erhaps you ve heard this quote by 18th century author Oliver Goldsmith: Our greatest glory is not in never failing, but in rising up every time we

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2 P erhaps you ve heard this quote by 18th century author Oliver Goldsmith: Our greatest glory is not in never failing, but in rising up every time we fail. I have referred to that many, many times over the years because of my firm conviction that it s OK to fail provided you learn from those failures. I ve had the opportunity to visit with many dealers over the past year and there appears to be a common thread running through those dealerships that continue to struggle with profitability or sales. That thread leads to processes. When questioning dealers about which processes they have implemented in hopes of leading them to greater profitability or increased sales, I am often impressed by the fact that a process or series of processes actually exist. C O N T I N U E D O N P A G E 7 2 W W W. N I A D A. C O M / J U N E / 71

3 C O N T I N U E D F R O M P A G E 7 1 So then, if a dealer has taken the time to develop what appears to be an effective process in order to assure things get done rapidly and correctly, what went wrong? What is preventing the dealership from reaching its maximum profit potential? To answer that question, you must first identify what exactly it is you wish to improve. Simply suggesting you wish to make more profit isn t enough. In order for any goal or business objective to be successfully achieved, the goal or objective must be clearly stated and defined. Let me clarify. A process can t be clearly defined and implemented unless the outcome is specific. With that in mind, if for some reason it appears your process isn t working or employees aren t following it, perhaps it s time to revisit the process. There are many reasons employees fail to implement or follow a process you implemented and expected to be followed and adhered to. Over the years, I have discovered failed processes can be helpful to teach us lessons regarding our own management styles. So before you get too frustrated and throw your hands in the air, it might be time to analyze why a particular process has failed. Let s take a look at an example of a failed process. Let s say a dealer has a need to increase the rate of turn for his inventory from four times a year to nine. Immediately, we have identified the goal: to increase turn by five times. Let s answer the next question: Why? Well, there are many reasons to want to turn inventory more quickly, but let s look at the most obvious reasons. Faster inventory turn leads to increased cash flow, more sales, greater overall gross profits, less capital needs. That, then, would be the premise for wanting to create a process to make sure a more rapid turn occurs. Once the goal is clearly defined, it is time to create the process. This is the part in which you might wish to involve relevant employees. It is not the job of any one person to develop a process of that magnitude when there are others inside and outside of the dealership who contribute to or hinder the turn process. That can explain why some processes fail to launch or to be followed. If you want a process to have any chance of survival, you need to seek input from the employees who can make it happen. As an example, you want cars to be washed and waxed within 24 hours of the time the vehicle is acquired. While that is an admirable objective, you might have failed to get input from the individual who actually 72 / J U N E / W W W. N I A D A. C O M

4 washes your vehicles. Had you gotten his input you might have discovered your buffer machine has been broken for several weeks and has yet to be replaced, or the lighting in the detail area is so poor the detailer can t see well enough to increase speed and quality at the same time. What then will be the process to move the vehicle from the detail area and be properly placed in inventory for sale? What will the process be to price the vehicle to market, and who will place the price on the vehicle for customers to see? How will the dealership be able to assure the price on the vehicle and the price on the Internet complement each other? How will that price information then be relayed (including any price changes) to the sales staff? Those processes would appear to be straightforward. But are there any other processes already in place at the dealership possibly in conflict with your objective of a more rapid inventory turn? For example, do you already have a policy in place that says when a vehicle is sold and you want to deliver it immediately to the buyer, the detailers are required to stop whatever they are doing to focus their clean-up efforts on the vehicle to be delivered? Let s take a look at the situation a bit more closely. Not only is the objective of turning inventory faster being derailed by this other process, but a certain level of employee frustration is being engaged as well. Please let me be clear on this. I m not suggesting the delivery should be delayed because the detailer is committed to completing the stock vehicle, because the sale is important and getting that customer on the road as quickly as possible is also important. What I am suggesting is that before any attempt is made to implement any process, consideration must be given to those processes already in place that might conflict. At this point, two goals might be revealed the first, that inventory turn is essential to overall dealership profitability, and the second, spot vehicle delivery is essential to customer satisfaction and sales retention. Can both of those goals be satisfied? Of course they can. But it takes careful planning, employee involvement and a commitment from the dealer to recognize that both of those goals are important to the long-term success of the company. That is the beauty of a failed process. A careful review of the failure can ultimately lead to a better and more productive outcome for the company as a whole. The trick is to measure processes regularly and often to measure the effects of each well before a serious negative impact is forced on the company. In other words, a dealer should not wait until something bad happens before a reevaluation is necessary. That is why it is essential for management to be able to evaluate and measure what is and is not working before something stops working. While in the process of considering any process development, consideration must be given to how the process will be measured for effectiveness and to whom that responsibility will fall. One example of measurement would be evaluating how long it actually takes (with proper lighting and adequate equipment) to clean one vehicle, move it out of the clean-up area, retrieve another and repeat the process with other units, until eight working hours are consumed notice I said working hours. Other measurements might include: How frequently does the dealership conduct C O N T I N U E D O N P A G E 7 4 W W W. N I A D A. C O M / J U N E / 73

5 C O N T I N U E D F R O M P A G E 7 3 spot deliveries each month? What is preventing the dealership from having vehicles that can be sold and delivered immediately from stock without having to be re-cleaned? Is it because of an existing process that says vehicles in inventory will be cleaned weekly rather than daily, contributing to dirty vehicles? Does that weekly clean-up process possibly contribute to lower gross profits because customers are less enthused about purchasing a dirty vehicle and therefore are more likely to negotiate or offer a lower price? Stop and think for a moment. Where do the hours of my day go each day? Why is it that often you feel as though you have spun your wheels over and over only to end up no further than when you started your day? Perhaps the answer is hidden within the accidental processes you created some time ago, without taking the time to evaluate and measure how effective these processes really are or were. What feedback mechanisms are in place at the dealership to make employees more aware of the impact (positive or negative) your company s processes have on overall profitability, customer service, sales and so on? You see, if employees don t know whether a process is really effective toward making their job responsibilities more efficient or profitable to them, there might not be a legitimate reason in their minds to continue performing your process. Instead, they might choose to create their own process, causing a negative result counteracting your original intent to increase overall dealership profitability or sales. Let s face it, a dealer s day is not necessarily all fun and laughs, but it doesn t have to be all chaos and confusion, either. How many potential profit-making hours are lost daily, weekly, monthly or yearly because of a decision to create (or not create), measure, manage or follow through on a process that was created in the first place to improve the overall outcome of your business? Without a doubt there are a multitude of things that must be done every day and it s very easy to be distracted by many of those other things that have to be dealt with. And I understand that. But ask yourself: What are my employees doing while I m running around the dealership like a chicken with its head cut off? Why am I so stressed out while my employees appear to be worry-free? Perhaps the answer is focus, or your lack of focus, on one particular important 74 / J U N E / W W W. N I A D A. C O M

6 issue that truly must be dealt with. Perhaps your valuable energy is being wasted on many tasks that, quite frankly, could or should be delegated to your employees in order for you to focus your valuable energy toward the really important task of creating a more profitable and sustainable business. A leader s job is not to be distracted by the minutiae of daily activities, but rather to focus on the goals and objectives of the company. Business leaders must learn to filter through the grind of the day in order to achieve what is most important to the success of the business. Please stop telling yourself, If it s going to get done, I m the one who s got to do it. I am the process around here. Processes are designed to help you to achieve more in less time, while providing better customer service and creating greater employee work satisfaction, all the while achieving a higher degree of net profitability. Don t be afraid of failing. Be more afraid of failing to rise each time you fail. Processes will not work all of the time, and that s their beauty. When one process fails you have the opportunity to create a better and more efficient process because you learned from past failures. W W W. N I A D A. C O M / J U N E / 75