Looking back 15 years ago at my role as General Manager, I would approach everything differently. Some time ago, I thought that going into the dealership and restructuring everything from day one was the way to go. But as you learn invaluable lessons from experience, you realize that not everything needs to be changed day one. In fact, it’s best to observe every facet of the dealership looking for ways to build on the current team in place. If I could go back in time, in my DeLorean Time Machine of course, here is what I would tell myself….
As a new GM, taking over a dealership, you think the first priority is to cut all expenses and vendors to get a fresh start. Because – without fully understanding the statement – you believe that cutting everything leads to an immediate increase in profit! Even better, you think that tying the dealership’s training to your manager’s pay plans from the get-go will make it work. Thinking it must work because it’s the coin machine mentality, no? The more coins you put in your managers, the harder they’ll work to train the teams! But what you didn’t think about were the unintended consequences from your immediate response. That is the breaking down of your dealership’s morale by creating too much change at once, cutting successful vendors, or, more importantly, understanding why the dealer hired the vendors in the first place, and worse – thinking that your sales managers can train the staff. You see, making these bold moves without a new plan or understanding why they hired them (or what the vendors contributed) or taking the time to understand if your sales managers are even qualified to train, you just blew everything up. Granted, not always a bad thing, but definitely not always a good thing either and the manner in which you go about it, with no knowledge, no data and only based on the input of those that don’t truly understand the specifics themselves is a definite receipt for disaster. But now you have to ask yourself what the plan is? How are you going to connect the dots again? And more importantly, how do you make training a priority or work with untrained managers who are somehow responsible for training now that you’ve blown everything up?
Perhaps you made these changes with the vendors because you had a go-to list you’ve known for some time or were comfortable with. Maybe you even trusted those vendors more so than working with anyone else. And perhaps you assumed that your sales managers – for simply being in the role – were capable of training. But the problem with this mentality is that you don’t have all the answers yet. And you haven’t taken the time to get to know the department heads, sales managers, or those that made these decisions. Before you can dismantle the dealership’s infrastructure – no matter how broken it is – the first step is getting a list together of all the vendors the dealership uses. The next step is getting ROI reporting (year over year if possible) together, training programs (not just the OEM), onboarding processes, and a list of all the tasks your department heads and sales managers do daily. And, more importantly, what they believe their roles mean. It’s your job as the GM to understand what their priorities are on the dealer level – understanding what they contribute to the dealership, how training & onboarding have been approached, and, more importantly, how they work with the vendors. An internal SWOT analysis is critical and if one manager is using CRM and another is using Excel, you have a manager problem, not a CRM problem. Translation: don’t change CRM’s – pay for the onsite CRM training and fast, get everyone on the same page, set clear expectations and then inspect what you expect. Think on this, if half the desk is using CRM then half your reporting is accurate. So, you fire your ad agency for bad results but the results really weren’t bad, it was bad management…. Total units sold is still based on the ad agency that’s doing a fine job, you just don’t know it. Nor can you communicate it and that’s what got the last guy fired.
But let’s take a step back since you decided it was best to dissolve all the current vendor relationships – without understanding your department heads roles – you’ve unintentionally created a large gap. One that can create chaos and dissension, which isn’t something you can afford to do ever, let alone as a new GM. As the GM, you have to create a culture that enables your managers to lead with you supporting them. Leading by example as you – the GM – have built a master plan which sets the overall strategic direction and thus incorporates all moving pieces among all departments working together in harmony. A plan that would have managed one of the chaotic gaps you unintentionally created by dissolving everything without a plan. You know what that is? It’s training. You see, if you’ve prematurely cut all of the vendors, which could be related to any of the processes followed on the dealer level, you’ve just left your sales managers in the dark, not entirely sure what the process is for training or vendors. Now, you have untrained sales managers whose pay plans are tied to training – without a plan or strategy in place where they’re left asking themselves what training looks like? You see, perhaps they didn’t have a reliable process or training programs in place, but the fact is they had “something.” Had you taken the time to observe that “something” objectively, it could have enabled you to build on it, and more importantly, restructure that “something” aligning the task with the talent. Also known as hiring a training company! And no, objectively looking at that “something” is not simply making a sales consultant a manager or vice versa – regardless if that role was promised to them by previous management, either (another trap, by the way). Clean up is almost always required and expected, that’s why you’re there, that’s why the other guy isn’t. But, just because someone “isn’t happy with the inventory management solution” currently in place doesn’t mean they need to be fired. It means you, as the new GM, needs to understand why and then should talk with the inventory management vendor yourself and figure out what the real story is. And then, guess what? Schedule training on it and sit in on that training yourself. This reminds me of a scene from a movie, a cockpit from a plane is taken over from the bad guy and the good guy says “here are your new coordinates, don’t try anything, I’m also a pilot!” If you have a cursory knowledge of the system you’re asking your team to use, if you sat in on the training yourself, it makes shenanigans increasingly difficult if not virtually impossible! They are, after all, human nature.
Back to cutting costs, take phone training, sales training, name it. You listened to your “gut,” and instead of working with that “something,” you decided you’d make your untrained sales managers the “trainers” for the dealership. This perhaps wasn’t your best move. And not because you meant to do more damage, or had ill intentions either. You didn’t know, it was the “norm.” Looking back, though, did you take the time to ask yourself and think how untrained sales managers – who can barely keep up with their current roles – can train new hires (especially considering the turnover) or train your current sales consultants? Did you think that all the department heads knew what to do themselves? One uses CRM, another uses Excel. You may even have one using a legal pad….
Wait, that’s right. You didn’t take the time to get to know your managers. Understanding what their strengths and weaknesses are. You looked at the bottom line already excited that you “cut” expenses, having tied the new pay plans to training, led by your untrained sales managers. But had you asked yourself if the sales managers collectively earned their respective positions by excelling in that area by keeping up with the vast situational curve balls thrown in an ever-changing market or, more importantly, if they were qualified to train, capable of structuring a program to gauge academic retention monitoring their performance, you might’ve had a different perspective.
As hard as it is to swallow your pride, you have to get over what you think you know – calm down, and actually dig into where the real opportunity is, and spend a few hours reflecting on your role. Understanding the gravity of the decisions you’ve made or are going to make. This means not going into the dealership on day one and cutting everything, or deciding that your untrained sales managers are going to “train” because you’ve tied their pay plans to the dealer’s success. What if you had taken the time (on day one) to deep dive by watching their process, how sales are happening, how departments interact amongst each other, talking with everyone, the office manager, porters, receptionist, and the warranty administrator. Take a minute to have a conversation with every department. Understand the role from their perspective, what does their role mean to them? Do they know how the role affects the other departments?
Once you have a solid understanding of the above, then it’s time to review your detailed expense report, your payroll summary, your last 30 days of MIS’ for trends and ultimately your statement which brings it all together and look for overlap, similar vendors, you can’t cut your way to a profit, and you can’t save your way to being wealthy. They’re both part of an extensive plan that has many moving parts. And don’t expect a huge bonus check on month one, not even on month two. If it was that easy, they wouldn’t need you.
To be a successful GM, half your day needs to be in the action and customer-facing to see what’s really happening, and half your day needs to be locked in your office deep-diving on what exactly went wrong and where. ABP: Always Be Prospecting, ABC: Always Be Closing and ABH Always Be Hiring, most of your time is spent with ABC. What about the other two? Managers should handle ABP but you should really focus on ABH and keeping a solid pipeline of talent is critical. You know the national average for turnover in retail, automotive retail is even higher.
Imagine having taken the time to understand the dealership’s infrastructure, the managers, training, vendors, and all other employees before making any massive changes? You’d have a much stronger foundation, one that will enable you to grow and evolve as your managers learn to lead, and not just “manage” by checking off the boxes. And more importantly, you’d have a “trained” team – training is half the battle to continued success. You cannot run a successful dealership with a broken, chaotic, “un-trained” team being “trained” by “untrained” sales managers. It doesn’t even sound right.
And if there is one thing to take away from this, firing every vendor and having your people do everything themselves is NOT it! That’s about as brilliant as firing your entire staff and doing everything yourself…. Yeah, remember that one? Epic story for cocktail parties now but thinking back, that was a complete and utter mistake and probably one of the worst decisions you ever made. You can take heed in this, or you can learn this the hard way and go back and redo it month after month and cost yourself a ton money.
Okay, hopping in my DeLorean and going back to the future….
Originally posted on Dealer Refresh, September 23, 2020