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Category Archive: Culture

Lindsey Quinn

NCM Case Study: How Darin Wade Saved Power Ford

Power Ford

When Darin Wade purchased a Ford dealership in Albuquerque, New Mexico, in 2012, there was no question that he was facing a challenge. “Nobody ever says,” he jokes, “‘Hey, our dealership is doing so well that we just want to give you a piece of it!’”

New employees, new challenges

So it wasn’t a big surprise when Wade realized that his new staff had no idea just how poorly they were performing. A big part of it, he clarifies, was the preexisting culture.

“I’m one of those dealers who believes in sharing all of the numbers with my team,” he explains, “because I have found that if you don’t share the numbers, they typically make it up. And they usually don’t make up the numbers in your favor.”

“Sure enough,” Wade adds, “most of the employees that were over here … the numbers weren’t shared with them. So, they had a pretty good idea that they weren’t doing very well, but they didn’t know.”

Quick solutions for a high-performing culture

“There was some lack of training,” Wade says. “So, when my NCM moderator called and thought that our store might need help … well, he knows me, and he was dead-on correct!” Wade made arrangements for Lee Michaelson, one of NCM Associates’ consultants, to evaluate the store and develop an improvement plan.

Michaelson and Wade began working together to address the dealership’s most pressing concerns. (They continue to work together to this day.) And, because the consultant came to the dealership each month, the approach had minimal impact on the overall operation. “This whole concept of bringing a trainer to your store is great because our number one challenge anytime we take people out of our store is that not only do we struggle with production going down, but we also struggle with the expense of getting them somewhere. Especially in Albuquerque, New Mexico: I mean, it’s a plane flight for quite a bit of distance wherever you want to go!”

Get the most from every expert visit

Success takes more than having the consultant onsite, Wade explains. Like any improvement process, consulting requires commitment. Here are Darin Wade’s must-do steps to bring an expert onsite.

  1. Make it mandatory for your team. “You just can’t have any interruptions,” Wade explains. “We know when Lee is coming in, and it breaks down to four hours tops, maybe three. You have to have an environment that’s a locked door deal, and you have to have the rest of your staff able to cover the positions. And it will be three hours very well spent.”
  2. Be there. “The general manager or dealer principal needs to be in the meeting 100% of the time because it shows his people that he’s serious about it.”
  3. Take advantage of goal setting. “NCM’s format is great on goal setting and commitment time,” Wade comments. “Every department head will be asked to do a commitment plan, and write it down. The sheets will be turned into not only the dealer and GM but also to the consultant. And I think the best use of the time is that every 60 days that you do the consulting, we also start with the commitment and did we get there or not? I think if you do that, you’ll grow your store.”

A powerful combination

While Wade was already a long-term NCM 20 Group member, adding consulting to the mix was exactly the right combination to bring Power Ford back to benchmark. “The format for the NCM deal,” he says, “is phenomenal.”

“I think NCM does a good job of recruiting people that have done things before,” he adds. “I mean, Lee Michaelson has run a dealership before. And, when a vendor comes in and speaks the same language and can actually walk the walk, not just talk the talk, people in the retail industry can see into that very quickly.

“When you have a 3rd party who’s validated like that … and saying the same things that you say … it adds another layer of credibility to how you run your business.” And your employees pay attention.

At Power Ford, consulting got the staff quickly up to speed and transformed how management and employees communicated: “Suddenly you’re having business conversations instead of guessing, even at lower levels, whether a department head or even just a manager. It helps them connect the dots between what their daily routines do and how they affect the financial statement and the numbers.”

Laying the foundation for success

About a year after taking ownership, Wade reported to Albuquerque Business First that sales were up 300 percent over the previous year, with car sales up more than 50 percent and trucks up 6 percent.

Four years later, Power Ford continues to be a top-seller in the area. While his new leadership clearly was the driving force behind the dealership’s transformation, Wade is quick to praise his partnership with NCM consultant, Lee Michaelson. “It was our moderator being the catalyst for change. Sometimes the general manager and dealer principal can say it, and everybody understands that. But when it comes from a different source, sometimes that’s the extra thing that’s needed that can help your team realize that they need to … they actually need to do the action in order to get the results.”

See how NCM 20 Groups and in-dealership consulting can help your dealership improve, just like Power Ford.

Permanent link to this article: http://blog.ncm20.com/2017/04/ncm-case-study-how-darin-wade-saved-power-ford/

Adam Robinson

Employee Turnover is Killing Your Dealership

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The auto industry has dealt with a number of changes in recent years, largely in response to new spending habits and expectations of millennials both as consumers and employees. While dealerships have made great strides in connecting with this new generation of consumers, many businesses are still in need of significant improvement to retain their employees. In fact, the employee turnover rate within the industry is currently at an average of 67 percent according to the NADA Dealership Workforce Study, correlating to an industry loss of billions of dollars annually with the average dealership suffering an average of half a million dollars lost each year.

An issue half a decade in the making

This decline in employee retention has been steady since 2011, with the average sales position lasting a little over two years, according to the NADA, compared to nearly four years ago when the study began. Furthermore, data showed that while only 45 percent of dealerships had an average retention rate of three or more years; that number fell to about 33 percent when looking exclusively at those in sales positions. The private sector, by comparison, reported an average of 67 percent retention for the same amount of time.

Not surprisingly, the best-in-class dealerships with the highest revenue and profitability also suffer the lowest turnover rates. What’s more, dealerships across the board seem to be notably lacking at hiring and retaining women, with less than 20 percent of the workforce made up of women in 2015.

Another factor accounting for the loss in dealership employee retention is the changing landscape for consumers. Instead of going into a dealership and meeting with a salesperson when looking for a new car, customers are now spending up to 11 hours researching online and less than four hours inside a dealership speaking with a representative. With significantly fewer trips to a dealership, the salesperson has less of an opportunity to interact with, and push product on, customers. This new lack of negotiation skills, however, provides dealerships with the opportunity to hire a more diverse, and perhaps qualified, pool of candidates.

Retention issues impact sales

The employee retention rates not only cost dealerships a monetary loss in the form of search and training expenses but ultimately result in lost vehicle sales due to inexperienced sales staff and a lack of continuity with customers.

According to AlignMark Corporation, there are four main categories to help employers quantify the expense associated with employee turnover:

  • Separation – unemployment compensation, exit interview costs, etc.
  • Replacement – advertising, pre-employment testing, time, and materials
  • Training – time and effort required to bring new hires up to speed
  • Productivity – lapse in morale and production, as well as low-quality output

How to find the right employees

By 2020, millennials are expected to make up 40 percent of all new-vehicle buyers. Millennials also now form the majority of the workforce and currently account for 60 percent of new dealership hires, making it critical to maintain a focus on retaining this demographic to keep dealership floors stocked with quality salespeople. Millennials, however, dislike the conventional dealership commission-based compensation and instead prefer salaried positions with more steady income and advancement opportunities. This makes it difficult for many dealerships to retain their new hires, requiring those in hiring positions to reevaluate the interview process and hiring strategies altogether.

According to ESI Trends, common mistakes dealerships should avoid during the hiring process include:

  • Hiring quickly out of desperation
  • Hiring someone after just one interview with one person at the dealership
  • Overselling the position’s earning potential
  • Not trying to impress the recruit

Some additional best practices dealerships should consider to boost retention include:

  • Keeping job descriptions updated with the most relevant, accurate information
  • Implementing a business development center to funnel sales leads to salespeople
  • Offering creative compensation in addition to stable base wages
  • Providing a career growth and professional development plan

By switching to more base-waged positions with bonuses, dealerships make room for employees to meet customer needs versus negotiating the best price for the dealership. Dealerships that take things a step further and create a career path for their employees will significantly increase employee retention rates, especially for today’s millennial who places priority on career advancement.

The auto industry has recognized there is a problem in its employee retention and has taken steps to improve retention rates. However, there is still a long way to go in creating the industry culture and offerings to not only attract today’s top talent but to keep them there for the long haul. Until then, employee retention will continue to wage a significant toll on your dealership and the industry as a whole.

Thanks to NCM Associates’ partner, Hireology, for sharing their guidance on attracting and managing millennial employees. Learn more about Hireology and join NCM’s experts for more actionable advice on hiring the best people for your team in our Hiring Top Talent and Success-Driven Pay Plans classes.

Permanent link to this article: http://blog.ncm20.com/2017/04/employee-turnover-is-killing-your-dealership/

Brandiss Drummer

Employee Retention: Why Just Having a Pay Plan Won’t Work

Hispanic businesspeople talking

The automotive industry faces some unique challenges managing people, as evidenced by an average dealership turnover of 40.5%, with some positions, such as sales consultants, reaching up to 67%. Also, over 42% of dealership personnel are classified as millennials, whose turnover rate exceeds the average at 52%. In black and white terms, the average dealership will spend half a million dollars a year in turnover costs.

Retention problems are personal

I’ve heard of many approaches to combat retention issues in automotive. Some dealers recommend defining a career path and creating stability through a pay plan. Others point to providing a work-life balance or empowering people to make their own decisions. While all of these points are valid, I prefer to concentrate on a singular approach: relationship.

There are two reasons why I think all roads lead to relationship building: 1) perks are easy to find, and 2) one-size-fits-all solutions don’t work.

Perks are replaceable

First, let’s look at perks. If we’re honest, even the best benefits package is easily replaced. And there are a lot of businesses out there offering flexible schedules, bonuses, and other benefits. That’s the problem with focusing on material things: Your great employee could jump to the next job as soon as there is a better offer!

Everyone is different

Secondly, focusing on specific items like pay plans or flexible schedules leads to a “one size fits all” solution. But each employee has different ideas of what is important to them. For example, it may be vital to Betty that she works in a job where she gets weekly feedback on her performance. However, for Mark, that may make him feel micro-managed. Mark may prefer to have more autonomy, which makes him feel trusted and important.

Relationship building with each of our employees ensures that we are giving them what they need as individuals. Perks can be replaced, but it’s hard to replace a person you genuinely believe cares about you.

Think about it like a marriage. There is always someone out there who may have just a little bit more in this one area than your spouse, but they can never replace the feeling of someone who knows and loves you, the relationship that you have built with your partner over the years. This is the reason why factors such as “I have a best friend at work” and “my supervisor seems to care about me at work” show up on the Gallup study on positive business outcomes, “First, Break all the Rules.”

Building better relationships

So what can you do today to start building or cementing your relationships with your people?

  1. Recurring, one-on-one meetings. Take this time to get to know your employee. Let them lead the first part of the meeting, and be sure to ask questions about things going on at work, as well as significant events in their personal life. The point is to make them feel comfortable around you so that they will open up and you can get to know them. The key is consistency. Set up recurring meetings in your Outlook calendar and try your best not to cancel or move them. By keeping to the schedule, you will demonstrate their importance to you.
  2. Keep track of personal information for each of your employees. This was a great tip I got from one of my mentors. He kept a memo on his phone of important dates for each employee, such as their birthday, work anniversary, and wedding anniversary. He also stored information he learned in his casual conversations with them, such as favorite food, hobbies, children, interests, etc. This information became very helpful to give personalized gifts, or to help personalize the conversation in their one-on-one meeting.
  3. Be relatable. Relationships are two-sided, and your employees want to know you are human, too. Share things you have going on in your life with your employees, when appropriate. And remember, the old-school way of being the “stoic” manager doesn’t work anymore. It is OK to share concerns or stressors that you have, as long as you do so in a way that still conveys stability and competence.

For the skeptics, I am not entirely idealistic. I know that retention starts with hiring the right person in the first place. I also realize that you can’t win them all and that some factors go beyond a relationship. However, I genuinely believe that when you build a healthy relationship with your employees, the other more tangible factors, such as flexible schedules and professional development, will become more effective. As Simon Sinek says, build a great relationship with your people, and they will believe what you believe. They’ll work for you with their blood, sweat, and tears.

For more information on retention and great leadership, attend our Leadership Program in June.

Permanent link to this article: http://blog.ncm20.com/2017/03/employee-retention-why-just-having-a-pay-plan-wont-work/

Emily Johnson

To Fax or Not to Fax?

Fax vs Bike

After four years’ experience as an NCM client services and meeting coordinator, I’ve become a strong advocate of “out with the old, in with the new.” While I don’t consider myself a millennial, I am firmly planted somewhere between the generations currently active in the workforce. This position allows me to appreciate the ways of my predecessors, while also eagerly staying on the lookout for new and exciting improvements to technology, business practices, and social strategies.

It then comes as no surprise that I have some opinions about the fax machine and the role it plays in the modern workplace. And here’s my position: If you haven’t already, now is a good time to begin phasing out your company fax machine.

Lost in translation

Coordinators request specific information from clients for their 20 Group meetings, and that information frequently gets lost in translation when the fax is utilized, simply because of the technology.

The biggest issue is that faxed documents are usually handwritten in some capacity. Once these documents pass through dated machinery, over phone lines, and print out on the other side, they often end up a blurry, illegible mess. As a result, clients spend valuable time corresponding with coordinators to confirm faxed data, something that could have been avoided by using a typed, legible email.

The story of Joe

One coordinator—let’s call her Megan—shared a story with me about a client—we’ll call him Joe—whose meeting was derailed because of the fax machine. (Just to be clear, I’ve changed the names to protect the innocent!)

Joe thought he had faxed his 20 Group meeting registration form to Megan but had instead “faxed” it to Megan’s phone number. Megan hadn’t even included a fax number on the meeting registration form! Joe received a reminder email from Megan and didn’t see his name on the meeting attendance roster. He immediately called Megan and was very upset because he had faxed his forms, but wasn’t on the list. He thought he had done what he needed to do, but Megan had no idea Joe was even planning on attending the meeting.

To make matters worse, Joe had to book a room at a nearby hotel, not the hotel where the meeting was held. By the time Megan realized he needed a room, the hotel was completely sold out, and the group’s block of hotel rooms was full. This cost Joe valuable time and additional money, all because a fax was sent but never received.

Need for speed

NCM gets its faxes on a machine that integrates faxing, printing, and copying. So, how does this affect our ability to get your faxes? When you send a fax, it gets mixed in with all the other materials in this machine’s output tray. It’s not unusual for faxes to be temporarily misplaced, and it’s common that a fax never reaches the coordinator.

If a coordinator knows about a fax, she can go searching for it, but if she doesn’t, it could be a while before she receives the fax in hand (or never receives it, like Megan). In comparison, an email arrives in the coordinator’s inbox in an instant, and she can respond immediately. The speed of delivery is increased dramatically. Even if you choose not to switch to a scanned document or PDF file, I highly recommend that you at least email your coordinator every time you send a fax so she can watch for it.

Be sure to look for emailed reservation forms and other documents from your coordinator. Scan and email those forms back to NCM, or fax them (to a verified fax number–don’t be like Joe) and immediately call your coordinator to let her know to watch for it. If your document includes sensitive information, like a credit card number, go ahead and call NCM to give it to us over the phone. Or, for a safer email option, check out this free system for sending secure emails that’s been hailed in Forbes as the most difficult to “hack.”

Overall, when you switch to email, your NCM coordinator will be able to help you faster, enter your data more accurately, and provide a better customer experience. And you won’t end up at La Quinta instead of the Four Seasons, taking an Uber to your meeting like Joe.

Permanent link to this article: http://blog.ncm20.com/2017/03/to-fax-or-not-to-fax/

Adam Robinson

Dealership Culture: 3 Ways to Create a More Modern Workplace

business team winning a trophy

The need to foster a robust and positive company culture has gone from a “nice-to-have” to a “must-have” as millennials become the majority of the U.S. workforce. Retail automotive dealerships must evaluate their workforce culture to ensure they not only attract, but also retain, today’s most qualified talent.

By offering an environment that contains the benefits, flexibility, and career structure important to the millennial demographic, companies will create a better place to work and improve job satisfaction resulting in higher productivity and higher sales.

Shaping existing culture with a more modern approach is a growing trend implemented by some of the top dealerships today, and most others can easily follow suit.

Here are three ways to get started:

1. Involve the Leadership Team

Millennial employees are not interested in office politics and the traditional “rat race,” but rather want to be part of an energizing work environment where they feel like they matter. They want to feel like management is honest about what is expected to be accomplished by them and where they stand, at all times. Leaders should maintain transparency to prevent employees from feeling like they are being kept out of the loop because employees will quickly lose trust in management. Leaders should also consistently and concisely convey expectations and ensure that their vision is known and shared by all.

Employees want to get to know who their bosses are as real people, and there are many ways leaders can step out from behind their titles. For example, Audi Des Moines holds monthly barbeque lunches where employees have a chance to interact on a more personal level and cultivate relationships, as well as several sponsored events such as bowling nights and baseball or hockey games.

Today’s leaders are encouraged to facilitate an engaged team, promoting dialogue but not controlling the conversation. Employees should be allowed to show passion for their job, by being invited to step outside their traditional roles and explore other responsibilities within the company, trusting in their leaders along the way.

2. Provide Recognition and Resonate with Ideals

Studies show that out of the top perks employees appreciate from their workplace, half appreciate more employee recognition, a higher percentage than those who say they’d prefer cash incentives. A company providing substantial recognition and rewards to its staff will provide top talent with an incentive to stay and remain highly productive.

Companies must not only provide meaningful feedback to employees but should do so in a timely manner. Employees report a 20 percent increase in work satisfaction after receiving feedback. When feedback was delayed, however, it increased employee suspicion, making them nervous and less productive. Gone are the days when annual reviews were the bulk of management face-time, replaced by a constant stream of engagement.

Feedback can include non-financial incentives and personalized employee rewards. For example, Capitol Subaru of Salem recognizes an employee of the month from multiple departments, providing them with recognition at the company meeting, dinner certificates, a wall plaque, and entry into an Employee of the Year program for cash and other prizes. Not only does this make the employee feel appreciated in between periods of promotion, it strengthens the relationship between managers and employees—and studies show workers are loyal to their managers more than they are to the company.

Millennials want to work for a company that aligns with their values and ideals, and they appreciate a company who talks the talk and genuinely walks the walk. For example, if your dealership claims to support a local charity or organization, employees want to see how the company plans to make a difference in the space. Will they host a fundraiser, volunteer, or donate money? At Capitol Chevrolet-Cadillac of Salem, employees are provided with eight hours of paid time off to spend volunteering in the community. As part of Yark Subaru’s partnerships with local animal shelters, the company pays half the adoption fees for any animal adopted by an employee.

3. Employ a Casual Dress Code

When employees feel comfortable, they project those positive feelings onto customers. In the auto industry, a positive experience can help instill the confidence needed in potential buyers for what will be one of the biggest purchases of their lives. Allowing employees to dress casually on the sales floor is not only beneficial to their moods but also can help them be more productive. For example, if an employee must wear a suit and take customers outside in 90-degree days to show cars, the heat may cause them to show customers fewer cars than they would if they were comfortable enough to be outside for longer periods of time.

By taking into consideration the needs of today’s employees and altering the company environment in small but meaningful ways, employees will feel a deeper connection to your organization, resulting in increased loyalty and higher productivity.

Thanks to NCM Associates’ partner, Hireology, for sharing their guidance on managing millennial employees. Learn more about Hireology and join NCM’s experts for more actionable advice on hiring the best people for your team in our Hiring Top Talent and Success-Driven Pay Plans classes.

Permanent link to this article: http://blog.ncm20.com/2017/02/dealership-culture-3-ways-to-create-a-more-modern-workplace/

Jeff Lampton

We Learn Our Bad Habits in the Good Times

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Since the great recession, new vehicle annual sales had a steady increase, climbing from 10.4 million units in 2009 to 17.4 million units to finish 2015. The seasonally adjusted annual rate (SAAR) peaked at 18.2 million units in September 2015, plateauing at that number for the fourth quarter of 2015. Since then, the industry has experienced a steady decline in the SAAR for September 2016 finishing at 16.9 million units.

Good times, relaxed practices

Year-over-year new vehicle sales increases have allowed us to let down our guard. Dealers have been afforded the opportunity to relax their attention concerning their expense structure, and have done so. But relaxed standards come with a steep cost: they become our bad habits.

Sales-to-expense formula

Now is the time to refocus, review and “remember, remember” 2008: People are a dealer’s biggest expense on the income statement, but they are also your biggest asset! Utilize your people as a resource to identify opportunities to reduce expenses.

Keep this simple formula in mind:

form1

Here’s an example. The average NCM member (all brands) is at 3% net to sales. If a dealer has an increase of a $100, it requires a sale of $3,333 to compensate for it.  Conversely, saving $100 in an expense is the same as making a $3,333 sale.

Form2

Create a culture of expense awareness

table

Click to enlarge. Small changes in expenses have a surprisingly large effect on your budget. Always be mindful of how much more you need to sell to offset increased costs.

Understanding this equation is important.  Sharing it to educate your people is more important.  This is a number that is surprising and eye opening for most employees; it will have an impact on them.

Everyone can affect expense change. Employees who are not in income producing positions may feel they can’t change the bottom line, but they can. Those who are in sales positions can identify efficiencies as well and still keep their focus on selling. Solicit and encourage all employees to share their observations, ideas and suggestions. Recognize and reward for ideas that reduce an expense or gain a process efficiency that the dealership implements.

If it has been awhile since you had a meeting with your managers to review current vendors and bills, now is the time! (Check out what can happen when you let expenses go unmonitored.) Sit down and walk through each and every bill. A detailed list of expenses and vendors provided by your accounts payable person can be used as a source document for the meeting. Providing your managers this information for their review in advance of the meeting will help facilitate the discussion. In lieu of this, simply take the stack of payables checks to be signed to the meeting, Sign the checks during the meeting after one of your managers approves the payable. (If you need a tool to help you better manage expenses, I recommend that you take a look at LiveAudit®.)

If you’re an NCM 20 Group member, take a look at the library of ideas you and your peers have presented at other meetings. This is a great resource, and one section of the library is devoted to and collects expense saving ideas. Log into the Members’ Portal to access your library.

Here are the key takeaways. People are all dealers’ biggest asset, use them! We learn our bad habits in the good times. Don’t forget 2008! The little things do matter! Now is the time!

How do you control your dealership’s expenses? Share below. Learn more about Jeff Lampton and how his NCM colleagues can help your dealership through 20 Groups and in-dealership consulting

 

Permanent link to this article: http://blog.ncm20.com/2016/10/we-learn-our-bad-habits-in-the-good-times/

Paul Faletti

Three Ways to Build an Innovative Culture

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Our offices are abuzz with excitement about the upcoming convention this April. We’re finalizing travel plans. (If you still need help, just contact our Travel Solutions office and they’ll take care of you. Tell them that Paul sent you.) Our experts are putting the last touches on their product demos and workshops. And the Marketing team is rounding the corner to the finish line.

In other words, things are busy.

Even with the rush to get everything done, preparing for the event has given me a few precious moments to reflect about NCM Associates and how our tradition of innovation has created a dynamic, versatile company. It’s a model, I think, that any business can follow … and creativity can mean the difference between success and failure.

When you stop creating, you stop growing.

The digital era is defined by innovation. The internet offers us unusual opportunities to disrupt traditional business models and communicate directly to consumers. This is great for companies like Airbnb, but I think it’s more challenging for an established, mature industry like automotive to find its way—especially when so many of the new models are dedicated to dismantling the old ways.

Trust me, we get it. NCM Associates is nearly 70 years old, and our primary service, the automotive 20 Group, was invented shortly after World War II in 1947. That’s a very mature product. So, let me share the secret to our success.

Innovation isn’t a thing; it’s a culture.

You can’t just demand that people innovate. Instead, you have to build a business—and, yes, a dealership—culture that encourages people to do more than the everyday. You also have to show employees that new and unusual ideas aren’t just tolerated, but welcomed.

Here are three of the ways we make this culture happen.

1) Let’s do this: Get everyone invested. NCM Associates is a 100 percent employee-owned Employee Stock Ownership Plan (ESOP). Each and every individual in our company has a personal investment in our organization’s growth and performance. They feel the impact, every year, when our business is valuated. This approach means that we all work together to propel the company forward.

Now, not every company is an ESOP. (But I encourage you to learn more about them). However, I challenge you to think of ways you can encourage your employees to feel a strong and deep-rooted commitment to your business. Consider events that encourage camaraderie and collaboration. And, if all else fails, performance-based bonuses are a tried-and-true motivation method.

At NCM, we like to focus on teamwork as a motivator. Each of our associates has this little sign on their desks:

letsdothis

“Let’s do this” is important to me. I’d like to take credit for the statement, but I didn’t invent it. (Sadly, I also can’t recall where I first read about it, so if you know the source, please comment below!) Another writer, Matt Frye, has a great explanation of what it means.

To me, “Let’s do this” is a good reminder that successful businesses are the result of every person working together as a team to achieve a particular goal. The more creatively we can accomplish this, the better.

2) Share your knowledge. The cornerstone of NCM’s business is information and experience. We require that all our moderators, consultants and instructors come from a solid background with many years spent at the dealership. And we have the best minds aggregating member information to create the best benchmark data in the industry.

Even though we keep lots of things private, the true value in knowledge comes when you share it. Our experts travel throughout North America to present their knowledge at conferences and workshops, and many of them write thoughtful articles for this blog.

We’ve recently launched our NCM Fundamentals whitepaper series, which includes insights our clients have used to successfully address many problems commonly encountered in the dealership. More books are in production, because we believe it’s important to give everyone an opportunity to improve their business and create an accountability culture. If you’d like one, sign up for one of our product demos or mini-workshops we’re hosting at the NADA Conference. Every attendee will receive a complimentary printed copy.

Capture

Now, few dealerships have the resources to write whitepapers. But there are lots of ways you can share information. Encourage team members to discuss new ideas during daily roundups. Support training for your employees, and offer a monthly book club that encourages them to better their personal and professional lives. (And, please, supply the books!) Consider writing an article for one of many industry publications and, if you have a team member you plan to groom for management, encourage them to write about and share their successes with others.

And, speaking of knowledge sharing, no community has done a better job of collaborating than 3D-printers. That’s why we’re so excited to announce that NCM has partnered with Ultimaker, a 3D printer developer and manufacturer, to offer a complimentary 3D-printed business card holder or moveable car for visitors!

Stop by booth #3013C to pick one out and see the 3D printers work. Here’s a sneak peek of what you’ll see:

3) Take risks. Have you heard about NCM axcessa®?  I remember the day I signed the papers establishing a partnership between NCM and ReverseRisk, the developers.

There was no question that the product was remarkable, but I certainly didn’t know how the market would react to this innovation. While NCM axcessa offered an entirely new level of transparency and accountability for dealers, it would require a significant change in dealership culture to be the most effective. Would people be willing to do that?

A few years later, here we are! NCM axcessa has exceeded all our expectations, and we’re proud of giving our clients such a useful software solution for managing their operational and financial needs. In 2016, NCM will be launching the NCM LiveAudit® dealership payables monitoring platform that allows you to dive deep into your payables activities to watch for unexpected expenditures and fraud, as well as manage recurring contracts. You can test it out at our booth at NADA, too.

How can you take risks as a dealer? Remember my suggestion to encourage idea sharing during meetings. Invest in one of them. Try a new marketing strategy. Offer a new promotion. Whatever the idea, make a small investment in testing it and see what happens. The results may surprise you, and your willingness to try something new—even if it fails—may drive the next big thing in your business.

Ready to innovate? Come see our creativity at Booth #3013C this April in Las Vegas. We hope to see you there.

Permanent link to this article: http://blog.ncm20.com/2016/03/three-ways-to-build-and-innovative-culture/

George Gowen

Who’s your dealership’s MVP? The answer may surprise you.

Auto Mechanic

Take a look at what department affects your business the most. I know— “Nothing happens until a car is sold!”—is the answer heard the most. But what department has the most contact with your customers? Where is the opportunity to create customers for life? And which department displays your culture to your customers most often?

So who is the MVP? I’ll give you a hint: It’s not in sales.

The average salesperson sells 10-15 units a month, while a service advisor sells service to 15 customers EACH DAY! Now consider the relationship of sales dollars to gross profit dollars: Who can create 70% or more gross to sales from an inventory that has no holding costs?

Customer retention happens in the service department

Now, let’s look at the one position in your business that’s most influential in building loyal customers. A salesperson’s ability to retain that customer cannot be discounted, but often, little to no effort is made to improve retention. And there’s certainly little done on a daily basis. The service advisor, however, can make or break your relationship with the customer dozens of times each day.

Create an outstanding service culture

What people within your organization have the most opportunities to create “WOW” moments? Who displays the culture of your store to the most customers daily? Who creates the most “customers for life”? So where should you focus your training, coaching and motivating? That 80/20 rule comes into play here.

Go spend time in the service drive and see who wins your MVP!

What do you think—is customer retention made or broken in the service department? What strategies have you implemented to make the most of this relationship with the customer? 

Permanent link to this article: http://blog.ncm20.com/2015/12/8089/

Dave Anderson

Building a High Performance Culture (Part 22)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

books

Words That Work: Hunger

In this post on building a high performance culture I’m adding the word “hunger” to the “words that work” category. Hungry cultures are those that regularly change, risk, and stretch—even while things are going well and all the seas appear calm.

I’ll dig deeper into hunger below; but first, quickly review the strong and weak cultural words below so you can conceptualize the ideal culture to move your organization towards, as well as what you must weed out of your culture in order to maximize your organization’s potential.

Words that work and must be woven into culture

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Wise: having or showing good judgement.

Diligent: giving constant effort to accomplish something.

Words that hurt and must be weeded out of culture

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about (as opposed to being committed).

Foolish: lacking good sense or judgment.

Micromanage: to control with excessive attention to minor details.

Hunger is defined as an intense desire, a compelling craving. 

Note that the definition isn’t limited to merely a “desire or a craving;” intense and compelling are the keys. If something is intense and compelling it moves you, which brings up the key point to this post: you can’t have a hungry culture without hungry people at all levels moving it forward. The challenge is that while you can motivate people—stoke embers that already exist—you cannot make someone hungry by putting the embers of desire within them. Thus, your team members must bring hunger to the table; they must give you something to work with. Hungry people normally have the following traits that make them easier to identify during an interview, or to evaluate the people already within your culture:

  1. Hungry people have compelling reasons—their “why”—that drives them to excel. Their why may include a range of motivations from buying a nicer car, moving into a bigger home, sending their kids to a private school, helping a sick parent, making a difference in the lives of others, to supporting orphans. People tend to lose their way when they lose their why, and wind up going through the motions as they miss their potential by a mile.

One purpose of an interview is determine just how specific and compelling a job candidate’s why is. This will give keen insight into how self-motivated you can expect them to be.

  1. Hungry people are rarely stuck in their ways. They change before they have to, enjoy learning and sharing new things, and would rather take a mature risk than defend a safe status quo.
  1. Hungry people want new responsibilities. They want an opportunity to learn and grow and to expand their skills. They also want increased latitude and discretion to make decisions without having to always check with a higher-up.
  1. Hungry people are more prone to seek out feedback. They know they need fast, honest, specific feedback to grow.
  1. Hungry people don’t need as many pep talks. Of course like anyone they appreciate pats on the back, but aren’t dependent on them in order to stay motivated and work hard to reach their goals.

Final note: A culture is in big trouble when the leaders have let complacency nudge out their hunger and begin leading more from the rear, than from the trenches; maintaining, presiding and administering but not having a stretch impact on the team. Frankly, lethargic leaders create lethargic cultures. Hungry leaders build hungry cultures, and more naturally attract those with the like levels of internal motivation necessary to build a great organization.

Permanent link to this article: http://blog.ncm20.com/2015/10/building-a-high-performance-culture-part-22/

Rick Wegley

Wagging the Dog: Don’t let a 5% problem ruin everything

Over the last several years, I’ve visited hundreds of dealerships. And, while performing operational assessments, I discovered that the majority of the headaches plaguing the culture and profitability of my clients were self-inflicted.

The problem with too much regulation

Intending to control unique and infrequent variables—and keep them from disrupting their daily routine—I found managers who kept adding steps and reducing employee empowerment. They chose this approach in lieu of defining the structure of the fundamental process, then documenting and training employees on it.

You can map out only so many scenarios. No matter what, unpredictable and uncontrollable variables will appear in nearly every customer service or sales environment.

Ultimately, managers created hurdles that made their jobs easier. But these limitations severely curtailed their employees’ ability to meet objectives and take care of customers. Most importantly, they completely changed their overall process in an attempt to manage the 5% of unique variables we call exceptions within their business model—and, in doing so, negatively impacted the 95% majority of the customers. Worse, they even created culture problems within the store!

Variables are unavoidable

So many processes changed. And, yet, these managers still were unable to avoid the unpredictable and uncontrollable variables that come with doing business.

By trying to control everything, most created new problems along the way. Now, they spend an inordinate amount of time and resources trying to manage a department with ineffective processes for handling the majority of their day to day operations.

Employee morale is low. Customer satisfaction suffers. And the department isn’t meeting its objectives. There’s pressure from above to “right the ship,” and these managers are unable to identify the root cause of a growing problem.

Manage by the RIGHT numbers

You should definitely manage by the numbers, but make sure you’re using the right ones.

Take a good look at your current structure and re-evaluate your current processes— simplify wherever possible. Involve your employees. And solicit feedback from both them and your customers on what is working well and what they feel needs improvement.

Once you have simplified and streamlined your processes, put them in writing. Hold meetings with all of your employees and make sure they all understand the revised processes. Provide the necessary training and resources for employee success. Definitely let them know what the empowerment guidelines are and the accountability aspect for each individual role. And clearly explain the minimum acceptable standards for performance.

Don’t forget the “why” part of this equation when discussing any changes with your employees. Discuss some contingency plans you have considered for the exceptions, and then review the empowerment tools that you have provided for them to use. Give examples of how and when they should be used.

The 5% goal

Manage 95% of your business by process, and then manage the 5% of exceptions. Once a clearly structured business model is in place, a manager should need no more than 5% of their time managing unpredictable and infrequent variables. This ideal state requires simple, defined processes (in writing) to manage the majority of predictable and measurable daily activities that contribute to profitability and customer satisfaction.

Is the tail wagging the dog at your store? If so, take a good look at your current structure and re-evaluate your processes. Chances are 95% of your problems are self-inflicted.

Tell us how you manage exceptions in your business? Is it a 95/5 mix or something different? Comment below with details. 

Permanent link to this article: http://blog.ncm20.com/2015/09/wagging-the-dog-dont-let-a-5-problem-ruin-everything/

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