Dealers must employ specific tactics to foster a culture defined by skin in the other manager’s game. I am betting you have experienced this pain as a dealer too many times: The new car department constantly fights with the used car department, which is always upset with the service group. Service and F&I dislike and disrespect both sales staffs, and everyone hates the office manager. So, how do you foster competition between departments?
It’s time to stop the insanity. I actually have heard a few dealers say they like their departments feuding, because each is trying to outdo the other so everyone stays aggressive and on their toes. My reply is, “Are you kidding me?”
A healthy level of competitiveness and willingness to stand up for your department are one thing. However, constant battles and bickering between a dealership’s departments will inflict far more damage than any good that results.
The success of every dealership starts with the culture and work environment. Even an expensive luxury home eventually will crumble if the foundation is bad. And, a business’ culture and environment are built upon having the right people doing the right things in the right way, i.e. character. In turn, character requires good leadership, and good leaders communicate effectively.
In every struggling dealership I’ve seen that is experiencing infighting with its departments, there has been little to no communication. Communication must come both from the top-down and bottom-up, and without it, your different departments will never understand and empathize with one another.
Now, let me address some potential approaches to improve communication, and minimize or eliminate inter-department wars in a dealership.
Pay Based On Other Group’s Success
If each one of your managers gets paid in part upon the success and failure of other departments, then he or she has skin in the game with those groups.
How would such a pay plan be set up? You could use a manager compensation pool that is based on the dealership’s overall performance, or for example pay the new car manager a percentage of profits in F&I, used car sales or even service in a “cross-banded” system.
There’s an old saying in our industry that the used car department is the service department’s best customer, yet it is often treated the worst by service and waits the longest. You could create a days-from-reconditioning-to-sale component of compensation for both the used car and service directors or managers, thus incenting them to work together. These pay components or bonuses also could have a punitive effect if desired outcomes are not achieved.
A successful business comprises successful departments. Encourage your individual staffs to assume at least some responsibility for their colleagues’ performance, using an overall dealership success bonus that fosters a “we” mentality.
Cross-Departmental Strategy Meetings
If you aren’t already, try holding a weekly meeting between top leadership and your managers. Heads of every department – new car, used car, F&I, Internet, BDC, service, parts, body shop and controller – should attend and be prepared to report on performance against five top metrics established for their groups. They will cover month-to-date numbers and extrapolate them to project future performance, based on working days.
I call this a “war board meeting,” as I prefer that each manager write his or her numbers on a large dry erase board that is broken into columns. Physically recording your department’s data on the board promotes personally responsibility. You should not rely on doc sheets, as their numbers usually are behind.
Once the group has discussed each department and filled in the projected profit and loss based upon working days, take a few minutes to talk about one thing that each department can do to help another. Doing this helps creating a culture and environment based on teamwork and purposeful communication.
For the same reason, I suggest daily save-a-deal meetings with the available managers. Apart from producing possible ways to revive a sale that is in trouble, these meetings improve communications, teamwork and accountability to other departments.
Job-Shadowing Helps Managers’ Perspectives
Job-Shadowing Helps Managers’ PerspectivesI also believe job-shadowing by managers helps with communication, understanding and empathy. All managers should be required to periodically work in other departments for a day. Imagine if the new car or used car managers shadowed a service writer or service manager for a day. What do you think would happen to their perspective?
Also, all managers should periodically work the jobs of the people they manage. A sales manager should occasionally work the floor for a day, and a GM should staff an F&I job, etc. Managers should never lose the perspective of their staffs.
Find Cross-Training Opportunities
The days of silo management in dealerships may be coming to an end. As one example, technology has blurred the lines between the sales and F&I managers and process. Try moving your F&I managers into the sales offices and use their current offices for contracting only. Cross-train the sales and F&I managers on one another’s positions. You should reap benefits from increased customer focus, faster processes and improved communication.
Also, require training in another function that occurs outside of the dealership. For example, try sending a service manager to a sales seminar and vice versa.
Plus, schedule social activities outside of the dealership that give your teams an opportunity to interact in a relaxed fashion as regular people. At the end of the day, they will be able to understand one another and relate at work better.
How To Defuse Staff Tensions
As a dealer, you must also make sure to always handle conflicts between your departments immediately. Inter-department wars start off as small embers of dissent; eventually, the fire can grow so large that it’s tough to put out without firing people. Ignoring problems only makes them worse; you can’t sweep manure under a rug and expect the stink to go away.
With that in mind, let me provide some tips for resolving conflicts:
1) Address the problem immediately, but only in private with the parties involved.
2) Be concise, handling only the issue at hand, and be firm. Address the issues, not the people.
3) Don’t let your emotions get the best of you. It leaves scars on you and your team.
4) Don’t let your managers play the one-up game (“Yeah, but you …”)
5) Avoid conflict words such as “always,” “never” and “but.”
6) Give suggestions and alternatives. Build your managers back up. Show them and tell them that you care.
7) Always end the meeting by talking in terms of “we,” not “I” or “you.”
As a dealer, there is no better feeling than going to work each day to a successful dealership staffed by successful, happy and professional team players. There is no worse feeling than trudging into an underperforming store drained by staff infighting and backstabbing. Do not tolerate inter-department strife that can ruin your team and your business.
