How To Stop Corporate Infighting

Over the past 15 years I have had the opportunity to visit the corporate office of hundreds of national retail and restaurant companies. During these visits I always took the time to look around the lobby of the office. There were usually articles that would highlight the culture of the company. In one office I noticed they spoke about their employees and their value, in another office they talked about the drive to find new products or foods to satisfy the needs of the consumer. I have also seen many companies talk about their history; some even putting them into book form. All of these tactics of reinforcing the culture of the company are worthwhile exercises. It is when there is disagreement in the agenda of the company that things start to fall apart.

The easiest example of opposing agendas in the retail arena is the battle between brick and mortar and ecommerce. You can certainly understand how this happens; the brick and mortar is threatened by the high percentage sales gain (shiny new object) being constantly thrown in their face by management. They can see the numbers daily and become fixated by them instead of worrying about the real competition. The pay plans of each division are not designed to reward the overall gain of the company in a way significant enough to change behavior. While some management thinks this type of strife within an organization is a healthy way to grow the business, they are simply wrong. These two groups are fighting so hard for resources and attention within the organization they often forget about the threats from outside the organization.

Another area where there can be opposing agendas is in the area of inventory control. The merchant and the store team are often on the same side of the duel; they never want to be out of stock. They want extra inventory to mark down so they can drive sales during traditional soft periods in retail. On the other side of the discussion is the CFO. He wants to have inventory magically appear just as the customer reaches for it on the shelf. He does not understand the value of a full store to paint a merchandise picture for the customer.

In the franchise world of restaurants there exists another big area of opposing agendas. While a franchisee normally purchases a franchise partly because of his reputation, and that reputation is built on the back of a number of stores, he does not want another location anywhere nearby. The franchisor is normally paid on the gross sales of the entire franchise system; so the more sales the more they make. On one side of the discussion you have a party that wants exclusivity and on the other side you have a party that wants total coverage. So, what is the solution?

The solution to all three of these problems is simply respect. If you respect the other party to the discussion you will listen to what they have to say in the context of your opinion. The Brick and Mortar retailers should realize that the consumer likes to shop both on line and in the store. The e-retailer should understand that working with the Brick and Mortar part of the business gives the consumer a better shopping experience. They should stop worrying about protecting their turf and start worrying about working together. If this can be accomplished there is no reason the e-tailers like Zappos.com should even exist. Because omni-channel retailers have a huge strategic advantage over pure play e-tailers.

Respect is also the key to the inventory problem. When central planners realize that individual stores, given the right tools and pay plan, can do a much better job at the store level than central units can, they will be given back both the authority and responsibility to keep the store in stock. Store managers, in both specialty and big box retailing, can change the direction of the merchandise mix because of their personal preference. They will sell more of a product if they are excited about that product. This will also be the same for each department within a big box store. But, you cannot simply give the store team authority, you have to give them responsibility and hold them financially accountable. When you ask people to fly, give them the proper tools and explain how rewarding it will be, you will be surprised how high Orville and Wilbur will go.

I have observed many different franchise organizations. There seems to be an incredible amount of friction in so many of them. This friction comes from a lack of respect. From the moment the franchisee purchases a franchise he forgets the reason that he agreed to pay a lump sum of money and a percentage of all revenue that his/her franchise could generate. He goes from “I am so grateful you wonderful people allowed me to be part of this wonderful team” to “You are stealing my money and I am not getting anything for it.” He forgets all of the effort that went into developing and growing the business. And, he forgets that he agreed to the terms without any gun being involved. And the franchisor is no better. Rather than looking at the overall health of the business, the franchisor forgets about the hard work that the franchisee does each and every day. Work that he agreed he would support with store visits, advertising to drive traffic, and continued product development to keep the franchisee competitive. 

All of these opposing agendas can be fixed with respect. I was at the Restaurant Leadership conference two years ago and a group of franchisees came to my booth. They were accompanied by a member of the franchise leadership team. It was like the pied piper leading around his flock. You could tell that this group was all on the same page. They looked toward each other for continued success. And, during the past 5 years this franchise has had outstanding success. It wasn’t an accident.
​
So, how do you fix opposing agendas within an organization? By respectfully listening to each other. If you put your own individual success ahead of that of the organization then you are just waiting for your next job. When you start caring about the success of others you will realize that their success will make you even more successful in your life.

---