The History of Franchising As We Know It

The franchise model has been called the greatest business model ever invented. It’s allowed people all over the world who’ve wanted to own their own businesses do just that. But, how did it begin? How did franchising start?

The answer to that question, along with an historical timeline of franchising, follows.

Let’s take a quick detour from the history of franchising as we know it in order to explore the meaning of the word franchise.

There are several different dictionary definitions of “franchise”, but the one we’ll focus on is this: The right or license granted to an individual or group to market a company’s goods or services in a particular territory; also a business granted such a right or license.

A franchise is a unique kind of business with a very interesting history.

The Middle Ages

The Middle Ages, as strange as it sounds, is where the business model of franchising started to appear.

The Middle Ages weren’t a fabulous time to be a human. There were hundreds of famines—especially in Europe, a continent that lost a third (or more) of its population to The Black Death plague. Violent uprisings were often staged by working class folks who didn’t feel they were getting paid fair wages. And adding to the general discontent of the time period were serious religious conflicts.

But, at least one positive thing occurred amid all the suffering that was taking place on a daily basis: franchising.

In those days, some of the local governments granted high church officials (and others considered to be important) a license to maintain order and assess taxes. Medieval courts (or lords) gave these individuals the right to hold markets, and perform business-related activities. These first franchisees paid a royalty to the lords in exchange for, among other things, “protection” that was essentially considered to be a monopoly on commercial ventures. Over time, the regulations that governed these first franchisees became a part of European Common Law.

The Colonial Period

The next time period in which the concept of franchising started to take hold was the Colonial period. This period is a personal favorite of mine, because it involved what were called “Franchise Kings”. The local sovereign/lord would authorize individuals to hold markets, run local ferries, hold fairs, or to even hunt on his land. This concept extended to the Kings, who would grant a franchise for different types of business activities. European monarchs (who were technically close enough to being Kings themselves) even bestowed franchises upon local citizens who agreed to take on the risk of establishing colonies. Once a colony was created, the founder was able to gain the protection of the “Crown” in exchange for taxes or royalties.

Interesting—that concept sounds very similar to a common and important part of what’s often included in franchising today… a protected territory.

The 1840s

Go ahead—grab your favorite beverage before you continue reading this post. And if your favorite beverage happens to be beer, the 1840’s should be of particular interest to you.

During the 1840’s, there was a beer brewer in Germany who granted certain rights to several local taverns to sell their beer. What’s interesting about this is the fact that the tavern owners had to use the beer brewer’s trade name. That name: SPATEN. The tavern owners were franchisees of sorts, because they had to pay for the right to use the trade name (a.k.a., the brand name). And, isn’t a brand name one of the more popular reasons that people buy franchises today?

By the way, the SPATEN trade name still exists today.

The 1880s

The modern franchise business model can be traced back to Mr. Isaac Merrit Singer, an entrepreneur of the highest order.

Isaac Singer was the founder of I.M. Singer & Company. He was the first person to patent a practical, widely-used sewing machine. Sewing machines started to appear on the scene in the mid 1800’s—but not like the one Singer manufactured. Singer’s sewing machines could sew 900 stitches per minute, a lot more than any other sewing machines in existence at the time.

Because everything was stitched together by hand in the mid-1880’s, a faster sewing machine was really big deal. The women who did the sewing worked incredibly long hours, in clothing factories that weren’t very nice places to work. Housewives had to do a good amount of sewing too, if their families could even afford a sewing machine.

At $120 each, Singer sewing machines were out of reach for most Americans. But one of Singer’s partners fixed that. He came up with what would turn out to be the first-ever installment plan. That’s right—everyday people could purchase Singer’s sewing machines and pay for it in installments. With this plan in place, Singer was able to sell a lot more machines. He just needed a better distribution method. And being the entrepreneur that he was, he figured out just how to do it.

Licensing Arrangements

Here’s how Singer’s licensing arrangement worked:

Singer and his partners would find business people who were interested in owning the rights to sell Singer’s sewing machines in specific geographical areas. Once they found parties that wanted to become licensees, they would charge them an up-front fee—a licensing fee, for the right to sell the machines. In addition, Singer required licensees to teach consumers how to use the machines that they had just purchased. This arrangement was a win-win. The partners now had money coming in from the licensing fees which enabled them to fund more manufacturing. The licensees had businesses of their own, and were selling a product that most households wanted.

During that time, there was another item that most American households wanted. Like the Singer sewing machine, it was an item that was starting to be produced in large quantities. And it was an item that would end up having a huge impact on our way of life—and on franchising.

The Turn of the Century

The creation—and ultimately, the mass-production—of automobiles changed everything in America. There was finally a way for people to get from location to location quickly… or at least faster than with a horse and buggy.

The entrepreneurs who were producing automobiles must have known that they had a life-changing product in their hands. Right?

As more and more consumers were becoming interested in automobiles, and interested in purchasing them, Henry Ford, who had just pioneered mass production by way of the assembly line, needed to find a good way to distribute the product.

Believe it or not, for a time automobiles were sold through mail-order catalogs! Some were even sold by salesmen who traveled around the USA trying to find buyers. Those two distribution methods weren’t cutting it, so Ford and other automobile manufacturers worked on other ways to distribute their product.

One of those new distribution methods was the automobile dealership.

In 1896, William Metzger built and opened the first independent automobile dealership in Detroit, Michigan. He actually sold an electric automobile called a Waverly for around $1,000. That’s right—an electric automobile. Isn’t that starting to happen again?

The second businessman to get involved was H.O. Kohller. He opened the first automobile dealership in Pennsylvania. He sold Winton automobiles.

Those men were actually the first auto franchise owners. Henry Ford and the other businessmen who were producing automobiles now had a distribution system. They had an automobile franchise network. And soon, automobile franchises were appearing everywhere.

Other Franchises Started Appearing

Lots of automobiles were sold by automobile franchises. More roads became paved. Americans were able to travel longer distances in a shorter amount of time. But, these new machines, these automobiles, needed gasoline to run.

The oil companies started opening gasoline service stations to keep all of the automobiles fueled. Some of them became franchises. Some of them, like Chevron, still are.

Another form of energy was needed for this growing legion of automobile drivers—food. As the years went by, restaurants (independent ones at first) started popping up all over the place… especially near all of the freshly-paved roads. Eventually, food franchises starting opening.

The 1960s

Raymond Albert Kroc is my personal franchise hero. If it wasn’t for Ray Kroc, franchising may not have become what it is today. And McDonald’s restaurants, which have been dotting the landscape near exit ramps of every major freeway since the 1960’s, wouldn’t be in existence.

Born in 1902, Ray Kroc was a sales guy with an incredible vision. He started out selling milkshake-mixing equipment. He believed in the product (the Multi-Mixer) so much, he mortgaged his home to become a distributor of this machine which could make five milk shakes at the same time. Kroc traveled all over the country selling Multi-Mixers to people in the food industry.

During his travels, Kroc had heard about two brothers from California named Dick and Mac McDonald. They owned a busy hamburger stand and were using eight of Kroc’s milkshake-mixing machines—simultaneously. He decided to take a drive out to California to see how they did it. What he observed there was an assembly line-like system. The McDonald brothers appeared to have this procedure of theirs down to a science, and Kroc was impressed.

Kroc had quite an epiphany after seeing the McDonald brothers’ restaurant. He envisioned restaurants like theirs opening and operating all over the country. Coincidentally, the McDonald brothers happened to be looking for a “franchising agent” to sell franchises across the country—and as someone who’d been a salesman for the past 30 years, Ray Kroc was the right guy for the job.

Kroc cemented a deal to be the McDonald brothers’ exclusive agent, and started selling franchises. At the same time, he also opened the first duplicate of the McDonald brothers’ California restaurant in Des Plains, Illinois. Ray saw something big in the making, and tried to convince the brothers that they should start thinking bigger also. A few years later, the three owned multiple restaurants. However, Kroc was the one that wanted to build the eateries into a true “empire”. He recognized that it was the perfect time to introduce a chain restaurant like theirs, as automobile travel was becoming increasingly popular and freeways were beginning to appear in more and more places.

Kroc ended up buying out the McDonald brothers for $2.7 million after learning that they weren’t as motivated as he was in building a restaurant empire.

By 1963, McDonald’s had 500 restaurants up and running. Today, there are approximately 34,000 McDonald’s restaurants open. 80 percent of them are franchises. 1.8 million people are employed by McDonald’s in 118 different countries. I’d say that Kroc succeeded in building an empire.

Three Modern Franchise Leaders

Issac Singer and his partners were able to find an easier way for consumers to buy their product. The Singer Sewing Machine installment plan made it possible for Singer to ramp up production of his sewing machines; he just needed an efficient distribution system. He developed one, and his licensing system was a precursor to franchising as we know it today.

Henry Ford played a part in the actual design of the franchise model. Once he was able to get mass production down to a science, he knew (like Singer) that he had to hone in on the distribution side of the business, too.  He did so by creating a franchise (dealer) network all across the country.

Ray Kroc’s contributions to franchising have to do with uniformity and cleanliness. A McDonald’s franchise located in Beaufort, South Carolina will have basically the same menu items and will probably be as clean as a McDonald’s franchise located in Portland, Oregon. In addition, the restaurants he built near freeway exit ramps were quickly followed by other businesses—some of them franchises, like hotels and motels that cater to people travelling by automobile. It was a domino effect.

As Kroc once said, “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it.”

Ray Kroc, Henry Ford, and Isaac Singer were in the right place at the right time and did something about it. And more.

Source: http://articles.bplans.com/the-history-of-franchising-as-we-know-it/#ixzz330Pa3x5l

Success or Failure: Which Breeds Stronger, More Resilient Entrepreneurs?

Champions aren’t born, they’re made–or so the saying goes. But each champion is made in a different way, and there is no blueprint for business success: Some entrepreneurs burst out of the gate and never look back; others stumble badly, learn from their mistakes and make the most out of their second chances.

Formative success breeds sustained success, contends Ian H. Robertson, a professor of psychology at Trinity College Dublin and founding director of the school’s Institute of Neuroscience. In his book The Winner Effect: The Neuroscience of Success and Failure, Robertson explores the science behind how success impacts brain chemistry and makes humans and other creatures smarter, more self-possessed and more aggressive, setting the stage for even greater accomplishments to follow.

On the other hand, eventual success can be forged from the crucible of failure, argues Cass Phillipps, the founder and global producer behind FailCon. Inaugurated in 2009 in San Francisco, Fail Con is a series of conferences spotlighting entrepreneurial failures and how those negative experiences can shape wiser, more thoughtful business leaders, giving them the critical insights and assets necessary to build startups that thrive.

Entrepreneur pitted Robertson and Phillipps head-to-head to identify whether success or failure is the optimal launching pad for subsequent achievement.

Success Leads to Success

Ian H. Robertson: “The main ingredient of success is having success.”

Photo © Cliona O’Flaherty

Former heavyweight boxing champion Mike Tyson may seem like an unlikely model for entrepreneurial success, but his comeback from prison exemplifies “the winner effect,” as detailed in Ian H. Robertson’s book of that name.

When Tyson returned to the ring in 1995 after a three-year incarceration, larger-than-life promoter Don King set up a comeback bout against journeyman Peter McNeeley, a so-called “tomato can” the rusty, out-of-shape Iron Mike could beat with the proverbial hand tied behind his back. The fight lasted just 89 seconds before McNeeley’s corner conceded defeat. From there, Tyson demolished challengers Buster Mathis Jr. and Frank Bruno, regaining his heavyweight belt in March 1996.

“The winner effect is a phenomenon that occurs across species, whereby if someone wins a contest against a weaker opponent, they’re more likely to win a subsequent contest against a tougher opponent,” Robertson explains. “Tyson wouldn’t have reclaimed the championship if he hadn’t fought the tomato cans. When you are faced with a challenge against someone, your testosterone levels go up. The higher they go up, the more likely you are to win. If you win compared to losing, your testosterone levels shoot up as well. The experience of winning increases the number of receiving stations for testosterone in the critical parts of the brain associated with aggression and motivation. The next time they’re in a contest, the surge of testosterone has a much bigger effect on them, because there are more receiving stations in the brain.”

Photo © Cliona O’Flaherty

Success breeds success across all walks of life, Robertson states, noting that entrepreneurs who hit pay dirt early on are likely to experience even greater professional triumphs as their careers unfold. “The main ingredient of success is having success,” Robertson states, citing sociologist Robert Merton’s theory of the Matthew effect, which in essence contends that “the rich get richer and the poor get poorer.” (This stems from a verse in the Gospel of Matthew: “For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.”)

The other critical element of success is self-confidence, Robertson believes. “[Facebook’s] Mark Zuckerberg knew he was very bright. He didn’t need other people’s approval. He got satisfaction from being smart,” he says. “You can generate success experiences for yourself purely internally, and generate the biological benefits of that in your brain. Success and power can make you smarter, because testosterone increases dopamine, which affects the front part of the brain’s functioning. Success can make you smarter, and more able to think of new ideas.”

Anyone can experience success, Robertson asserts. It’s all simply a state of mind.

“If you fake the external trappings of power and success, you can trick your brain into believing you are successful, and you will trigger the dopamine and testosterone that make you feel more confident,” Robertson says. “If you go out there, shoulders squared and arms swinging, saying, ‘I’m an entrepreneur–I’m going to make it,’ you’ll make it easier to have your next creative idea or see yourself through the next setback. The most successful people are great engineers of their own brains.”

Failure Breeds Better Things

Cass Phillipps: “Failure’s actually really great.”

Photo © Eva Kolenko

Cass Phillipps’ startup was tanking. Just six months after she and her partners launched social media aggregator Trogger, it was clear the company was irrevocably doomed–not that Phillipps was ready to admit it, at least publicly.

“We made all the mistakes that every first-time entrepreneur tends to make,” she recalls. “But I was still telling everybody that my startup was awesome.”

In the absence of a forum where she could openly discuss Trogger’s demise, Phillipps created her own, establishing FailCon in 2009. Each FailCon event in the U.S. and abroad brings together technology entrepreneurs, software developers, product designers and investors to explore startup setbacks and how the lessons learned prime the pump for future success.

“Failure teaches self-confidence and tenacity,” Phillipps says. “There are people who fail and take it very, very personally, and that makes it hard to recover from it. They are at risk of forever being fearful of taking new risks. That’s what FailCon is trying to change. We tell people, ‘Don’t take this so personally. Failure’s actually really great.'”

Photo © Eva Kolenko

Startup failure is essentially an MBA from the school of hard knocks, Phillipps believes. “People that use failure to become more successful are people that see their failure as a learning experience and recognize, ‘Hey, I got through that, and that was the worst of the worst. Why not start again?’ Some people look at failure and say, ‘I can’t go through that again.’ Others say, ‘I failed, and I’m still alive. What worse could happen? Let’s take another risk and see.'”

But failure isn’t just about building emotional resilience; it’s also about teaching practical lessons. Phillipps says that while many entrepreneurs attempt to build sexy, customer-facing startups during their first go-round, their rebound efforts are typically far less flashy and much more no-nonsense, targeting verticals like financial analysis or elderly care. “They’re not worried about impressing their friends,” she notes. “They’re worried about building a good product.”

Failure is about gaining much-needed perspective. “The people who bounce back make sure they’re home for dinner every night with their wife or husband. They go to their yoga class every single morning. They make time each year to travel abroad,” Phillipps says. “For a lot of first-time founders, their company is everything to them, and it’s how they define their success as a human being. The people who bounce back are able to realize, ‘I can be a great entrepreneur and not make my startup every single aspect of my life. I can find balance.'”

So don’t think of it as failure, Phillipps says. Think of it as the foundation of something far bigger and better.

“Having something fail teaches you to question the decisions you’re making, be more open to alternative options and be more aware of what consequences you might have, so that down the road, you won’t have those consequences again,” Phillipps maintains. “Failure–emotionally and philosophically–gives successful entrepreneurs a drive and sense of self-confidence that they otherwise wouldn’t have. Shit can really hit the fan, and they will be able to get through it, because they’ve done it before.”

Source: Entrepreneur.com

Why Strong Employee/Employer Relationship is Important and How to Achieve This?

Maintaining a strong employer and employee relationship can be the key to the ultimate success of an organisation, the results are advantageous. It is known that if a strong relationship is in place employees will be more productive, more efficient, create less conflict and will be more loyal. Taking this into consideration, is your company operating at its peak performance? Is this because you lack a strong relationship with your employees?

The Benefits of Strong Employment relations-

Having strong employer and employee relations reaps a lot of benefits for your business. The three most advantageous are listed below;

Productivity

Strong employment relations create a pleasant atmosphere within the work environment; it increases the  employee motivation  and can also be increased through improved employee morale. Companies that have invested into employee relations programs have experienced increases in the productivity, and therefore the increased productivity leads to increases in profits for the business.

Employee Loyalty

Creating the productive and pleasant work environment has a drastic effect on an employee’s loyalty to the business, it encourages a loyal workforce. Having such a workforce improves employee retention, in doing so the cost of recruitment, hiring and training is cut drastically. For most businesses the high cost of employee turnover outweighs the cost of the employee relations program that they have in place. Another benefit is that when the employee turnover is low it ensures that the employer has a trained and skilled set of employees.

Conflict Reduction

When a work environment is efficient and friendly the extent of conflict within the workplace is reduced. Less conflict results in the employees being able to concentrate on the tasks at hand and they are therefore more productive.
All the research and statistics lead to one conclusion, ‘A happy workforce is a  productive workforce’. Creating a sound and efficient work environment with good management and a strong employer- employee relation can be the vital key to any businesses success or failure. Good luck.

Achieving Strong Employment Relations

So how exactly is a strong relationship developed? The first implicating factor is good management. You may ask, why? Through research and surveys it was found that an employee who respects their employer is more likely to over-achieve in their designated duties, this creates a goal setting environment where the productivity levels are high. So how exactly does one perfect good management? Below is an outline of 5 factors that are beneficial in the practice of good management.

Motivating your employees

Ask yourself these questions;

1. Why are the employees there? (Don’t assume it’s money- most people aren’t one-dimensional)
2. What keeps them loyal to your organization?

Now you can understand the current motivation of your employees and continue to motivate them further through encouragement and incentives. Encouragement can be achieved simply through applauding your workers every once in a while, both publicly and privately. It is known throughout all levels of management that happy employees make productive employees.

Set Goals

Achieving strong  employee relations  is also providing your employees with the image of ambition and success. A saying that should be considered is ‘Under-promise, Over-deliver’. This phrase is a great managerial mantra. Consider this; do you want to be the person who has wildly optimistic goals that they never meet, or do you want to be the person who sets measured goals and ends up exceeding them by leaps and bounds? Although this is focused on image it also is focused on reputation, these are important when seeking respect from your employees.

Delegate

Delegation of work/tasks throughout any business is important. Through delegation you are taking an opportunity to teach and empower your employees. This also allows you and the employees to acknowledge and understand their strengths and weaknesses. These are a few points to consider when delegating tasks;

1. Assign tasks that challenge your employees
2. Assume responsibility for your employees mistakes
3. Do not take credit for your employees achievements
4. Accept your own personal mistakes

Communicate Effectively

When creating a work environment with an effective communication network there is one key factor that is vital. It is to ‘Keep your door open’. Regularly remind and reinforce that your door is always open to any inquiries or concerns, and that you as a manager or business owner are willing and ready to listen. Maintaining an open channel of communication will make you aware of problems quickly, which is beneficial for quick resolution.

Embracing Equality

Most employers aren’t into equality as they would like to believe they are. In some cases favoritism can be subconscious. But by embracing equality for all employees will create a fair and equal workplace environment for all. If every employee feels equal and important they are more likely to work harder and be more productive.

All the research and statistics lead to one conclusion, ‘A happy workforce is a productive workforce’. Creating a sound and efficient work environment with good management and a strong employer- employee relation can be the vital key to any businesses success or failure. Good luck.

Source: Business2Community.com

7 Things Great Entrepreneurs Know

Leadership is not in your DNA. There is no genetic code for becoming a chief executive or a business owner. We’re all born with a clean slate, more or less. What happens next – your childhood, your upbringing, your education, your experience, your behaviour, the choices you make – determines what you become. And what you make of yourself.

It might surprise you to know that growing up with nothing does not diminish your chances of accomplishing great things in your life. On the contrary, growing up with adversity, in a competitive environment, can have a positive impact on your career. It all depends on how you use that experience.

So how about we throw out all the conventional wisdom and popular myths about where leaders and entrepreneurs come from and focus on what really matters: the things you have control over today that can really make a difference in what you achieve going forward.

While there is no common blueprint for success, there are common themes I see again and again in those who do exceptionally well. Here are seven things that, in my experience, every great entrepreneur knows. Most importantly, they’re all within your reach.

There is no four-hour – or 40-hour – workweek. You get out of life what you put in. There are no shortcuts to success. There’s no fad, no silver bullet, no miracle pill that will help you achieve great things without working your tail off. Period.

How to focus. The first rule of a startup is to focus. First you focus on coming up with a breakthrough concept. Then you focus on demonstrating it. Then you focus on delivering it and gaining customer traction. Then you focus on scaling the business. Focus is how things get done. If you can’t focus on what matters and shut out the noise, better not quit your day job.

Themselves. We spend a good part of our lives trying to find ourselves and figure out what we want to do for a living. That comes with the territory. If you haven’t found it yet, keep looking. You’ll know it when you find it. It’s important you do because that’s when you’ll have the opportunity to do great things.

How to influence others. Great entrepreneurs are passionate about their work. There’s always something they need to prove or achieve. It’s that sort of desperate obsession that drives them and motivates others. It’s instinctive and contagious. Leadership characteristics, emotional intelligence, extravert/introvert, employee engagement – you can save all that for later or, better still, never.

How business works. They’re not born with the knowledge, but at some point, every great entrepreneur learns how business works. Capitalization, P&L, sales, customers, relationships, negotiations – if that scares you, welcome to the big leagues. You can maybe delegate some of it, but you still have to understand it first.

BS when they hear it. There’s a line from Star Wars that really resonated with me: “The Force can have a strong influence on the weak-minded.” The same is true of BS. I’ve seen dozens of executives and entrepreneurs surround themselves with sugar coating, self-serving yes-men and indulge in group think. Sooner or later, it always takes them down. Always.

There’s no reward without risk. Everyone calls herself an entrepreneur these days, but if you’re not risking anything, you’re no entrepreneur. If you want to be successful on your own, at some point, you have to cut the cord. If there were an easier or safer way, everyone would do it. I’m telling you, there isn’t.

Truth is, entrepreneurship isn’t really a “dip your toe in the water and see how it feels” sort of endeavor. If you’re not willing to go all in, you might consider getting a real job. But if you think you’ve got what it takes, these are pretty fundamental concepts you should strive to understand and embrace.

Source: – www.entrepreneur.com/article/232087

The Price Of Doing Business With Generation Y

There has been no lack of literature on the different paradigms of the generations recently. I can’t open an HR focused magazine without finding at least one article about Generation Ys or Millenials, sometimes described with admiration and awe, sometimes decried as irrational and even dangerously separated from reality.

I had one conversation with a very senior Generation X HR executive who described conducting a job interview with a Gen Y person, and she said that the Gen Y’er sounded as if “He was interviewing me! These people are crazy!”

This highly emotional response illustrates a fundamental shift in the employer proposition. Gone is the ‘You should be grateful to work here’ paradigm. The more likely held paradigm by Gen Y is, ‘Why should I work for you?’ This dynamic can dramatically unsettle even the seasoned interviewer, as it genuinely does make us question who really holds the power here? The answer is not so straightforward.

In a job interview, the party who is more willing to walk away holds more power. If I can generalise for a moment, the implication here is that Generation Y has much more employee power than any generation before. They care less about working for a specific employer, and more about the quality of the work environment. They care less about employee longevity and more about employee mobility.

Just think about our own family experiences. I’ve asked this of dozens of colleagues, executive education participants, and clients over the years. It is almost invariably true, no matter the country of origin:

• Our grandparents had one to two employers over the course of their professional lives,
• Our parents had three to four,
• Most of those currently in the workforce have, or anticipate having, at least eight.

This pattern implies a doubling of the number of employers in a lifetime in every generation! Therefore, do those in university now anticipate having 16 employers? If they work until they are 68 to 72, a reasonable assumption today, this anticipation seems very realistic – a new job every three to four years. But ignoring anecdotal information for the moment, let’s see if quantitative evidence bears this out.

Since 2009, London Business School has been issuing a survey to the participants of our executive education open enrollment Emerging Leaders Program, asking their attitudes toward work, employee engagement, and leadership paradigms. This course is a training ground for the global managers of the future and are almost all Gen Y – average age is 29, representing 33 countries over the past five years. One of the questions of this survey asks how long the programme participants anticipate staying with their current employer:

• 11+ years
• Six to ten years
• Three to five years
• Two years or fewer.

The results support this startling change in worker attitudes over the last two generations:

• 11+ years: 5%
• Six to 10 years: 5%
• Three to five years: 53%
• Two years or fewer: 37%.

Two startling conclusions from these results are that 1) 90% of those surveyed anticipate staying with their employer for no more than five years, and 2) over a third do not foresee staying more than two!

For the employer, and specifically the HR function, the implications are fundamental. HR needs to focus more on asking their employees: what can you do for us now rather than five years from now? How can we support your development with short, sharp interventions, programmes, mentoring, or coaching? How can we support your career, knowing you will probably explore other opportunities, and entice you back when you are an even more senior, fully developed professional? How can our culture, rather than our employee ‘package’, keep you longer than we would otherwise enjoy? What benefits do you truly want, recognising that those benefits that grow slowly over time may not be relevant to you?

These are not easy questions to answer, particularly because the answers will be idiosyncratic to each organisation, each answer defining or redefining its culture and employer proposition in a manner that supports its unique brand, mission, vision and values. But if talent is key to success, and I see no evidence to suggest this paradigm has changed over the generations, then our answers must be compelling ones and may in some cases represent a sea change over previously held sacred cows.

By Adam Kingl. He is speaking at London Business School’s Global Leadership Summit on 24 June 2014

Source: – forbes.com