IS20G12 - Check Your Speed - Mike Cavanaugh
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This document outlines a SPEED check framework for evaluating key areas of a business. The SPEED check examines: Support (training, tools), People (right staffing), Environment (workplace satisfaction), Expectations (goals and communication), and Design (structure and processes). Conducting regular SPEED checks in these areas can help identify problems, prioritize issues, and guide actions to improve business performance over time. The framework provides a simple way to systematically diagnose root causes and cure diseases, rather than just treating symptoms.
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IS20G12 - Check Your Speed - Mike Cavanaugh
- 1. Check Your SPEEDTitle Sponsor Mike Cavanaugh Executive Vice President MAXDigital mcavanaugh@maxdigital.com
- 2. Who Is This Guy? • Executive Vice President – MAX Digital • Chicago based automotive software company • Inventory management, merchandising, digital retailing • Former Chief Operating Officer – 28 Store Group (9 states) • Led 300+ employees from $10/hr to 6 figures • Led captive leasing company • Led inventory team purchasing for thousands of cars (US/CA) • Automotive Finance Sales Leader • 25 Years In Automotive • 2nd Generation “Car Guy” Mike Cavanaugh mcavanaugh@maxdigital.com
- 3. Why Should I Care? What I am going to talk to you about today will help you more effectively run ANY business in ANY industry. • I have learned these things over the past 20 years and seen them turn around underperforming teams and companies. • Implemented at Credit Acceptance in 2007 (NASDAQ – CACC) • Saw company go from $12 per share to over $400 in under a decade • Helped 4x a dealer group (7 stores to 28 in 2.5 years) • Implemented over the past 6 months at MAX Digital IT FLAT OUT WORKS!!!
- 4. What Is A SPEED Check? A S.P.E.E.D. check provides you with a framework to evaluate where you need to give your attention. • Managers often struggle with solving the RIGHT problems • “When you are a hammer everything looks like a nail.” • Breaking your business down into a few key areas and asking the right questions helps you get to the root cause. • You can stop treating “symptoms” and actually work on curing the “disease.”
- 5. What Are The 5 Areas? Support People Environment Expectations Design
- 6. SUPPORT • Does each person have the knowledge, skills, and tools necessary to succeed in their role? • Can I honestly say I am training my employees consistently? • Am I developing my high potential people, so they are ready for their next role? • Are there any tools or technology that could help my team more effectively or efficiently accomplish their work?
- 7. SUPPORT • Are there any tools or technology that we are paying for that we are not using or are underutilizing? • Am I paying too much for any of my tools or technology? Can I replace them with less expensive options? • Am I leveraging my relationships with vendors and asking them for help on a regular basis?
- 8. PEOPLE Do I have the right people in the right seats, and enough of them? • Does everyone on my team consistently behave the way I expect them to? • Would I rehire each of them if given the opportunity? • Am I attracting and recruiting high quality people or settling for what’s available?
- 9. PEOPLE • Is my hiring process objective or subjective? • Do I have the right number of people in each role? • Do I have contingency plans in place if anyone leaves? • Are my people investing in themselves or just expecting others to invest in them?
- 10. EXPECTATIONS Are they falling short or do they just not know where the goal line is? • Does my team understand what is expected of them and what their priorities are each day? • Are these expectations realistic based on their knowledge, skills and abilities? • Are we clearly communicating how current performance compares to expectations and have we agreed on action plans to improve?
- 11. ENVIRONMENT Do people like coming here every day? • Does my team trust me? My managers? • Do I ask my team members how we can get better regularly? • Do I do something with the feedback? • Does my team enjoy working together? • Do my team members feel appreciated?
- 12. EXPECTATIONS • Am I measuring the inputs or just the outputs? • Is the performance of each department or individual easy to review on a consistent basis? • Can we use data to explain why we performed better or worse than expected in each department or with each person?
- 13. DESIGN Have I allowed conflicts or bottlenecks to emerge? • Is my current structure organized to optimize efficiency and effectiveness? • Are my compensation plans aligned with organizational goals, or do they conflict with each other? • Do my managers and I have enough time for coaching? • Is the most important work consistently getting done? • Are my leaders/managers able to balance efficiency, being a subject matter expert, making important decisions, and holding their team accountable for results?
- 14. SUMMARY The first step to improving your business is to ask yourself these questions… The next step is to prioritize what needs your attention first, then… TAKE ACTION If you get into a monthly or at least quarterly cadence of evaluating your business this way, I can promise much better results.
- 16. ENJOY THIS SESSION? Post about it on social media using the hashtag #IS20G! Share some love for your favorite speakers! Title Sponsor Mike Cavanaugh Executive Vice President MAXDigital mcavanaugh@maxdigital.com
Editor's Notes
- There are a handful of questions for each of these areas that I am going to discuss with you today. Once you understand the “why” behind each of these questions you will clearly see how asking them on a monthly basis… and then taking action… will change our business forever.
- Bullet 1 – People are your number 1 asset. Before you start saying that someone can’t do their job or needs to go make sure you assess if it’s a “NO” problem or a “KNOW” problem. Have you shown them what it takes to be successful, have you provided them with the right tools and training around those tools. Ex: Think about a sales person and your CRM. Did you just give them a login or have they went through training? shadowed a strong performer on your team? Have you verified or tested that they actually retained what you trained? Bullet 2: Training is not just something that happens when you first start, it has to be part of your culture. Think about the greatest athletes in any sport. How often to they train? Practice? Learn about new techniques? Bullet 3: We talk about how bad turnover is in the car business, but one thing that I see as a glaring issue at many stores is not developing your high performers, or even asking where they would like to be in a year or 2 in their career. Ex: Not every top sales person wants to stay selling cars for the rest of their life. Find out what they want to do and how you can help them get there. They will stick around a lot longer if you are vested in their success. Bullet 4: If you have great people with the right knowledge, skills and abilities but aren’t achieving the results you want to be or need to be, then it is time to look at technology to help your team. Technology ALONE will not help you sell more cars. Technology in our world is like tools to a carpenter. You can give an unskilled, demotivated carpenter the coolest, most expensive tools they sell and he won’t be able to build you an amazing house (or even a livable one for that matter). The same applies with your staff, if they don’t understand the concept of a hammer don’t get them a nail gun. I’m a big fan of technology that helps put processes on rails. This is why I have been a big CRM guy for years and why I like “digital retailing” tools like our Path Appraisal. People are inherently bad at consistently following processes, technology can help here. Analytics around tech can also help you pinpoint where your problems lie.
- Bullet 1: I recently wrote an article about this topic. A good operator of a dealership, department, or any business for that matter should be looking at their financial statement monthly. Are you paying for anything you aren’t using or are underutilizing. Look at all of the details of your CRM bill, or website bill. Are you not using any of those features itemized on that bill? If so, cancel it or hold your vendor accountable for improving utilization and ROI… and proving it to you! Bullet 2: There are so many different vendors out there that do very similar things. Websites, CRMs, IMSs, DMSs… Don’t let status quo or one persons level of comfort with a tool dictate paying twice as much (or more) for a product or service. Bullet 3: I spoke to this one just a bit ago. If you do business with anyone that will not get out to your store or at a minimum on a web meeting when you need their help then you may want to start looking for someone else. Many vendors would love an invite to come in and do some training… you just have to ask!
- Bullet 1: This is one of the most important areas of the SPEED Check. If you get this piece right the rest is easy. If you get this piece wrong the rest is nearly impossible. Without thinking very hard you can probably answer the first 2 bullets. You know who behaves how they are supposed to consistently, who has integrity. Now we all make a mistake here and there, but for the most part you know this. Bullet 2: The second bullet may be a bit harder… and it may not be for some of you. My recommendation here is that you have to ask yourself this question about your team monthly. If the answer is NO, then you need to make sure that employee knows it. It doesn’t have to be negative, but they have to know they are underperforming and they need to know what they need to do differently so that you would absolutely rehire them! Bullet 3: This last bullet is likely a hard question to ask for a lot of you. We are in the “car business.” This is not the sexiest, most esteemed industry out there. College grads are lining up to get into dealership for the most part… unless you went to school where I did. If your answer is NO here then pay close attention when we start talking about Environment. The best source for great employees are your current great employees. If you don’t have any take a hard look in the mirror and ask yourself why? You may be the problem.
- Bullet 1: With many companies I have worked with the answer to this questions is usually “kind of a little objective.” If you don’t know what to look for in a good employee for each role at your store than you are likely making decisions based on likability and necessity. Come up with a scorecard you use for each position, involve your other managers and make sure you are getting feedback before hiring. Bullet 2: I have grown up in and around dealerships since I was a kid and unfortunately I have seen both ends of this spectrum more often than not. Option A – “Flood The Floor” In this option dealerships don’t look for the right people they simply hire a lot of people hoping to get lucky with some of them. What ends up happening is tremendous waste, burnt leads, lost opportunities, bad CSI, and a bad name in the community as an employer. Option B – “Expecting Superheroism” In this option dealers don’t hire anyone. No additional sales people, no BDC, no anything. They simply expect the same few people to miraculously sell more cars. Now turnover may not be as bad in this example, and the few guys may make OK money, but they are probably often stressed out, working too many hours, and eventually headed towards burn out. Many opportunities are missed here, response times are usually super slow, and bad CSI usually accompanies this model. If you are stagnant, don’t be afraid to add the right addition to your team. But ensure they are properly trained and set up for success. Don’t let the vets run them out of Dodge before they have a chance to be successful. Bullet 3: The best dealers I know are phenomenal networkers. They are always looking for people to work at their store, even when there isn’t an opening. They have a pipeline. These same folks are usually good about cross training their folks and avoiding being at the mercy of having on 1 person in the store that can do F&I, or use the IMS… Make sure you are one of these smart folks and planning for the worst, while hoping for the best. Bullet 4: The last thing to not only look for, but encourage is this. People are like their own business. If someone asked you to invest money into a business that they weren’t willing to put their own money into, how excited would you be about that? The same holds true with people. If you want other to invest in you with time, effort, energy, training, mentoring, but you spend all of your free time drinking beer, smoking cigarettes and bitching about not making enough money I’m probably out on you. However if you are reading business books, asking your peers for advice, and trying to better yourself, I am all in!
- BULLET 1: This is one of the most common issues I see with many businesses, especially dealerships. People understand the outcomes that they are expected to produce. However they don’t understand the inputs necessary to actually accomplish those desired outputs. Some of the best managers/ leaders help their team members map out how to accomplish their goals. BULLET 2: Another trap I see that leads to demotivating employees is setting the same expectations for a new employee as they do for a veteran. In most cases this is due to lazy or inexperienced management. They either set the goal the same for everyone, or let everyone set their own goals without any dialogue on how they expect to achieve those goals. Again, what inputs are YOU going to do that are going to lead to those outputs. Personally I believe this is one of the easiest things to fix to help slow down turnover issues. BULLET 3: When it comes to performance managing employees we need to regularly and timely communicate to employees when their performance falls short of what is expected of them, or necessary to succeed. This should be done from a good place, in person, and then documented in writing. It isn’t about “coming down” on someone it’s about coaching them on what they need to do (specifically) to improve.
- Turnover is a MASSIVE problem in our industry, it has been for years, and it keeps getting worse. Asking these 4 questions can help you slow it down at your dealership without worrying about cereal bars and free Red Bulls. BULLET 1: You have likely heard that people don’t leave companies, they leave managers. I have seen this play out so many times throughout my career. Most of the time it boiled down to 1 thing, lack of trust. This doesn’t mean you and your managers have to be best buds with everyone, you don’t have to become drinking buddies. What you do need to do is ensure you are a person of integrity. Do what you say you are going to do. Be the same person when the owner is around as when they are not around. Be the same person when you are talking to the customer as when you are working the deal at the tower. These basic principles are at the foundation of building trust. BULLET 2: People inherently like to feel like they are part of something greater than themselves. They like to feel like their voice is heard, and it counts for something. Not very many people in an interview would say “I’m really just looking to be cog in a wheel.” How do you make people feel like they want to feel? Ask them questions on how you can get better as an organization, as a leader. Even if you don’t take their advice, let them know why. BULLET 3: Have you ever noticed how well certain teams play together. The NBA has so many great examples of teams that have won championships because they were greater than simply the sum of their parts. These teams played better together than some of the squads with the 5 best individual players statistically. This dynamic plays out in your dealership the same way. Hire people that will work well together. Don’t tolerate and back inappropriate or unprofessional behavior. BULLET 4: For years in the car business I heard… “My people know I appreciate them because I pay them and I pay them well.” Financial compensation is just 1 aspect of making your team members feel appreciated. Remember everyone is unique and a blanket “policy” on how your recognize people and their accomplishments rarely works long term. Find out if someone would rather have a more flexible schedule, an extra day off, or some other benefit to show your appreciation. What you may find out is that some of these options may even cost you less than additional financial compensation and keep your people happier longer.
- BULLET 1: We look at so many metrics in this industry, we look at number of sales, gross profit, number of leads, number of appointments, number of shows, and on and on and on… What I have found in any department is that the leaders that measure the inputs not just the outputs are the leaders that are able to most effectively coach and drive improvements on their teams and in their departments. The proper measurement allows you to get to the root cause of the deficiency and spend time working on the right things. BDCs are actually one of the best examples of how proper measurement can lead to immediate improvements in results. BULLET 2: Being able to measure the right things, inputs not just outputs is important, but the key is they have to be easy to take a look at too. If you are doing business with a vendor in any area of your business that does not make the measurement and reporting of that area easy, ask them for help and demand results. You all pay a lot of money every month to your technology providers, make sure you are getting what you pay for. If you don’t understand the data or how to pull the reports, ask for help, ask for training, ask to get them automated. If the numbers aren’t easy to see then you won’t be able to make decisions quickly and that costs you money! BULLET 3: This last point is very important. Far too often we scramble at the end of the month to close strong, then the month goes by and we try to explain how extenuating circumstances led to our poor performance… “It was too hot, it was too cold, it snowed too much, it didn’t snow enough, the leads sucked, we didn’t have enough cars…” We have to have the discipline to be able to point to the inputs that we fell short in and then drill down to uncover the root cause of our problem. We can’t accept commentary alone, it has to be backed up by facts and data.
- Design is all about paying attention to how your organization is designed. Often times this happens without much thought. For example, this is how the dealership was organized before I got here… or… this is how we did it at my last dealership…. Asking yourself these questions can help you find opportunities for operational efficiencies. BULLET 1: You know the answer is no, when you have infighting between departments, when it takes longer than an hour for a customer to purchase a car from you, when you time to market is over a week… BULLET 2: One thing that our industry has been cursed with and seems to have become accepted as status quo is managers not spending time coaching people. I have been in thousands of dealerships and most managers are behind a desk or in an office much more than they are working with people, observing how they interact with customers, providing them with feedback. If this is your store, then you know you have an opportunity. BULLET 3: Do you excuses run rampant in your store? If you often here “I couldn’t get to this because I was busy delivering cars” than this probably applies to you. Delivering cars is important, very important, but you need to assess if someone else needs to be hired, trained, or delegated to in order to get important work done consistently. The most common thing I see holding a lot of dealers back from being wildly successful is this area right here. They won’t delegate, maybe because they have been burned in the past, maybe because they don’t know how to properly train, or maybe because they don’t have the proper vendors in place to support them. Accept no excuses here. BULLET 4: If you are a manager you have to ask this of yourself, if you are a GM or an owner you have to evaluate your team of managers.