You Are Not Running A Democracy

In Fixed Ops Toolbox by Don Reed

“The secret to success in service operations is not employee “buy-in” – it’s holding service employees accountable.

“There are only two reasons why advisors are not presenting menus to 100 percent of your service customers: 1) They don’t know how to, or 2) They don’t want to.”

— Don Reed, CEO
DealerPRO Training

Hitting Home …
Recently, I conducted two workshops at a conference for a major parts supplier. Afterward, I had the pleasure of speaking with a number of attendees and answer their questions pertaining to some of the workshop content.

Many of these attendees were, of course, dealers and managers who made comments like” “You really hit home hard!” and “I felt like you were talking about my store” and “I’m going to use your comments with my employees.”

I asked what specifically they were referring to regarding my comments and the two most common answers given were: “You are not running a democracy!” and “Are the inmates in charge of the asylum?”

The point I was making is that, as a dealer, you are the ultimate decision-maker. As a dealer, do you need to hold an election every time you want to make a change in policy, processes or personnel? Do you really need anyone’s vote other than your own?

Assuming you own the store, aren’t you the one who has made the investment in property, equipment, inventories, marketing and personnel? If so, then don’t you deserve a good return on that investment?

If you answered “yes”, then why do you think you need permission from any employee to make a change in anything? What would be an example? How about “employee buy-in.”

What group of employees do you suppose these nice folks had the most concern about “buy-in” to change? If your answer is “technicians” you are right on the money! I find this very troubling, given that I did not speak to a single person who told me their technician productivity was more than 65 percent.

Think about that for a minute …
You are paying your technicians an hourly rate for 40 or more hours of clock time on the job and yet they are only producing about 26 billable hours!

And you are afraid to implement any changes in processes and compensation in order to increase their productivity because they might quit working for you? Sounds to me like the inmates are definitely in charge of the asylum!

Let’s assume your service department’s productivity is running at 100 percent. Great job!

You have two open bays with lifts and you ask your service manager to hire two more technicians so you can sell more appointments, increase service sales and reduce repair cycle times, thereby raising your service absorption. Then the first words out of your manager’s mouth is: “Ralph and George (your techs) each are using two bays and they would be very upset if we hired two more techs and gave them one of their two bays, so I don’t think this is a good idea.”

What do you do?
Do you need the “buy-in” of your three employees before you can make a decision? Do you need their “buy-in” in order to provide your customer with a higher level of service?

Here’s another thought. You have a very good F&I department currently averaging more than $1,000 PRU by doing a great job selling from their F&I menus. You then decide to implement a service department maintenance menu to properly train your customers on preventative maintenance and increase service sales. You pay a professional to design it for you and install it on your advisors computers. You then have all of your advisors professionally trained on how to make a proper feature/ benefit presentation of the menus just like you did with your F&I producers.

A couple of weeks go by and you sit down with your service manager to review your advisors performance report and you find that your HPRO, profit margins, 1-Item repair orders and sales per RO have not improved at all.

You ask your service manager: “How can this be happening?” He responds: “The advisors just don’t have the time to use those menus.”

What do you do?
Before you answer that question, understand this: There are only two reasons why advisors are not presenting menus to 100 percent of your service customers: 1) They don’t know how to, or 2) They don’t want to.

Now, you’ve already paid to have them professionally trained, so clearly they should know how to. Clearly, they just don’t want to. You see, they did not “buy-in” to the training and the new process of presenting menus.

Really?  Do you need their “buy-in” to implement this new process?

How about if you decide you want to train your service and parts managers to become more effective managers by measuring the performance of their respective employees every single day. You do this by using those measurements to compare their performance to the industry benchmarks and thereby hold them accountable for their individual performance. You feel it’s important that these managers become proficient at reading, understanding and evaluating their departments’ financial statements to build a plan and focus on achieving 100 percent service absorption.

Your managers respond with: “I don’t have time to do all that stuff.”

What do you do?
Would you agree that if your managers do not have time to do “that stuff” then they really are not managing? Do you need their “buy-in” to do the job you hired them to do?

By now you should have a pretty good idea that I don’t have much empathy for people who don’t “buy-in” to change when it comes to improving customer satisfaction and retention, increasing profitability and giving a dealer the kind of return on their investment that they deserve.

Here’s a News Flash: Condition: There are dealers who are losing money in their service operations!

Cause: Lack of “buy-in” by employees to change!

Correction: Hold them accountable to change or replace them! You don’t need their vote.

You think I’m too harsh? You think because someone has worked for you for a number of years that they shouldn’t be held accountable for their performance? Does tenure make them a Top Performer? Please answer the following questions:

  • What do you do with an F&I producer who can only average $200 PRU?
  • What do you do with a salesperson who can only sell two units a month?
  • What do you do with a sales manager who closes less than 10 percent of your opportunities?
  • What do you do with a sales manager who doesn’t have time for an appraisal?

I’m guessing your answers might be a little harsh. You see, most dealers have proper accountability standards in place for the sales departments and even the office staff.

Your processes are not optional based on who “buys-in” to them, are they? Why should your service and parts operations be any different than your sales operations?

Remember this: If any employee is not a top performer there are only two reasons for that:

  • They don’t know how to be a top performer
  • They don’t want to do what it takes to become a top performer

Now, if they don’t know how, you can correct that condition with training that will give them the tools and skills necessary to perform at a higher level. If, however, they don’t want to learn new skills and refuse to change their behavior in order to perform at a higher level, then it’s time to change the manner in which they are compensated. In other words, compensation is directly affected by their performance based on the goals you have established. If a change in compensation has no impact, then it’s time to start aggressively recruiting for their replacement.

As a dealer or manager, you deserve better, so give yourself a pay raise by recruiting employees who want to become top performers and are willing to be compensated by earning incentives.

Remember, you are not running a democracy

Call me toll free at 1-888-553-0100
Or email

Don Reed
CEO–DealerPRO Training