The Field Is the R&D Team: Kathleen Gosser on how franchisors find, prove, and scale what works

Hello everybody and welcome to today's webinar. So lucky to be joined by Kathleen Gosser, PhD. Kathleen you are one of truly my favorite people in franchising. You have been a part of our journey for so long, I am so so so excited to have you on. For those who don't know Kathy, I'm gonna turn it over in a second, but Kathleen is the associate professor of franchise management at the University of Louisville. Also the director of the Yum Center of Global Franchise Excellence. She spent over 35 years at KFC leading the learning and organizational development team, and Kathleen you were just an unbelievable wealth of things on scaling, trading, coaching, best practices adoption, and now really in my mind the voice of education and franchise. I mean you've done it in a career, you've now done it in this unbelievable program you've built at University of Louisville, and I hear about all that you do for your students and it's just it's all incredible. I'm such a fan of everything you do and I hope I did your justice with that two second intro but thank you.

Thank you. That was way too kind, thank you.

For those who don't know, I'd love to hear from your own words kind of you've done so much in your career: What's the synopsis you give for new folks?

Sure. So I'll try to make this short. So I did have the privilege of spending 35 years with young brands, the predominance of it with the KFC brand US, and had a lot of different roles starting as a mystery shopper outside of college, which is what my students always love to hear about. But worked to progress my way up into the organization, led auditing programs, customer satisfaction programs, spent a lot of time leading a subcommittee of our large franchise advisory council, which brought me so much joy to really understand the value of franchise relationships.

My last seven years, I led learning and development as well as our KFC Foundation. And then, had the wonderful opportunity upon retirement to go to U of L to teach franchise management. It started as a graduate level program, a stackable credential within the MBA. We then moved that to professional, with our alliance with the International Franchise Association. And now we have an undergraduate certificate that is the sweet spot, 'cause the students love it and young brands came along.

After I'd been there about two years, wanted to do more and more investing. They've continued to invest heavily, they created the endowment that provided the center. They're focused on all things education. We have a group of Yum scholars. We just now have our first PhD in entrepreneurship with a focus on

Franchising.

She starts in the fall. So, I'm very, I'm very grateful to Yum brands for all they've done, but I'm also very grateful to have the opportunity to bring this wonderful franchise model that brought me the career dreams are made of, to all of my students.

They're so lucky. I tell myself, maybe I'm getting a crash course on franchising now in this space but I would if I could do it over, I would go back and do it. It sounds so unbelievable. So let's maybe start in the learning sphere, I mean it's so core to everything you're doing. And learning in franchising, it's pretty unique right. The idea that the entire system is based off of learning from folks that have done things well, and finding ways to distribute it and standardize it and roll it out . So in your experience, how have you thought about the difference between a great operator, and maybe a great practice. The idea that you learn from some and you teach the rest, but what's the framework that you use in your head for that.

That is such an Interesting question. You know, a great operator really succeeds because of their personal talent. Lot of them have great leadership style, instincts, they know exactly how to work with their team, they build those relationships, and it's a very individual thing. But when you talk about

A great practice, what you're talking about is something that can be replicated. That you can explain it, you can teach it, and you can actually remove the individual from it. You know, back in the day we called sometimes great operators. The problem was they were muscle managers, meaning they could muscle through anything. But to have a great practice, again, you can share that with your entire system and it really makes a difference 'cause others could adopt it. Now, don't get me wrong, everybody wants a great operator. But the great practice is where you can really scale.

But you mean in a massive organization you will have both right. You're gonna have the great practice, and the great operators. So I guess I'm curious you know, how did you think about finding ways to support the practice while learning from the operators because you know, it can be twofold right. You can impose the practice from ones that need, onto those who need it. But on the flip side maybe those who might push the system in better ways as well.

You know, that's an interesting question because there's a tension between, in a franchise model, you want consistency. So you'll often hear franchisors say, follow the model, follow the model that we give you, and you will have results. But then there are those operators who will work within the model.

So you have a model, but you gotta have some guardrails, right? You have some non-negotiables, but you have guardrails. So these great operators will come up with new practices that could be replicated. But how do you get the attention of a franchisor to say, Hey, that is a great practice we could share across the system.

And then how do you share it across the system? So there are so many pieces to it. When I was at KFC, we always talked about, oh, let's share best practices. First of all, how do you define what the best practice is? Second of all, how do you create it? Third of all, how do you scale it? I mean, how do you make sure everyone follows it the same way?

So it's a very complicated question that I think we're gonna have to break down.

Well maybe let's start at detection right. I think you say that first part was detection, early detection, understanding maybe local winds right, the idea of somebody within the guardrails. In the decades of you doing this, what are some of the best success stories, or where have you seen people hone in and find those opportunities.

That's a great place to start. So a lot of the opportunities will happen in things like staffing and retention, or local marketing, or operational efficiency. They have found a way to make something easier to do, or even in the customer experience they have found a way, and I'll give you an example of that. So there was a large franchisee that really loved their customers, and they wanted to have a way to personalize it. Well, we had come up with a system where you got a receipt and we just yelled your number out. You know, 222 or 282, your order's ready. Well this operator said, that's okay, but that seems kind of cold.

And we're a Kentucky Fried chicken. We have, you know, we're Southern hospitality. So the leaders took it upon themselves to have their team members actually write the person's name down. So once they got their order, they say, may I have your first name? You'd say, Gary.

So they say, Gary, your order's ready. Well, I think we all agree that's a lot better than 282, your order's ready. So that is an example of a practice that was still within the guardrails but it really worked. And so what we did is then we tracked their customer satisfaction scores, and did those improve?

And they did. So then that practice was shared across the system. Small example, but I think it gets you the idea.

So but that's interesting because you had to I mean, who was the first person to identify that right. You know theoretically, maybe they didn't want you to know that they were using names instead of numbers. And then it was after the fact I guess it's kind of a chicken and the egg almost. What was that identification process like?

So, the franchisee had his head of HR who sat on our franchise advisory council that I led call the

Operations Excellence Subcommittee. And so he brought it to the subcommittee and told us about it, and we were all very interested. Another reason why franchise advisory councils are so powerful. So then we talk to the franchise business consultant in the field and they're like, oh yeah, it's working great. I'm out there and I see it. So we validated it that way as well. Oftentimes, those folks can bring practices to you as well. But if you have a system that's built on trust and transparency, the franchisees will tell you, because they were still working within the guardrails.

There was nothing they were doing that was outside of the standards. They were just taking it up a notch and it really did make a difference. And so when they mentioned it, imagine this, you're on a franchise advisory council and this very successful, prominent franchisee says, this is what we're doing. Well, okay, if you're another franchisee, are you gonna listen to me, the corporate person, or are you gonna listen to the successful franchisee? They're gonna listen to that franchisee. So that's what they did, and not everyone adopted it, and it didn't become a standard, but it was one of those that was a best practice and quite a few franchisees around the country did adopt it with success.

I think the thing that's so interesting to me there is that there was an inherent openness it sounds like right. I think some brands might say that you know we've perfected or we know, and that's the compliance arm right, this idea of compliance. But it sounds like you guys at KFC which I mean massive right, So big, such a far reach. It seemed like you had retained a bit of a culture of openness to say well we're great, this system works but there are ways to improve, and looking to the franchisees not internally but looking externally to the experimenters to pull that in and bring that to you.

And I think that is the secret of a really strong franchise system is that there is a little bit of freedom within the framework, but they share that with you

And they still follow the standards. I mean, there was nothing outside of the standard of saying somebody's name, nothing.

That is absolutely fine. But then they share that and the results because they care about the whole system. In a strong franchise brand, the franchisees really care that everyone succeeds. And that's what I saw in this large franchisee.

So what about that success though right, I can imagine a franchisee you know think everybody's unique right. Like that's gonna work for them It's not gonna work for us. And then maybe we start getting into the proof of the idea of well, how does I mean let's maybe use your the example you just gave. How would somebody know if calling names instead of numbers would work for them? You know how do you build that business case for the remaining 99.5% of the network?

I think that's where, you know, you can do some pilot tests, or you can put it out there and say, hey this is happening. You can give it a shot and tell them which KPIs to follow. And typically customers sat is the one that would show up, and there's a hospitality element to that. Are we improving in hospitality? And then obviously asking your team members too about the complexity of it. Has this slowed you down? So you'd wanna look at some of those unintended consequences? Does it affect speed of service, for example? So having an eye on all the components of what makes up a great experience and then tracking those is important. And a best practice is not something, something like this is not what would be become a standard per se necessarily. So it would still maintain a best practice. But I'll tell you, if a franchisee sees that it's gonna improve a metric, they're gonna do it. They're definitely going to adopt it. Now, on the other hand. Franchisees will bring ideas to you that you, that you really can't allow them to test on their own. Example, the chicken strip. The chicken strip was actually introduced to KFC years ago by a franchisee who said, why don't we try a chicken strip? And he was willing to test it. And so the RD department actually created it with the vendors, etc., and it was tested in their restaurants.

That's something they wouldn't test on their own 'cause that takes you way outta compliance and way outta the model.

Has to have a lot of oversight. But again, listening to those ideas is what makes a franchisor better. What ideas do you have? What can they test on their own? What requires the strength of the organization to test?

You now put in a second example, and I think you landed on something that we've come to our own conclusion on this differently, in our own way. But You know for every action that a franchisee can take it's not just how much money are they gonna make but how hard is it to do. For example, switching numbers to names, easy. Implementing a whole new thing in their menu, hard. I mean you know on the extreme of that, you might say relocation. I mean that's one of the hardest things to do right. And so, the way we think about things when we are using Harmonyze and I'm curious it sounds like you guys have been doing this apparently for decades was to think about what is the highest value for lowest effort. Which is you know of course that makes sense, but it's a way to center the franchisee instead of the franchisor and the franchisee's needs and realities and context.

Exactly. So it really depends upon the impact, complexity, etc. And you have to look at compliance. You can't just let franchisees start serving their own products because then you have no brand, no oversight, tons of liability, you know all the things. So it is a delicate balance, but having a system that trust and will have conversations and talk with each other makes all the difference in the world.

Well now we're getting to a flywheel of kind of learn, experiment, prove and I guess the rounding out of that would be you know package it or rolling it out. So how how did you guys think about that of how do I get my franchisees to adopt whether it's a new menu item or a different practice on using name set of numbers? That's really the learning piece of how did you roll that out across hundreds of operators and franchisees and you know thousands of employees?

So one of the things that you have to understand and that was apparent to me very quickly, is training is expensive. Because when you have thousands of team members who are are paid hourly, you have to pay them for the training as you should.

Right? But when you're a franchisee and you're looking at all your expenses, you wanna make sure the training is impactful and that it hits on the mark. I had a very large franchisee who knew what one minute of training cost his organization, and he would share that with me. And it was quite large, let me just tell you.

But, see you have to be very, very careful. What we found is that people learn best, especially in today's world, where there's the attention span is nothing. Our phones are, make us just crazy. What we found is the faster we can make the training a quick hit the better. So if, for example, we could do a quick video, like, how do you make a sandwich? You could do, there was a, there was a craze for a long time on Facebook where they showed you how to make food without words or anything. They just showed it. We did a lot of that.

How can we give you fast learning? How can you see it on your phone? How can you just see it quickly? That training is powerful now when you make a product mandatory, then you can mandate the training. When it comes to best practice, it's better served if it comes peer to peer.

If it just comes from a corporate communication, they're not gonna pay attention. So the peer-to-peer, having conversations with franchisees where they meet makes a huge difference.

So it's interesting. The first is the LMS right kind of rolling it out.

There's maybe a layer of other supporting channels and the peer group is a great one, probably the most impactful but then we start talking about an FBC, or kind of more broader content. I guess how did you think about those very critical, I don't wanna say add-ons but those really critical elements of the entire coaching experience for the franchisee, not just the team members that are doing the work but everybody in the org.

Gary, you brought up the real secret is strong franchise business consultants. Having those folks in the field and just for, just for ease, we'll call 'em FBCs. They're the folks that are between the corporation and the franchisee. They're the ones who visit the locations, who are the counselor, the coach, you want them to be more than a mailman, which is what I've heard a lot of times mail person.

Never heard that.

Yeah, they're like, we don't just need them to be someone that brings the mail or the communication, if you will. We need them to really help. So by providing the FBCs with the tools in order to be effective is important. So training them on a best practice. Always when we trained a new product or new process that was mandated,

We started with that group. That group would come into headquarters and we trained them first. Cause they have to know it cold. And a lot of times they would go out and do some training, especially if it was in person. So I would train them as I would, it was it train the trainer. I train them to train and then they really knew it.

Because if you have to teach something, you really know it. I mean, there's no better way to learn something than have to teach it. But that

Is a pivotal group and providing them with insights like on these best practices. 'cause if they're out there and they notice that there's some hospitality issues. How easy for them to say, hey you know, your friend in the northwest is doing this, and have a conversation about it. And really be able to coach them, you know, to excellence. So that group is critical and I think often overlooked as well as misunderstood, the power that they can have. It has to be a relationship where the franchisee trust, listens, and responds.

I've never heard that be more than a mailman but I have heard a very similar where people said a FBC needs to do more than just report the news. Right it needs to be more than saying, I actually think yours is a bit zippier than mine. I do think that there's value in that in you know what does a good FBC look like, it is somebody that is collecting huge amounts of data across swaths of you know areas, and somebody in different regions, and maybe you know cross-functionally sharing things with other FBCs to figure out and be a consultant. Right someone that's there. I read a very cool article this week about this idea of a board member right and it was not in the franchising space but there's this idea of a board member being a more influential element of a business when they have higher context and are able to be more than just a reporting seat. And I was thinking you know what is the translatability of calling an FBC not a voting board member, but a consultative board member on the franchisees business that sits there and understands it and is a part of that business. I really love that analogy and honestly the first time I've told anyone about it.

I think that's pretty cool. And you know, I have seen varying degrees of performance with FBCs, as you can imagine. I mean, we're human right, but the best FBCs, they did act as board members. They were trusted advisors for sure.

How did you understand who was doing well or I guess as an executive that you know you were overseeing you know a small army of FBCs that was going out and doing this high impact work, what was the feedback loop if any for you to understand who was doing well, who was coaching, who was just talking about the Cowboys because it was easy? I guess you know help me understand how that used to work.

That's interesting. So I worked on the training side, I didn't oversee them

Exactly

But I could see what they were doing and I would hear, and

And you know, franchisees, they will tell you everything, especially when you've been around a long time. And so how I found out is franchisees would tell me. Like when they had a great FBC, they would tell me and they would give examples, and they would talk about it at this operations excellence advisory committee. They would actually talk about it. And the ones that weren't, it wasn't that they didn't want to, they didn't know how to, so they needed training. I mean, I rarely ran into anyone who just didn't wanna do a good job. People don't show up to say, I don't wanna do a good job. So we would listen and have to ask the right questions, what is it that person's doing that makes them so effective?

And then try to share that the best we could with the others. Franchisees will tell you, and then you can look at the results. If in one area results are not improving at all, you know that that person needs some extra help and how can they coach? Because we know that these repeatable practices will make a difference, are they not being used? So, that was pretty important. But the training, I could tell who could train well and who couldn't, and so we worked very hard on that, on training skills and understanding. A lot of effort went into that.

That's so interesting, I think training the trainer is a different job right and maybe let's peel that back and you know and maybe this is rooted in your experience at University of Louisville or elsewhere but, how do you think about coaching the coach or training the trainer, or kind of this second order management and coaching and education piece? It's so different, how do you think about that?

Training the trainer is hard. You're exactly right. Especially when not everybody's built to be a trainer. Unfortunately in most organizations we expect that oh, anyone can train, that person can train. We actually had, we were doing large rallies around the country and we actually had a few folks we knew it was just not their top talent, let's say. So we would buddy them up with someone who it was. So that you would make sure that you had a strong trainer with them. I'll tell you, if anybody that used to work with me hears this, I'll start laughing cause I actually put together a rubric that talked about how they train and we actually rated them on that. And then would put people together that could train well, because our franchisees deserved, absolutely deserved to have the best training. That's what they buy into, they buy into the system to have training, support the brand, etc. So we felt that

They really did deserve to have the best training. But it's tough because people don't like to be told they're not great trainers. It is a skillset. It's like there are certain things I can't do, I can't, I couldn't do your job, for example.

Well I was gonna say, I was I was imagining the FBCs and I was imagining I would definitely get paired up with Kathleen, the good teacher and I would be the one who's sitting there with my rubrics for sure.

Yeah, I mean, I think you have to have a passion for it as well. And you know about, I

Think probably 60, 70% of people really do have a passion to train.

There's you know this is completely separate and I we've talked about this but one of my best friends, he teaches fifth grade here in New York City, and we are always talking about what it means to be a teacher, and what it means to kind of pull somebody along that journey. And it is such a hard job, and I think you know to what your point is about the critical role of an FBC to be highly observant, highly analytical, highly collaborative and then also have the skills of actually not just showing how, but getting somebody and coaching somebody over the hump. It's such a hard, such an important job.

It is and it's hard. And then you have to ensure you have credibility. So typically the best FBCs are those who've done it before, who have maybe led units, and been in operations, and have proven success. That helps a lot too, but that's a hard job.

I think the FBC role is one of the most critical and one of the most difficult roles in a franchise organization.

I'm just so curious, you know we need all these FBCs that come from different walks of life. I think there is a classic, I used to be an operator, I kind of became a manager, and then I am now a coach right. And I think there's other folks that maybe come from a more analytical and they're very good at reading a P&L and there really is this nexus of so many different skills that are coming in around. Like analytical and you know coaching and soft skills, I guess have you seen a recipe that is more or less or kind of a certain skill set, or is it just truly it depends on the individual?

I actually think the relationship building is key. So if you have those soft skills that you can build a strong relationship, built on the foundation of trust. Which allows you to have constructive conflict and free flow of ideas with your franchisees, you're gonna be pretty successful. Because if they're transparent with what's going on in their organization, you're gonna be able to help them better. I don't think that FBCs need to analyze data because the tools such as yours that are available today, why would you hire an analyst? I think the person with the people skills who can get in there, have conversations, show how it could be best done, share those practices that have been proven in other places.

Those

Are the ones who are really gonna make a difference in the franchise organizations of the future. And if I were hiring a team of FBCs, that's what I would be looking for. Because you can provide them the analytical data, you can say these are the top three things they need to work on,

But

You need someone who can take that and have those conversations, coach, drive morale, you know, drive a air of positivity and brand compliance.

Those are the ones who are gonna make a difference.

I love that. Kathy this is awesome, I feel like I came here thinking that there's some flywheel here in how you do it and you just filled me through one step at a time. It's you know openness, observation, KPI tracking, packaging, and then the final step is that human aspect. That irreplaceable coaching getting people over the hump, whether it's through peer communities FBCs, all that. Kathy you're the best, every time I talk to you I feel like I learned something new. This time we're just clicking record but I thank so much, really appreciate the time spending here with us and our listeners.

Oh and I love what you're doing, so thank you, Gary.

Amazing, talk soon.