By Champ Rawls, Partner, The Rawls Group
With all the challenges associated with operating a dealership today, surviving and thriving into the future has never been more complicated. The economic environment, global competition, manufacturer relationships, customer and employee demands, shrinking margins, and the everchanging and polarized political environment are all impacting retail auto dealers.
The way I see it, you have to make the customer happy, keep your employees paid and engaged, move the product for the manufacturer’s to ensure you receive your needed product/allocation to sell while simultaneously managing the expectations and business model of your manufacturer in the process. Therefore, as auto dealers, the challenge of succeeding has never been tougher. Conducting a simple self-assessment will hopefully tell you all you need to understand this core concept: “you cannot do things the way you did yesterday and expect to survive into the future.” Simply, where and how does the dealership of yesterday move to what it can and needs to become to succeed tomorrow?
To answer this, you first must look at your foundation: “who are you,” what is your mission (external marketing), vision (internal employee marketing), and purpose for turning the lights on every day? These need to be clearly defined for you to be able to get where you want to go.
You may have to go back to a discussion of owner motivation and perspective (why did you go into business in the first place) to find this foundation, in some cases, re-educate yourself on what your business is all about. A part of the process is identifying your business’s core values. This can be particularly important because the process of developing and communicating those values gives your staff the “playbook” of how to successfully operate and make decisions, and identifying and communicating your vision provides them insight into the future of the organization and their opportunity to grow within it. Remember, people are attracted to thriving growing things; articulating this as a value will attract and retain talent.
If you adhere to this premise: “The dealership or “auto group” of tomorrow desires to position itself for success through increased efficiency, higher profits, better employee satisfaction, and the potential for growth,” then a self-assessment of the dealership needs to be implemented to explain where they are currently based on where they want to be. This is the first step in identifying a strategic plan. A proper strategic plan has a 3-5-year time frame objective, with continued review and execution over time.
The goal in strategic planning is to identify potential challenges and opportunities you can tackle in a scheduled and manageable timeframe. You look at areas of management deficiencies, structure, people development, processes in culture and collaboration and teamwork; all areas which allow an organization to grow (or fail if proper planning is not done). Do you know what your key objectives are this month, next year or over the next five years?
A 4-Step Process to Meet Your Objectives
The following four step-process will help you meet your objectives.
1. Complete a SWOT – A strength, weakness, opportunity, and threat analysis uncovers critical items of importance. If you and your team have tried to develop a SWOT analysis and have just given yourselves headaches, here are some guidelines to help you concentrate on the big picture:
a. Strengths and Weaknesses (the S & W) are all about business models, practices, policies, and procedures that the team has control over. Four fundamental areas that you control are internal capabilities, financials, products and services, and human resources.
A hot point for manufacturers recently has been “capacity.” Are you fighting the best fight in your market? Are your marketing dollars giving you the return that you need, do you have enough support, are you running too lean on inventory (losing sales) or buried in a floorplan that cannot be moved fast enough?
b. Opportunities and Threats (the O & T) are all about factors operating outside the scope of your immediate control. Four fundamental areas here are the external market direction, the industry, disruptive innovation, and the government.
A hot point lately has been paying attention to online reviews where dealers often view these as uncontrollable. It is becoming important to the manufacturers that these be dealt with because they ultimately reflect the store and brand. What do your reviews say about you? What does your CSI say about your store? Are you delivering within range to the disruptors of the industry within your sales and service experience (first-time customer in the service drive, efficient sales delivery process, not spending all day at the dealership)?
The SWOT analysis is designed to help you identify critical issues that can make or break you in attempting to accomplish your mission and vision.
2. Identify Objectives – Completing the SWOT provides your organization with a list of objectives or key areas to focus on. This list can get long, and most often cannot all be accomplished in a 3-5-year timeframe. Some dealers prefer to work on 3-10-year plans. What is important here is that there is a definite timeframe that is manageable, communicated, and agreed upon by all parties involved. The goal is to ensure the objectives you identify are tangible, achievable, and that they are in alignment with your mission, vision, and purpose. Also, regardless of the timeline you prefer, we always recommend reevaluating your strategic plan on an annual basis.
3. Select Strategic Priorities – Review your list, and pare it down to issues that are strategic in nature and will have the most bang for their buck. You should only be left with a handful (suggested 3-5), and they should align directly with where you are looking to take the organization into the future.
4. Execute an Action Plan – Once you have completed the first three steps, you are ready to develop, communicate, and execute the plan of action. We like to use an Update Action Agenda that organizes the process and details the task, the team, and the due dates. As soon as you accomplish one of your objectives, celebrate, and then use the Update Action Agenda to move onto your next opportunity.
Strategic planning builds business value by identifying clearly defined goals and creating a vision that provides a distinct direction for the future. Engaging in the process one time without a well thought out plan of how to attack the future is not a successful route to choose. Like your customers paying attention to the regular need for tune-ups on their car, if they don’t act accordingly, the car more than likely does not have a sustainable future. Therefore, engaging in this process often provides the opportunity for what we like to call “Reality Alignments”; If you don’t know where you’re going, and how you are going to get there, the probability of ending up in the right place is slim to none.
ARTICLE BY Champ Rawls
Being a part of his own family’s business, CHAMP RAWLS has a unique insight into the difficulties, challenges, and triumphs families face when combining family and business. Champ has been officially associated with The Rawls Group since 2012, although it could be said he become a part of the team in 1984 when he was born into the family business.