Success in the retail automobile business is achieved through four key business outcomes. The order is of priority is most important to least important.
- Team member engagement
- Client Advocacy
- Productivity (sales)
- Profitability (net profits)
It’s obvious that without #4, net profits, no business in any industry can survive. Yet it comes up fourth on our list. The reason may surprise you.
Fully engaged team members create all business opportunities. Every business is a reflection of those they employ. This is evident through the employee’s attitude towards internal and external clients, willingness to go the extra mile, bravery to speak out professionally when things are not right, and appreciation to the leadership for the opportunity to be employed. So, who you hire is essential for those net profits we desire so much.
Yet after time, effort, resources, and money are spent in finding the right person, few companies take the time to prepare them for their company’s processes, procedures, and culture. You would think I was talking about small organizations with little or no resources. However, I am talking about MOST organizations, including some billion-dollar companies I have worked with. Since my area of expertise is the retail automobile business, I will address that industry segment with my comments.
Like most industries, the automobile industry has a difficult time hiring really good team members who have the right DNA. It is the personality and internal characteristics that matter most. Once these criteria are filled, we can all train them our way. To add to that, the Gallup organization tells us that the number #1 reason our engaged team members leave us is due to their direct report managers. So we hire for DNA, make the investment, and then lose the person due to leadership incompetency. Sad, but true in many cases. For all my friends and associates in the industry, don’t blame the messenger for being honest! Our industry has subpar middle managers and little or no development strategies for creating future mentors, coaches or leaders.
Most auto dealers miss the key to their organization’s growth. Simply stated, it is middle managers, not the front line. Middle management is essential in establishing the foundations of the company’s culture and follow-through on established policies and procedures, as well as identifying and mentoring future leaders. Since the industry has a hard time promoting middle management from within, it depends on acquiring talent from outside their company. Doing so, we often hire too quickly, and pay more, to find someone with the necessary experience who is available when the need arises.
What we should all be really concerned about is that hiring middle management this way is possible, but takes enormous planning and discipline. Planning and discipline your current leadership most likely doesn’t have, because they have never been developed in this area. You, the dealer, must drive this strategic vehicle. You need an onboarding process to teach processes, procedures, vision, and culture. You need a leadership team that is all on the same page philosophically. You need to be careful to be strict on your approach, yet allow for free flow of thought, creative thinking, and innovation. You need to know that most middle and upper management hires have NEVER been trained to be a leader. Therefore, they don’t know what they don’t know. They get by with enormous effort, hard work, drive, and hours spent on the job. They are basically productive, yet inefficient. Without an onboarding process that has legs, you have a revolving door, leading to disruption of your front line and organization.
When you don’t take the time to onboard new middle and upper level managers professionally, what you most often get is upheaval. The new hire egotistically says to themselves, “These folks don’t know what they are doing. I will show them all how to run a business.” So out with the dishwater goes whatever consistent processes and procedures you have, vision takes a hit, and culture is crushed. Some hires make it, but most end up going to the next highest bidder at some point down the road. Don’t blame them, you did not give them the rules to the game before you hired them. You did not onboard them to your way of thinking. You did not realize these hire only work well in very consistent and structured environments. You did not mentor them to do it your way, so they simply got frustrated and left.
The solution is simple. When you own a profitable business, you know what to do already. The answer is to get your current as well as future managers and leaders to follow your lead. Start a basic plan to train your team members for their next position well before they get it. Train your current middle managers how to coach, mentor, and lead, and then observe and develop them. If you hire from outside out of necessity, be clear on what ACTIONS, processes, procedures, and culture you want. You need to be involved on this approach every single day, so train them YOUR WAY even if they have experience doing the job. Time to look at your model and get deeply involved again.
“Times, they are a changing”.