Sun-tsu and The Art of a Franchise Business

"Generals who succeed in war will strategize in their sanctuary way more than the other guy." -- Sun-tsu

Over two millennium ago a Chinese general and philosopher wrote a book called The Art of War. Sun-tsu’s text has become a classic used by leaders since. It's been used by Western military leaders as early as Napolean and as recent as Operation Desert Storm. During those ancient days long ago in my MBA program and my tenure with multinationals, Sun-tsu's writings, which I studied for language purposes in my undergrad years was chic. People knew and could quote from the Art of War. It had a band wagon, albeit a small one.

I’ve never heard the Art of War discussed in franchise circles so let me be the first. Being able to read Sun-tsu’s Art of War in the original classic Chinese, I will take some translation liberties in quoting Sun-tsu to better convey the essence of the text. Here goes.

If Sun-tsu owned a franchise…

The very first thing Sun-tsu would do in running a franchise would be to strategize. It would be the opening chapter to his business book. Strategy in the war of business is planning how to demolish, or at least gain a degree of competitive advantage over the enemy, one's local business competitors. If Sun-tsu were running a franchise, he would probably be told by his field rep that implementing the operating manual perfectly would wipe out his competitors. He would understand the strength of running a tight ship but would also demand more of himself. Strategy is meant to be thought up and applied to the enemy at hand by the commander on the field, the franchisee and not just corporate headquarters.

Sun-tsu would recognize any lack of strategem provided by the head office and would add on to what he was given. Franchisees use annual business plans. These tend to be more about store compliance to system standards and budgets that are really more of just an upgraded status-quo. Franchisees tend to be more concerned about the immediacy of things such as replacing the salesperson because he decided that the store was too small of a pond for his talents or deciding how to tell one's sainted mother that the store can no longer afford her. Ouch! Those are things that aren’t so easy to find in Sun-tsu’s manual. They are more tactical. And there's a big difference between strategy and tactics. Frank Muir said, “Strategy is buying a bottle of fine wine when you take a lady out for dinner. Tactics is getting her to drink it.” Frankly, Mr. Muir, I would be content in just getting a lady out for dinner, never mind getting her to drink wine.

The challenge for Sun-tsu the franchisee would be to find a sanctuary, a place of solitude to plan, to think big and to think out of the box. I imagine quiet places aren’t the easiest thing to find as a war general. There’s pandemonium all around you – kind of like my store. Likewise, finding a solitary place free from interruptions and quiet time can also be a killer for a franchisee. It is easy to get caught up in the minutia of operating a store. Getting away can help a franchisee think of the bigger picture and the forces that are working on the store and its competitors. It allows one to think of what are the pie-in-the-sky possibilities for the store in a perfect world and then plan how to get there. Time management consultants often speak of blocking out a period of time for planning and creating a space of solitude away from distractions. Strategic planning needs many hours of blocked out time, typically three days. Sun-tsu would create such a space and block out the time.

There's a lot of forms and help in creating a strategic plan for a franchise. Business plan templates from franchisors come in all sorts of shades and colors. My particular franchise system provides a SWOT analysis form. It’s a good start in helping me think of the current business playing field, of forces that are changing it and how. There are many tools to help get the strategic planning juices flowing – e.g. Kepner-Tregoe Driving Forces Analysis, Porter 5 Forces Analysis, Value Chain, and McKinsey Strategy Failure Checklist to name a few. Rather than a single fixed budget, scenario planning would help Sun-tsu budget with flexibility, something Sun-tsu would definitely like. After all, he liked going with the Tao, the natural flow of seemingly random events. (but that’s a discussion for another day.) These business strategy tools could help Sun-tsu the franchisee think more like a proactive chess player and less like a reactive Black Jack gambler. Using them would be more work in stretching the old noodle in setting strategy and then tying in practical and realistic tactical objectives to those strategies. After all, a strategy is just a dream if it's not hooked into the tactical reality of day to day activities.

As he no doubt burned the midnight oil he would say, “Much planning brings an ease of winning while little planning brings defeat.” We moderns would agree, even if we did think he talked strangely. We might simply say of a franchisee who did not plan strategically and was out maneuvered, "you get what you deserve."