Location: Southeast United States
Company Overview: Family-Owned Group of Auto Dealerships
Succession Matrix® Issues: Business Performance, Management Synergy & Teamwork
Challenge: The General Manager of one of the dealerships was making decisions solely based on what was best for him and his store which was proving to be counterproductive to the overall interest of the company. Dealership was not performing at the level it was capable of.
- Coaching was provided to the GM and the owners on how to handle the situation.
- The company’s compensation system was restructured to be tied more to the organization’s overall performance rather than individual store performance.
- After implementing the two steps above, it became clear to both the manager and owners that this was not the right place for him to be and the manager resigned.
- For GM’s replacement, a Job Model was created for the position and candidates were evaluated as to how well their strengths matched the strengths needed for the position.
- A new GM was hired who is still with the dealership and both manager and owners are happy.
- In addition to the organization’s overall rise in profits, in the five years since the new GM took over, profits at this specific dealership have increased by 116%.
- The dealership group’s culture has improved with more teamwork between management.
Interview with the Succession Planner
1. What was one of the key issues you helped your client address?
The General Manager of one of the dealerships was not acting as a team player for the entire organization and selfishly fixated only on his dealership. His behavior was not only impacting business performance of his dealership, but the entire dealer group and also putting undo strain on the synergy and teamwork of the management across the organization.
These pressures were inhibiting the dealer group’s ability to increase profits, grow and build the necessary teamwork for propelling the business through the next generation.
2. Do you have any idea why the GM was acting this way?
As the GM had been with the company for a good length of time and the dealership he was at was making a profit, he felt he was safe continuing to act in his store’s best interest only.
3. What was the first thing The Rawls Group did to address this problem?
After reviewing the situation, The Rawls Group discovered that the current compensation system for managers was actually encouraging and promoting the General Managers to care only about their store, even if it was at the expense of the overall Dealership group. The first step The Rawls Group took to correcting this management issue was to restructure the compensation system including the Supplemental Executive Retirement Plans (SERPs) and management company incentives to be based more on company rather than individual store performance.
4. What else needed to be done to fix this situation?
The Rawls Group started coaching this General Manager on how to become more team oriented, however it quickly became clear that the GM would need the coaching to come from the owners for it to have a chance of being effective. The Rawls Group then counseled the owners on how to handle the GM.
5. How did the GM react to these actions?
With the restructured compensation system and coaching, the GM still failed to adapt and become team-oriented. Both ownership and the GM himself realized that the GM was not a good cultural fit for this dealership group and they parted ways.
6. What was done to bring in a new GM?
To ensure the new GM would be better suited for this organization’s environment, a Job Model was created that described the characteristics of an ideal GM. Then all potential candidates for the position completed a ProScan that measured their individual strengths. Each candidate’s ProScan report was evaluated based on the Job Model description which allowed the owners to select the next GM with a high level of confidence that the candidate they chose would be very successful in this position.
7. How is the business doing now?
The General Manager that was hired to replace the old one has turned the store into one of the top performers in the country for that brand. In the first five years the new GM was in place, profits for the store more than doubled. As a whole, the organization’s managers are all working together more and viewing the organization’s overall performance as their top priority. Job Models are being used when recruiting for any open management position and profitability for all stores continues to increase.