For many dealers, coming to terms with the assets and liabilities impacting the continued success of their business can be a difficult wakeup call. The ability to build a resilient, sustainable business over multiple generations is a multi-faceted endeavor impacted by different factors. One common concern heard from dealers however; is “Who has what it takes to fill my shoes?”. Here is an example of just that type of situation.
“Loyd, is there anything else you want to discuss? This succession assessment has really put me under a microscope. I haven’t been bruised up like this since I slipped on the ice a few years back!”
“Just one more topic, Susan. And again, we are not being critical. Dr. Merlot and I understand how important succession is to you and we are just pointing out areas of opportunity where you can enhance the probability of Succession Success™. Keep in mind, you inherited the vast majority of these issues from your late husband. So please don’t take it personally.”
We were in the process of finishing our Phase I Succession Planning Assessment for a 60-year-old owner of four dealerships, positioned in an impressive auto mall, with about a dozen managers and two employed sons aged 28 and 26. She had been operating the dealerships for the last 5 years after her husband passed away unexpectedly. An aggressive, tell-it-like-it-is woman, she was a honking kick-butt dealer.
“Don’t worry, Loyd, I was just kidding with you”, she responded with a smile. For a man who wares silly socks and funky ties, you take a little smack pretty seriously. I thought I would get you to lighten up a little. And not to worry, I can handle this so let’s proceed.” she offered curtly in her classic impatient tone. Fortunately Dr. Merlot did not offer any response to her awkward sense of humor and redirected our attention to the review.
“Susan, currently leadership succession appears to be a planning liability. Both of your sons came into the business directly out of college. They have been to the Dealer Academy but neither have been in a direct responsibility position for long enough to measure their competency, capacity, or commitment to the business. Although both are designated GMs, they are not serving in that capacity and neither could currently replace you. Your sons are excelling at busy work, 20 Groups, make meetings, and award trips. The most bizarre situation is the competition between the two of them. In lieu of running their stores, they appear to be paying too much attention to what the other is doing or getting. Your senior managers are patronizing them and apparently picking who they think will be the leader, which is creating barriers to teamwork across this impressive campus. We don’t believe either son is on the pathway to becoming a competent successor dealer and we are not advocates of the two-headed leadership concept. Most importantly, we believe your choice of either son will create ‘troubles in River City’.”
“There you go again with those metaphors.” Susan responded with frustration, clearly not pleased with what Doc had offered. “Would you dispense with the Music Man lingo and speak English?”, she pleaded sarcastically.
“My apologies,” Doc responded. He was clearly not used to being talked down to by an aggressive, borderline abrasive woman. “I’m just trying to paint a picture for you, assuming your sense of humor is still active.”, he followed with a return of sarcasm.
“Oh I wish he had not said that!” I thought to myself. “This lady likes to talk smack but something tells me she doesn’t take it very well.”
Susan lost her smile and drilled Doc with, “I lose my sense of humor when you start talking down about my sons or their ability to continue this automotive legacy.” With her parent-gun pointing at Doc she continued, “My father put my husband and I through the grind. We wanted to be part of what my grandfather started so Jim sold cars, working ten hours a day six days a week for ten years. I worked in the office as a payables clerk. My sister and brother also worked here. My father tried to run all of us off because he and his cronies did not want to be distracted with our ideas and opinions. Jim moved to service when our manager died and my brother would not take the job; too much work, too grimy, too much routine.” She offered with emphasis. “Five years later, my father’s partner and GM died. My brother tried to be GM for a while but almost put us out of business with his country clubs and stupid spending. After a confrontation with Dad, he quit and went back to school and is now a college professor. My sister also quit as soon as she got pregnant. Dad allowed Jim to be the temporary GM. He and I started working together and the rest is history. Dad had a stroke a few years later, and in his absence, we began buying additional franchises.”
She then paused a moment as to hold back emotions. “I am giving you this background to explain that my husband literally worked himself to death. When he died, our oldest son was in his senior year of college. I needed help and comfort. I decided I was not going to put him or his brother through the grind we experienced because they might decide to go find an easier job, just like my brother.”
She paused again looking down at her twirling thumbs and then back up at Doc with an expression of resolve. “I also am not an advocate of two-headed leadership. We do have a plan. In five years or so when I am ready to hit the beach, I am going to select who will be the successor dealer principle, and at this point, I would pick the oldest, JJ. I am confident his brother and all the managers will fall in line.”
Her resolve was impressive, so thankfully Doc did not challenge her logic. We both just sat there trying to consider the impact of her plan on her family and business. After a few moments of deafening silence she focused again on Doc. “So don’t you agree I have a leadership succession plan”, she asked emphatically?
Doc, hesitating to respond, squirmed a bit and then offered, “I suppose so.” in an unemotional, detached manner.
“Suppose so!” she responded throwing her arms out in frustration. “What do you mean by that? And don’t give me any corny metaphors!”
“I looked over at Dr. Merlot and blood rushed to my face because he scooted up to the edge of his seat and I knew it was on.
“Well, since you are so adamant, Susan, I agree you do have a plan but it is no doubt the dumbest plan I have ever heard.”
“Holy moley!” I thought to myself. We are done here. I could tell Susan was perturbed and about to explode. I stood up and put my hands out hopefully to calm her. “Susan, he did not call you dumb, he just thinks your plan falls a little short of opportunity.” She settled back in her seat a bit startled but attentive expecting Doc to explain himself.
Doc was feeling it now and stands up for emphasis, leaning forward on her desk. “Susan, do you know why you are sitting behind that desk and not your brother?” She looked a bit perplexed as he continued. “Do you know why you do not have two siblings as whinny shareholders wanting demos, distributions, and make trips? Do you know why you are pressed with picking a successor from your two sons without five cousins working here and making your life miserable? And finally do you know why this is such a marvelous and extraordinarily profitable business?” With both hands on her desk he just leaned in for her response. However, with those penetrating questions it was apparent that Susan had now become the student and was not going to run the risk of embarrassing herself.
“Because your father established successor filters that cut the wheat from the chaff. He required you, your husband, and your siblings to go through the grind that ultimately identified their lack of commitment and called them to go find a more compatible career. That same grind he required you to endure, prepared you for a traumatic recession and ultimately your husband’s death. The craziest thing I have heard in a long time is your concern that if you required your boys to learn all aspects of the business they may become discouraged and seek another career. God bless them if they did because don’t you want them to follow their passion or do you want them to just be your comforters?”
Doc had hit the mark, Susan was speechless. I am thinking he’s done when he continued. “And if what I have said doesn’t touch you, try this vision on for comfort. In five or ten years you do pick JJ to be your successor and totally blow out Richard, who is raving mad at both you and his brother because he thinks he is the better leader and there are no metrics to affirm if he is right or wrong; or vice versa. Odds are, you are going to alienate one of your sons and family relations could go straight into the dumper, just when you will need family the most.” he offered with emphasis and turned back to sit down.
Again, deafening silence as Susan fiddled in her desk drawer to avoid making eye contact. Then with renewed enthusiasm she looked up and asked, “Doc, can we discuss some Successor Filter strategies and is it too late to use them with my boys?”
She then looked over at me with an impish smile, “Impressive comeback. Must be the socks.”
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