I often hear dealers say they don't necessarily want to be the biggest, but the best. How do you define best? As having the highest volume? Having the best customer satisfaction? Being the most profitable? Most efficient? Most employee-friendly?
Well, actually, we want it to be all of the above.
We all know what happens when preparation meets opportunity. It's called luck. We make our own luck based on our choices. So, what choices lead to our operation becoming the best?
Profitability is cultural to a great extent. That may sound strange. Let me explain. If our actions, not words, emphasize profit-related efficiency, then it becomes the culture of an organization.
Efficiency is the power or capacity to produce a desired result.
Checking “efficiency” in the thesaurus, you will see “effectiveness” which is “the extent to which actual performance compares with targeted performance.”
So, establish parameters in your organization, then monitor actual performance against targeted performance. No areas are exempt if you want to be the best.
Operational efficiency begins with staffing, followed closely by process.
A dealer I once worked for challenged me to find the best employees for the dealership, and compensate them at higher-than-competitive wages to control personnel costs.
At first, his idea seemed flawed. Then he explained that the best employees will deliver twice the results of average staffers, while our compensation would be comparable to 1.5 times that required for an average employee.
The results: We improve productivity and profitability, while reducing our personnel head count and the personnel expense as a percentage of our gross. This is one example of efficiency I have personally experienced. I know for a fact it works.
Think for a minute about the difference in your star performers vs. average or below-average employees.
Stars are self starters, requiring minimum supervision. They possess the ability and the drive to accomplish tasks in a shorter period of time. They always seem to be striving to reach higher levels.
Earlier in my career, I was somewhat reluctant (okay, afraid) to employ personnel with more perceived talent than my own. I thought they would make me look bad and possibly cost me my position.
In reality, I accomplished the complete opposite by hiring such people.
Doing so changed my thought process. It raised my idea of excellence. It showed the importance of hiring quality people.
I still practice this today as head of NCM Associates Inc. We always are searching for the best talent for our organization. I'm proud when clients and others comment on the quality of NCM Inc. personnel and their ability to make a difference in business and professional lives.
In service departments, we routinely measure efficiency based on the number of flat rate hours a technician is able to produce in a given period of time. In the sales department, we measure employee productivity based on a gross-per-employee basis.
Wouldn't it be beneficial if someone would devise a calculation where a dealer could measure and monitor actual employee efficiency?
So, back to the initial question: How do we define best? Does it mean being the highest volume dealership, having the highest CSI, being the most profitable or the most efficient or the most employee-friendly? It really is all about our choices.
Tony Noland is the president and CEO of NCM Associates Inc. He is at [email protected].
Best (best): adjective
- Surpassing all others in excellence, achievement, or quality; most excellent: the best performer; the best grade of ore.
- Most satisfactory, suitable, or useful; most desirable: the best solution; the best time for planting.
- Greatest; most: He spoke for the best part of an hour.
- Most highly skilled: the best doctor in town.