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Changing a Dealerships Culture
In Greek mythology Sisyphus was compelled, as a punishment for deceitfulness, to roll a boulder up a hill, When it almost reached the top he would witness it roll to the bottom and then would repeat this action over and over again for eternity.
General Managers and owners often recognize these things and attempt to make changes only to watch the boulder roll down the hill again.
The only way to truly effect change in a dealership is to change the culture. If you have ever visited a foreign country you have been faced with culture shock. You have observed odd things that people do that is part of their habits and heritage. If you ever inquire as to why, lets say for argument sakes the brits drink tea the answer would sound a lot like this. “I don’t know, we have always drank tea. It’s british don’t you know”
Many “things” that are done in a dealership are done out of habit and heritage. Take for instance the training of the new salesperson. My experience has been that the new guy is introduced at a sales meeting and everyone is asked to help him out. The Sales Manager shows him his desk, walks him around the showroom and then he is shown the key room. “These are the keys to the new cars, and these are the keys to the used cars, now go and make me proud”. Often they are “assigned” to another seasoned salesperson to show them the ropes. This usually develops into the new guy becoming a glorified personal assistant to the “mentoring” sales person. After a few months the new guy just doesn't seem to be cut out for the car business. He has learned a lot of bad habits and has developed a negative attitude. Is it any wonder?
General Managers and owners want to change this behavior. They speak in their managers meetings about making changes and introducing new “policies” of “don’t do this” , or “don't do that” with the threat of punishment or termination. None of which they want to carry out.
And so we see the boulder continually roll down the hill after we have exerted massive effort to get it to the top of the hill. Why does this happen? Do you find that both managers and employees simply wait you out? Do your employees have a notion that “if we just, provide lip service, and act like we are doing it, it will simply go away.”
The examples above may seem extreme, you may even say “my people aren't like that” Take a long hard look and observe the action of your people. When you ask for a “culture change” (meaning lets do something completely different) do they ACT, or do they follow the previous attitude of wait and see?
To bring about a true culture change in your dealership you must first evaluate your assets. These are your people. I would say that all of you would describe them as people who like the car business, that they genuinely want to help people that as salespeople they want to sell cars, that as service writers they want to sell customer pay, and more importantly they want to see the company grow. So why does the boulder roll backwards?
Knowing that you have good people working for you, knowing that they all want to succeed means you have the raw material to change the culture in your dealership.
1) Start with your commitment. When you want something done, do not compromise, do not take no for an answer, do not take prisoners. Accept only success for your plan. Ask yourself, am I accepting of mediocre performance because the company makes money? Or in other words, it must not hurt enough to change. Apathy is your enemy, complacency is the army apathy uses to keep things at the status quo. It uses excuses as artillery and false emotions as it’s spy’s.
2) Map out your plan. What is it you want to accomplish? For the purpose of this article we are going to use the goal to increase market share by 20%. Ask and answer all of the questions that will help you get there. Do I have enough sales people? Do I have enough marketing? Do I have the right structure?, Do I have the right Process?, Do I have enough inventory, etc… You will need to have in place all of the tools to accomplish your plan. It is so often that dealerships will say they want to increase market share but are unwilling to hire enough sales people to do that very thing. Or they don’t have enough inventory to sell in order to get that many more cars on the road.
have you ever wondered that when you have a great month in sales but your market share stayed the same. Why did that happen? Because the whole market grew, all of your competitors had a great month too. It didn't mean you conquested any new business, it just means you maintained your piece of the pie. So what really needs to happen in order to attain that goal?
3) Create Metrics. Once you have a goal in place you will need to measure your progress. In order to increase market share you will need to sell (x) many more cars than your competitors. and (x) many more than your goals that your manufacturers rep sets. What leads to those extra sales? Start with the basics. Set in place a way to measure the test drives, proposals, manager turns, appointments set, appointments show, appointments sold, leads, floor ups. All of these things are Key Performance Indicators (KPI’s). We all know that the car business is a numbers game, so many people, so many test drives, so many sales. So look to your CRM to provide this for you. MANDATE that everyone uses the CRM and you hold them accountable to it. Mention in your internal emails and memos a line that says “if it didn't happen in CRM, it didn't happen. Tie your salespeople's pay to the CRM usage. You know who is using and who is not using and more importantly who is faking. Call them on it, however this is where CRM gets tricky. If you use CRM like big brother and it is the bat you use to beat on your underperforming salespeople and look the other way with your top performers, you don’t understand how to manage with metrics or a CRM.
The CRM must be used as a coaching tool. If Johnny Salesman saw 100 people last month and he did 75 test drives, but only sold 4 cars what does that tell you? If you tell johnny he’s not doing his job and he needs to get more sales, he is going to game the system to make himself look better.
4) Training. The reason things don’t get done or they are not done very well is because people don’t know how to do them. Take Johnny Salesman. If he is seeing a lot of customers and doing a lot of test drive but selling few cars it is most likely that he does not know how to get the customer to a write up stage. Meet with Johnny one on one review, coach and most importantly ROLE PLAY with Johnny how to take the customer to a write up/offer stage. I cannot express enough how important roleplaying is. Your managers should be the ones to role play with the salespeople. They are the mentors and coaches of your sales team.
5) Shorten the runway. Many times leaders feel that they need to give others ample time to complete a task. This is usually due to the fact that in the past tasks assigned have not been completed or completed poorly. (see training). What takes place with a long time span to complete a task is that it is put on the back burner until the last week or the last day, and then it is given great focus to complete. The results are usually subpar. By shortening the runway or the time allotted to complete the task you employ your teams urgency and laser focus. If they need training they will request it.
6) Accountability. Sun Tzu’s book The Art of War, earned him an audience with the King of Wu, who said, “I have read your books, may I submit your theory of managing soldiers to a small test?”
Sun Tzu replied “Sir, you may.”
The King of Wu asked “Can the test be applied to women?”
Sun Tzu replied that it could, so arrangements were made to bring 180 beautiful women from the palace. Sun Tzu divided them into two troops with one of the King’s favourite concubines at the head of each. He then made all of them take spears in their hands and spoke to them: “I presume you know the difference between front and back, right and left?”
The women replied, “Yes. Of course”
Sun Tzu continued, “When to the sound of drums I order ‘eyes front,’ look straights ahead. When I order ‘left turn,’ face toward your left. When I order ‘right turn’, face toward your right. When I order turn around, face around to the back.
After the words of command had been explained, the women agreed they understood. He gave them spears so he could begin the drill. To the sound of drums, Sun Tzu ordered ‘right turn.’ In response the women burst out in laughter.
With great patience, Sun Tzu said, “If the instructions and words of command are not clear and distinct, if orders are not thoroughly understood, then the general is to blame.” He then repeated the explanations several times. This time he ordered the drums to signal ‘left turn,’ and again the women burst into laughter.
Then Sun Tzu said, “If the instructions and words of command are not clear and distinct, if orders are not thoroughly understood, the general is to blame. But if the commands are clear and the soldiers disobey, then it is the fault of the officers.” He immediately ordered the women who were at the head of the two troops to be beheaded.
Of course, the King was watching from a raised pavilion, and when he saw that his two favourite concubines were about to be executed, he was alarmed and swiftly sent down a message: “We are now quite satisfied as to the general’s ability to manage troops. Without these concubines, my food and drink will not taste good. It is the King’s wish that they not be beheaded.”
Sun Tzu replied, “Having received the sovereign’s commission to take charge and direct these troops, there are certain orders I cannot accept.” He immediately had the two concubines beheaded as an example and appointed the two next in line as the new leaders.
Now the drums were sounded and the drill began. The women performed all the maneuvers exactly as commanded. They drilled perfectly in precision and did not utter a single sound.
Sun Tzu sent a messenger to the King of Wu saying, “Your Majesty, the soldiers are now correctly drilled and perfectly disciplined. As sovereign, you may choose to require them to go through fire and water and they will not disobey.”
There are two lessons we need to gleen from this example. One is that we as leaders need to do all we can to educate and train our salespeople, BDC agents, and service advisors. It is our responsibility to create an environment of learning and teaching. Every opportunity you spend with your team should be an opportunity to mentor and teach them the skills that will help you to win the war.
The second lesson is that when you have done all that you can to teach, train, mentor, and instruct, only then is it time to show them the door. You must approach every situation when it comes to employees and their termination with one question in your mind. Have I done all I can to teach, explain, demonstrate and mentor this person. If the answer is yes. than make the change. It is easy to get hung up on the “he beheaded the concubines” side of the story. However, it is the most logical end to a situation that refuses to fix itself and perform in the manner that you have instructed.
Apply these lessons to the top salesperson in the dealership who refuses to use the CRM. If after you have done all that you can do and you don’t let him go, what message have you sent to your troops (the Salesforce) and King Wu (Owner, Dealer Principle). Conversely, if you do let him go because he refused to use the CRM, what message does that send. You will find that the people next in line will become your top producers and you will have full compliance with any initiative you put forward in your dealership. Your salesforce, sales managers and everyone in the dealership will “go through fire and water and they will not disobey.“
Putting these principles into place does not need to be hard. Employ help from others, the worst thing you can do is to do this alone. Sit down one on one with your managers tell them your plan, allow them to give you feedback and then ask them for their help.
We get so hung up on getting everyone's “buy in” that we lose site of the fact that the only one that needs to be bought in is you. You don’t need to ask permission to make changes in your dealership, you were given that when you accepted the job as the dealerships leader.
These are a few simple guidelines to get started. As you progress through this process you will encounter “interesting” obstacles that don’t conform to these guidelines, and that’s OK. Just simply ask this question. Is this derailing me and the dealership from changing the culture from good to great. If it is, don’t do it.