In the summer issue of Rural Lifestyle Dealer, I shared 4 decisions that every dealership must get right to maximize its revenues, profits and time. Those 4 decisions are: people, having the right people in the right seat doing the right things; strategy, top-line revenue growth that is driven by clarity of focus and alignment within the entire organization; execution, turning increased revenue into increased profits consistently month after month; and cash, growing your cash on the inside of the organization by focusing on your cash conversion cycle.
Now that we have a high level understanding of the 4 decisions, I wanted to pose some challenge statements to help you see how the 4 decisions can impact and guide your organization. In reviewing the statements and answering the yes or no questions, I encourage you to consistently evaluate your organization. Look at where you are and how you are progressing to where you want to be. These statements will help you identify specific actions to improve your dealership.
Statement 1: We have clear, agreed upon and well-defined responsibilities and roles. Yes or no?
Most employees and employers want to know what success looks like for every person in the organization. Unfortunately, it is not always as clear as we would like it. There are 3 components that must be defined for every position to have clarity: 4-6 characteristics to be successful; 8-10 responsibilities; and 2-4 expected outcomes. Characteristics are items that are not easily trained and we possess naturally, such as being detail oriented or relationship minded. Responsibilities are what the position does, not how the employee carries out the position. Expected outcomes are clear "measurables" that state what is required, such as sales, turnaround time, budget management, etc. Start with your own position and then move through the rest of the organization. Once you get yours right, the rest will be easy.
Statement 2: All of our employees can clearly articulate the company's strategy in a single sentence. Yes or no?
In 10-20 words, every team member should be able to state what your focus, priority and direction is for your dealership. You should write this sentence as well as teach, train and communicate it clearly so everyone is on the same page. This sentence will create motivation for all. Here's an example of a strategy statement from General Electric: "We will be #1 or #2 in every market we are in or we will get out." It's simple, to the point and will drive action for every position.
Execute the Plan
Statement 3: Everyone can clearly articulate the top 5 priorities for the quarter and know the role they play in achieving those priorities. Yes or no?
I believe every employee should have a 90-day action plan. This keeps the team focused, with benchmarks, timelines and key dates to ensure progress. A team member's 90-day plan should be driven by the company's goals and priorities for that period.
I think of a priority as a domino. Remember as a kid lining up dominos on end, knocking one down and watching the rest follow? What are the top 5 dominos to knock down this quarter that will drive the results you seek?
Statement 4: We consistently prepare 12-month cash flow statements and regularly review our progress.
Yes or no?
Have you ever said, "Our financials show we are making money, but where did the cash go?" This is such a common statement in the business world. Not only do we need a budget each month to ensure we are profitable, we also need a cash flow statement to predict when we will have cash coming in and when we may be short on cash. Take the time to map out the next 12 months based on when money comes in and when you will pay the bills, debts or take on new expenses. This can be considered the story of your business for the next year. Granted, the story will never be 100% accurate but it will be a guiding post for decisions, actions and cash management.
Keep your focus on these 4 areas - people, strategies, execution and cash flow - and take action to grow your dealership!