So here’s the situation. One of your top sale reps has just returned to the office from a huge sales call. He was presenting a proposal to a current customer for $250,000 of new equipment plus maintenance and supply contracts for each machine. The total value of this sale including maintenance and supplies over the next 5 years will be over $400,000. As he walks into the office he says, “I nailed it!!! We got the deal.” However, the paperwork isn’t signed because the owner of the company has to “rubber stamp” the deal. Of course, you’re told there’s no way he’ll say no. The rep goes back in next week to get the paperwork only to find out that they decided to go a different direction. You find out that they purchased the equipment from another dealer, and not just any other dealer, your arch rival.
How did this happen? There can literally be hundreds of possible answers. The more important question is, “what can we do to make sure this doesn’t happen again?” One of the main precepts of the Hubbard Management Systems, developed by world acclaimed author and administrator L. Ron Hubbard, states very simply “Look Don’t Listen.” What exactly does this mean? In a nutshell it means don’t just allow your staff to go about there jobs and tell you what they are doing or have done. A good manager needs to actually look at what is being done. It is critical to observe staff when they are doing their job. By watching someone do the steps of their job you can very easily see steps they’re missing or things they may be doing wrong. This allows for immediate coaching. You also need to look at reports that show what was actually done. When an employee tells you what they did you don’t get the whole picture and very often don’t get a true picture. Unfortunately I’ve seen employees lie about doing something that they never did. Similar to asking your kids if they washed their hands before dinner and they say yes, even though they never even got close to the sink, let alone the soap. This is not common but it happens. However it is not the biggest reason for looking. You are looking in order to determine ways to improve what they do for better results in the future.
Let’s go back to the original situation. The rep returns from the customer’s office to tell you about the call. So you’re immediately listening to what he did instead of looking at what he did. What could you do differently? The sales rep is about to go on the biggest sales call of his career. The first step would be to make sure that the sales manager or the dealer principal goes on the call with him. Not to take over the sales cycle but to look at what is happening so that help can be offered as needed and to make sure that all of the appropriate questions are asked and answered. When working on a big deal sales reps will often avoid asking questions like, “Who else are you considering for this purchase?” from fear of introducing the idea to shop and thus don’t find out what’s really going on.
To further drive this point home I’ll review a couple of examples and how to apply this principle in your dealership.
One of the most common areas where dealer principals listen instead of looking is finance. Do you look at your income statement and balance sheet every month or do you listen to what the controller tells you about the financial position of the company? You should sit with your key managers and review these documents line by line asking pointed questions? When going through the income statement you should compare revenues, cost of goods and expenses to your monthly averages, same month last year and recent monthly actual numbers to see if there are areas that jump out as extraordinary.
For example, let’s say telephone costs for the month were $1,100. When looking at the numbers you see that the recent average has been $700 per month, the same month last year was $750 and recent months were $725, $680 and $735. Now it’s time to have the controller give you a breakdown of exactly what made up the $1,100 expense. When doing this you find that there was a $400 charge for a replacement cell phone. However, you have insurance for the cell phones. A new policy is then issued clarifying the cell phone replacement procedures to prevent future problems.
One other financial area that is very often not looked at is the monthly bank statement. If you have a bookkeeper, controller or CFO that does your bank reconciliations and tells you everything is okay you need to look for yourself. The easiest way to do this is to have the bank statements delivered to your desk unopened. You would then open them yourself and look at each transaction. If you don’t do this now, try it, you’ll be surprised what surfaces.
Another area that is commonly overlooked is accounts receivable and collections. Do you listen to you’re team telling you how collections are going? The first step is to look at the reports to see how the ageing is really going. From there it is very important that you or another manager actually look at what the collections person is doing. This includes sitting with them and watching them do their job. How many calls do they actually make? Are they calling everyone they should or just certain accounts? What do they say when they call? In almost every case where I’ve had dealers do this the result is changes to the collections process and considerable improvement in A/R ageing. Not because the collections person was bad but because they weren’t being managed the way they should be.
The service department can also fall victim to listening instead of looking. Have you ever asked your service manager or dispatcher, “How are we doing with calls today?” What kind of an answer do you get? Typically you’ll hear things like “good” or “we’re doing okay.” What does this mean? How many open calls are there? How long have they been open? What is your response time? Is there anyone who has been waiting for an excessive period of time? You need to look at the open calls to see exactly how many there are, how long they’ve been open and what the calls are for. When you see a big customer who has had a call on the board for 3 days you ask why. There will be times the answers will shock you, like “we’re trying to save money on overnight shipments so we ordered the part to ship ground.” Now let’s look at the technicians. How often does your service manager make follow up visits to look at machines the technicians have worked on? You listen to what they say was done when they close out the call but how often do you look to see what was actually done? How often does the service manager ride with a technician and watch them do their calls for the day? This is probably the best coaching and training you can give a technician.
Of course the sales department can fall into the bad habit of listening instead of looking as well. Some common areas are sales calls (as shown in the opening example), cold calls, proposals and general daily activities. When was the last time you or your sales manager went cold calling with a rep to look at what they are doing? How’s their approach? Do they ask the right questions? How well do they introduce the company? Like the service example, this time spent looking at what a sales rep does and how he does it leads to the best coaching and training you can offer. Another sales area that doesn’t get looked at closely enough is proposals. Who looks at each proposal before it is presented to the customer? It should be standard policy that the sales manager read and approve every proposal. This allows the manager to see how the sales rep prepares his proposals, gives an opportunity for coaching and most importantly allows for changes to be made before the customer sees it. Finally, sales managers often listen to reps telling them what they did for the previous day or week. Of course you can’t be with each rep every day but you can look at their activity by asking very pointed questions in a weekly one on one meeting and requiring that all activity be entered into a contact management software package. Having this visibility makes it easier to look and not just listen to the sales team.
As you can see, the common thread in all of the examples and the key fact to keep in mind when managing is Look Don’t Listen. When you rely on listening to what people tell you instead of looking at what they do you can easily be misled. In addition you lose the opportunity to make changes that will improve the employee’s performance in the future. A good manager learns to really look and can spot a problem area from a hundred feet away while going at a dead run. So help your employees improve their skills, look at what their doing and coach from there.
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.