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Paul Herr

Paul Herr Partner in Charge of Employee Engagement

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Creating a Culture that "Slays" the Competition

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There is a lot of confusion in the automotive industry about the importance of factors like “culture” and “employee engagement.” Isn’t this the soft stuff we don’t need to worry about? 

Not according to Deloitte’s latest “Human Capital Trends” report, which concluded;

“This year, employee engagement and culture issues exploded onto the scene, rising to become the No. 1 challenge around the world in our study. 

Really?  If culture and engagement are truly “No. 1,” maybe we should get serious and devote some noodle time to figuring out what they mean in the context of a dealership.  Both terms are so general and vague that we’d have a hard time defining them.  For example, if we asked 100 people on the street to define “culture” and we’d likely get 100 different, and humorous, answers.

Here are some of the things we might hear.   “Culture is what happens inside people-friendly companies like Disney where employees are part of the “cast.”  Or, “Culture is a Silicon Valley tech giant where programmers lounge in hammocks surrounded by beanbag chairs and candy dispenser.”  Answers like these, I’m afraid, miss the mark entirely. 

I’ve been exploring the concept of “culture” for 38 years, and in 2009 I wrote-up my findings in a book titled “Primal Management: Unraveling the Secrets of Human Nature to Drive High Performance.”  I wanted to call it “Managing the Tribe,” but the publisher, the American Management Association, said, “The word 'tribe' doesn’t resonate with a corporate audience.”  Curiously, the top business book of 2009 was titled, “Tribes.”

It is much easier to understand “culture” if we go back to the basics.  Way back!  We don’t think of this often, or ever, but not so long ago human beings lived in small, intimate bands, struggling to survive by hunting and gathering in a harsh ice-age wilderness.  The total population of the planet at that time was around 1 million as opposed to 7.3 billion today.

“Culture,” in the ice-age context, was straightforward and much easier to think about.  “Culture” equated to the tribe’s database of hard-won survival knowledge acquired from centuries of near-death experiences and trial and error experimentation. 

Because of this tribal heritage, our brains are still wired to reward us with powerful feelings of high self esteem when we master the survival skills of our tribe, and punish us with painfully low self esteem, when we let the tribe down.  The brain’s culture mechanism, in other words, has sharp emotional “teeth” to make sure we pay attention.  Maybe this is why half of us will suffer from a mental illness during our lifetimes, because the brain thinks we are ignoring our tribe’s survival priorities.   

This “tribal” definition of culture is hard, not soft, because the culture system protects our survival.  It also helps explain the saying, “Culture eats strategy for lunch.”  A tribe that masters a common survival technology, and deploys it expertly and in a united fashion, can achieve amazing things, like bringing down a Wooly Mammoth.  But a strategy without a motivated tribe to execute it is worthless.

Most modern workplaces, I would argue, don’t qualify as tribes because the people inside don’t really care about one another.  In a real tribe, tribe mates will literally take an arrow for one another.  Sort of like the Marine Corps motto: “No man left behind.”  Modern corporations don’t qualify as intensely-bonded tribes and hence they don’t really have true cultures.  What we call “culture” is often just rules dictated by the boss: “Do this or else.” A true culture is based on the group consensus and defines what the tribe deeply believes in and strives for.

In the modern context “employee engagement” is the term we use to describe tribal behavior and tribal connections.   An engaged employee is like a tribal ally who commits to his/her workmates and will go beyond to call of duty to impress and protect them.

Unfortunately, most dealerships are not populated with allies, but with impersonal “trading partners.”  The motto for a trading partner is, “If you give me money, I will trade you a certain amount of work, but not one bit more.”  In a trading-partner world, “I don’t care about you, and you don’t care about me, so if you disappeared tomorrow, I wouldn’t care.”  Gallup calls these people, “disengaged.”  In the average US company, 51% of employees fall into this category.

On a sales floor flooded with salespeople, the situation is often worse.  Here we often find warring tribes who compete aggressively for customers; almost like gladiatorial combat.  The hapless customer often gets caught in the middle of the melee and ends up disliking the experience.   Gallup has a term for these folks, “actively disengaged.”  These are people who dislike their work experience so much they actually want to harm the business and sabotage their co-workers.  You can think of them as the enemy within.  Here is a disturbing fact, in a typical company, 17% of employees qualify as “actively disengaged.”

Now we can see why consulting firms like Gallup, Deloitte, Kenexa and many others make such a big deal out of culture and engagement, because companies that manage pull it off, and truly connect with their people, excel.  Engagement, for example, has been linked to an ever-increasing list of business benefits, like:

  • improved customer satisfaction,
  • improved strategy execution,
  • better employee retention,
  • higher productivity,
  • increased market share,
  • more innovation, and, for all of the reasons listed above,
  • improved profits.   

Engaged workplaces are simply better at tapping into committment, energy and passion of the workforce. By the way, I call the tribal approach “natural management” because it works with the grain of human nature, not against it.

For retail automotive, creating tribal connections and an authentic culture might make the difference between lagging your competitors and "slaying" them in the marketplace.  An engaged tribe will master and deploy the latest technologies more quickly, and adapt to ever-changing customer expectations and market conditions more efficiently.  Culture and engagement create a powerful competitive advantage because employees have your back.

Since companies are so bad at building “tribal connections” and engaging employees, there ought to be a huge upside for companies that get it right.

This is exactly what I have found.  The business benefits that accrue when people truly commit to the organization, and to each other, have been astonishing.  For example, I helped the largest designer and builder of hospitals and clinics in the US double revenue and triple profits over a 4-year period.  I also helped VCST, an automobile parts manufacturer in Mexico, cut employee turnover from 65% to 15% over a 14-month period.  As a bonus, productivity increased 125%!

In summary, I think every company should become a united tribe because everyone comes out ahead.  Employees win because coming to work, no longer seems like “work.”  Mangers win because everybody gets their jobs done faster, better, and smarter and with a good attitude.  Customers win because they get better goods and services delivered with a smile, and shareholders win because they make much more money. 

I think managers and executives intuitively want to treat employees respectfully and I simply give them permission to do so.  I tell them, “It’s okay to bring your humanity to work, and it’s okay to take a personal, mentoring approach with your people.”  This should make common sense.  After all, if you want your people to knock down walls for you, you had better be prepared do the same for them!

Transitioning to a “natural management” approach is easier than you might think.  Give it a try and then watch how hard your people will work to impress both you, their trusted mentor, and their tribe mates!

What are your thoughts on culture and employee engagement?  Is your dealership full of allies, trading partners, or warring tribes?  Could it benefit from this organic, natural-approach to management?

mark rask
this is so true.....we are trying to roll these concepts out next year
Theron Gammell
We're 15 years into rolling it out. It felt like it was actually taking off after only about 6 or 7 years though. (point being... not an easy or quick process. lol)
Paul Herr
Hi Theron, Yikes, 15 years! It really doesn't have to take that long :) One of the biggest barriers is the fact that feelings and emotions are stealthy and very hard to think and talk about. STEP 1: CONCEPTUAL FRAMEWORK AND LANGUAGE TO DISCUSS MOTIVATION The logical first step, therefore, is to bring them out of the shadows and explain how they work in simple language. I provide a conceptual framework for understanding emotions and a vocabulary for discussing them. This piece, alone, can shorten an employee-engagement initiative by years. In fact, I've seen major improvement in as little as one year. STEP 2: RELATIONSHIP BUILDING Another critical piece to the puzzle is relationship building. There can be no tribe without authentic, caring relationships between the parties. I have had excellent results using a mutual-mentoring process. I randomly pair up everybody in the organization and then teach them a two-step relationship-building process. The paired-up employees first describe their personal life history, their biography. Ideally, this includes both their greatest achievements and biggest disappointments. While one person presents their autobiography, the other one looks for things they have in common and things he/she admires about the other person. They then switch roles. This piece is important because we are not going to invest in someone we don't admire. The pairs then meet weekly to help one-another solve problems. I call this "mutual mentoring." When employees do this for 4 months, the mutual investment creates an enduring emotional connection. The pairs know when the connection is finished, because the other person's successes will start feeling like OUR successes. There is a psychological term for this connection-making process--cathexis. Every new connection created by the mutual-mentoring process is like a wire that allows knowledge and energy to flow to where it is most needed in the organization. I then re-randomize everybody and create another set of relationship "wires" between the human supercomputers. Besides the conceptual model, and relationship building, I have a two-pronged intervention during which I work with management and employees simultaneously. STEP 3: TOP-DOWN LEADERSHIP TRAINING In the top-down part, I train managers on leadership basics; universally-helpful behaviors that should work under any circumstance. I also discuss the five motivational "hot buttons" that drive performance, and how to push these "buttons." I can send you some of these leadership action plans if you want. STEP 4: BOTTOM-UP SELF-MOTIVATION TRAINING The bottom up approach naturally starts with employees. I try to convince them that they are partly responsible for their own motivation. I also survey employees to find out what their pain-points are. I then schedule focus groups to collaboratively rid the workplace of pain points (pain points can be interpersonal, related to inefficient or frustrating processes, caused by poorly-functioning equipment or system, lack of training, coercive policies and rules, and disrespect from management). Once the organization is heading in the tribal direction, it enters the maintenance phase. This phase goes on forever and consists of a short yearly survey to take the temperature of the organization. If pain points are discovered, they are repaired before they affect the bottom line. Does this process look anything like your 15-year engagement initiative? What was the most powerful part of you engagement process? In other words, what worked and what didn't?
Theron Gammell
It sure does. Getting in the right culture took 6 or 7 years before we felt it was really taking off. Part of that was that it was an ownership change. It was a huge culture shock for most of the existing dealership staff. A lot got off the bus over the years, but we do still have quite a few. Probably 25 or more are still here. The 15 year part is the maintenance that you mention. Every time someone who is on the bus moves on or up, retires, etc... and a new person takes their place, it takes a year or two before they truly believe and buy into the culture. We've made mistakes a couple of times hiring directly into management from outside, and that is devastating to the culture. I think we've finally learned to bring people up through the culture at all costs now, though learning the need for that has been painful more than once.Your approach looks proper. We have the management team all regularly meet to collaboratively meet to solve problems even in dissimilar roles. We take quarterly anonymous surveys to measure how we are doing, and every single comment is addressed by the management team. We put the entire company through biannual culture meetings that run about 2 to 3 hours, with the sole purpose of restating our mission, vision, and values, and reaffirming and recommitting to them. Management all regularly takes leadership classes, and reads materials and discusses them as a group. Last quarter we put our entire staff through 7 habits training, to facilitate understanding and collaborative communication. (Franklin Covey) That's no small feat with 6 locations across the city, and 300+ employees. This takes a huge commitment. On the other hand, we started with a single point store and now have 3 OEM dealerships, a Collision center, a used car clearance center, and a standalone service facility next to the largest employer in the city. When everyone was laying off and cutting back during the recession, we didn't lose a single employee. We shared every challenge, and worked as a team to overcome them so that we could keep our team and culture intact. We opened another location DURING the recession. When everyone was chopping, opportunities to grow were easy to come by. When you do build a culture like this, it's very difficult for others to compete with. It takes hard work, trust, and a constant commitment to stick to it. But it makes you a powerhouse...
Paul Herr
Dear Theron, Thanks for sharing your insights and inspirational story. For what it's worth, your organization gets the Primal Management seal of approval for aligning with human nature and creating a united tribe. I love how you pulled together during the economic downturn. Nucor Steel, under the leadership of Ken Iverson, did the same thing during a big downturn in the steel industry. Iverson wrote a marvelous little book about his experiences titled, "Plan Talk, Lessons from a Business Maverick," that is chock full of management wisdom. Iverson said, "When the seas get stormy, you don't throw your shipmates overboard." Instead, Iverson took a 75% pay cut, other executives took a 60% pay cut, and hourly workers took a 25% pay cut. When the downturn was over, Nucor roared back to dominate the US steel industry. By the way, my favorite Ken Iverson quote is: "Managers are not more important than employees, we simply have a different job to do." Iverson's humble and selfless approach was crucial for gaining employee buy-in. Happy Holidays, Paul Herr

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