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“What is your biggest single challenge?”
This was the question we asked the attending dealership executives and department managers at the beginning of each of our NCM Institute classes. Although it may not quite have come out of their mouths this way, the answer we consistently heard was, “Managing change!” I'm sure you’ve heard this theme over and over: the automotive retail world we work in today is in continual flux, requiring continual adaptation and an unprecedented acceptance of change.
"How do I increase my traffic count by better promoting my dealership and my vehicles on the Internet?” (What she was really saying was, “The Internet has changed my business. How do I need to change, in response?”)
“I don’t know how to motivate and manage the younger employees coming into our business…they seem to have a different work ethic!” (What he was really saying was, “The Gen X and Gen Y employees are different? How do I need to change my management style to become an effective leader of these younger employees?”)
“I’ve always been focused on maximizing my $PVR. Now I’m told that my focus should be on my ‘Price-to-Sale Gap,’ and we’re having difficulty adjusting to this concept.” (What he was really saying was, “The price transparency on the Internet has changed the way we need to price our vehicles and manage gross. I am (and my salespeople, also are) having difficulty adapting to this.”)
Shifting the center of my career from dealership operations consulting to dealership management training significantly altered the way I looked at change management. When I was regularly visiting a client dealership, rolling up my sleeves, and working side-by-side with the management staff to improve the store’s culture, processes, and accountability, I never got too wrapped up in the challenges of implementing and executing change. I was an active, visible part of the change initiative. It was easy for me to say to the dealer, GM, or involved department manager, “Don’t worry about it! WE will make it happen!” That seemed to make everyone pretty comfortable.
In the NCM Institute teaching environment, one of the mantras under which the faculty guides the students is, “Identify, recognize, and admit what needs to change at your dealership, and develop an action plan for implementing that change, and, most importantly, execute your action plan!” As I’m sure you suspect, this is easier said than done. Typically, the NCMi faculty members face one of two scenarios:
The participating manager identifies, recognizes, and admits what needs to change, but has no real understanding of change management and is very uncomfortable about how to develop, implement, and/or execute an action plan for change. (After all, he/she doesn’t have Garry House, or another NCM Retail Operations Consultant to hold his hand!)
The participating manager is a bold, visionary leader who has the confidence to take his dealership (or department) in exciting new directions. But confidence can balloon into overconfidence (which seems to be an affliction many “car guys” suffer), and unless the student has a sound understanding of change management (which most don’t), this student will have difficulty executing his change vision.
Achieving and maintaining strategic momentum through change is a challenge that confronts a dealership organization and its leaders every day. Change management fails far more often than it succeeds in the retail automobile industry. I will address this challenge below.
In early 2014 I facilitated a training workshop titled Leading Your Dealership Team to Success. Although the attendee evaluations of the training were very positive, I know that, at the conclusion of the class, several of the participants were asking themselves, “How do I embed the principles that I’ve learned into the culture of my dealership?” After 25+ years of training and consulting experience, I know that what they were really saying was, “How do I manage the changes that I know are necessary at my store(s)?” And to be clear, these necessary changes did not relate to the handling of routine problems and issues that arise at almost every dealership; the required changes that these senior managers recognized (and admitted the need for) involved significant alterations in the way their front-line managers and employees must behave in the future.
When the NCM Training & Consulting Division (now renamed the NCM Retail Operations Division) was formed in 1994, we knew that there were three primary questions that our new NCM team needed to answer when engaged by a client-dealer.…1) What needs to change? 2) How does it need to change? 3) How do we manage that change?
And the hardest question was the last one…”How do we manage the required change?” To assist in responding to this question, we “borrowed” some of the strategies recommended by Dr. John Kotter, in his book, Leading Change:
Establishing a Sense of Urgency – If there is already a true urgency, your work is done. If there is not a real urgency, you need to create one. (“If the dealership is not already burning, start a fire!”)
Creating a Guiding Coalition - Assemble a group with enough power to lead the change effort, and encourage the group to work as a team,
Developing a Change Vision and Strategy - Effective visions have six key characteristics, They are:
Imaginable: They convey a clear picture of what the future will look like.
Desirable: They appeal to the long-term interest of employees, customers, owners, and others who have a stake in the enterprise.
Feasible: They contain realistic and attainable goals.
Focused: They are clear enough to provide guidance in decision making.
Flexible: They allow individual initiative and alternative responses in light of changing conditions.
Communicable: They are easy to communicate and can be explained quickly.
Communicating the Vision for Buy-In - Use every vehicle possible to communicate the new vision and strategies, and teach new behaviors by the example set by the Guiding Coalition. Focus your efforts on getting Buy-In from the Top 75% of your employee body. You’ll rarely convert the Bottom 25% to understanding, or agreeing to, the needed changes.
Generating and Celebrating Short-Term Wins – First go after the “low-hanging fruit,” and publicize and celebrate your achievements in these areas. Nothing is as great as the sound of applause!
Solidly Anchoring New Systems and Processes – When questioned about a proven practice, don’t ever allow yourself to think (or say), “We used to do that!”
Sounds easy, right? Is it? NOT!
For example, here are three sample responses from a Used Vehicle Management class that I instructed just prior to my departure from NCM Associates:
Garry House has had extensive experience in managing change at more than 300 dealerships. Please contact him and explain your current issues with change management. We're certain that he can help you more effectively deal with your challenge.
Call us by referring to the "Contact Us" Tab beneath the Connect with Garry button on the main menu. You'll be glad you did! There will be no charge for our initial conference. Remember, GH&A always provides Value First!