Developing A Culture Of Effective Communication

Any true partnership works much better when there’s a culture of effective communication in place. BusinessDictionary .com defines effective communication as, “A two way information sharing process which involves one party sending a message that is easily understood by the receiving party. Effective communication by business managers facilitates information sharing between company employees and can substantially contribute to its commercial success.”

In our case, effective communication would involve SEI imparting essential information and background on new programs and promotions, answering our questions in a timely manner, and including us in the decision-making process. As it stands, our present system of communication—or lack thereof—impacts the system and how we operate our stores, to the point that many franchisees question if we have a true partnership with SEI.

Examples of this abound. More often than not, when SEI rolls out a new promotion or program there’s very little information communicated to franchisees other than, “This is what we want you to do.” Usually, once the promo or program is in play, problems arise and SEI deals with them after franchisees point them out. I’m sure many of you would agree that if SEI would just keep us in the loop when the program or promo is being developed in the first place, many of these problems could be ironed out and avoided beforehand.

This happened with BT in its early days. Franchisees weren’t as well informed as we should have been about the program and it was sold to the stores as a system that would generate additional net income. After its launch, the initial reactions from storeowners were confusion and disappointment. BT was rolled out on the premise that it would generate more gross profits, so that’s what franchisees targeted and that’s how we analyzed the success or failure of the program.

After franchisees complained that BT looked like it was going to be a failure because the test stores were reporting minimal increases in GP percent and no increases in net income, SEI began to communicate information and respond to franchisee concerns more effectively, to the point that with the changes made, the current model better explains how BT makes the system more efficient and gives us more control over our inventory, turns, shrink, ordering, and so on. With this better understanding, franchisees are now much more cooperative and involved and openly embrace the program.

Lately at the National Coalition we’ve been getting a lot of calls about company strategies, particularly in regard to gasoline. Typically, strategies get downloaded into our systems every morning and we just follow them. Sometimes the strategies instruct us to set gasoline at prices that are too high compared to the competition, which raises questions from the franchisee.

Now, there may be many good reasons for this price strategy—like supply situations, underground CPG situations, or in general what’s happening with our volume so far. However, too often when the franchisee asks his field consultant questions about the strategy, the FC would move it up the chain of command at the market level and perhaps Dallas, and in the end no one gets back to the franchisee with an answer. What SEI should realize is that if these reasons were communicated to franchisees in a proper and timely manner when questions arise, it would make it a lot easier for the franchisee to understand the change and not be frustrated.

Similarly, I have received calls from franchisees who were notified that their gasoline tanks were going to be removed without any explanation. I would look into it, and after many inquiries I would eventually get the answer as to why. Many times its because the tanks fail and the cost to replace them far outweighs what the stores makes in gasoline volume to recoup the expense. Again, there’s no proper communication initially and the franchisee feels like he’s been left in the dark.

Effective communication is also very important for FM in regard to the maintenance cases created by franchisees. We are all very aware of how bad the situation is with the help desk—franchisees create cases, they get closed, and no one tells the franchisee why. Very often the franchisee waits weeks in frustration for a response. This results in wasted time and energy for all involved. To its credit, FM has been working 24/7 to follow though on repairs and has even built a website just for 7-Eleven storeowners. So they’re trying to improve communication and it appears to be slowly progressing.

In any business relationship, having more open communication and transparency is key to getting things done. I cannot stress enough to SEI that franchisees are not rabble-rousers who want to complain about stuff all the time, that we are all rational businesspeople—and if the company makes a good business case for something, we will understand it and accept it.

To that end, we need to develop a culture of open communication and sharing in the system, and it has to come from Dallas. It really goes a long way when the company says, “This is what we’re thinking, this is what we would like to make happen, here’s why we want to do it, and here’s how we would like you to do it.” It’s a lot easier to get people to do things when they have ownership in the decision-making process and the programs.