Bite-Sized Pieces

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Bite-Sized Pieces

Curriculum designer Caroline Slee-Poulos joins us for this week’s instalment on Lifelong Learning: Bite-Sized Pieces.

I don’t know about all of you, but I do know that when I was growing up my mom always made sure to correct me when I tried to eat extra-large bites of food. I was often guilty of this when it came to twirling my pasta. Anyone else?

It isn’t just food that matters when it comes to bite-sized pieces: it’s learning, too. While there is some data on the human attention span to indicate that we can maintain focus, or concentration, is around 45 minutes. In fact, prevailing practices in education suggest that all students should take a “brain break” at that point in a lesson. Yes, this even applies to adult students. You can read about this here.

This is the “why” behind our class structures. Rather than a long learning segment, we stick with the shorter, bite-sized pieces. Our students spend approximately 15 to 20 minutes of learning before each quick check for understanding. This built-in brain break means each individual has a clear moment in the class to pause and do something else.

For the students who look back at their time in classrooms as an unpleasant memory, this offers a chance to reset what learning means.

Isn’t it time for you to invest in yourself with Learning?

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When And Where Should You Spend Money?

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When And Where Should You Spend Money?

Guest writer Jennifer Albright addresses the money issue head-on by asking the question “When and Where Should You Spend Your Money?”

As a supply chain professional, I pretty much had to buy this when I saw it on the sale table at a local museum. This topic actually comes up quite often in our consulting life – advising dealers on when to cut corners and when to spend. It could be anything from office supplies to personnel to software and anything in between, the dealers we work with are constantly asking us when and where to invest their time, money, and people.

While the answers will vary from dealer to dealer depending on a number of factors – company size, years in business, geography, the commodity in question, and many others, there are a few constants that are always worth the investment.

People. 

It is always worth investing in people. Hire the best folks you can, and invest in training and development. Your people are your brand, and they will make or break your dealership. Whether someone is answering the phone, turning wrenches, selling equipment, or paying the bills, invest in your people. While salaries can take a chunk out of your operating budget, it’s a lot less expensive to pay for a highly skilled employee than to train up someone with less experience or to clean up after someone who was in over their head – and much less than the cost of turnover.

Planning 

This is another area where investment pays big dividends. Budgetary planning helps keep everything in check. We’ve worked with a number of folks who overspent in one area when they really needed investments in another and regretted it after the fact because they hadn’t taken the time to budget or plan for the expense. Facility planning, especially during times of growth, is huge. I can’t tell you how many times we’ve spoken with dealers who rushed through facility planning and had outgrown the new building before construction was even completed, or hadn’t taken the time to design the space appropriately and it didn’t fit their needs well despite appearing to be large enough on paper. Planning takes time which can be frustrating, and can seem expensive in terms of hiring design firms, financial folks, or investing in software, but it is well worth it. 

Technology. 

There are so many choices available right now in every area of dealer business and many of them can bring efficiency and in turn savings to the dealership. If nothing else it can be a bigger challenge to weed through all of the options and decide which technology tools best fit your dealer size, complexity, and will address your biggest challenges versus chasing each shiny new tool that catches your eye. 

Priorities. 

At the end of the day, it’s about priorities and risk. Looking back at our raccoon friend Reuben in the photo, there will be times when a cheap plastic sword will serve your purposes because it’ll get the job done 90% of the time and you can have a plan B to handle exceptions. In other situations, investing in a metal sword may be the best tool for the job or the risk involved with the plastic sword failing is too great. By investing in your people, focusing on planning, and leveraging technology where it makes sense, you’ll be in a much better position to make these spend decisions effectively.

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Operating and Financial Forecasts Using Artificial Intelligence

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Operating and Financial Forecasts Using Artificial Intelligence

Guest writer Steve Clegg brings technology to the table in his blog post for this week, “Operating and Financial Forecasts Using Artificial Intelligence.”

Operating and Financial Forecasts Using Artificial Intellignence

Forecasting your operating and financial results is an important part of any business. Whether you are a startup or an established company, accurate forecasting will help you make informed decisions in your day-to-day operations. 

Operating forecasts drive your financial forecasts—not the reverse—and allow you to predict key metrics like customer retention and customer transactions, resulting in reliable forecasts for revenue, expenses, and profits, so that you can take advantage of any growth opportunities as they arise. By understanding how you can improve outcomes in these areas, you create a business strategy that helps you maximize your profitability and meet the expectations and needs of your customers. With the use of Artificial Intelligence, forecasting and managing your growth is simplified.

Let’s look at some of the most important things that you need to understand about operational forecasting.

The determination of the key operating metrics that drive your financial performance is often very difficult to understand. As a result, many businesses are reactive versus proactive because of everything that can impact a business, including competition, service expectations, distance, seasonality, technology, and the economy. 

It is important to remember that successful businesses focus on what really matters. They make choices to identify who their customers are, what products and services are most profitable, and the markets and industries that make the most sense to target. With this approach you can improve your product and service offerings to exceed the expectations of your target customers. 

Identifying which customers, industries and geographic markets are important to your business is the first step in managing your future. You can then use this data to segment customers by type, provide them with the products and services that they are most likely to purchase, and deliver the customer engagement they expect. This approach will help you improve customer satisfaction and keep your customers coming back. Retained customers double their purchases every year that they stay with you.

How do you create and maintain reports that track your performance and accurately forecast your next 12 months? 

AI technology has come to the rescue. These plans can be easily created and updated using Artificial Intelligence which will provide a detailed plan to help you, identify what drives your business, and set clear goals and targets. With a clear plan and outline for how you intend to achieve your goals you can stay on track, overcome obstacles and manage your employees and resources to determine which operating, sales and marketing programs are working. AI allows you to be proactive by knowing the future versus being reactive and a victim of the past.

By using AI, you are able to make data driven decisions that are proactive, rather than emotional reactive decisions, based on misguided opinions or guesses. It also provides you with valuable feedback that you can use to measure the effectiveness of each decision and accurately forecast and improve future performance.

Tracking your operating results and forecasting them correctly is a critical step in ensuring that you meet all your operating and financial goals. 

Zintoro.com is an online artificial intelligence tool that automates forecasting and tracking of your key operating and financial metrics and determines what is really driving results by branch, department, product line and customers. Zintoro.com tracks historical results and provides 12 month rolling forecast with a >95% accuracy for forecasting your customers, transactions, and revenue.

The first step in creating a good financial forecast is to understand the key operating metrics that matter most to your customers and your organization. By constantly using these metrics, you will be able to make better business decisions that maximize your organization’s financial performance and meet the expectations of your customers. 

Let’s look at an example of a key business metric that Zintoro.com uses as the foundation for preparing an operational and financial forecast for your business: Your Customer Retention Rate

The retention rate tells you the number of customers who return to purchase your products or services over a specific period. For example, if you have a rolling 12-month retention rate of 70% this means that 70% of your customers will continue to do business with you after their first 12 months. A high retention rate indicates that your customers are happy with your products and services and will return to buy more. If you have a low retention rate this indicates that your customers are not satisfied and continue to look for alternatives to meet their needs. Understanding the retention rate can help you make important changes that improve your customers’ experience and ultimately improve their satisfaction and loyalty to your brand.

Customer retention is your primary growth engine, because each year a customer is retained their transactions and revenues will double for up to three to five years. With a successful sales and marketing program, transactions and sales will double again.

A successful financial forecast is based on your ability to retain customers, which helps you identify business opportunities, achieve your growth goals, and make smart business decisions that contribute to your overall success. The financial forecast, which is determined by your customers forecasted transactions and their retention, helps you manage your costs and avoid unexpected expenses that can negatively impact your bottom line. 

Zintoro.com automates the process and identifies your key metrics that drive your business and which customers you are at risk of losing. Stop guessing and start anticipating the future. 

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Managing for Success

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Managing for Success

Guest writer Arlen Swenson takes readers through what makes or breaks a product in the market with his blog post, “Managing for Success.”

Managing for Success

Most of us look for ways to be successful in our work and business careers, but what are the basics of getting there and then exceeding and continuing with that success? In most cases it depends on your approach to each situation and whether you solicit and gain input from others. 

Certainly, you may already have good knowledge on a variety of subjects and management techniques, however it is always good to verify and insure you are up to date and aware of changes in the markets you serve and possible new areas of growth opportunities. 

Checking new areas of growth opportunities is what I call developing a Pathfinder’s Mentality. In its simplest form is having an inquisitive mind about what is happening in your business and what changes or opportunities that might be available if better understood. 

A more formal approach is forming an actual Path Finder Group charged with exploring identified business and market opportunities.  The role of the group is to investigate those opportunities to determine possible fits and what would be required to attain those opportunities. Many times, it starts with looking at a product your company already produces but is not selling at the level required or examining new end-user markets that could be available to you. 

The role of the Path Finder Group (PFG) is to study products and their use in various markets and determine what those markets are expecting of your product including comparison to existing competitive products and their strengths and weaknesses. To be accurate requires the PFG to go the field and study your product and competitive products in actual applications and hear from the voice of those users their opinion of the product’s strengths, weaknesses, and suggested improvements.   

Depending on the geographical size of the product’s market and complexity may require several months of study by the PFG to develop an accurate picture of the best path to improving your product’s success in the marketplace. In the process the PFG will become experts in the product and obtain the voice of the customers using the product and developing detailed knowledge of the strengths and weaknesses of both the product and markets it serves. 

Certain discovery of basic market needs that your product needs improvement on would be communicated immediately to determine if basic design changes should be made now as part of the process.  As the PFG develops its knowledge of product and market uses, actual testing of their discoveries should be field tested to determine the effectiveness of those discoveries if those discoveries would be implemented. 

This requires the PFG conduct a firsthand study of their discoveries with the product in actual use in the hands of customers.  

It requires hearing directly from the end user their recommendations and/or questions about your product and its proper application.  In other words, why should your product be selected versus a competitive choice or a different method? 

Gaining accurate data will require a formal approach to hands-on study. 

  • How does your product compare to competition such as: size, operating ease, cost effectiveness, safety, reliability, serviceability, repairability, owning/operating cost, fuel economy, meeting OSHA standards, availability of parts and repairs, return-on-investment, customer support, customer knowledge of your product, customer misconceptions about your product, competitive mis reputations about your product, customer lack of knowledge about your product and various other market considerations. 

All of this and more must be understood to determine the best steps to gain success with the product. 

The PFG is charged with finding the right path to improve the product’s success in the marketplace.  

The time to complete PFG study and recommendations may take several months and require detailed study and changes to the product or going to the market approach.  However, sometimes proper solutions found by the PFG can be quickly implemented and they are economically viable. 

At the conclusion of Path Finder’s Group’s market/product study a detailed report would be provided to management for approval of changes recommended to improve the product’s success. 

The recommendation could include moving in a different direction, changing the design of the product, changing distribution of the product, expanding the product line offering or even elimination of the product. 

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Performance vs. Potential…Is There a Difference?

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Performance vs. Potential…Is There a Difference?

Our new guest writer Seth McColley is a HR professional with more than 25 years of diverse, action-packed experience across a number of industries such as telecommunications, restaurant/hospitality, distribution, software, retail and construction/heavy equipment. He has worked for some of the largest Fortune 500 companies and been able to apply those learnings to help smaller companies “level up” and grow. He understands that we are not defined by the titles we hold or our position on the organization chart, but rather our relationships and how we can serve others. In his inaugural blog post, Seth asks “Performance vs. Potential…Is There a Difference?”

Seth is a firm believer that people are any organization’s greatest asset, but employees need to be led, not managed. Our professional networks need to be cultivated, not manipulated. If we are the sum of all of our experiences, the connections we make and the relationships we build make us the incredible people that we are today and that we will become tomorrow. 

Seth launched his first podcast, “6 Degrees or Less”, in February 2019, with a sole focus on the art and power of networking, or “relationships” as he calls it. It’s connected to the idea, six degrees of separation, that every single one of us is no more than six steps away from being connected to one another. He uses this platform to help break down stereotypes and misconceptions about what networking is (and isn’t) and to help listeners improve their networking skills to build more meaningful, effective professional relationships. On each episode, guests from different backgrounds, with different dreams, and on different journeys will share their stories and lessons learned. If our network is the lifeblood of our careers, the professional connections that we make will significantly affect the impact of our careers. 

Seth is a solid ENFP (Myers-Briggs Type Indicator) and his five Strengthfinders strengths are – Empathy, Adaptability, Context, Harmony and Ideation. He earned his BA in Psychology from the University of Texas at Austin and his MBA from the University of Phoenix in Seattle. He is actively involved with both Dallas HR and the Oklahoma City Human Resources Society (OCHRS). He currently lives in Edmond, OK with his wife and son (5), while his daughter (19) attends Southern Methodist University in Dallas, TX.

Is there a difference between performance and potential? 

The answer is a resounding yes, particularly when you’re talking about talent and employee development. The mistake that many (if not most) organizations make is that they’re confusing one for the other or even worse, lumping them into the same group (and usually calling them high potential or HiPo). 

Having supported sales organizations a few different times in my career, I’ve seen this play out more times than I can count. The conversation goes something like this:

Sales Director: “I’ve got an open Sales Manager spot to fill and I think Bobby is the right guy for the job.” 

HR Manager: “Oh? Tell me more. Why do you think Bobby is a good fit for this role?”  

Sales Director: “Well, for one, he’s got the best sales numbers in the entire division! Did you take a look at the TPS reports last week? The guy’s been killing it for the last three quarters. He’s a perfect fit!” 

HR Manager: “Of course I looked at the TPS reports. I know he’s the best salesperson on your team, but what makes him the most qualified for the Sales Manager role? Has he ever led a team before? Has he ever managed anyone?” 

Sales Director: “What’s it matter? Bobby is the top salesperson on my team. He’s a natural leader!” 

Has anyone else ever had this conversation? Does this sound familiar? 

Abraham Maslow once said, “If you only have a hammer, you tend to see every problem as a nail.” 

One of the biggest mistakes that an organization can make, when it comes to their talent, is mistaking high potential for high performance. A blog post from Software Advice, gives managers some tools to help identify, assess and develop high potentials and high performers.  

Check this out…  

“High performers stand out in any organization. They consistently exceed expectations, and are management’s go-to people for difficult projects because they have a track record of getting the job done. They’re great at their job and take pride in their accomplishments, but may not have the potential (or the desire) to succeed in a higher-level role or to tackle more advanced work. 

High potentials are birds of a different feather. Malcolm Munro, founder and CEO and President at Boss Builders, says that “High potentials have demonstrated initial aptitude for their technical abilities and…have future potential to make a big impact.” In short, they can do more for the organization – possibly much more (with the caveat that high potentials who are consistently low performers are rarely strong candidates for management roles). 

High potentials can be difficult to identify, for two reasons.  

  • First, high performance is so blindingly easy to observe that it drowns out the less obvious attributes and behaviors that characterize high potentials–like change management or learning capabilities.
  • Second, few organizations codify the attributes and competencies they value in their ideal employees–which means that managers don’t know precisely what to look for to assess potential. 

As a result, most managers focus exclusively on performance, and that can be a problem. 

Truth. 

I’ve seen high performance get mistaken for high potential, firsthand, and you know what it usually equates to? 

Style over substance. 

When an employee is earmarked as “high potential” it’s often because they’re operating at such a high level at their current job. They may look the part, say the right things, and put themselves in front of the right people; it doesn’t always mean that they’re capable of doing more. Hence, style over substance. 

This is where a sound, solid talent management plan comes into play. The best organizations have people processes that include bench planning, succession planning, talent reviews and the like to help identify high performers, High Potentials, mission-critical roles, potential successors, and then create development plans to help put the right people into the right places. In future posts, I can dive deeper into the mechanics and details of where to begin when it comes to succession planning, how an organization determines which roles are “mission critical” (and why succession planning for those roles is so critical), and what it means to create bench plans and regularly update them. 

Clearly, managing and developing top talent isn’t easy. As HR professionals, the least we can do is get some practical tools into the hands of our managers and leaders so they can start understanding the difference between potential and performance. While these two are certainly related to one another, in and of themselves they are completely separate things.

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Ever Wonder?

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Ever Wonder?

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In this week’s installment on Lifelong Learning, guest writer Mick Vaught challenges readers to truly assess our paradigms and pre-conceived ideas in “Ever Wonder?”

Ever wonder why we tend to remain in our comfort zone and never see a paradigm shift coming around the curve? 

One of my all-time favorite role models growing up was Stephen Covey and his book titled “The 7 Habits of Highly Effective People”. In my opinion, this was his finest publication ever because it really changed my views on many things.  This book was a real game changer for me. Of the 7 habits he prescribed, habit number 5 “Seek first to understand, then to be understood”, was the most useful for me during my journey in the construction industry. I look back now at some of my biggest mistakes in dealing with what I thought was critical in problem solving, only to realize later that I did not understand the root cause of the various issues. 

A good example of what I’m talking about was my preconceived notion of how to correct the overwhelming problem of developing and retaining top notch service technicians. Like many well intended experts, I believed the best approach was to offer better wages and benefits than the competition with hopes that money would be the answer. What I didn’t understand was the critical needs of the service managers, technicians, and most importantly, customers. Over time, I gained a better understanding of the many issues and how to address these issues. Here are some of the initiatives I found to be most appropriate.  

Step 1:  Identify the scope of the current needs, and those in the next ten years.

  • Determine current utilization of techs based on OT and customer service response times.
  • Measure machine populations, aging of company rental fleet, trends of growth and new skills required. 
  • Determine and log the current CSA requirements and new product lines introduced or proposed for the future. 
  • Rank the current staff skill sets by determining specific strengths and weak areas and score each tech on an equal and consistent measure process. 
  • Chart the aging of current techs and estimate potential replacement cycles. 

Step 2:  Analyze the current mix of jobs, and skills required for the work. 

  • Determine % of Level 1 jobs currently being performed through work order analysis.  (Cleaning, Greasing, PM services.)
  • Determine % of Level 2 jobs requiring higher skill levels. (Inspections, Pre-deliveries, basic electrical and hydraulic repairs.)
  • Repeat same review of Level 3 jobs requiring troubleshooting, diagnostics, basic welding, major component R&I and exchange, equipment software usage and understanding. (Tech Tool, Matris, etc) This level will require factory and on-line training requirements for specific areas of knowledge. 
  • Finally, all Journeyman level jobs requiring unlimited skills to be able to perform all troubleshooting, diagnostics, major repairs, component rebuilds, welding, and complete knowledge of equipment software, fault code analysis, Tech. Tool, ,  etc. This level will require completion of all manufacturer online training modules, and attendance at numerous factory training programs. These techs should be targeted to customer jobs as a priority. 

Step 3: Rank the current service staff.

  • Create the same four tier tech classifications to match the service jobs and attempt to match the skills to the job.
    • Level 1 – Apprentice
    • Level 2 – Shop Technician *
    • Level 3 – Senior Technician *
    • Level 4 – Journeyman Technician, Shop / Field **

    *Requires supervisor sign off, and training requirements.

** Requires GM sign off and required training completion and testing. 

  • Pay levels are made consistent with Tech classifications, as an incentive to move up in classifications and knowledge. 

Step 4:  Recruitment

You now know the needs of what tech levels are required to meet the existing needs, as well as future requirements through business growth, changing technologies, retirements, and tech development and promotions. 

Recruiting Apprentices:

Today, tech school students are being drawn to the less “dirty” jobs upon graduation by trucking companies, HVAC companies, Major Rental companies, etc.  Recruitment has become very competitive and many companies start there in high school years by attending college job fairs. 

We need to be active in these recruitment sessions and offer significant incentives to draw the prospect to the construction industry.  The biggest obstacle facing a student after graduation from a tech school is the tuition debt they have incurred, and the expense of buying tools to start work. We will prepare incentives to address these two issues:

  • Tuition Reimbursement Program: 

The student would be reimbursed for his existing tuition debt over a period of employment as a technician with the company.  This four-year program would refund 25% of the student tuition expense every year, with 100% refunded after four years. It would be required that the student achieve a minimum of a Level 3 technician to qualify for 100% reimbursement. 

  • Tool allowance program:

The student would be given a basic tool set and toolbox to start his apprenticeship program. These tools would remain the property of the company until the employee has completed his Level 1 apprenticeship period and was elevated to Level 2, (Shop Tech). The tools would then become the property of the tech.  OR, an upfront $2500 tool bonus that would need to be paid back if the employee left in the first year. Further, a $1000 tool allowance will be given to the tech on an annual basis up to the Level 3 classification, and then receive the standard company tool allowance.  

Recruiting Senior and Journeyman Technicians:

The needs of these techs are different.  They are looking for job security, good pay, good benefits, a clean, safe workplace, nice field trucks, and more quality in the job.  To draw these potential techs to leave their current employment and join our team is more difficult, complicated, and costly. 

  • Address their concerns: 

Recruitment in regions where work opportunities are transitioning, can appeal to the job security concern. For example, the coal fields of KY and WV offer little job security at this time, and in the future. These techs are looking for what they are going to do going forward.  You can offer job security with the vibrant growing markets. You need to heavily advertise in all transitioning areas. 

  • Provide a safe, clean and modern workplace.  It is important that the facilities and shops be kept clean and updated, along with providing the tools necessary to do their jobs. Service trucks are very important to field technicians that view these vehicles as their homes on wheels. This is a very big consideration for a field tech to join your team from another company. 
  • Provide excellent training opportunities.  No tech wants to get to a job and not know what to do. Offering year-round training sessions online and at the manufacturer is a big draw for those who do not have it now. You need to market and sell that. 
  • Have specific guidelines in place to include relocation expenses, temporary housing, storage, and relocation assistance services, as required. 
  • Offer all techs an annual tool allowance, boot allowance, and specialized skills training, such as welding, MSHA certifications, etc. 

Overview:

The company will need to have a structured, consistent approach to the recruit process that will provide for the needed demand in the years to come, and fill the vacancies created by tech aging and retirement.

Balancing the tech skill levels to the work difficulty levels is difficult, but provides the best profitability to the service department, and the best customer support to the end users. 

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Are you afraid of your dealer business system?

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Are you afraid of your dealer business system?

Guest writer Chris Kohart Tackles our reluctance to update the software systems we use in “Are you afraid of your dealer business system?”

Dealerships invest heavily in people and the infrastructure to support the business, so why do so many dealers still utilize antiquated software solutions to manage their operations? Many deployed these “state of the art” business systems more than 25 years ago and still support their operations on these outdated platforms. Technology has transformed our business in many areas, from how our customers want to do business with us to telematics. What makes us believe a 25+-year-old business solution enables us to keep even or get ahead?  Thinking about changes, what was state-of-the-art business technology like in the late 1990s?   Here’s a short list that comes to mind:

  1. Personal Digital Assistants – remember the Palm Pilot?
  2. CD-ROM – remember when they were state of the art for data storage?
  3. Dial-up connectivity –internet access or point-to-point communication with your OEM?
  4. Fax machines – great for expediting signed documents, but remember those 100-line parts orders?
  5. Desktop CRT monitors – mine took up 1/3 of my desk space, and I’m convinced that’s what caused me to start wearing reading glasses

I guess that, excluding a few fax machines still in service, all the above have long been retired from your business and home.  Since software and hardware are many generations ahead of the 1990s, why is your dealership still relying on 25+-year-old first-generation software to operate?  Some dealers probably still remember the pain of training the entire dealership on how to use the system and the extremely high hardware and software costs.  Many of these dealerships are still maintaining nightly or weekly tape backups.  Perhaps it is easier to muddle along using the same solution (quick fact: most of these older “legacy” systems are on life support, and there has been no new development for years).  Think about that every time your dealership pays your vendor’s software license and support invoices.  Most legacy dealer software providers have been sold or merged a few times and probably don’t resemble the company you started doing business with. The newer consolidated entities are trying to maintain the dealers that have not joined modern times by developing middleware that allows the 25+-year-old legacy system to communicate with more modern graphical user interface (GUI) solutions.  It looks great in a PowerPoint sales presentation, but for those utilizing these tools, everyone experiences issues with two or more disparate solutions trying to communicate in real time.  Latency, loss, or corruption of data are prime examples.  Many dealers deploying this hybrid approach experience employee and customer frustration, increased license and operating costs and decreased operational efficiency.  Why would a dealer principal subject themselves, their employees, and their valued customers to this?  

The top reason: is fear of digital transformation. How many ERP projects fail? On average, 55 to 75%.  That’s a scary number, and I understand why it keeps many from moving their dealerships to modern times.  Let’s flip the averages above – why do 25 to 45% succeed?  Three reasons: people, process, and planning.  Let’s briefly break these three down:

People:

We all run lean; it’s the nature of our high dollar – low margin business.  The senior management team must make in the very early stages that your best people (senior, middle-management, and junior) be assigned.  Depending on the size and complexity of your dealership, some individuals will be assigned full-time for the duration while others will be part-time.  Most dealerships should be able to find a balance of experienced forward-looking thought leaders to participate part-time during the project.  The input, guidance, and deep understanding of your dealership’s functional (and cross-functional) areas will be a critical factor in your success.  Please ensure these individuals have your unqualified support and are provided with backup in their departments so staff and business operations don’t suffer.

Process:

Virtually no digital transformation project will be successful without going through the tedious and critically necessary task of mapping every process from levels one through five.  Don’t be surprised if you identify hundreds of processes throughout the dealership; the depth and quality of your process mapping will significantly affect your success or failure.  You will also be able to identify processes solely required by your 25+-year-old system that add no value to your operations; reviewing these processes will allow your team to map processes that make business sense instead of processes created to satisfy the requirements of the software. When you have completed your process mapping and reviews, you have a roadmap for the minimum requirements of a more modern dealer business solution.

Planning:

As mentioned in a previous article, the more steps you take upfront, the more successful your project will be.  Here are a few very high-level areas that you must consider early:

 

  • Perform a complete audit of your current business systems.  This includes your legacy solution and anything else, right down to excel or extensions written in-house, payroll processing, HR management, etc.  Don’t be surprised if your list exceeds 50 disparate solutions; it’s pretty common.  You will most likely discover software being used within the dealership that you’re unaware of.
    • Map every solution to the business area(s) it supports and understand why it is being used.  Is it mission-critical, or did someone start using it, unaware there was a better way within an existing solution?  The more granular your team is in this area, the better.
  • Create a functional requirements document.  Using the above audit, identify your business functions that are not currently being supported (possibly equipment yard management, key reporting metrics and BI, the share of customer wallet) and begin recording this information.
  • Talk to your peers– what are they using, and how does it support their operations?  The goal is to identify those who have made a successful journey and are now running their business without feeling software-based operational or growth constraints.
  • Talk to your OEMs – what dealer business system software do they support in communication (equipment, parts, service) and their sub-functions? 

Once you’ve completed the above, you can evaluate the various solutions providers – many excellent, technologically current dealer business systems are available today.  Take the time to review all of them and weigh the benefits and pitfalls of each solution.  While the ROI may be nebulous, you can take measures to validate many of the productivity and time savings you will gain, not to mention deploying a modern, user (and customer) friendly business system that will continue to update as technology advances. 

Suppose you’re concerned about organizational depth or team availability to carry all of this out internally. In that case, it makes sense to bring in an outside consultant who understands the industry, dealer software, and how to integrate successfully.  It’s a small investment in the success of your project and, ultimately, your dealership’s long-term viability. 

Considering this, why would any dealership still deploy 25+-year-old software to run their business?

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Entry Level Technician Needed

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Entry Level Technician Needed

Guest writer Bill Pyles tackles more staffing shortages (hint: it’s not just teachers and nurses) in today’s blog post, “Entry Level Technician Needed.”

Most segments of the country are enjoying growth in the construction area, which translates to growth among construction equipment dealerships and other companies. A couple of challenges for the equipment dealers are the availability of new equipment and the severe shortage of equipment technicians. 

I can recall this economic cycle back to the early 1990s when most dealers began to realize the tech shortage was real. A heavy equipment technician was not a glamorous job, and more of the younger generation was moving to the new dot com boom. Around this time, major equipment OEMs, Cat, Deere, Komatsu, and other companies began to partner with local colleges to implement technician educational programs, offering a tech certificate or a two-year degree. Even the military changed their recruiting ads showing soldiers, sailors, and Marines staring at computer and radar screens, launching high-tech armament, no longer the recruits crawling through mud pits. 

Technical schools such as Universal Technical Institute, Nashville Auto Diesel College, Lincoln Technical, and others were utilized by equipment dealers looking for entry-level techs to bring on board. 

I’d like to use this opportunity to discuss what’s worked for me in recruiting and retaining entry level-techs. It’s always a great day to have a resume cross your desk presenting a tech with years of experience with the equipment your company represents. Unfortunately, those techs are gainfully employed and do not move around. Today tech recruiting begins at both ends and in the middle of the technician level of experience. Companies that neglect to grow their entry-level techs will likely pay the price over the long term. 

But what is considered entry-level? What is a good hourly wage? What do I, as the hiring manager, need to know or do to successfully hire entry-level technicians? 

I have always felt if you gave me a motivated individual with a strong mechanical aptitude, basic skills, and a willingness to learn, over time, he or she can be developed into one of your go-to technicians. All it takes is dedicated time, training, coaching, and encouragement, all things I bet your company is currently using! Carefully planning and reviewing your entry-level tech process will normally transform a new tech into a loyal, dependable employee. Keep in mind that I have hired numerous techs over the years who left their last dealer due to a lack of training and direction. 

The first bridge to cross with the new entry level-tech is what do you pay them? Salary.com lists entry-tech wages between $20.00 and $27.00 per hour. Of course, this will vary depending on where you do business and if you are a union shop. Base your entry wage on experience and certifications (for example, A/C; Welding). Another financial aid the dealer can offer is the new tech’s cost of technical schooling. Perhaps you can offer a tuition reimbursement amount to help offset the training debt the tech has already accumulated. Of course, other benefits such as medical insurance, paid time off, paid training, tool allowance, the opportunity for advancement, and a good 401K add value to the new tech’s wage structure. Sell the entire package your company has to offer, not just an hourly wage. 

Before agreeing on an hourly wage, be sure to have a copy of your training program to share with the candidate. Basic tech testing should be used to measure the level of experience (and helps structure the new tech’s training path if hired). I would have a copy of the training outline the company has developed (both online and instructor-led) based on the OEM’s and dealer’s training requirements. This outline of required training was usually spread across a three-to-four-year period. Usually starting with basic safety training and an expectation of quickly completing the basics within a given timeframe. At the successful completion of the required training modules and mandatory on-the-job-training, there would be an increase in the hourly wage. 

The first 90 days are critical in bringing the new tech into your process and procedures. I highly recommend the new tech be partnered up with one of your experienced techs who is willing to be a coach and mentor to the new tech. I would appoint one or two coaches/mentors in each shop. These more experienced techs take pride in knowing they are helping to develop another tech. I can remember when I started my career as an entry level-tech. It’s scary realizing you’re surrounded by trained, competent techs, and I’ve just broken off three bolts because the impact was set to install, not remove the bolt. But I had a great coach/mentor, a man named Tom Kennedy. Tom was the lead tech for the shop, and I swore the man was a wizard. No matter how deep I got into a problem, Tom would never lose his temper or chew me out for screwing something up. He’d then show me what I did wrong and instruct me on how to properly make the repair. Yes, I was truly fortunate to have a great mentor early in my career. Without a doubt, it helped shape the rest of my 48-year career. Thanks, Tom! 

Depending on your dealer’s onboarding process, a new tech should not pick up a wrench for at least five or more working days. One of the best suggestions I can offer is to carefully create and constantly review your on boarding process for all employees. During the first days spent onboarding, introduce the new tech to the safety rules and policies, and meet with shop and parts personnel and those he or she will be interacting with. Cover the basics, what your expectations are, break times, lunchtime, writing service reports, etc. Make the new tech feel he is part of the team, not the “New Guy.” Please do not put the new tech on the shop floor and expect immediate performance. You’ll be very disappointed and have a very confused tech. 

Be sure to engage the new tech and ask how things are going, then listen. Sometimes a new set of eyes in your shop will see things you may have been overlooking. Several of my best ideas have come from other people, and new techs are no exception! 

If you’ve done everything correctly in hiring, training, coaching, and mentoring, you’ll see an amazing transformation of the new tech into a confident and contributing technician who may be your next mentor/coach. With a plan and the resources, it’s within your reach.

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Unbiased Customer Feedback

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Unbiased Customer Feedback

Today, guest writer Alex Kraft explores customer comments in this blog post on the importance of unbiased customer feedback.

Customer surveys are all the rage these days.  I wouldn’t be surprised if the kid’s lemonade stands down the street started texting a survey after each purchase made.  I had a recent positive experience that caught my attention though and is the purpose of this blog.  It isn’t necessarily about the frequency of surveys, its more about the employees’ communication to customers.  It seems like in almost every instance, the consumer is told what scores are acceptable.  It usually happens like this: “just to give you a head’s up, you’ll be getting a survey and it’s really important for us here.  Anything less than 5’s across the board hurts us”.  Of course, I don’t want this person negatively impacted by my answers.  I understand that many companies use surveys as an incentive compensation opportunity, but doesn’t this practice contradict the entire purpose of surveying for customer feedback?  Customer feedback is critical to understanding performance, market perception, and expectations.  But this approach detailed above has become all too common and misses the mark.  To me, identifying areas to improve is the most important part of customer feedback.  

So, if customer surveys are largely pencil whipped, how can an equipment dealer get real critiques?  What many do is go on a customer tour of their 10-20 largest accounts.  I understand how important it is to stay close with your largest accounts, I’m not suggesting otherwise.  But this won’t get you any closer to areas that you can improve.  These customers get the best of everything from your dealership:  best pricing, most attention, and best access to your senior level teams.  When one of those 10 accounts has an issue, the fire alarm sounds and everyone within the dealership comes to the rescue. Funny enough, you don’t need to ask as almost everyone in the dealership knows exactly what these customers’ experiences are with your company! 

I learned this lesson when I worked for a dealer and again once I started Heave.  In my dealership days, I remember meeting a large account that rarely gave us business.  We’d get the occasional rental and quote every purchase, but when it was time for them to sign the contract, the other dealer walked out with the signature.  We had one of our top salesmen on the account and he was a true professional, calling on them weekly.  I don’t remember what prompted us to ask the question, but I do remember the meeting when we just flat out asked, “what are we NOT doing that _______ dealer is doing?”  The customer described their experience with one of our competitor’s service departments as the deciding factor.  He mentioned that our competitor serviced their machines on the weekends and off-hours.  When they showed up for work on Monday, their fleet was ready to go with invoice in hand and that is why they continued to buy from our competitor.  He said, “no one else in the market has ever come close to this experience, and when we need service from the others it always interrupts our operation.”  This was a great eye opener for me as a leader.  I learned that day where the bar was for us if we wanted to earn, not only this customer’s business, but most likely many of the other top accounts in the area.  This is not something I would have “learned” from reading customer surveys. 

I visited many customers when launching Heave.  We had a vision for what the platform could look like and how we could serve customers.  There were two customer visits that stood out, as both customers told me that Heave ‘wasn’t for them’.  If I was ten years younger, I probably would have gone into a pitch trying to convince them that they should use our marketplace.  But the purpose of the visit wasn’t a sales call, it was an information gathering meeting.  For me, this was an incredible learning experience to understand from their perspective why Heave didn’t provide value.  These two meetings were pivotal in helping us shape our product and strategy. Without this feedback, we would’ve continued to struggle defining who Heave is built for and probably wasted a ton of time pursuing the wrong customers.   I can’t thank those two individuals enough for the respect they paid me by being honest and unbiased.  

Every dealership knows a group of customers who don’t really buy from them but that they know well.  These are the customers who can be incredibly helpful if they’ll give you the time and be honest.  One great quote I’ve learned years ago from an executive was, “customers vote with their wallet”.  Maybe there’s a group of customers that have quietly shifted their buying behavior towards a competitor the past few years.  We’ve all run through the list of customers parts sales- are there customers that buy parts from your dealership but don’t have corresponding service revenue?  My point is that these are the perfect interview candidates.  When you start losing business, the typical knee jerk reaction is always, ‘they must be solely buying on price’.  Rarely is that the case.  But it makes us feel better because our inner dialogue tells us that there was nothing we could do. Our job as leaders is to put the effort in and dig deeper to find out where we are falling short. The other thing worth mentioning is that it’s ok if you can’t put an immediate fix in to some of the issues that arise.  For the example I gave above about servicing equipment on weekends and off-hours: our dealership didn’t have the manpower or expertise at the time to shift in this fashion.  The point is that it’s much better to know where the bar is set than to make internal excuses or to simply not know what is driving market decisions.  This feedback helps shape long term goals within the dealership. I think you’ll be pleasantly surprised what people will tell you if you approach it in the right way and create an environment where customers feel that they can be open and that you’re asking for the right reasons.  

And a quick reminder:  when Ron sends out a survey asking whose content on his site you’d prefer to read more of, please don’t forget to rate mine near the top.  “All 5s’” for this guy…

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The Importance of “Professionalism” in Recruiting and Retaining Excellent Technicians

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The Importance of “Professionalism” in Recruiting and Retaining Excellent Technicians

Guest writer Steve Johnson addresses the important issue of hiring and retaining employees in this week’s post, “The Importance of ‘Professionalism’ in Recruiting and Retaining Excellent Technicians.”

Finding good people and employee retention have for years been tough, relevant issues in the equipment industry, especially with regard to technicians. This also applies to other jobs at your dealership.  The “great resignation” has brought the issue of retention to even greater prominence. Now, some might say, “aw, they’re just lazy, want a handout, have had it too easy,” etc. 

I don’t buy it. 

I’ve seen too many motivated young people at career and technical colleges, at Skills USA and other venues to buy that. I’ve seen too many great employees and great employers who show me a different story to buy that. There are too many young people out there who make great employees at companies that re far-sighted enough to educate them well and provide great career opportunities. There are too many companies out there that manage their retention rates well through expert and informed “professional” human resource management. Here I am not just referring to the human resources department, but the entire organization’s management. 

I remember once asking an equipment dealership owner what he pays beginning techs and mentioned what I thought was an average number. His reply? “Absolutely not, nobody can live on that! In a different mid-career job, I worked for a training organization, and one business owner was angry at me because he had trained all his people and they had all quit and moved on. He said it was my fault. In reality, it was because his shop was far less than desirable as a workplace. Another said he couldn’t find any good techs. Then he told me he was paying them a way below market rate at $8.50 / hour. Seriously? Which of the above was the more professional reaction? 

There have been many articles I’ve read over the years as to why people want to leave their jobs and do leave their jobs. It seems to me that the reasons are not that different today from those years ago… an unlivable wage, no upward mobility, poor leadership, a negative company culture, below standard benefits, a chronically overworked staff, and so forth. I would never expect employees in today’s labor market to stand for that, and apparently many are not. In my opinion, the “great resignation” is largely more an issue of employer human resource management professionalism than an employee issue. 

In summary, my belief is that running a professional organization has everything to do with dealer professionals treating people like the human professionals they are in a professional environment. What does that mean operationally? Here are some thoughts on employees staying or leaving. 

  1. Fair and equitable pay is an important factor; everyone wants to do their best supporting themselves and their families. Fair and equitable benefits are also important; ask anyone who has had medical issues and did not or couldn’t afford to have health insurance.
  2. Is there anyone out there who doesn’t feel burned out at times; needs some personal or family time; or some vacation time to be with their families? How about providing on average a good balance of work/personal life.  
  3. Not all, but most “motivated and productive” employees do want to have continuous learning opportunities, both OTJ and more formal learning, to help them move along in their career into better paying, more responsible jobs. There are other ways to enable this than just “climbing the company management ladder.”
  4. Most employees would like to know that their employers are paying attention to them and their near- and long-range personal and professional goals. Consider that the costs of not paying attention to such things continue to go up.
  5. See #4 above. This is particularly true for all leaders and managers, from parts and service managers all the way to the top management.
  6. Does your company have an employee feedback mechanism to take the company pulse. For example, does management “walk around” the company often to be accessible and get the pulse? What if you found that half your company wouldn’t recommend employment there to a friend? I know of that happening at one company. Does management make an honest effort to find out why people are leaving? Do they act on the collective information results?
  7. Does management set a good professional “work ethic” example to employees; what about employees to other employees. Do the rules apply to everyone? Are honesty, good character, integrity, mutual respect and fairness words that apply to actual practice at the company and are at the top of the company’s value list?
  8. When you hire a new, qualified technician, or even an intern or apprentice, do you have them on the wash bay, or make sure they are working and gaining new experience at the highest level they are qualified for?
  9. Does your shop appear as a professional environment should, or does it hearken back to memories of years ago that preserve the old “grease monkeys” image. Are your employees proud of where they work? Does your employee dress code reflect professionalism or something less desirable? Yes, even maybe uniforms in the shop.
  10. Are up-down and down-up company communication’s what they should be? Does staff communicate well to all concerned parties? This includes any performance reviews… “If we’re doing our job as leaders, a performance review should only be two columns: Column A is what you do great and Column B is what you do not-so-great. Now, here’s how we move things from Column B to Column A.” (Story by Carly Guthrie, Guthrie HR Consulting, San Francisco, CA)

My goal here is to urge you to think about “company professionalism” and how that impacts your companies’ human resource management as you develop a hopefully successful recruitment and retention plan. Yes, the above over-simplifies the issues greatly. However, I believe that if companies work to manage the career interests of new and experienced employees continuously and professionally and give them challenging and rewarding work opportunities in a professional environment, those employees will thrive. So will those companies.

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