When I ask dealers what their goals are for the coming months and years I typically get responses like; “I want to grow the business by 25%” or “we’re looking to double the size of the business.” If you’re taking time from your busy schedule to read this article then I assume you too have goals to grow your business. Unfortunately, very few dealers are experiencing the level of growth they want. The reasons given are many, ranging from the economy to problems with products to “lazy employees.” When looking closely at dealerships on both sides of the equation, those growing and those not, I can tell you that there are some basic similarities shared by companies meeting their goals. The good news is that because they are basic it doesn’t take a nuclear physicist to apply them. So, how do you get your company on a path of continuous growth year in and year out?
As a consulting and training group we work with office systems dealers to implement the Hubbard Management System, developed by L. Ron Hubbard world acclaimed author, administrator and, interestingly enough, nuclear physicist trained at George Washington University. One of the principles outlined in the Hubbard Management System states; “What it takes to make an organization go right is the intelligent assessment of what really needs to be done, setting those as targets and getting them actually fully DONE.”
Sounds simple doesn’t it? The first part of this principle states that it takes “intelligent assessment of what really needs to be done.” There are a million things that could be done that would not lead to improvement in the business. Have you ever had an employee that just couldn’t prioritize their work? Instead of spending time on things that really need to be done they squandered their time on insignificant tasks. Common examples of this are reports that take hours to produce yet are never used or meetings that don’t have a specific purpose. This is not to say that you should stop creating and using management reports or discontinue all meetings, but rather that you should make sure that the reports and meetings are things that really need to be done. Another example of this would be a parts manager who spent time analyzing obsolete parts inventory while incomplete service calls and overnight parts orders went up dramatically. The parts manager should have been evaluating car stocks and putting a plan in place to remedy this problem. Intelligent assessment identifies what is important and what is not and is where good leadership and management really shine.
When starting the process of assessing an area the easiest way to start is by defining the expected products of each area. In the Hubbard Management System a product is defined as “a completed cycle of action, which can then be represented as having been done.” Every area of your dealership has specific things that it must produce. For a sales rep it would include closed sales, for a service technician it would include completed service calls, for an accounts receivable clerk it would include invoices collected and for a sales administrator it would include orders billed. When you define the products for each area you can see what really needs to be done to get these products in volume. If you or your staff members have trouble defining the products for an area it’s a sign that time is possibly being spent on things that aren’t really needed. Going back to the products listed above, would you think a sales rep delivering toner is doing something that really needed to be done to get a sale? In most cases the answer would be no, yet this happens daily in some dealerships. As mentioned earlier, there are a million things that can be done that don’t really need to be done, the key is to identify them and get the focus back on to those things that will lead to further production.
After deciding what needs to be done you move on to, “setting those as targets and getting them actually fully DONE.” The first thing to look at here is the meaning of targets. The Hubbard Management Systems defines a target as “an objective one intends to accomplish within a given period of time.” It is critical to business growth that a timeframe be assigned to targets. When targets don’t have a set timeframe they tend to drag on and on. It’s like the person who tells you they want to lose ten pounds. If there is no deadline set for the weight to be lost the goal is very often never met.
Targets are best set by first identifying the actions that lead to production. For example, a sales rep needs to make prospect calls, schedule appointments and present proposals in order to close sales. Targets can be set for each of these areas. These targets could be to complete 25 prospect calls per day, 2 appointments per day and 1 proposal per week. Once these targets are set they must be “actually fully DONE.”
Obviously, setting targets that never get done will not lead to improvement in the area. The supervisor of the area must make sure that the targets are being completed by the designated time. The easiest way to do this is by requiring the employee to report back all completed targets. This puts the majority of the burden on the staff not the managers. However, managers must keep track of and review the expected targets on a regular basis to catch those that have fallen through the cracks.
Real world examples:
You are trying to figure out why you haven’t been able to hire the new sales reps you need. You start by assessing what really needs to be done for you to get the sales reps on board. First you would need a way to bring in candidates. Next you would need to interview the candidates and narrow the choices down. Then you would have to hire the best ones and get them trained. You can get candidates by asking your current employees for referrals, advertising in local newspapers and having recruiters send you candidates. So you work out a plan with the sales manager and set the following targets; meet with each employee by next Friday to ask them personally for referrals, have ads placed in the three local newspapers by this Thursday and get a contract with a local recruiter by Tuesday. You then set a recurring target to interview three candidates a week. As the sales manager’s senior you check back with him to make sure that each of these targets was met in the allotted timeframe. I’ve implemented this exact program with some of our clients and had great success. I’ve had clients go from interviewing once every three weeks or so to a steady stream of 3 per week. This increased selection of candidates always leads to better hires. It’s great to have options.
I encountered another example while working with a dealer that had trouble with collections. Over 35% of their accounts receivables were older than 60 days. In assessing the area I found that they were not mailing statements, that the accounts receivable clerk had called less than 10% of the past due accounts and that no one was monitoring this from a management level. From this assessment it was determined that they needed to start sending out statements, needed a tracking system for calls made and a reporting systems for management to see what was actually being done. We set some key targets. The first target established was to have statements printed and mailed to all accounts with an open balance on the 15th of each month. The next target was to have the accounts receivable clerk call every account that is past due at least once a month. From here the A/R clerk was to begin tracking these activities through the dealership’s management software. All contacts were to be documented and reported to the accounting manager. Once a contact was made all follow up activities were to be entered as future calls and completed on time. From here the accounting manager required a report of all calls made and invoices collected. Because the activities were being entered into the management software it was very easy to verify compliance with the targets and monitor each step of the process account by account. In a matter of a couple of months, accounts receivables older than 60 days had come down to 25% and continued to come down from there.
So if you answered yes to the title of this story, you need to concentrate on “intelligent assessment of what really needs to be done, setting those as targets and getting them actually fully DONE.” If you spend time doing these exact steps with each area of your dealership you’ll be reaching those growth goals that seem so elusive. Just assess the area, set targets and make sure they are completed on time, it’s that simple.
Jim Kahrs is the President and Founder of Prosperity Plus Management Consulting, Inc.
If you have any questions please don’t hesitate to call 631-782-7762 or email.