Two dealerships are nearly identical in location, facility and staff size as well as product lines, but one is making five times the profit of the other. Why? It was a question I was anxiously awaiting to answer when I read "Good To Great," by Jim Collins, co-author of the bestselling book "Built To Last."
"Good To Great" delves into companies that generated exceptional results and sustained those results for a minimum of 15 years. Collins explains patterns and shared characteristics of good-to-great companies and reasons they grew above the general market. Although the book focuses on public companies, the principles can be applied to any business regardless of size and public stature.
One significant similarity of the good-to-great companies was their leaders and the quality of their staff. Collins describes the importance of getting the wrong people off the bus and the right people on. Due to payroll costs, however, keeping the right people on board can be expensive, but they're worth every penny.
The low traffic counts and ultra price conscious shoppers have caused nearly every dealership to cut expenses. While I believe in "cutting the fat," it's vital not to sever the muscle. The talented employees have helped their stores last this long, and it's those same employees who will bring them out of this rough period. Hang on to them if at all possible.
Karin - Your comments are so correct. We (Channel Ideas, "The BOS") tell our clients that the best way to make more money is to spend more on good people. If someone isn't performing, the "line needs to be cut". That doesn't say that paying more (to new hires) automatically provides better performance but good or proven new employees will cost more yet greatly increase profit from hard and smart work. We need more dealers to understand this is a big part of making it in this down cycle of the industry.