What Makes a Great Dealership Leader?

If you’re reading this post, it’s safe to assume you’ve spent time working at an auto dealership and you know how important leadership qualities are to day-to-day business and end-of-year bottom lines. And if you’re in a leadership position at a dealership – or would like to take that challenge on some day – you likely wonder what makes some dealership leaders so effective in their roles while others are ineffective at best…and harmful at worst.

At Mastermind, we spend a lot of time with leaders from dealerships and dealer groups of all types and sizes, allowing us to see some of the best dealership leadership skills in action. In this blog, we’re stepping away from talking about software, data and analytics (mostly!) for a moment and sharing some thoughts from our experiences and the experiences of some of the most famous business leaders of all time, including how to:

• Hire the best employees for your dealership
• Do your job and trust your team to do theirs
• Build a dealership culture that people enjoy being part of

How Your Dealership Can  Avoid the “Bozo Explosion”

As a leader, one of your key responsibilities is to hire great people. It’s a relatively straightforward concept at its core, yet hiring talented people who are also a fit with your culture can pose challenges for leaders, especially when it comes to specialized roles where it often seems there aren’t enough “great” people to go around.

One mistake too many leaders make – especially new managers, who are often uncertain about whether they’re prepared to succeed in their new responsibilities – is failing to identify and find the people who are so good they could do your job, potentially even better than you could.

It’s a truism in business that “A’s hire B’s, and B’s hire C’s” – in other words, managers tend to hire people slightly less impressive than they are, whether out of not being able to appreciate better candidates’ qualities or out of fear that they would open themselves up to competition.

At Apple Inc., CEO Steve Jobs refined this concept, arguing that truly great employees – the “A’s” – would hire people as good or better than they were. But Jobs also warned that B’s would hire C’s, who would in turn hire D’s, leading to what he memorably called the “Bozo Explosion” that would occur in any organization where leadership didn’t maintain an ongoing and rigid focus on recruitment standards.

Nobody wants to lead a “Bozo Explosion.” Make sure you’re not only hiring people who will push you to be even better at your job than ever before, but that they’re doing the same in turn.

The return on hiring people better than you is immense. As legendary advertiser David Ogilvy would tell new managers while building Ogilvy & Mather into one of the first global ad agencies: “If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants.”

Do Your Job, Not Theirs

Possessing great leadership qualities doesn’t necessarily mean you have to handhold your team. Some of the most famous leaders in American business history agree that one secret to their success was simply not interfering when the great people they hired were doing the jobs they’d been hired to do:

• Berkshire Hathaway chairman and legendary investor Warren Buffett: “This approach seems elementary: if my job were to manage a golf team –  and if Jack Nicklaus or Arnold Palmer were willing to play for me – neither would get a lot of directives from me about how to swing.”

• Auto industry giant Lee Iacocca: “I hire people brighter than me and get out of their way.”

• Apple CEO Steve Jobs: “It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.”

In a dealership environment, one of the quickest paths to disaster is to have leaders who don’t let the people they’ve hired do the jobs they were hired to do. It’s a fast track to employee dissatisfaction, poor performance, unhappy customers and missed metrics. Those with great leadership skills understand their role is to make sure the job gets done not by doing it themselves, but by putting the right people in the right roles with the right resources to do their jobs.

Ask yourself: For every metric you’re holding someone responsible for meeting, do they have the skills, resources and authority to do what needs to be done to meet that metric? If they lack any of those three key factors, then the fault is on you as a leader.

Oftentimes, dealership leaders see employee training as a hassle, an expense or a certification requirement that gets in the way of doing business. While it’s certainly an investment of time and resources, part of being a great dealership leader is getting to know and understand your people and their skills, then identifying the places where they could accomplish even more if they had the training necessary for personal and professional growth. Automotive leadership training can yield profitable results. According to Gallup, talented leaders contribute about 48% higher profit to their companies than average managers.

When it comes to resources necessary for doing the job, don’t just think about tools, desks or funding. In today’s dealerships, the most important resource is information. This is why Mastermind’s Market EyeQ is such a powerful automotive marketing tool for dealer leaders, as it spreads that critical resource throughout the dealership to everyone who needs it.

Once you’ve ensured your people have essential training and resources, it’s easier to give them the authority they need to make day-to-day decisions. Great leaders ensure nobody on their team ever has responsibility without the necessary authority, or authority without the attendant responsibility. You can’t make every decision, but the people who are making decisions must be accountable for the results.

Build a Dealership Culture You’d Want to Join

In the same shareholder letter where he talked about hiring skilled people and then getting out of their way, Buffett also noted the importance of building a team of people you like and enjoy spending time with: “We intend to continue our practice of working only with people whom we like and admire. This policy not only maximizes our chances for good results, it also ensures us an extraordinarily good time.  On the other hand, working with people who cause your stomach to churn seems much like marrying for money – probably a bad idea under any circumstances, but absolute madness if you are already rich.”

Today, we call this “culture,” and it’s arguably your most important job as a leader.

We’ve written previously about the importance of culture in dealerships. We focused primarily on customer experience, but no dealership with a terrible employee experience can deliver on a great customer experience. You can tell when you’re at a store or office where the employees are there begrudgingly and are taking their unhappiness out on the customers. Your dealership is no different. It’s very difficult for your employees to dedicate themselves to your customers’ happiness if they don’t feel that same commitment from you in return.

Are you giving your team the training and tools they need to do their job…and do it well? Contact us today to schedule a free demonstration of Market EyeQ and learn more about how it can help you enhance your leadership skills through reporting, accountability, and giving your team the ability to work efficiently.