What You Can Learn from Small Town Auto Dealers (HBR)

(Although this post was written nearly a decade ago, its lessons remain relevant.)

Until recently, one of the less-reported aspects of the crisis in the automotive industry is the effect that its radical downsizing is having on auto dealers. Now that General Motors and Chrysler have axed roughly 1,100 and 800 dealers respectively, stories of dealerships closing are front page news. While cuts have come largely at the expense of urban dealers, some smaller rural stores are surviving — at least for now.

Many of these smaller dealerships are family enterprises; three and even four generations old. Their longevity is a testament less to Detroit’s products and more to their smart and sharp business practices. And now that some of their competitors are closing they may do even better. Let’s consider what business leaders can learn from these small-town auto dealers.

Know your customers. Small-town auto dealers know what vehicles their customers prefer. This comes from having long-lasting ties to individual families, selling new cars and trucks to grandparents and parents, and putting the children into affordably priced used cars. Part of knowing your customers means considering their changing tastes. Decades ago many of smaller dealers signed franchise agreements with Asian and European manufacturers like Honda, Nissan, Toyota and VW to provide their customers with even more makes and models from which to choose.

Service matters. Dealers will tell you they make more servicing cars than selling them. Manufacturers pay for warranty repairs but good dealers, particularly those in small towns, will keep their customers returning after the warranty expires because they provide reliable servicing. They also have a reputation for honesty, a word that is not often associated with automotive retailing. Local dealers have no alternative to treating their customers right; they live in the community, and word gets around.

Invest in the community. In many areas, car dealers are the soft touch for youth sports teams as well as school musicals and church raffles. True, it is good visibility to have your store’s name on scores of soccer uniforms and and church bulletins, but something more is at work. Car dealers are part of the life of these towns; their philanthropy supports causes and activities that add texture to the community.

Maximize opportunity. Dealers are entrepreneurs. Those who are not closed will get aggressive. As reported in the Wall Street Journal, surviving dealers will buy up inventory at a good price, add salespeople (some from former competitors), and expand their sales reach. One Dodge dealer in Jackson, Michigan — right in the heart of “downturn valley” — said, “I’m going to buy every car I can find with every dollar I have until I run out of money.” While that attitude may have led investment bankers to run Wall Street into the ground, hearing it from a dealer sounds more optimistic. He has faith in himself, his business, and his community.

Not every dealer is worthy of imitation. Just as there are poor businessmen in every field, there are less-than-reliable automotive retailers, especially ones who cheated their customers, not to mention their own employees. But these smaller, successful dealerships can teach us a lesson or two that may help us grow our own businesses.

As a youngster I recall the dealer showroom windows that were papered over every September in anticipation of the sparkling new models that would soon be introduced. I still remember drooling along with my chums at the brand-new 1963 Corvette parked at the corner of Carl Schmidt’s Chevrolet in Perrysburg, Ohio. We ran our fingers over the radical new lines of the first Stingray. No salesman shooed us away; our ogling and awing was a kind of third-party endorsement.

Maybe that’s another lesson; let the kids touch the merchandise and one day, he’ll tell his friends about you.

First posted on HBR.org on 5.18.2009

Crisis Raises Issues for Executive Coaches (HBR)

Note: While this post was written nearly a decade ago, the research cited remains relevant today.

1999 was the year of me! 2009 may be the year of us!

At least that is what we may infer from a new survey of seventy executive coaches conducted by WJM Associates, an executive coaching firm located in New York City. As the survey states, “the change [in coaching priorities] seems to reflect the trend of executive coaching being used by organizations to address specific business issues, rather than for individual, general ‘self-improvement’.”

This makes good business sense. 1999 was a good year. It was a time of the new economy when e commerce was transforming the way people and business interact and operate. Top five coaching objectives 1999 were for “self-awareness, personal goal setting, work/life balance, stress management [and] improve quality of life.” 2009 is a very different. We are mired in the deepest economic downturn since World War II. Analyzing today’s coaching priorities which are specifically requested by client and their employers gives us a handle on how businesses are coping with the huge upheaval.

Build/Align/Motivate Team. Organizations need executives who know how to get people to follow their lead, especially in challenging times. It takes a leader who knows how to assemble the right people and put them in the right places so they can do the right work. Motivating them comes from providing them with the right resources and right opportunities. This is not always easy when resources are scarce so the leader needs to be seen as doing what she can to help her team succeed.

Executive presence. Leaders need to demonstrate their earned authority. Presence is the manifestation of earned authority that comes from knowing how to do things as well as having earned the respect of others. Another critical aspect of presence is composure. Leaders need to keep it together when everything else around them is falling apart. Leaders demonstrate their mettle during crisis.

Effective communications. If you want to lead others, connect with them. Yes, it is imperative to articulate the message, the goal, and the outcome. But you also need to invest yourself. That comes from listening to others as well as allowing others to give you honest feedback. Learning from what you listen is critical to moving the organization forward. Use the down time to learn more about the capabilities of your people.

Interpersonal savvy. As Harvard author and psychologist, Daniel Goleman, has taught us, leaders must be able to get along with others. The ability to relate to others as a fellow human being is essential to gaining buy in for a leadership objective. Sure you can tell people what to do, but if you do not earn their trust you will get compliance, not commitment. Being everyone’s pal is not necessary, but treating others with respect is essential gaining trust, an attribute that is essential to holding teams together in trying times.

Strategic thinking. So often we coaches hear the need for managers to think and act more strategically. A reason more managers do not do so is because their bosses keep them occupied with tactics so they do not have time to think let alone act strategically. Therefore, senior leaders must give their direct reports room to breathe, reflect and consider alternatives that will affect not just a department but also the enterprise. Now is a great time to map out new strategies that may help your company find ways to make the best of bad times.

Of these five, only “executive presence” is focused on the individual; the other four are focus on relationships with others or in the case of “strategic thinking” what executives can do for the business. That said, we cannot forget the individual, as my friend and fellow Harvard blogger, Stew Friedman, demonstrates with approach to Total Leadership, individuals must be tuned into their inner selves and satisfy those specific needs if they are to be truly effective, especially over the long term.

Executive coaches are business professionals; like all consultants who succeed they have learned to adapt to changing business conditions and respond to evolving developmental needs. And that may be a hidden benefit of the executive coaching process. Since most coaches work for a number of different businesses, good ones have experience working not only with different executives, but different cultures and disciplines. That provides coaches with a long view of how organizations respond to change and how those changes affect employees. That insight, over and above the coaching process helps individual executives gain perspective that they can apply to help their organizations manage tough times as well as good ones.

First posted on HBR.org on 5.21.2009

VIDEO: How to Lead When Everyone’s Watching

Savvy leaders know that everyone in their organization is watching them.

So what can leaders do to lead in the age when social media is not only ubiquitous but also perceived to be more credible than mainstream media?

In this video, I offer some suggestions for leaders who need to manage their time in the spotlight.

First posted on SmartBrief on 7/21/2012

Troubleshoot Your Way to Recovery (HBR)

One summer Akio Toyoda disappeared from public view. In reality Toyoda, a member of the company’s founding family, was very much in view if you were looking on the asphalt of a dealership in Ann Arbor, Michigan. As Michelle Maynard writes in the New York Times, Toyoda, who will become company’s new president this June, was on his hands and knees inspecting the undercarriage of the new Toyota Tundra.

Unlike most of Toyota’s product line, the full-size pick up was plagued with problems that forced Toyota to issue recall notices. As Maynard notes, what Toyoda was practicing was a time-honored tradition in the Toyota Production System, called “genchi genbutsu,” translated as “go to the spot.” That is, find out where the trouble is through first-hand observation.

Genchi genbutsu, or trouble shooting, is a practice prescribed in “lean thinking” — an approach to productivity that marries two complementary concepts: improvement and learning. The part of lean that involves trouble-shooting is something that every manager can put into practice as a means of not simply delivering continuous improvement, but of finding out what’s working and what’s not.

Recessions are a prime time to practice trouble shooting for two reasons. One, managers are challenged to do more with less; two, managers may have more time due to the economic slowdown. Most especially, trouble shooting can be essential to optimizing execution and so for that reason it makes good sense. To implement your own form of trouble shooting, consider three questions:

What is the real problem? Dysfunction is often apparent. For example, a product does not perform to specification. Or a process fails to deliver a consistent outcome. Diagnosing the problem requires the discipline to find the root cause. A product failure could be because of a faulty part; a process failure could result from a missed step. You do not know until you take time to investigate.

How do we fix it? Sometimes, as with product recalls, the fix can be costly. Other times it can be solved by a simple product or process redesign. Judging what it required takes an experienced hand with strong diagnostic skills, but also savvy to understand how to make the most effective solution and do it expeditiously.

Who is best suited to fix it? Putting the right people on the job is essential. Not everyone is a born problem-solver. You want to have people who like asking questions but more importantly have the facility to analyze and implement solutions. You also want people with a degree of tenacity, those who are willing to stick with it until they find a solution.

An important part of implementing trouble shooting is that it puts the manager into closer contact with people doing the work. As all experienced managers know, nothing good can happen without the input and buy-in of people doing the work. And for all the emphasis that companies put on execution, too frequently they omit the human aspect of bringing initiatives to life. By talking and listening to people on the line, or in the cubicles, managers find out what is going well and what requires improvement.

Trouble shooting by itself will not generate value but without its practice, organizations will find themselves repeating mistakes and worse failing to capitalize on lessons learned. And in times of turbulence that is something that cannot be overlooked.

First posted on HBR.org 5.26/2009

Never Let Your Ego Stop You from Learning (HBR)

When the most physically dominant player of his generation goes back to school because he wants to “learn the secrets,” it makes news. NBA all-star Shaquille O’Neal recently took a crash course in sports broadcasting journalism at Syracuse University in preparation for a career after basketball. O’Neal is no media neophyte; as reported in the New York Times, he’s starred in movies, made rap albums, performed in over 250 commercials, and done too many post-game interviews to remember. Still, O’Neal aspires to something more — to do a sports talk show — and to do that he wants to learn to develop and deliver stories on the air.

O’Neal’s experience reminds me of what thought leader Jim Collins did a few years ago. In addition to being a best-selling author and much sought after consultant, Collins is a climber, and has been since his teen years. But sometime in his early 40s, as he writes in the Epilogue of Upward Bound, he knew that if he wanted to get better he would have to relearn his climbing technique. And so he put himself under the training of two climbing coaches. “The most important lessons…” as Collins explains, “lay not in what I needed to learn, but in what I first needed to unlearn.” It was arduous and awkward at first, but Collins persisted and made progress. In honor of turning fifty, Collins scaled the 3,000-foot vertical face of Yosemite’s famed El Capitan in just 19 hours, a feat that takes most experienced climbers at least 24 hours.

There are lessons for managers in what O’Neal and Collins have done. O’Neal honed his basketball skills through practice and coaching; Collins holds an MBA from Stanford and is an accomplished teacher. Each has learned how to learn in one field and has been able to transfer that skill to another field. That transference discipline is essential to continued self-development.

Peter Drucker advised in his famous Harvard Business Reviewessay, “Managing Oneself,” that it is critical to realize how you learn. For example, Drucker writes that Churchill, a poor student, “learn[ed] by writing.” Beethoven wrote in his sketchbooks but did not refer to them when he composed; ideas and melodies had been committed to his subconscious. Speaking personally, before I teach something I feel more comfortable when I write out my ideas first. Recognizing your learning method is important because it defines the way you absorb information and process it as knowledge. As children we are force-fed in classrooms (and not always well either); as adults we need to use our intelligence to discover how we master what we learn.

Most often you cannot receive more schooling, especially when dealing with critical issues that are fast-breaking and in which there is no body of formalized instruction. You will need to figure things out for yourself. For most leaders figuring things out is second nature; it is way they have arrived in positions of leadership. But the best leaders are those that are never afraid to ask questions. Rather than a question being a sign of ignorance; it is admission ticket to learning as well as a good way to build rapport and trust with colleagues.

Neither O’Neal nor Collins let their egos interfere with their desire to learn. That is a good lesson for the rest of us. There is little to gain by allowing your ego to supersede your desire to learn. Too often we may feel too embarrassed go back to the classroom, or even to ask questions, for fear of looking stupid. Actually the stupid thing to do is to fake it. The smart thing is to apply your learning skills.

First posted on HBR.org 5/28/09

VIDEO: Individuality and Teamwork

“We expect everyone here to be team players.” 

Most of us have had a boss who preached teamwork. Some bosses even like to put up posters with slogans such  as, “there is no ‘I’ in team.”

Teamwork is essential to organizational success, but too much teamwork can be deadly.

The secret to effective collaboration is individuality. You want everyone on the team to feel free to contribute ideas to a project as a means of instilling ownership and therefore increase engagement.  That does not mean that every idea that anyone says goes, but it does mean people can contribute their brains as well as their brawn.

First posted on SmartBrief on 8/03/2012

Exert Ownership in Your Workplace (HBR)

In March 2008, Tom Stewart, then editor of the Harvard Business Review, posted nine trends that he believed would influence the future of business in the coming years. Stewart focused chiefly on big ideas such as multiculturalism, financial regulation, and intellectual property. Inspired by Tom’s fine example, I would like to offer my suggestions for human factors that will shape the workplace in the coming years.

– Managers will talk strategy but act tactically.

– Initiatives from on high will falter on the shoals of poor execution.

– Companies will say that people are their most important resource, but profits will dictate decisions about headcount.

– Bosses who make the numbers will be rewarded more than bosses who “make” people, e.g. develop them.

– Connections to the top will trump competency when it comes to getting promoted.

– People with no interpersonal skills will be promoted into management.

– Your boss will not listen to you.

No doubt as you can tell, none of these are future trends. They are a collection of actions and behaviors that we see every day in the workplace. They are the things that Scott Adams has used to great effect in his Dilbert strip as well as the creators of The Office have used in their series. Readers can certainly add many more. The challenge is what to do about it?

To me it comes down to a simple proposition: exert your ownership. If your boss is not giving you feedback, ask for it. If your teammates are driving you crazy, talk to them. If you are struggling with an impossible workload, find ways to lighten it. Proceeding as you are is inefficient; failing to address the problem may be even worse. Bottom line, you have a responsibility to do the job for which you are paid. Do it.

Part of the ownership proposition demands that you continue to learn. Once upon a time, hierarchies made decisions for people; they told you what to do and how to do it. In return, you were compensated and developed. That social contract began to erode at least a generation ago with the rise of emerging global competitors; downsizing became a way of life. Smart employees realized that they must fend for themselves, or at least develop their own skills. Whether you work for a small company or a large one, you are responsible for your career development. Insist on it.

All of the factors listed above are with us. We are human after all, and humans continue to do silly and stupid things. But there is an advantage we humans have over other sentient beings. We can think and we can decide. Look inside yourself first. Are you part of the problem? Are you doing what you can be doing to improve the situation? If not, then consider making a change. Nothing will ever improve unless you make a decision to act.

Sometimes what you do can make a difference in how a company thinks and acts. You can exert a positive influence on your peers and your boss. And if the frustration becomes too much, consider other options. You may be happier working in another part of the company, or for another company, or even for yourself.

First posted on HBR.org on 6/04/2009

VIDEO: Instilling Collaboration

How can a leader instill collaboration?

In a previous video, I spoke about the need for members of teams to retain their individuality.

Teamwork is essential to getting things done, and to do it effectively managers need to draw upon the talents of individuals who have a stake in the outcome. There might be no “I” in team, but as Michael Jordan, whose singular play powered the Chicago Bulls to six NBA titles, used to say, “But there is in win!”

First posted on SmartBrief 8/17/2012