I’m going to begin this month’s epistle speaking some truth to power(sports). It’s another one of my columns where I’m right, but you’re probably not going to like it. I’d like to float the idea that a lot of you are your own worst enemy. I propose that a lot of the under-performance and failure going on in the powersports industry is your own doing.
“What?!” you say? “What is this idiot talking about?! Has he not been made aware of the general malaise of the world economy? None of what’s happening to me or my dealership has anything to do with my management or the calibre of people that I have working here! I’m only a victim of circumstance! How dare he blame me for my dealership’s troubles?”
Let me lay my main argument out for you. In my 5 years in this industry (after coming from the high-tech world) one of the most surprising and disturbing things I’ve noticed was the general lack of higher education or even formal professional training among dealership staff (often including the principal or GM level).
I propose that this is being driven by two main factors: 1) Dealerships, by and large, don’t pay worth a crap (I was appalled when I saw the results of Dealernews’ Wage and Benefits review. No wonder so many dealerships are such horrible places to shop in when you pay less than WalMart does for a night stock clerk), and 2) There’s a general lack of respect for the value of education within dealerships (perhaps driven by fear on the part of higher management that they will soon be surrounded by people that are “smarter than them.” Don’t laugh, I’ve had dealer principals admit as much.)
In this economy, less than 20% of college grads are able to find a job in their desired field [ http://abcnews.go.com/Business/story?id=7636561&page=1 ]. What does that say to you? It says to me that now is an excellent time to do some major replanting in your company.
You’ve got a pool of educated people out there that could bring significant improvements to your business. I’m sure that among all of those kids that are dejectedly dropping off applications at Starbucks, Home Depot, and Best Buy, that more than a few are motorcycle or powersports enthusiasts that could contribute positive things to your business if you made it worth their time. I’m not talking about picking up good people cheaply. I’m talking about an opportunity to pay reasonably well for value (these kids have significant financial requirements to think about http://redtape.msnbc.com/2009/05/college-debt-so-crushing-grad-says-i-wish-id-gone-to-prison-instead.html). There’s a big difference.
Yes, I’m fully aware that a lot of you reading this are the principals or management of dealerships or retail establishments that have been seen as “successful” for many years. I’m sure that more than a few of the dealerships that have gone under this past year were seen as successful as recently as a year or two ago. But that success was relative. They were competing with a bunch of other dealerships that weren’t exactly highly performing either. It’s fairly easy to be a good JV team when you’re competing with other JV teams in your neck of the woods. But shortly your JV team is going to be playing against the varsity and maybe even the pros from around the world. How’s that going to work out for you if you keep doing things the way you’re doing them now?
I can hear you know… “But Todd… You’re being ignorant and naive! We need to hire a lot of people with years and years of experience in this industry because they need to know how things work as there’s so many fires going on at any given time. We don’t have the money or time to recruit the best and the brightest because we’re dealing with all the crap going on every minute, of every hour, of every day.”
I suggest that you have so many fires to deal with at your shop because you’re doing it wrong. Look… In general (notwithstanding radical outliers that are caused by environmental factors outside of your control), positive outcomes are the result of two major things: 1) quality inputs and 2) a robust repeatable process that is continually reviewed and improved.
Beyond the products and services that you sell (which are by and large generic and totally undifferentiated) what other “inputs” into your business do you have to offer other than the people? Think about it.
What does this have to do with my column’s title, “Doing Business Online?” Everything!
Businessman vs. Enthusiast
Here’s what I see happening over the next two years:
1) The very small mom-and-pop shops are going to go out of business. They will just vanish. They don’t have anything worth buying from a merger or acquisition standpoint. The hole in those markets will be taken over by new dealerships that are part of large, multi-store “chains” or dealer groups that are run by professional businessmen.
2) Large (but not unhealthily so) dealerships that perhaps have been in the family for a while, will be taken over by sons or daughters that are fresh out of B-school. These are kids that have been around the industry for their whole life and know its ins & outs. They don’t see a lot of great prospects out there in the job market, so in spite of the many family fights in the past that included a “There’s no %^&*ing way I’ll work in that %$^$ #$%^ shop of yours!” they will realize a pragmatic reality and decide that perhaps they can bring to bear their exposure to the industry and the formal business education that they picked up at college.
So what’s going to happen to you, one of the dealers that make up the bulk of shops in the middle? Check back next month to see what kind of recommendations I have for how to get out of this cycle and set up your business for success in the future.
Tags:Column, DealerNews, dealerships, E-Commerce, ecommerce, employment, internet, motorcycle, powersports
2 comments ↓
Yes, I’m leaving a comment on my own site… I wrote this as a reply to a discussion on LinkedIn, but LinkedIn limits how long a rambling rant can be. I have no such self-imposed limitations here on my own site!
LinkedIn discussion is here: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=139818&discussionID=16968203&split_page=1
I’ve been lurking here for a few days reading these replies. For the most part I’m encouraged by what I’ve read. This has been a topic that’s been stuck in my head since I started working in this industry a few years back. I actually think it’s one of the most important factors in the eventual success or failure of the business model for powersports here in the US.
So much so that I wrote a column on it in Dealernews… http://www.radicalpowersports.com/selling-online-38-you-get-what-you-pay-for-hiring-pt-i/ and http://www.radicalpowersports.com/selling-online-39-you-get-what-you-pay-for-hiring-pt-ii/
From my perspective it’s interesting because I came to this industry, and have remained active in it, for one, and only one reason; motorcycles are cool. So I would put myself in the “enthusiast” column. It’s certainly not for the money, women, or fame.
However, I’ve never been able to shake the feeling that so many of the “problems” we have could have been avoided or at least mitigated if it was a little _less_ populated by “enthusiasts.”
[over-generalization alert!]
On of the problems seems to be that the pool of folks that want to work at a dealership (and are _willing_ to work at a dealership) is mostly populated by The Young, and The Old.
The Young typically seem to be kids that are into powersports, but have never really been all that interested in things like school, business, etc. I’d say that most 18-25 year olds that WERE into those things are not willing to work in retail in general, and at a motorcycle shop in particular, unless they are quite a way out on the tail of the distribution or have some kind of unique circumstance.
Most of their previous jobs were at Jamba Juice or delivering pizza. They land a “dream job” at a shop and for a week or two it’s the coolest thing they could possibly imagine!
Eventually however something happens and they realize that it’s still a job.
You know… Work.
They have to deal with customers…
Motorcycle shop customers…
They have to be somewhat “professional”. To make matters worse, they often are managed by a boss (owner, GM, etc.) that has, as Mr. Banks pointed out, an attitude of “You’re working for (add your Big Brand here), you’re part of a global phenomenon… you should be paying us to work here.”
I think it’s pretty obvious that The Young could be helped out if they had management that knew how to actually manage (educate, motivate, mentor) _people_.
Heck, even go-getters out of college getting a job at a Fortune 500 company are basically worthless until they get properly mentored by decent managers. There’s probably not a lot of high-ranking officers in those top companies that made it there through a succession of crappy managers.
The Old are “enthusiasts” that are retired, semi-retired, etc. that are looking to get into the business they’ve always been passionate about. They typically know their stuff when it comes to bikes, riders, gear, etc. etc. However, they are (often) not working there because they _have_ to. They want to walk into a building full of motorcycles everyday and talk to other motorcycle folks.
Again, that’s not a bad thing. It’s actually a potentially huge asset. However it presents some very unique and difficult management challenges when it comes to things like motivation, education, etc.
Hell, managing just these two disparate groups of “enthusiasts” would present a serious challenge to the best managers out there regardless of industry or education level.
How’s a person that’s never been managed by a good manager themselves, never received the education necessary to know how to properly manage or lead, etc. supposed to have a chance to become a good manager themselves? Luck? Good genes? Divine intervention?
A good manager is not just someone that knows the part numbers to rebuild a carb from 1970 or knows how to do co-op paperwork. Functional knowledge is not enough to make a good manager.
The good news is that exists plenty of educational and training opportunities (some even developed by and for our industry) that teaches people how to actually become good managers/leaders.
Now back to technical knowledge…
The requirement of in-depth technical knowledge in our industry makes things even more “complicated”.
Customers (especially the internet-forum reading, club president’ing types) HATE it when the poor girl on the other side of the counter can’t tell them off the top of her head exactly what brand of oil a manufacturer recommends for break-in after rebuilding his 1949 P.O.S. that no one has ever heard of…
“I’m sorry sir, I just answer the phones here… Please stop yelling at me.”
Add on top of that the insane amount of parts, apparel, gear, etc. that are available in our industry… I’m amazed every time I look through Dealernews’ annual directory!
So you essentially need to find an enthusiast that is capable of significant internal motivation to learn an insane amount of technical and trivial detail, is an excellent people person, is reliable, and is willing to work for less than they could be making selling hot pretzels in the mall…
Yet we still have folks in our industry that say stuff like (sorry Jim, I’m just offering up the other side): “Unfortunately, most dealership employees seem to lack the professionalism neccessary to make themselves valuable to their employers. Beyond the enthusiasm, employees lack the determination needed to transform a dealership into a viable business.”
Most shops don’t pay very well, offer much in the way of benefits, etc. A lot of GM’s and owners have somehow convinced themselves that they can pay less than what a guy makes at the Boost Mobile kiosk in the mall because again, they perceive that the motorcycle shop lives in a parallel universe where “coolness” has tangible value when it comes to buying food, paying rent, or paying for insurance.
Until this industry realizes that’s complete self-delusional B.S. there’s going to be problems. I’ll offer up, with myself as Exhibit A, that there ARE people that recognize that there is a premium value to being in this industry, but I still think it’s a mistake to build the entire industry on that belief.
The good news is that there are now good people out there that could function very well as managers that are looking for work that could be valuable in building out a strong organization.
[flame: on]
I couldn’t agree more. It’s not just the powersport industry that has this problem though, there are a lot of other industry’s that ail from the same mindset.
The social work / mental wellness industry is another great industry plagued by the perceived “coolness” of their field. Only in their case, it isn’t how cool it is to be around fast and loud machines, but instead how cool it is to help those in need.
A few months ago I interviewed with a company in the wellness industry to be hired on as a marketing exec. The company was manged and owned by ex social workers and supplied services to large public and private institutions to promote mental well being in their client’s employees.
The interview went great, by the end of it they were sure I would be a fantastic addition to their team and we began to negotiate compensation. Their offer? $25k a year. Not too terrible for a kid working his way through college or an intern, but for somebody they we’re going to hire as a marketing director / manager? Come on… fast food assistant managers make almost twice that.
So I did what any reasonable individual would do and laughed. I laughed hard and for a good while.
Once I was able to catch my breath again I asked them if they we’re serious. Surprisingly, they were. Their reasoning? They were very competitive in their industry.
They explained to me that a social worker with 5 years of experience and a masters degree typically doesn’t make much more than $30k and since I didn’t have my MSW, they thought they could pick me up for less. This was coming from a company that acknowledged just 10 minutes earlier that their current team of ex-social workers were somehow failing to achieve their marketing goals.
I’m sure a background in social work is important for client relations – but for writing copy, designing promo materials and placing media? It’s not important.
I’ve written plenty of successful copy for financial advisers, but I don’t have a series 7 license. I didn’t need it for the capacity I was hired. If you think about it, the entire freelance creative industry is based on this premise.
I don’t care what industry you’re referring to, a successful manager understands the importance of discovering their company’s weaknesses and hires the best individual that they can find to fill that niche. They also understand that the only way that you can attract those individuals is to offer them compensation packages based on the field of their expertise and skill set, not comp packages based on the industry that they are in.
Cheers!
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