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The ROI of People-Rich Businesses

By Richard F. Libin
07 August 2015   |   6:50 am
SALES people can improve three things: their attitude (positive), mindset (the world won’t come to an end) and their performance, both of which are influenced by their managers. Manager must provide a roadmap for their success that outlines processes and procedures, yet gives them the flexibility to apply their talent and personality for success. An…

rich-bus---CopySALES people can improve three things: their attitude (positive), mindset (the world won’t come to an end) and their performance, both of which are influenced by their managers. Manager must provide a roadmap for their success that outlines processes and procedures, yet gives them the flexibility to apply their talent and personality for success. An effective means of achieving this is:

Controlled Track Selling – Think of it like a railroad track. If the track is sound, the train won’t derail. If sales procedures are sound, sales people will succeed – as long as the procedures are not so rigid…Picture one – If the procedures/processes are rigid, like one rail on the track, sales people are asked to walk a fine line and sell using a formula, robot like. If they are given procedures or two parallel rails, and allowed to move across the ties or down the track integrating their own personality, they will succeed.

Ownership and passion vs. formulaic and mundane – Ask sales people to come to work every day and put his time and talent into the job. If they do, and managers support them, they will become more successful, and the business will grow.

Businesses are not money broke today, they are “people broke” – This essential distinction has a tremendous influence on the success and growth of businesses today. Businesses spend hundreds of thousands of dollars yearly in advertising and promotions to drive prospects into their stores only to realize – too late – that they don’t have the sales people or sales managers in place to serve these potential customers as they arrive. Being “people broke” is a critical limiting factor for growth as businesses look to expand and acquire additional stores. As many have learned, it takes a significant amount of time and investment in personnel to get new stores up and running profitably. For many, it is quite surprising to learn how much hand-holding this process actually takes.

So, how do businesses overcome being “people broke” so they can focus on growth and expansion?
Develop People From Within – When businesses look externally to fill Sales or Managerial positions, they typically recruit from a pool of professionals employed at other businesses in the general vicinity. When this happens, the new recruits bring the methods and habits of their former businesses to their new position, whether or not these methods and habits match the established processes and culture of their new employer. In essence, it’s a double-edged sword. The new Manager is hired to run the organization based on their past successes, yet they are expected to do so within the structure and parameters of an established structure which they don’t understand. In reality, what happens is that the new Manager changes the structure. This may result in a temporary increase in performance; however, since the rest of the team is not trained in the new structure, the long-term impact is a drop in performance and an increase in turn-over. We call this the “Flash In The Pan” – the new Managers come in throw some fuel on the fire resulting in a big flash which then burns out quickly. Conversely, when businesses hire – or promote – someone from within the process becomes much simpler with better results. When promoted from within, the new Manager is not intent on changing things. He/she is ready to take the next step in established structure, using processes that are familiar to the entire team, to continue to drive growth and performance.

Offer a Career Path to Every Employee – Within an established structure with clearly defined processes, it is essential to provide their teams with a clear career path. Having a career path not only clearly demonstrates the opportunities he/she has with the business, but also creates a team environment where everyone shares a common culture and goals. To complement a career path, businesses must offer an attractive employment package – a longevity plan that serves as an incentive for employees to stay at the dealership. This can include health insurance, life insurance, spousal benefits and the opportunity for substantial financial gain regardless of the position an employee holds.

Equip Employees with the Tools to Succeed – Having a career path is only part of the route to longevity and retention. It is essential that businesses help their people develop. To do so, dealers must provide mandatory training in the skills needed for every job function for every employee.

Training programs don’t have to be complex, but be comprehensive and include motivational, organizational, managerial, sales, service, and leadership skills. A host of programs are readily available from auto manufacturers as well as specialized training organizations like Ken Blanchard or Franklin Covey.

The ROI of Being “People Rich” – Most dealerships embrace what we call the Totem Pole perspective – Dealer at the Top, Managers in the Middle, and Salespeople at the Bottom. This perspective is typical in dealerships where there is little training, no clear-cut path for advancement, and high turn-over rates. It’s no secret that retention is crucial in this business.

Building longevity – not simply retaining employees – requires a different mindset beginning at the highest level, one we call the Funnel. In this model, Salespeople are at the Top – they are the ones who put everything into the funnel; Managers are in the Middle, controlling what passes through to the bottom, and Dealers are at the Bottom reaping the rewards of a well-structured environment that follows effective business processes. In this model, employees are viewed as an asset, not an expense. Training, career paths and longevity programs are seen as investments with the potential for high returns – profits and growth. Using this model, dealers can create an environment that makes them “people rich” and that leads to high financial returns.

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