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It’s Not Necessary to Change. Survival Is Not Mandatory.

The above quote is by W. Edwards Deming. It’s also the focus of an article by Mike Esposito in the July issue of F&I Showroom Magazine. Mike’s guest editorial is on page 40 and is titled, “State Your Purpose.” Here is the article in it’s entirety:

Regardless of what industry you’re in, sometimes there is a divide between what’s good for a business and what’s good for the employees of that business. In retail automotive, this means what’s good for the dealer may not always be perceived as being good for the employees. Take change, for instance.

Dr. Demming understood completely that change is necessary to survive. Change can be difficult, but necessary if dealerships are going to stay competitive in this market. Even though the volume of sales has picked up this year, the Internet has made pricing so transparent that dealerships all over are being forced into price-matching wars. Continued, downward pressure on pricing means lower margins, and unfortunately for dealers it looks like this trend is here to stay. In order to be profitable in today’s world and in the future, dealers must look for ways to stay lean and improve processes. They must continue to test new technologies that can either save them money or make more money.

But often when a dealer or GM attempts to introduce a new process or technology, they are met with stone-cold resistance from employees. As a DMS provider, I often hear from dealers who would love to implement a new system, but decided not to because when the idea was presented to the dealerships’ employees, there was such an uproar that you’d think they had proposed a permanent ban on all coffee consumption within the dealership.

I don’t blame the employees, however. Implementing a new process or learning a new technology can be difficult. If a major change is being considered in your dealership, here are a few things to keep in mind:
 
Most employees are tuned into that old radio station WII – FM (What’s In It – For Me)

 A new process or technology may indeed add thousands of dollars per month to a dealership’s bottom line. That’s great for the dealer, but what do the employees get out of it?

Take the service manager, for example. Switching to a new DMS would definitely be a pain for him because he probably gets paid a bonus based on the amount of gross profits he generates in the service department. If a new system is implemented, it’s going to take a lot of time to learn it, which takes time away from other activities that generate profits.

Office managers are notorious for objecting to a DMS switch. Their life can be pretty miserable throughout the entire process, and is their pay changing for the better? Probably not. So where’s the incentive to change and learn a new system?

Extrapolate these examples out to everyone else in the dealership; the parts manager who is used to the inventory system, the salespeople who are used to and like their CRM, etc. No wonder there’s an uproar, and no wonder dealers throw up their hands and say they can’t change.

Yet, wouldn’t a more profitable dealership ultimately benefit all the employees too?
 
By Changing Nothing, Nothing Changes

 Dealers, your name is on the sign and you are the decision maker. Yet you are also part of a team. You want to do what’s best for you and your bottom line, but you don’t want to upset everyone else on the team. Is it possible to do both?

Of course, but the trick is to find and offer something unique to each team member that will help them accept the change. Tell them what is in it for them. For service managers, the extra savings or revenue could be used to purchase more lifts and hire more technicians. For parts, it could be extra cash to stock more inventory; for sales, it could be more money spent on advertising; for the office manager, it could be a bonus.

One thing’s for sure. By changing nothing, nothing changes. In today’s increasingly transparent world, dealers must be proactive in looking for ways to increase profit margins. More efficient processes and new technologies are the way to do it; but buy-in from the team is necessary to make them—and your dealership—successful.

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