Organizational Design Scaling in Retail [Agile, Lean]
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Massage Envy Franchising, LLC (MEF, Franchisor) lacks an effective goto market for new multi-unit Massage Envy Franchisees. These are my thoughts on that topic.
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Organizational Design Scaling in Retail [Agile, Lean]
- 1. Patterns for Organizational Scaling – Massage Envy Franchisee PREPARED BY ME_AL, LLC Laszlo Szalvay +1.360.399.6545 (m) Szalvay@gmail.com Copyright 2017 ME_AL, LLC.
- 2. Company Overview - We have about 180 employees across six locations in Oregon. - Today, The Company’s revenues are primarily derived from monthly subscriptions. - The Network’s Plan: build a skincare line of business (retail and aesthetics) to compliment the existing subscription massage business line. Currently at 2% of total revenue, looking to build this line of business to 8% of total revenue over a 36 month period. - Retention: we do better when our members don’t cancel. 2
- 3. The Problem Statement Massage Envy Franchising, LLC (MEF, Franchisor) lacks an effective goto market for new multi-unit Massage Envy Franchisees (MUF): - Lack of consistent training / onboarding for MUFs. - Lack of organizational patterns for scaling from one location to multiple locations. “Roll your own” strategies within the network amount to little more than 1+1 +1 thinking. - Roles are built horizontally, providing no opportunities for career tracking, or growth for tenured managers. - No inherent economies of scale or efficiencies when scaling around expenses, include franchising fees, CapEx or OpEx 3
- 5. Our Approach – Org Design Changes, part one - New Roles. Creating new roles and career tracking (e.g. Director of Aesthetics, Director of Guest Services, Director of Field Marketing) vs. “Business Manager #1, Business Manager #2, Business Manager #3. Moving from 1 + 1 + 1 Horizontal Roles to verticalizing across the entire business (not location specific). This move feeds into systems thinking / Dan Pink philosophy around employee engagement, purpose, mastery and autonomy. - CoreTeam. This is uplift of three front desk associates (FDAs) per location. We split up the traditional managerial job duties into three roles (Assistant Clinic Administrator, Member Concierge, and assistant to the ACA and MC). We provide identical binders to each location and create ‘daily checklists’ for each member of the core team. - These two changes created immediate ‘career tracks.’ 5
- 6. Our Approach – Org Design Changes, part two - Elimination of location specific business managers. With an effective core team and the rollout of verticalized specialists, we will be able to effectively eliminate the horizonal business manager role or at least reduce it by 50-67%. One business manager will now oversee two to three locations, because their job responsibilities have been transferred to the core team. Their job effectively moves into a quality control, and culture cheerleading role, not a ‘doer’ role. See: https://en.wikipedia.org/wiki/PDCA 6
- 7. Our Approach – Social / Communication - Moving from top-down ‘fear based’ culture to nourishment (aka Starbucks) culture. We’re taking anxiety out of the system. - Opening communication between locations and between employees. Introduced Slack/snapchat as a mode of cross-organizational communication. As a side effect, we’ve effectively eliminated internal emails. - We recognize every single win on slack. Wins usually come in the form of new member sign ups, but can also include personal wins. - Measurement: - Looking for signals of vulnerability as a means of validation around connectedness. (see: https://www.ted.com/talks/brene_brown_on_vulnerability/up-next) - Community engagement from slack.com 7
- 8. Our Approach – Social / Communication 8 - Cool Channel Names - recognition - Snap Integration - contests
- 9. New Organizational Design…. General Manager DirectorofAesthetics&Retail DirectorofGuestServices Biz Mgr 02 Location 04 – Assistant Biz Mgr Location 04 – Member Concierge Location 04 – Junior MC Location 05 – Assistant Biz Mgr Location 05 – Member Concierge Location 05 Junior MC Location 06 – Assistant Biz Mgr Location 06 – Member Concierge Location 06 – Junior MC Biz Mgr 01 Location 01 -- Assistant Biz Mgr Location 01 -- Member Concierge Location 01 - Junior MC Location 02 – Assistant Biz Mgr Location 02 Member Concierge Location 02 - Junior MC Location 03 – Assistant Biz Mgr Location 03 – Member Concierge Location 03 – Junior MC 9
- 10. Our Approach – Meeting Cadences - Maniacal focus on prioritization (and reprioritization) between the Owner and General Manager on a daily basis. - Currently doing weekly standups (12 mins, 3 questions) across the entire company using google hangouts. Need to get to daily’s. - Bi-Monthly Mgrs meeting - Monthly extended team meetings 10