As Appeared in the June 2014 issue of Auto Dealer Monthly

Everyone knows how important the chain of command is in the military. But during battles, emergencies and other times of duress, it's not always possible to run decisions up and down the chain of command. This is why soldiers are empowered by something called the Commander's Intent. The military commander gives his leaders a clearly defined goal (the mission) and the forces needed to accomplish that goal, along with a time frame for when the goal must be accomplished. Then the leaders are free to execute that goal however they feel is best.

During D-Day in World War II, the commanders' intent (of Britain, Canada and the U.S.) was to secure key bridges, road junctions and other locations in Normandy that would allow the ground invasion forces to advance inland. The plan was executed but the air invasion went horribly awry; only 10 percent of paratroopers landed in their drop zones, troops could not be united into fighting units due to a shortage of radios and difficult terrain, and one of the airborne divisions failed to capture their assigned bridges. In fact, none of the Allied objectives were achieved on the first day as the situation became chaotic, but everyone on the ground knew what the Commander's Intent was and were committed to carrying it out. They improvised, changed plans and within a week the primary objective of connecting five bridgeheads was accomplished and the Allies held a united front more than 60 miles long.

In the business world, Commander's Intent can also be used to empower employees. At FedEx, CEO Fred Smith's (a former U.S. Marine Corps officer) intent is clear: get all packages to their destination in a safe, damage free, cost effective manner within the shipment period specified by the customer. So if a snowstorm prevents planes from taking off or shuts down a highway, the FedEx employees must adapt. They are empowered to re-route drivers, schedule extra planes in another city, and change schedules. They do not stand around and wait for approvals and wait to be told what to do. They know that "the truck broke down" is not an acceptable excuse for not delivering a package. Commander's Intent is their primary objective every day.

I have a Commander's Intent also. I sit down with every new hire and explain to them that Auto/Mate is and will always be the number one DMS in customer satisfaction. All of our employees know this, so when they are dealing with a customer's problem over the phone or on site, they know they are empowered to solve the problem, take care of the customer and do whatever it takes to keep the customer happy. Whatever their job title, that is their primary job objective every day.

Do the employees at your dealership know what their Commander's Intent is? Dealers like to focus on process improvement, but what is the ultimate goal for improving your processes? Commander's Intent is a concise expression of the purpose of the operation, not an explanation of how the operation should be carried out. I am a big fan and believer in the benefits of process improvement, but only if the people who are following the process know why they are doing so. What is their ultimate goal? Is it to make their manager happy or to make the dealer as much money as possible (neither of which are motivating Commander's Intents), or is it to play an integral role in helping your dealership achieve a desired customer retention rate, or to achieve a reputation of being one of the best places to work, or to be a respected business in your community?

In the military, Commander's Intent is an important leadership philosophy that encourages all decisions to be devolved to the lowest possible level, so that front line soldiers are allowed to exploit opportunities that develop (within guidelines of course). Do the employees at your dealership have leeway to achieve their objectives? Empowering employees with Commander's Intent is a simple way to accomplish goals and keep your customers happy.

In my last blog, "Why Aren't Your Customers Loyal?" I discussed the connection between customer loyalty and employee happiness. My belief is that many dealers are wasting money on customer loyalty programs if they are not also focused on making their employees happy and on creating a great place to work. 

I am proud of the fact that Auto/Mate was recently awarded with a "Best Places to Work" distinction by our local business journal for the fourth year in a row. In 2013 our company also received a "Top Workplaces" award from the Albany Times-Union for the second year in a row.

But as I scanned the list of companies on each list I couldn't help noticing that not one dealership made the "Best Places to Work" list (out of 30 companies in New York's capital region) and not one dealership made the "Top Workplaces" list (out of 45 companies).

Out of curiosity, I dug a little further into similar "Top Workplaces" and "Best Places to Work" lists compiled around the country. Out of 2,224 companies that made these lists in various markets only 29 dealerships were ranked, or about 1.3% of all companies.

Why aren't more dealerships on their local "Best Places to Work" and "Top Workplaces" lists?

Most dealers I know are actively involved in their communities; in local clubs, charities, causes and events. Many dealerships are family-run enterprises, and claim they treat employees "like family." It seems to me dealerships should have a natural advantage in these types of rankings because they are locally focused.

The incentive associated with creating a great place to work is clear. If you read the interviews, comments and reviews associated with the "National Top Workplaces 2013," (compiled by WorkplaceDynamics) the best companies to work for are more profitable than their competitors, and their leaders credit their success to their ability to keep both employees and customers happy--in that order.

I can attest to this connection: it's no coincidence that in addition to being named a "best place to work" four years in a row, Auto/Mate continues to enjoy an average 20% growth every year. Our DMS was ranked the top DMS is NADA's most recent dealer satisfaction survey, and we have received the "Highest Rated" dealer satisfaction award from Driving Sales for two years in a row.

So how can dealers create a great place to work?

According to the millions of surveys that "Top Workplaces" has conducted over the years, these ten factors are what drive the highest levels of employee happiness:

1. Leaders of the organization caring about their employees' well being.

2. Being able to trust what the organization says.

3. Having confidence in the leadership of the organization.

4. Being paid fairly for the work performed.

5. Feeling valued in the organization.

6. Understanding the long-term strategy of the organization.

7. Being treated like a person, not a number.

8. Having adequate staffing levels to provide quality products/services.

9. Employees liking the type of work they do.

10. Retirement plan benefits.

In my personal experience, the three following management philosophies are the cornerstones of what makes a great place to work.

1) Employees are the Number One Priority.

How do you prioritize the following: shareholders (owners), customers and employees? In that order? I like to use Southwest Airlines as an example of a company that makes employees the number one priority. In 2008 when the economy went south, most airlines laid off a lot of their employees. Southwest's CEO refused to lay off a single employee. He insisted he was not going to put the company's stock price ahead of the well being of employees. How do you think that made the employees feel? I would say very good, and today Southwest is well known for its excellent customer service and high levels of customer loyalty and profitability.  As Herb Kelleher, the CEO of Southwest, once said, “If the employees come first, then they’re happy…. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It’s not one of the enduring green mysteries of all time, it is just the way it works.” This is how the leaders of great companies set their priorities: employees first, then customers, then shareholders (in a dealership, this means the principals). If you take care of the first two, the latter will benefit.

2) Employees Trust Their Leaders

In a great place to work, employees trust their leaders and believe the leaders are doing what's best for them--the employees--not what's best for the leaders. In a great place to work, when the leader of a company says he or she is going to do something, they do it. They also identify and state clearly what the company's values are, then ensure those values are adhered to in the day-to-day management and policies of the company. They lead by example. A good leader has a vision for the company, shares that vision with the employees, and explains management decisions to the employees.

If your employees trust what you say and believe that you are genuinely looking out for their interests, if they are excited about your vision and see how they will benefit from it, they will go all out to help you achieve that vision, grow the business and meet other goals that you have set. If employees feel valued and know how their roles contribute to the company's success, they will take personal ownership in helping the company to become successful. Ultimately, this benefits the leaders as much as it does the employees.

3) Rank Does Not Have Privileges

What is the role of a manager? If you ask your managers what their primary responsibilities are, many will say it's their job to set goals and to ensure that everyone is doing what they're supposed to be doing. Many managers believe that the employees in their department work for them; that is, the employees are responsible for helping the manager to meet the goals set for the department.  

At Auto/Mate, my philosophy is that managers (including myself) work for our employees. I tell my managers that they work for the employees in their department, not the other way around. Our primary job as leaders is to ensure that our employees have what they need in order to do their jobs to the best of their ability. Think about this for a moment. Think about the look you would get from your Sales Manager when you told him he “works” for the lot attendant and not the other way around. Well he does, in a sense. Assume that the lot attendant has major issues in getting keys for the vehicles. Can’t find the keys, can’t move the vehicles, can’t sell the vehicles, etc. If he tells his manager he has this problem (in many dealership this would never happen but that’s another blog) and the manager works to address the problem (new key machine, better process with the sales people for return of the keys, etc.) then who works for whom? Employee had a problem, manager fixed the problem. How do you think the employees feels? Much better than if his issue fell on deaf ears. A manager's job should be to ask, what do I need to do to make my employees' jobs easier?

If your dealership tends to have high turnover and low morale, it may be time to put some time and effort into creating a great place to work. Make it a goal to get your dealership listed in the "Best Places to Work" in your local business journal. What do you think makes a great place to work?

We've all seen and heard statistics regarding the connection between customer retention and a company's profitability. Here are some examples:

1) It's 6-7 times more expensive to acquire a new customer than to keep an old one - White House Office of Consumer Affairs

2) 89% of customers have stopped doing business with a company because of a poor customer experience - RightNow Customer Experience Impact Report 2011

3) A customer is four times more likely to buy from a competitor if the issue is service related vs. price or product related - Bain & Co.

4) A 10% increase in customer retention levels results in a 30% increase in the value of the company - Bain & Co

5) 86% of buyers will pay more for a better customer experience - RightNow Customer Experience Impact Report 2011

6) Increasing customer retention rates by 5% increases profits by 25 to 95 percent - Harvard Business School

There's no question dealers should be focusing on building customer loyalty but I believe many are going about it the wrong way. Although many customer loyalty programs have merit, discounts and incentives alone will not create a loyal customer. Loyalty is derived not from every day “good” transactions but by exceeding the customers’ expectations on a repeated basis. It is the delightful experience that makes someone emotionally devoted to you and tell others. True loyalty comes from a customer’s emotional connection and experiences with your dealership’s employees.

As a dealer, what's the best way to ensure that your employees are giving a great customer experience? Hire a trainer? This might help if your employees are lacking in interpersonal skills. But all the training in the world isn't going to help a grumpy service writer who is being pressured by their boss to increase gross for the month. In order to give great customer experiences on a repeated basis, your employees need to be happy and loyal.

“But I have loyal employees, many of my employees have been with me for years," you may say. Well, just because some of your employees have longevity does not mean that they are loyal. We all know of long-term employees who routinely “diss” their employer and job.

If your employees are not loyal and are unhappy, your bottom line is negatively impacted. No matter how many cars you sold in 2013 and no matter how much money you made, you could have made a lot more if you had loyal, happy employees and loyal, happy customers.

So you may be asking how you can make your employees happy and loyal. You may believe it's hard to find good workers.

It all begins with you…

“People ask the difference between a leader and a boss. A leader leads and a boss drives” – Theodore Roosevelt

If your dealership has a high employee turnover rate, if morale is generally low, if you have problems finding good workers, it's your fault Mr. Dealer (“the buck stops here” to quote another President). Something in your company culture isn't working. You can't attract the best employees (or they won't stay), and you don't have happy, loyal employees because your dealership is not a great place to work.

If you are willing to accept that dealer principals are responsible for their workplace culture, the good news is the solution is simple (though it may not be easy). If you make your employees your number one priority and if you focus on creating a great place to work, you will benefit from increased customer loyalty and the resulting increased profitability.

How do you turn your dealership into a great place to work? That's the subject for another blog that I will follow up with, same time next week. 

Customer satisfaction and customer loyalty are two different things. The Customer Satisfaction Index (CSI) scores that many dealerships and manufacturers rely on as a Key Performance Indicator (KPI) do not really have much to do with building loyalty. Customers can be loyal to a company and have an unsatisfactory experience, or they can have a very satisfactory experience without being loyal to the company.

I believe the CSI surveys should be phased out and replaced with something else; and here are a few reasons why:

1) The surveys are too long. In today's rushed world, every minute is precious. It's long been suspected that the people who are most likely to reply to surveys are the ones who are disgruntled, skewing scores lower than they should be. To get a substantial response rate, a survey should be only a few questions and should take no more than a couple minutes to respond.

2) Sales and service people game the system. Because manufacturers tie financial incentives to the CSI survey, the focus becomes on how to get a good CSI score rather than how to deliver genuinely great customer service that will build loyal customers. It's similar to how our education system is focused on test scores. Instead of teaching our kids how to develop good study habits, they teach them how to pass the test. It's too tempting and financially rewarding for sales and service employees to 'coach' customers on the importance of giving a 'highly satisfied' rating when they receive the all-important survey.

3) Customers game the system. There are many car-buying advice blogs out there, and so a lot of customers know how important the CSI survey is to dealership sales and service people. They then use this information to negotiate a better deal: "if you give me this, then I'll give you an excellent survey rating."

4) If a factory wants to add a point in a dealer’s market area or terminate a dealer, in support of its legal argument that it should be allowed to do so, the factory points to a low CSI score to argue that the dealer isn’t adequately serving the market.  In these circumstances, millions of dollars are often at stake.

5) Many new tech companies sell a product to the dealership with the carrot that using their product will enhance CSI. I am not aware of any product or technology that can provide a genuinely great customer experience. Only people can provide a great customer experience. I worry that in some dealerships, employees are now trying to "appease the technology" rather than trying to appease the customer.

6) Poor CSI scores focus attention in the wrong direction. Often, it's the salespeople and/or service advisors who get in the most trouble when the CSI scores are low. Yet, the survey asks questions about things that are completely out of the employees' control, such as how clean the restrooms are, or about a product feature designed by the manufacturer. If CSI scores get too low, sometimes pay levels get reduced, which most certainly leads to reduced morale. The best customer satisfaction levels are achieved by having happy employees, not angry, resentful employees. It's counter-intuitive.

For these reasons I believe that CSI scores are not a true measure of customer satisfaction. Apparently, some manufacturers are also taking notice of the survey's flaws. According to a January 2013 Automotive News article, Hyundai and Chrysler have both eliminated big CSI payments for dealers, and Chrysler has also eliminated penalties associated with lower CSI scores.

The Link Between Loyalty and Revenue

There is good reason for wanting to track and improve loyalty. According to a 2012 study by Maritz Marketing, the average dealership would be able to generate an additional $106,315 in gross profit by improving the customer experience. And J.D. Power & Associates 2013 U.S. Customer Service Index (CSI) study found a direct correlation between service satisfaction and loyalty.

Among vehicle owners who are "delighted," 96% say they "definitely will" return to the dealer service department for service and 59% say they "definitely will" purchase or lease their next vehicle from the same brand.

A Better Measure…..

The Net Promoter Score’s, or NPS® purpose is to evaluate customer loyalty to the company. It does not measure customer satisfaction per se. The ability to measure customer loyalty is a more effective methodology to determine the likelihood that the customer will buy again, talk up the company and resist market pressure to defect to a competitor.

So how do I find out what my NPS score is, you ask? The methodology is based on the fundamental perspective that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors. It asks one simple question: “How likely is it that you would recommend [your company] to a friend or colleague?”

Customers respond on a 0-to-10 point rating scale and are categorized as follows:

• Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
• Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate your company’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors.

For example:

You have 100 surveys returned

50% of them score you as a 9 or 10

20% of then score you as an 8 or 7

30% of them score you as a 6 or below.

In this situation your NPS would be 20 (50%- 30%)

Asking one question greatly increases the response rates. There is no simpler survey than that. However you may want to expand it by asking one or two other questions. For instance, if a customer scores you an 8 you may want to ask one question: What do we need to do for you to score us a 10?” If a customer scores you a 6 or below you may want to ask two or three questions as to what caused them to give you this score. The survey can be sent right after the transaction, so if there is "detractor" who had a poor customer experience, the dealer can take immediate action. It's also simple, so the focus can be on employees, process and customer service; not on the "score."

Studies have shown companies that achieve long-term, profitable growth have an NPS score twice as high as other companies. Most businesses average an NPS of around 5-10, but extremely profitable companies such as Apple and Harley Davidson have scores in the 50-80 range. The same studies show that companies with a negative NPS (more detractors than promoters) are more likely to suffer stagnant growth or go out of business.

What do you think of CSI as a Key Performance Indicator (KPI) for customer satisfaction? Do you think replacing with the Net Promoter Score (NPS) is a good idea? How do you measure customer loyalty?

I am posting this blog on behalf of Praveen Tamvada, Director of Marketing, Auto/Mate Dealership Systems

Last weekend was my son’s birthday party, and I had the brilliant idea of providing him and his friends with water pistols as a form of entertainment. Of course, I didn’t anticipate they would make ME the prime target of their water soaking misadventures. In a nutshell: I got soaked, changed clothes and the next day my wife threw my sodden shorts into the wash.

I had forgotten to take my cell phone out of the pocket.

Of course my wife felt terrible, but I bet not as terrible as I felt! I had taken pictures of the birthday party that were only on that phone. On top of that, there was other data, e-mails and many, many contacts. Like a lot of people, I feel like my smartphone has become an integral part of my existence. Living without one is tough. It’s not so much the device itself, but what’s on the device that’s important.

The Apple store said the phone was beyond help—of course they wanted me to purchase a new phone. I get that, but I didn’t feel like shelling out the money. So I spent a few days researching on the Internet and trying out various recommendations: throwing my phone in a bag of rice for two days, cleaning the pins and connectors, doing a hard reboot and then charging the phone for 24 hours. Last night my son was the first one who noticed the Apple logo glowing on the small LCD screen. We all rushed over to the charger and stared at the phone in disbelief. Voila! iPhone resurrected.

Fortunately I did not lose any data; but while I was in the Apple store they reminded me that thanks to iCloud, none of my data would be lost. They could simply download everything from the iCloud, a service that backs up my iPhone automatically.

This was a reminder to me how important it is to have regular back-ups of your dealerships’ data. Not just the data in your dealership management system (DMS) but also back-ups of the data on every individual PC.

Is your dealership doing a good job of backing up all your data on a regular basis? Do you even know when your last back-up was?

I’ve known of a couple dealers who have gone months without a system back-up and then had their servers crash. Of course they could never hope to recreate or retrieve all their data. The best-case scenario is spending an enormous amount of time and energy just to get the DMS to a point where the dealership can go forward from an accounting standpoint.

I’ve worked with two other dealers who had their servers stolen; one by an employee, another by a complete stranger who just walked into the dealership and walked out with the server. Then there’s the fire and flooding dangers.

You never know when something is going to happen.

With today’s cloud technology, there’s no excuse to not have a system in place that automatically backs up your data on a daily basis. If you still use a back-up drive, how often do you back up your data? Once a week? Once a month? If your server went down tomorrow, how long would it take everyone to re-enter data from the last week or the last month? How much is that lost productivity worth? And frankly, who wants the aggravation? Also, if you use a tape drive, remember to always keep a copy of your latest back-up off site.

Dealers using a DMS with Application Service Provider (ASP) technology are already being backed up into the cloud, and don’t have to worry about it. However, they shouldn’t forget other non-DMS documents and data stored in PCs and in other third-party vendor systems.

For a low monthly fee, Auto/Mate, along with most other DMS vendors, will back up all the data in your dealership management system (DMS) to “the cloud.” There are plenty of low-cost vendors like Carbonite.com that can back up all the data on your PCs.

Hopefully you will never get caught with your shorts down. Just remember, it’s when you least expect it that the unexpected happens. If a disaster hit you tomorrow, would it really be a disaster? Or would it be a mere bump in the road, because you know you can have your entire network up and running again, with all of your data current, within 24 hours?

What is that peace of mind worth to you?

In a recent article by our very own Praveen Tamvada, the pros and cons of the various mobile tablets are examined; and we give some tips on how you can determine which one may work best in your service department. Android vs. Windows vs. iPad. Which is your favorite?

We also explain how the tablets should integrate with your DMS and give some advice on how to design your service lane to get the most out of your tablets. 

To read the article, please visit our "DMS Central" blog at http://blog.automate.com 

Thanks!

Mike Esposito

sales CRM

A common perception of what makes a business successful is as follows: the leader is a genius who has a vision, defines the strategy, and all the employees work to make that vision into a reality.

The reality, however, is far different. In the best-selling business book, “Good to Great: Why Some Companies Make the Leap and Others Don’t,” by Jim Collins, a team of researchers discovered that the most successful leaders focus on getting the right people on board before they set strategy. In essence, they load a bus with the right people and get them in the right seats, before they decide where to drive the bus.

An example of this was in the early 80’s when Dick Cooley became CEO of Wells Fargo. Cooley foresaw great changes ahead in the banking industry, but he did not know exactly what those changes would be. (Sound familiar? As much as the auto industry has changed in the last few years, I believe more change is ahead).

Instead of trying to anticipate those changes and set strategy, Cooley decided to hire the best team he could so he could cope with any and all challenges. He hired the best people he could find, many times without a specific job in mind. When the changes finally did arrive in the form of de-regulation, Wells Fargo weathered the changes better than any other bank.

In contrast, while companies led by a “genius with a thousand helpers” can be very successful while the genius is at the helm, once that genius leaves, those companies inevitably experience a decline (think Apple). A great vision without great people is eventually rendered irrelevant.

So how do you find great people? When preparing for interviews, doing a little work up front will go a long way in helping you find the right person for the right job. Ask yourself the following and prepare questions that will give you the answers:

1. Can they do the job? Give candidates hypothetical challenges to solve and pay as much attention to how they analyze and approach the problem as the solution. Ask them to complete a project before the first interview and give them homework between interviews. Also, give them three hypothetical projects and ask them to rank which they’d most and least like to work on, and why.

2. Will they do the job? Here you are looking for self-motivation. Ask them tough questions about why they want to work for you and what their work ethic is. Ask them about their likes and dislikes and what their passions are. In general, self-motivated people:

• Ÿ Have a purpose in life and live it
• Ÿ Are not afraid to take risks or go outside of their comfort zone to achieve a goal
• Ÿ Are energized when given a new project, jumping in with both feet
• Ÿ Are able to laugh at themselves, admit vulnerabilities and take criticism
• Ÿ Learn something new every day because they love learning
• Ÿ Believe in themselves and others
• Ÿ Are persistent and willing to explore new options if something isn’t working
• Ÿ Strive for health in all aspects of their life; physically, emotionally, spiritually, intellectually and socially
• Ÿ Are able to rise above failures, adversity and loss

Also ask candidates what they think “successful” means, and how that person has tried to achieve it. In general, most people decide early on in life how successful they are going to be or want to be.

3. When in doubt, don’t hire. Keep looking. If you are having trouble finding the right person to fill a position, don’t compromise. Find a way to get through until you find the right person.

4. If you need to make a people change, act sooner rather than later. The moment you feel like you need to highly manage someone, you know you’ve made a hiring mistake. If you are giving third and fourth chances, hoping for improvement and wasting precious time and energy thinking and worrying about an employee, act sooner rather than later. Keeping the wrong person on board is unfair to that person and to all your other employees who have to work with them. Let them go and everyone will be happier for it.

With the right people in the right jobs, creating a vision and defining a strategy for success will be easier because it will be a team effort. Involving your employees in the decision, “where to drive the bus?” will motivate them to help you get there.

What tips do you have for hiring the best people? How do you keep them happy?

You may be wondering why the president of a dealership management system (DMS) company is talking about CRMs. It’s not because I want to sell you a CRM. It’s because one of the most frequently asked questions I get from customers is, “What do you think about such and such CRM?”

The first thing I always answer is, “Why do you want to switch?”

The reasons I get vary and often include: “Well, our new Internet Sales Director thinks that CRM is better,” or “Our guys just aren’t using the current CRM, they don’t really like it,” or “I hear this CRM is amazing and we could increase our revenue by 30%!” (Really?) Sometimes, dealers and managers can’t even give a good reason why they want to switch CRMs.

Besides your DMS, a CRM is potentially the largest technology expense your dealership has. So why switch if you don’t need to? And if you do switch, do you know which system you should switch to? The system that works for your fellow dealer in a 20 Group or the dealership down the street may not be best for you.

Here are the top three reasons NOT to buy a new CRM:

1. The newly hired Sales Director/ Internet Director prefers Vendor X’s CRM over your current CRM and insists on changing.
2. The GM/ Sales Manager is good buddies and plays golf with so-and-so over at Vendor X.
3. Just went to a trade show and saw a sales pitch for a really cool CRM.

If your current CRM has a low utilization rate, take some time to figure out why. Even the most basic CRMs have the ability to log ups, track performance from various ad sources, and send out letters and e-mails. If your employees aren’t using the CRM for these tasks, find out if the problem lies with the system or in the management of processes and employee accountability.

Because here’s the bottom line: if your salespeople aren’t using your current CRM the way they’re supposed to, they’re not going to use a brand new CRM the way they’re supposed to. So promises of increased revenue (based on features that won’t be used) will fall flatter than a tire with a leaky valve stem.

If you’re still thinking about switching CRMs, try a proven 10-step process that will help guide you to the right decision—without regrets and without wasting unnecessary money. Visit www.automate.com and download our FREE, unbiased ebook, “The Auto Dealer’s 10-Step Guide to Choosing the Right CRM for Your Dealership.”

Is your dealership successful or is it wildly successful? Are you a good leader or a great leader? And if you are merely “good,” but desire to be “great,” what does it take to make that transition?

I have been revisiting the best-selling business book, “Good to Great: Why Some Companies Make the Leap and Others Don’t,” by Jim Collins. In Chapter 1, he posits that good is the enemy of great. Meaning that if you are good, it is often difficult to become great because it’s so easy to settle for good. After all, who complains when “things are good!”

Yet even if the desire to be great exists, some leaders simply don’t have the traits necessary to build their dealership or other company to the next level. After years of research, Collins found in his empirical data – not through ideological goals – that great leaders consistently display very particular traits, compared with merely good leaders. The good news is that these can be learned by anyone (who is willing to learn, that is):

1) MODESTY

Great leaders tend to be modest, humble, shy and/or reserved. But don’t mistake these qualities for weakness.  Because they are also fearless, unafraid to take great risks, and have tremendous will that they apply towards their goals.

The quintessential great leader is President Abraham Lincoln, who was know for being very modest and reserved, but who was never weak and applied extraordinary will towards achieving his goals. Colman Mockler, CEO of Gillette for sixteen years, was also known for being extremely shy, but successfully fought off three hostile takeover bids and, during his tenure, grew Gillette’s value to outperform the general stock market by more than six times.

On the flip side, leaders of companies that did not achieve greatness were also examined. Most of the bold, overly confident CEOs who made brash claims about how they would lead their companies to greatness, actually never did.

2) AMBITION IS FOR COMPANY

Both good leaders and great leaders have egos and enormous ambition. The difference is, good leaders tend to have ambition for themselves. Their goals are related more to their own personal achievements. Great leaders channel all that ambition and ego into building a great company that can outlast their own tenure. They take pride not in their own personal success, but in their company’s current and future success.

3) WHATEVER IT TAKES ATTITUDE

Great leaders have fierce resolve and stoic determination to do whatever it takes to get things done and to produce results. In the early 1970s, the new CEO of Kimberly Clark made the gutsy decision to sell its paper mills. The new leader of Walgreen’s made the—then risky—decision to close its restaurants (remember Walgreen’s malt shops?) and focus strictly on building a chain of the “most convenient” pharmacies in the nation.

4) PROMOTE FROM WITHIN

Collins had strict criteria for companies to be classified as a “great” company. Only eleven companies out of more than 5,000 companies in the initial group for consideration made the cut. Out of those eleven, ten of the CEOs were promoted from within.  Merely “good” companies hired new CEOs from the outside six times more frequently than great companies.

Who knows your company better than someone who is already working there?

5) WINDOWS VERSUS MIRRORS

When a great company experiences success, its leaders look out the window and attribute that success to factors other than themselves. They credit their team, the economy and often claim they got “lucky.” Yet when things go poorly they look in the mirror and take the blame. In transcripts, they also use the term “we” and “our team” a lot.

Leaders of mediocre or merely “good” companies do the opposite. They often attribute their failures to “bad luck,” looking out the window to blame factors other than themselves. But when times are good, they are the first to look into the mirror and take credit. In transcripts, they tend to use the term “I” and “my company” more than great leaders do.

Do you agree with these attributes of great leaders? Do you know any great leaders and what are the attributes that contribute towards their success?