When CEO Lauren John Reid joined PuroSystems Inc. in 2010, the company’s PuroClean brand was already the fastest-growing franchiser in the $210 billion property damage restoration industry. But despite a decades-long track record of restoration industry experience, Reid had no concept of what it meant to run a decentralized franchising operation.
“You are dealing with a group of people that in some cases maybe were at an executive level one day, and then all of a sudden they are out of a job, and the next day they are running their own business,” Reid says.
“This is my first kind of ‘ivory tower’ experience. When you are operating a decentralized business, the branch manager or district manager or franchisee that is out there in the field — they are the brand.”
Because PuroClean had recently gone through a growth spurt of expanding its franchise organization, many new entrepreneurial business owners were now part of its franchisee network. Reid was now leading 320 other CEOs, all of whom were responsible for the brand’s success or failure, and many of which lacked experience in key management areas, whether it was with managing cash flow, marketing the business or generating inquiries.
To immerse himself in the franchisee culture, Reid launched an ambitious “100-100 Tour,” to meet with more than a third of the franchise network in his first 100 days in office. The goal was to give people a chance to put a face with a name but also for him to hear about what kind of support they needed from corporate to successfully deliver services.
Before Reid could continue to scale the $190 million business for growth, the first step was getting everyone in the company’s franchise network on the same page, delivering restoration services in a way that outshined competitors in the eyes of its customers.
“We backed away from focusing on growth of new franchisees because we really needed to take an introspective look at our network and make sure that our current community had all the tools necessary to start to take on additional growth,” Reid says.
Convincing franchisees to fully commit to this focus was a little different than getting buy-in from any employees. To get a diverse group of entrepreneurs thinking like businesspeople and salespeople, Reid needed to sell them on his vision of the company.
“In a lot of my former positions, I was the boss, and as a boss, you can tell people what to do,” Reid says. “With franchisees, I have to appeal to more of the making them understand, and then encouraging them that it’s in their best interest, because they are independently owned and operated businesses.”
During the 100-100 Tour and through 18 regional follow-up meetings, Reid spent time meeting with franchisees to discuss the 10-year vision plan, using his industry expertise to gain support for the company’s long-term goals. When talking about the vision, he sticks to what he calls “the vital few” in terms of the areas he wants the company to focus on.
“When you are out in the field looking back at corporate, you’re thinking, ‘Don’t these knuckleheads see what needs to be done?’” he says. “They want to see results. When you try to do 25 things, you don’t get anything done. You focus on a few things and say ‘These things we are going to get past.’”
Once people see the long-term goals, you then need to show them how changes involved in the big picture connect to and benefit them.
“It’s more about influencing and making them understand what’s in it for them,” Reid says. “So ‘If I go on to this program it means that I’m going to get more business, and that means I can grow my top line.’
“When you get people started thinking about that and they can start to think in a bigger scope, a bigger framework, it makes it a lot easier to get there.”
Once franchisees saw the benefit of bringing consistency into the network with new policies and standards in service delivery, the next step was giving them the tools and guides to make the necessary changes successfully.
“They said we want to be in these national programs,” Reid says. “My response was that if we want to be in those programs, we’re going to have to put a lot more focus on being consistent if we’re going to make that commitment.”
Give people the tools
If you want to have consistency in service across hundreds of offices, you need to give people a common set of service standards and guidelines for everyone to follow. So upon joining the company, Reid began work on installing a new operating system and launching a national Certified Priority Response program for franchisees.
With CPR, Reid says one of the benefits to ensuring consistent protocol is making the program optional. While whoever opts in can gain benefits for their business such as getting referrals from the company’s call centre — enticing franchisees to participate — they also then must agree to adhere to a common set of service expectations.
“We have 300-plus offices across the U.S. and Canada,” Reid says. “I have to get all 300 offices delivering a consistent invoice with consistent data, consistent response times.
“So we go out to them and say in order to be a part of this program this is the way that you are going to have to do the work, and we actually make them sign an agreement that, ‘OK. Yes, I signed up to do this.’”
The second part of consistency in service is the human element of selling a brand.
“People do business with people they like,” Reid says. “Making everyone understand that is a very important part of the process.”
While some franchisees had no experience managing a P&L or operating in the restoration industry, they really needed help with selling themselves as the brand. For example, one of the challenges Reid saw numerous franchisees having was getting past gatekeepers, such as the receptionist in the front office or assistant, to the decision-makers with whom they could build relationships.
“They are the ones that are going to have control over whether or not you are going to get past them to in this case, the agent or the broker,” he says. “So it’s treating them nicely and with respect. Just because they aren’t in many cases the decision-maker — they are the decision-maker in whether or not you are going to get past them.”
To address this issue, the company began providing interim sales training for all franchisees. When you are building consistency in a brand, how your sales people handle relationships is extremely important in what kind of reputation you gain with customers. Having good relationship-building skills is critical when you are trying to get in the door or, in a franchisee’s case, on a list.
“You have the loss of your house and you call your insurance agent,” Reid says. “Your agent wants to help you, so he or she will call in a restoration company, and you want to be at the top of that person’s list.
“The innovation and the technology — those are all nice things to build into the value proposition, but as a general rule, if people like you, they have a hard time firing you, which means you are going to get some chances if you stumble. And you are going to stumble because we are in the service business.”
Hold people accountable
Today, approximately 60 percent of PuroClean’s franchisee network has enrolled in the CPR program. But to keep people operating within a new set of guidelines, Reid has had to institute methods to hold them accountable to the higher standards.
“We are at such a size right now that there’s a 90-plus percent chance that if somebody calls to do business with us, they are going to be doing business with the franchisees,” Reid says.
“We can’t afford to lose a vendor program or a national account because of the actions of a few franchisees that aren’t following the process.”
For one, he put in place a desk audit system to poll a sampling of work from franchisees and ensure people are acting within the guidelines. In addition, a network leadership council, composed of a tribunal of franchisees, now serves as a disciplinary group for franchisees who deviate from the standards of the brand. If there is a deviation, management goes and works with that particular franchisee to help him or her improve.
For a decentralized business, giving people support in the field is vital in keeping franchisees accountable as well as motivated. With offices throughout the U.S. and Canada, the company’s ability to maintain alignment relies heavily on having strong, effective communication from management.
“The most difficult thing for a decentralized business is communication,” Reid says.
In addition to using training programs and regional meetings to maintain operational consistency, Reid uses field support specialists who can go out in the field and work with franchisees, talk to them about the vision and mission and answer their questions. These are people who have significant restoration industry experience and who Reid brought into the organization to lend another level of support.
“We’ve got to support our franchise community with the best trained folks,” he says.
“They want to know that you know that they are out there every day trying to make it happen on behalf of themselves. They are looking for whatever support they can, and they want to know that you are there to help them.”
That is also why Reid travels at least once a month to meet with franchisees throughout the network. Rather than being a removed CEO, he enjoys this time out in the field, connecting with franchisees and renewing focus on the brand’s mission and vision. He even encourages franchisees to come up with their own mission statements, which helps people stay focused on their part of the brand’s success.
“When you are in a decentralized business, the brand is you,” Reid says. “You are the only one who can look yourself in the mirror at the end of the day and say, ‘Did I do something today that advanced the mission?’”
With the goal of growing to a $1 billion company with 1,500 locations by 2020, Reid knows that having this group of people who can deliver the brand’s products and services consistently will be vital to future expansion.
“If we are going to be a player in the industry, we have to be able to deliver this consistency of our services if we are going to be successful,” Reid says.
“Everybody’s got the same equipment. Everybody has the same dehumidifiers, the same air movers, the technical equipment we use at the actual job site. There might be slight variations or differences, but it’s the way that you handle their client that differentiates you.”
How to reach: PuroSystems Inc., www.puroclean.com or (800) 775-7876
The Reid File
Lauren John Reid
Education: MBA, Northwestern University, Kellogg School of Business
Born: Toledo, Ohio
What was your first job?
Short-order cook at a pizza place
What is one part of your daily routine that you wouldn’t change?
I speak to everyone daily in the office and let them know I recognize their contributions.
What would your friends be surprised to find out about you?
I didn’t go to undergraduate school but earned my MBA.
If you could have dinner with one person you’ve never met, who would it be?
George W. Bush — The challenges he dealt with and decisions that had to be made every day and his reliance on his team were some of the most challenging in this time.
Reid on learning the franchising business: In my former life, I reported to the CEO. Now I have 320 CEOs. They all want a piece of you, and you have to recognize what is the core issue, what is the main issue. Nine times out of 10, a lot of the issues come back to communication and maybe lack of follow through or follow up. It’s really no different than any other business. The challenge is just recognizing that and making people understand that ‘I understand this is a big concern of yours, however, in the grander scheme of things, we have this issue that is affecting a third of the network, and we’re really focusing on that first, and your issue we’re going to put on the list. We’re going to get at it, but it’s not going to be today.’ Or trying to figure out some sort of a workaround. … I think the good news about entrepreneurs is that if they believe that you are trying, first of all that you are listening, you’re documenting and you are doing something about it, that’s a big part of it.