Dealer principals are tasked with navigating uncertain waters, and leaning on trusted advisors is a wise course of action.
Over my career, in which I have dealt with car dealers and other entrepreneurs, I have noticed that many are lonely.
Running a business has its rewards and its challenges, and one of those challenges is finding someone to talk to about critical matters affecting your business. Many dealer principals believe that they should have all the answers, but nothing could be farther from the truth. Successful dealer principals surround themselves with a valued team.
The business environment of today and tomorrow requires vastly different skills and experiences than in days gone by. With the rapid transition in our dealerships driven by customers, our financial, technology and franchise partners, and our own people, dealerships today are complex organisms with far-reaching ecosystems. As a dealer principal, where can I get practical advice and support?
Many dealers have found success in belonging to a performance group. Performance groups allow dealer principals to monitor and compare their operations against similar stores in different markets. They provide a forum for business improvement and innovation. There is no better venue from which to witness the impact of innovation than monitoring the real world results of members in your peer group.
Performance groups allow dealer principals to monitor and compare their operations against similar stores in different markets.
As dealer groups grow in size, complexity expands. Many dealer groups have adopted advisory boards. These are not legal boards, but rather an organized, closed forum to share ideas with successful entrepreneurs and experts from various industries.
An advisory board can add new perspectives. Most often, advisory board members have experienced the same situations as dealer principals and can share their thought processes and outcomes. Gathering two to three times per year, away from your stores, can prove healthy for you, your key managers, and your dealerships.
Also, as dealer groups grow, the quality of your management becomes critically important. It’s important to have a sound and knowledgeable management team that are all on the same page. Managers challenge each other and collectively arrive at an agreeable direction. This can be a great support to a dealer principal. Good management teams communicate regularly and leave their egos at the door.
The objective is to develop a strong and sustainable dealer group. This can only be done with a solid cohesive team that share a common vision. It’s not for everyone, but those that do sign onto the vision will help you and your dealerships prosper.
Some groups are divided along brand lines, other functional lines, and geographic concentration. Whatever works within your dealer group, communication and consistency are vitally important.
I’m not talking about creating a bureaucracy that takes on a life of its own. That is the downside and a quick path to poor performance. I am suggesting that managers can be a dealer principal’s equal at the table where collectively the direction of the group is monitored and planned to meet organizational objectives. Healthy discussions and openness are good for the team, and ultimately good for dealerships.
There are certain key roles that all dealerships must establish. For example, brand relationship is paramount and normally falls on the shoulders of the dealer principal. It is however, important that others in the organization are socialized with brand representatives, especially in succession scenarios. The dealer group develops its own brand reputation and confidence level within the walls of brand head offices. This is very important, and as a result the brand relationships must be carefully managed.
Other functions like finance and accounting, human resources and training, sales and marketing, and customer handling, to name a few, all must be regularly monitored to ensure maximum performance. Engaging customers and employees is critical and becomes a group-wide philosophy and practice. Both individual dealerships and dealer groups have their own persona. The customers, employees, and brands all feel it.
Values drive success. Values are the guiding principles behind how managers manage, how employees treat each other, how they respond to customer situations, and ultimately it’s how customers assess your dealership. There is a fine balance to be consistently achieved.
Your technological footprint is as important as the in-person experience. Consistency between the two creates trust from customers. Trust is the key variable. Customers and employees build confidence and feel emotionally safe when working or doing business with your dealership or group.
As I said in the beginning, the life of a dealer principal is not a simple one. It is extremely complex. As dealer principals, we must learn to trust our managers and employees and in return trust ourselves and our judgement.
You don’t need to know each and every intimate detail, but you do need to know enough to remain part of the conversation and approve the various key directional decisions taken that affect the future of your dealerships.
As a dealer principal, it is important that you stay on top of developments in your stores. You don’t need to know each and every intimate detail, but you do need to know enough to remain part of the conversation and approve the various key directional decisions taken that affect the future of your dealerships.
Some directional changes could be adopting new technologies, changing HR practices, or investing in new businesses like ride-sharing, car-sharing, subscription, and complementary businesses such as vehicle leasing or collision repair. The future is a little fuzzy, and dealer principals, more than ever, must be aware of the new options that exist. Attending conferences and reading white papers, for example, are more important today than ever.
However, the most important is keeping well-versed in the future direction of the brands you represent. Each brand might take a different spin on a similar business initiative and you must follow the brand’s lead as part of your franchise agreement. Your role as dealer principal is to work with your brand and your management team to develop the “how” of these new initiatives: how they will be introduced into your operations, if at all.
For those initiatives not requiring brand approval (and there are many) deciding what is right for your market, pocketbook, and dealership is on today’s required critical thinking path. This is not a time to ignore but rather work with your management team and advisors to create input into your dealership or group’s future direction.
Although it can be lonely at the top, your approach to seeking advice and support will determine how lonely you actually are in this exciting and critical time in auto retail history.
