NAEDA Equipment Dealer
Part 3B: Managing Your Dealership:
The Total Business Success Model™ & SOLUTIONS
By David Spader & John Spader
Most dealerships have plenty of challenges facing them these days. Last month we shared the first part of the Total Business Success Model™ that helps to categorize and make sense of these issues. In a world of rapidly changing environments and increasing complexity, this model enables leaders to break down these multifaceted issues in order to better diagnose what is going on and what actions need to be taken. We summarized these issues last month by breaking them into four quadrants: Q1 - Financial Strength & Profitability, Q2 – Customer Base Loyalty & Growth, Q3 – People Productivity & Morale, and Q4 – Economic Forces & Business Trends. These four areas are the issues that every business must effectively manage. This brings us to the second part of the model: the solutions.
There are ultimately only four types of solutions to any issue in your dealership. Knowing which solution to use will determine whether you resolve the issue or whether it will persist. Learning to use this model will help you prescribe the right solution to address the root cause of the issue instead of just treating the symptoms.
Solution #1: Culture
– A company’s real culture is composed of the actual behaviors and beliefs that drive its actions. Culture influences the way people work together, the way customer service is delivered, and also creates a sense of what we believe and the way we do things. A culture can be healthy or unhealthy or somewhere in-between. Without proactively managing your company’s culture, the beliefs of the individual employees can often drive the actions of your organization and often show up in wide swings in the behaviors of employees, departments, and locations. Culture often becomes a significant issue in mergers when what we believe and the way we do things at one store differs between the way we do things at another store. The culture solution involves creating a strong sense of identity that drives business results. Implemented effectively, it is not a soft solution but one with teeth in which people are either on the bus or encouraged to find another one.
Solution #2: People
– The ability to effectively hire, manage, and coach employees makes up the second solution. It is intimately tied to culture because the actions of people ultimately determine a company’s culture. Every employee that you add to your organization will either strengthen or weaken your culture. Other components of the people solution include a performance management system that effectively develops employees. Lastly, the most important aspect of the people solution is ensuring effective coaching by all managers. This is different than having the capabilities to do the job themselves. It is the ability to teach and develop others to higher performance.
Solution #3: Processes
– Every dealership needs systems and processes to run an efficient business. The challenge here is ensuring that your dealership’s processes are actually helping accomplish more work efficiently. Unfortunately, we see a lot of unnecessary processes and procedures that are created because dealerships have the wrong people in the seats. We’ve noticed that even if you have bad processes, if you put the right people in the job the processes magically get better. However, if you put the wrong person in the job, even the best processes suddenly don’t work anymore. Don’t try to fix a people issue with a process solution. It won’t work!
Solution #4: Strategy
– The last of the four solutions is effective strategy. It’s the ability to scan the external environment and capitalize on market place opportunities. The larger your dealership is the more structured this should become. Most dealerships do not have a clear strategy and do not execute it well. This is often the case because they don’t have people that believe in it (culture), are capable of executing it (people), or have the systems to support its execution (processes). Thus, you can see how successful strategy must take all of these things into consideration for it to work.
Learning to use tools like The Total Business Success Model™ will provide your dealership with a consistent, proven way to better diagnose the issues your dealership faces and which solutions will best address them. You may have a profitability issue but the approach to solve it will primarily be found in a Culture, People, Processes or Strategy solution. Choose wisely!
To learn more about these solutions, you can request the “Managing Forward” article by internationally renowned author Dr. Michael O’Connor by emailing us at email@example.com