The demands of operating dealerships today require a steady hand, wisdom, experience, insight and a strong gut. Some of these characteristics are embedded in us as entrepreneurs, but others can be taught and require constant reinforcing and updating.
As our dealership businesses grow in size and the business environment in which we operate becomes more complex, how do we, as dealer principals and business leaders, keep up? I have always viewed formal education as a way to better one’s opportunities in life. My parents engrained that premise in me and on the whole, if done properly and effectively it can have a significant impact on one’s life. Certainly for me, attending university, and progressing through the system to become a Chartered Accountant was a major life event.
The education process shaped my thinking and provided me with the hands-on experience to apply textbook knowledge to practice. That point is key. It is not how much you know that is important but how you apply that knowledge to succeed in whatever life arena you decide to pursue.
Education plus life skills
We can sum up the skills necessary to be a dealer principal today as a mix of formal education and on-the-job training supported by life skills. The entrepreneur in all of us, I believe, comes from the life skills part of learning. Entrepreneurs have taken largely the same learning opportunities as others but personalized them in different ways to create a self-sufficient foundation from which they operate their dealerships daily.
Entrepreneurs see life from a different perspective. They are passionate about what they believe in, which is often their own ability to succeed and to build a following of loyal supporters. As entrepreneurs, we appreciate talent and experience. We like to surround ourselves with skilled people as we build our team to take on the world. But as our businesses continue to grow in complexity and risk, how do we remain current with our knowledge and continue to lead our supporters? This, quite frankly, is where the rubber hits the road.
Looking at the big picture
Many dealers today are finding it to be an overwhelming task and I believe that is why ownership transactions are at their current pace. After all, exiting the business and realizing the rewards of your many years of hard work is not all bad. But what about those of you that have decided to stay in the game or even get in deeper?
You have heard me say many times that running dealerships today is a difficult assignment and not for the faint of heart. I believe keeping current is the pacemaker we need to keep our business hearts beating well into the future.
Continuing education comes in many forms, some of it formal and much of it informal. There are the intro shows, performance group meetings, regular brand bulletins and dealer interactions that keep you current about certain aspects of your business. But what I am talking about is stepping back from the day-to-day and looking at the big picture.
Foundation and change
Many of today’s dealers started with one store and were very successful. They had the financial success and backing to expand their businesses and to acquire other stores. The factories evolved from a collection of single-point to multi-point dealers as they learned that dealing with fewer dealers with the same or a greater number of locations was easier and better for the brand. Those same loyal dealers then began acquiring competing dealerships and began building multi-brand dealer groups. Today over 50 percent of all sales in Canada are from dealers owning more than one store - a very different scenario than even 10 years ago.
I can see clearly how the business has changed in the 20-plus years I have been involved as an advisor to the industry. What I do not see, however, is the corresponding change necessary to keep current at the dealership management level and the widespread adoption of continuing skills development processes.
Continuous improvement
Continuous improvement is a concept that, in automotive retailing, is usually applied to in-store processes. It involves the constant fine-tuning of the customer experience to maintain an acceptable balance between customer satisfaction and profitability. But what about continuing professional education for dealer principals and general managers?
Many dealers belong to dealer 20 Groups either in Canada or the USA. These are excellent forms of dealer principal interaction, focused solely on the issues of managing stores within a brand. And much of the knowledge gained is portable to other brands in your ownership pool. Many multi-franchise groups hold their own in-house sessions where they gather managers for all their stores regularly to review performance and spot opportunities for improvement. These are also excellent initiatives and I applaud those who participate.
More is needed
I believe today’s dealership managers require more, however. There are significant issues across all stores that need addressing, requiring that group leaders remain current and on top of the best thinking. I am talking about matters such as expansion, human resources, financing, acquisitions, divestitures, legal, accounting regulations and external reporting, among others.
Sure, you can afford to hire management to address these areas and many of you do. That does not mean, however, that you as the dealer principal can completely ignore them. Your management team can hopefully perform at the expert level, but you must possess more than a basic understanding of the issues to assess their performance. After all, you are ultimately the one accountable for signing off on the decisions.
Some examples
I was asked recently by a dealer principal in Canada to write a recommendation letter for his admission into an executive MBA program. This dealer decided to return to school part-time to build the skills necessary to understand, manage and lead his dealer group to its next level of performance.
I also had the opportunity to interact with another dealer principal and a dozen or so of the group’s managers at NADA and to hear from them the value of attending the convention as part of their group’s continuing education program. One of the side benefits was team building, as events were planned well ahead to ensure that time spent in San Francisco would add to the group’s long-term management effort.
Unfortunately not many Canadian dealers attended NADA and were able to take advantage of the low-cost educational opportunities available there. This is one form of continuing professional education, for you and your managers, that is 100-percent focused on the business you operate. There is much more to NADA than cruising the convention floor.
There are are also online courses from Georgian College, Northwood University and virtually every university and community college in North America at your disposal and they are quite easy to access and enroll. And there is now a broad range of on-line Webinars on offer that you can access right from your desk. They all require some time and effort on your part, but in my opinion the benefit far outweighs the costs.
Reading is also a good development tool. Many books are written annually on many business topics that could add value to your thinking and help frame your thoughts as you move forward.
Staying on top
With today’s challenging business environment a dealer principal cannot afford to sit back and rest on past successes. One must remain current and on top of big-picture developments to position yourself and your dealership so you can create and take advantage of opportunities that present themselves in the future. Business planning has both a short-term and long-term component. The short-term has a tendency to be more tactical where long-term is more strategic. In this business we have been trained to look at the short-term and react. I am asking you to also look at the long-term to make sure you are in a position to react.
As a dealer principal and business leader that supporters look up to and depend on, you must keep abreast of current developments in both the dealership world and the business world. There is no better way than to establish a regular self-improvement program and embrace the concept of a continuing professional education program. This will put you, your management team and your dealership business in the driver’s seat to meet the challenges I guarantee you will encounter on the road ahead.
Further information is available at www.seguinadvisory.ca. Chuck Seguin can be contacted at (416) 565-9493 or by e-mail at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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