Learning Organizations = Increased Profitability

Being a “Learning Organization” is key to remaining competitive in this rapidly changing world. Consumers are wiser, and competition more fierce! “Real-time” data, trackable training software, and feed-back loops for processes and products are now necessary for sustainable growth. And in todays market, establishing a network to rapidly transfer knowledge is key to success!

Breaking from the traditional “top-down only” approach provides insight into new and innovative ways to improve business operations, including new local supply chains. Throughout all the network interactions, franchisor’s have the opportunity to build a comprehensive “knowledge management system” based on knowledge known & knowledge created collectively. Utilizing this every-expanding knowledge base is critical for adapting to changing market conditions and improving efficiencies.

“Two heads are better than one”

Research shows that group performance often exceeds individual performance. That’s why companies have boards, teams are assembled, and franchisor’s establish advisory councils. And with franchising, you get lots of “heads” working on the same “tasks” every day, providing a great opportunity for improving the model. And while it is true that the franchisor will provide new franchisees the knowledge necessary to operate the business, including logistical information, supplier relationships, and other necessary data & information, over time, franchisees convert this information to working knowledge. Franchisees, in turn, provide franchisors their personal knowledge & experience, local market insight, and “boots on the ground” data into e.g. market shifts, whether subtle or drastic.

Organization knowledge is the collective sum of human-centered assets, intellectual property assets, infrastructure assets, and market assets.


Franchising is an ideal framework for the benefits of collaborative information systems, incorporating new techniques and processes to increase overall organizational competitiveness. But to achieve this feat, Information flow must become dynamic, and there must be a willingness to evolve. It is the franchisor’s responsibility to encourage innovation, and develop a system of collaboration for the benefit of the franchisees and the organization as a whole. Ongoing communication is essential to developing this basis of trust in sharing knowledge both upstream and downstream.

Franchisees are often geographically disbursed, yet benefit from collaboration. To expand into new markets and gain market share, franchisors must be able to benefit from past knowledge, and exploit new opportunities. No matter how you choose to define it, “organization knowledge” must be available throughout the organization. This requires people, processes, and the technology to rapidly transfer knowledge gained, and knowledge learned.

This Intellectual bandwidth – your “learning organization” – represents all the information, knowledge and wisdom of the organization; all of which can, and should, be used to improve the organization and increase productivity and profitability.

However, there is a catch…. It cannot be just manual based. While manuals are vital for establishing the basis of the franchise relationship, and necessary for training, and compliance, manuals often distill information to the core functionality. Manuals are passive, not active. And lets be honest, most people are not pulling the manuals off the shelf to learn. There must be active engagement to transfer new knowledge throughout the network, and that’s where coaching and technology come into play.

Transferring knowledge throughout the network

In addition to “manuals”, franchisors provide knowledge transfer in two primary ways, social (person-to-person via coaching) and through technology (to define/describe/train a task), via training videos, resource depositories, etc. And thankfully, in today’s technology drive market, franchisors have a considerable amount of options available when determining how interactive this knowledge transfer will be. Specialized products are now “plug-and-play”, easily connected to a systems, creating a technology stack that works together to achieve an effective means to transfer knowledge, set learning goals and objectives, and receive feedback.

Organizational knowledge is processed information embedded in routines and processes that enable action. It is also knowledge captured by the organization’s systems, processes, products, rules, and culture.


This organizational knowledge is part of the franchisor’s proprietary property that makes the franchise model unique. And a franchisor’s willingness to learn as well, fosters a “learning organization” that will embrace rapid knowledge transfer that fosters growth and establishes methods for contribution and collaboration from, and amongst, the network. Leaders demonstrating the importance of constantly seeking to improve the processes throughout the system, from all department, all franchisees, and all employees, no matter the station, helps builds a stronger, sustainable, network.

Great ideas can come from anyone….. it is up to the franchisor to encourage them!

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