(This article is one of many by PHD’s leader, Bill Shenk, that have appeared in major powersports magazines. We thought it would give you a little insight into the principles that drive PHD’s 20-groups.
THAT LEAD TO PROFIT
By Bill Shenk
From the PowerHouse Top Gun cockpit...
After analyzing hundreds of dealerships through the 20-group experience, I’ve learned that there are some basic characteristics that exist in ALL the most successful dealerships - the ones I call “Top Guns.”
These characteristics are foundational, in the sense that one is built upon the other. The order of their development is as crucial as laying the foundation before erecting the wall, and then putting the roof on the wall. If not assembled properly, no business will stand the test of long-term profitability.
Sharp readers will see that these “4 P’s” require you to switch hats between two roles that our Top Guns understand very clearly: Leader and Manager. Those are very different roles. I’ll point out which of the “4 P’s” requires which role.
1) PURPOSE (A Leadership Task)
The foundation, or purpose, of any dealership is the WHY, WHAT, and HOW of your marketplace identity. It’s the “personality” that your store will present to the public. Everything you do should reflect this personality, so this is by far your key decision.
To make this decision wisely, you must know your marketplace and what opportunities it presents. Naturally, you need to know the strengths and weaknesses of your competition. But you must also know your own company’s strengths and weaknesses. The marketplace identity you choose should match your own personality and beliefs as closely as possible, or it will be as hard to maintain as pretending you’re the King of Siam…and as hard for the public to believe.
Yet your identity must be different, in some important ways, from your competitors’ identities. Try to make it reflect the personality of the customers you serve (or want to serve). What will make the bulk of your potential customers comfortable? Should you be perceived as country casual, metro, or yuppie hi-tech? Do you want to be perceived as young, new, exciting and always delivering something new? Or is your message that you are family, that your roots run deep in the community and that your customers can expect the same great relationship for generations? In other words what is your “UMP” or Unique Marketing Position and how will you deliver that message though your facility, your people, and your marketing?
For example, at PowerHouse our stated purpose is “to assist astute powersports teams to improve their bottom line and quality of life.” Everything we do revolves around that core value or purpose. But our “identity” also includes a strong dedication to remaining independent, so our members can always be sure we’re delivering the best possible products and services, uncontaminated by outside influences. Not only does the market seem to welcome that “identity” of ours, but it’s easy for us to deliver because it happens to match my own core beliefs precisely. (It’s no fun to run a company that makes you strain to be something you’re not.)
Your job is to establish such an identity for your own company, and then lead your people to fulfilling it.
2) PEOPLE (Mainly a Leadership Task)
Do your people understand and reflect your dealership’s purpose and core values? Do they have the necessary skills to deliver YOUR purpose, from their training and background to their appearance? You’ll set the tone through your leadership—not just what you say, but how you act—and you’ll motivate your managers to reflect your company’s values as they hire, train, and manage their staffs.
3) PROCESSES (A Management Task)
Are your processes documented? Is your team well trained so there is consistency in all areas of your dealership, from how your products are ordered and how your customers are handled to interdepartmental paper flow? Do those processes reflect your purpose? It may not be the boss’s job to create these processes, but it’s definitely his job to see that they’re created and (most importantly) that they’re followed.
4) PERFORMANCE (A Management Task)
Does every member of your team understand the expected performance for his or her position? Is there a system in place to quickly and concisely measure that performance? Does everyone know “how good is good?” Are your compensation plans set up to reward top performance? Are there multiple performance indicators, from profit to the perceived customer value of the products and services you provide? Again, you may not be the only source of these performance indicators, but it’s your job to see that they exist and that they’re used to maximize your company’s success.