI is not really accountable to franchisees as shareholders. There is no way outside of litigation for franchisees to hold SEI accountable for poor performance. I believe the solution is to create a new venue that helps us avoid litigation and the adversarial relationships that can develop.
There is a lot of literature on franchise boards available on the web. One that I found very enlightening is “Exploring franchise boards: a stakeholders perspective,” by Denise Cumberland. You can find this paper here: https://ir.library.louisville.edu/cgi/viewcontent.cgi?article=1296&context=etd. It is a thoroughly researched and well written paper that can provide insight to help create the framework for a franchise board that helps us to break down the silo once and for all.
What I am suggesting is a franchise board that includes franchisees elected by franchisees, not dictated by the company.Such a group could be accountable on both sides with a set of rules and guidelines that prevent the body from being controlled by franchisees or franchisor alike. Such a group would facilitate the sharing of more vital information, have more open, honest and robust discussions and dialogue which would help break down barriers. It could have a set process for franchisee problem solving that avoids the courts, is somewhat binding and has franchisee representation and accountability. It needs to be acceptable to franchisees and transparent, but it also needs to have oversight so that the franchisees involved are
As franchisees begin to feel that they have a say in the plans and future direction of the organization, trust will grow, and adoption and implementation of programs and processes will be almost automatic. This is brand consistency. It is what SEI wants for the brand, and this should be our franchisee goal. A change of this magnitude will be difficult to implement, and may not run smoothly at first, but over time can have a huge positive and lasting impact on the culture of the organization.
I believe wholeheartedly that both SEI and franchisees feel they don’t get enough credit for what they do, and as a result we get caught up. The reality is that we are all in the same boat, we should always know we are in the same boat, and we should all be rowing in the same direction. All stakeholders in this system need to put personal feelings aside, this is not the place for grudges or personal agendas. There are too many people dependent on the system for us to get caught up in these types of distractions. It all starts with building a system where we
knock the silos down and ensure they don’t get rebuilt again.