When I’m working with a client, one of the first things I want to know is the history of the store.

How did we get to where we are today? Who started this? Who put the original sweat in this deal? Who grinded it out during all those really tough years? Who took the risk? Who took the challenge? Who’s been carrying the mantle up to this point?

As a leader, you are responsible for the history of your business. Maybe you didn’t create all the history but you’re now part of it and you’re responsible for sharing the history.

Some of it may be rich history. Some of it may be even a bit bleak. It doesn’t matter. You’re a leader, you’re responsible for knowing the history and even more important, you’re responsible for sharing the history.

If you want your organization to grow, share the history.

If you want your organization’s culture to expand,
share the history.

If you want to build a powerful team, share the history.

Share the history. Be part of the history. Make some history. History starts with you. That’s all I’m gonna say, Tommy Gibbs

Raising Expectations Might Be Stupid

I heard a great quote recently and it goes like this, “You should go to work for a company that has high expectations.” I like that, I like that a lot.

So, let’s turn it around. You should hire people who you have high expectations of and you should reinforce your expectations on a daily basis.

As a leader in your organization you are responsible for helping to raise the expectations of yourself and those around you.

If you accept a sales person selling 6 cars a month I’m thinking you’re gonna get a lot of 6 car sales people. What you are willing to accept has now become the standard.

If you accept the used car department selling 75 cars a month then that’s what you’re gonna get.

You might be wishing for 100 but everyone in the store knows your real expectation is 75, so you hover around 72 to 77 and that’s it. Everyone goes away happy. Sorta.

There is a direct relationship between expectations and the way people are treated. If they are treated well, they generally will perform well. Part of treating people well is educating and coaching them well.

Why do the workers at Chick-fil-A perform better than those at Burger King? Because management treats them better. They go to work at Chick-fil-A knowing full well what the expectations are.

The same at the Ritz, the same at Apple, the same at Starbucks, the list goes on and on.

Management’s error is that it often takes the approach of, “It is what it is; we are a victim of the market, so let’s just do the best we can.” Never let doing the best you can be your rev limiter.
People will stretch themselves to achieve the level of expectations that have been set. Every leader should seek to create and build high expectations to improve the performance of everyone in an organization.

People will respond when challenged in a positive way and rewarded with positive reinforcement. Positive reinforcement includes training, praise, celebrating results and acknowledging individual and company successes.

It’s not enough to just raise your expectations and treat people well. You have to raise the level of education and coaching you give your staff in order to give them the tools they need to achieve the expectations you have placed on them. To do anything less is just plain stupid.

Don’t be stupid. That’s all I’m gonna say, Tommy Gibbs

Absolutes vs Exceptions

Absolutes are a powerful tool toward creating a disciplined organization. As an example, an absolute would be saying “no cars over 60 days old” and meaning it.

The down side of absolutes is it chokes off the potential to have an acceptable exception.

Exceptions break the rule of discipline. Exceptions soon become the norm.

When exceptions become the norm chaos breaks out. The type of chaos I’m referencing isn’t actually like a bomb going off. This chaos is slow and gradual, often not recognized, and then – whamo – there it is, its ugly face screaming at you, “What the heck happened?”

Now here’s the real deal for those of you looking to become better leaders. You can have absolutes and exceptions in the same house. They can actually
hang out with each other once in a blue moon.

True leaders can use them both and chaos will never show its ugly face. Granting an exception and going back to absolutes is very doable. The problem with

leadership is that very few leaders have the skill to make effective use of them both.

Most people in leadership positions are stuck with one or the other.

At any given moment one is just as bad as the other. That’s all I’m gonna say, Tommy Gibbs

Choices We Make

You’ve made a choice and the odds are pretty good that you may not be happy with the choice you’ve made. You may have chosen to do volume or shoot for a high average gross profit.

Your struggle may be that you’re not generating enough total gross profit based upon your choice.

Let me remind you that the only thing that is really important is how much total gross you are generating. I always say, “You cannot spend average gross profit. You can only spend total gross profit.”

It’s a contradiction to say to your staff that you expect both high volume and high gross per unit. They stay confused and frustrated when you keep pounding them over the head with this misdirection and sleight of hand marching orders.

I’m sure somewhere out there someone is making it happen on both ends, but it is certainly the exception and not the rule. So, you need to get over it.

It’s a given that more than 80% of the people shopping for a used car shop the Internet. If you think you are going to post high prices or no prices out on the Internet and traffic is going to show up then you are dead wrong. The Internet is a “game changer” for all of you regardless of your new car franchise or set of circumstances.

You have to decide if you want to play the game. More importantly you have to decide if you want to win the game.

It’s a game. There are winners and losers. As Dr. Seuss said, “You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose…”

Taking this leap into the volume world means rewriting your overall strategy from acquisition to staffing, pay plans, reconditioning, marketing, and pricing.

Failing to address any of these will result in frustration and poor production and you may find yourself worse off than you are right now.

The bottom line should be to increase your total gross profit. It’s not done by improving your average. It’s done by maintaining a respectable gross and substantially improving
your volume. Small market or big market, it doesn’t matter.

The Internet has opened the world up to you and you have to decide if you want to be in either that world or your own little world. Your little world has limitations.

The Internet world does not. That’s all I’m gonna say. Tommy Gibbs

Breaking Resistance

Resistance is everywhere. It’s all those people yelling at you that it can’t be done. It’s you thinking, “I could never.”

It’s those around you throwing out the caution flag saying, “Are you sure, do you really think you can do that?”

It’s those friends, relatives and co-workers saying, “Hey, don’t leave us here, we like you being a part of our woes, please don’t run off and leave us.”

You have faith in yourself. You know you can do it. But, resistance keeps yelling at you from the far left hand lower corner of your brain, “Have you lost your damn mind? You can’t take such a chance.”

Momentarily you overcome the yelling, but then the yelling starts again, even louder, “You’re too old, you’re too young, you don’t have the experience, you don’t have the education, you haven’t been there and done that yet.”

Resistance is fear. It’s you being scared. It’s you being afraid to take a chance.

Resistance is as natural as the sun coming up each day.

Resistance is you being afraid to swing from your heels and go for the fences.

If you’re going to ever have your break out moment.

If you’re going to make it happen.

If you’re going to climb the mountain.

If you’re going to control your destiny.

If you’re gonna kick ass and take names.

All these ifs…

At some point you need to tell resistance where to go and get on with it. You’re smarter than resistance. I believe in you. A lot of people believe in you. You believe in you. Let’s go.

That’s all I’m gonna say, Tommy Gibbs

Becoming More Efficient

If you’re going to continue to make money, and hopefully make even more money, you will have to become more efficient.

Your processes will need to become more efficient. Your management team will need to become more efficient. Your entire dealership will need to become more efficient.

You will have to become more efficient when it comes to managing your expenses. And, you must become more efficient when it comes to speed and cost of your reconditioning.

There are many issues dealers are scrambling to deal with as we move into the most competitive environment in the history of the automobile business.

In order to do volume in used cars you need to have a “costing advantage.” By “costing advantage,” I mean what’s added to the car once you own it, which includes packs and reconditioning.

To have a costing advantage you have to re-think your packs (which usually gets down to pay plans) and most important, what you charge the used car department from your shop.

If you know your history, you know that the reason dealers added packs and charged full retail from the service department to the used car department was because sales managers worked from cost up.

In the good old days sales managers had control over gross so you could nail them with all the high charges you wanted. They still got the average gross you needed and you could put the money from Parts, Service and Packs in your other pocket.

This is no longer true as your sales managers don’t have control over gross as they once did. That’s why dealers are more and more becoming one-price dealers and saying “no” when the customer shows up and wants a discount.

If you’ve already dropped your pants on the Internet with a price designed to get them to show up then you have nowhere else to go.

So, without saying they are a one-price dealer, many dealers are taking a tougher stand as well as changing sales people’s pay plans to match their new found pricing and marketing strategy.

I predict within due time more dealers will become more like CarMax and not pay sales people or managers on gross.

Remember, as we move more toward a once-price concept the skill and pay level of the “desk managers” will be much lower than in today’s market. There will be more effort made to sell the store and the product with less effort on “penciling the deal.”

One of the things that you need to continue to evaluate and work on is the amount of time it takes for you to get a car on the lot and ready to go.

Sadly, most dealers do not actually know how long it takes. And even when they do, they turn a blind eye toward the problem. They let the proverbial tail continue to wag the dog when it comes to fixing the service timeline problem.

The second thing that needs to be addressed is the reduction of recon expenses. According to CarMax’s annual report they reduced recon expenses by $250 per car last year. How’d you do?

If you’re going to do more volume you need to have an advantage when it comes to getting cars through your system and the cost tied to doing so. You must become more efficient.

The pain of efficiency, or the pain of regret. You’re going to have one or the other and the cool thing is you get to pick. That’s all I’m gonna say, Tommy Gibbs

The Secret

Dealers are always asking for the “secret” to their used car operation. The answer is the dealer. The dealer is the secret.

Always has been, always will be. For definition purposes, the dealer as I’m describing here is the owner, operator or general manager. In other words, the PIC (Person in Charge.)

In almost all cases the PIC has a used car manager or management team who they have high expectations of and continue to be frustrated with in terms of production and profits.

The common theme among dealers is, “I need a used car manager/used car department who can get the job done, someone who understands both the technology side and the common sense side of the business.” Where do you find this person? He is sitting at your desk!

If you are the PIC and want to take a major leap with your used car business then you need to become the used car manager. You read that right, become the used car manager.

I’m not saying that you have to take the title of used car manager, but you have to take personal ownership of the used car department.

I don’t buy your excuse that you don’t have the time. Most dealers have a good Controller, a good Parts Manager, a good Body Shop Manager, a Good Service Manager and a Good Sales Manager. Most of these departments run better when you keep your nose out of their business.

That’s not to say that you don’t have a good used car manager, but the used car department is the one area that you have unlimited potential in and the one that most of you are not even coming close to maximizing.

You have the time if you want to make the time. Far too often the PIC doesn’t want to dirty his/her little paw paws with the day to day issues of the used car department and market.

In all my travels around the country the number one common thread for the very best used car operations is the PIC. I can tell you that as a new car dealer for 20 plus years I had the most success with my used car operation when I personally took ownership of it.

As the Dealer (PIC) I could make really quick decisions. If I made a mistake I fixed it and moved on. When you’re the PIC you know anything and everything that goes on in the used car department. When your typical used car manager makes a mistake he/she can’t always fix it without the wrath of the boss coming down on them.

If you’re the used car manager you are operating under a handicap. It’s called experience. Not your experience, but the experience of the PIC.

The PIC has been burned so many times with other used car managers they have tied your hands to the point that no matter what you think or want to do/try they just can’t turn you loose.

So, even though they themselves won’t dig in, they won’t let you dig in but so much. But, they still have these grandiose expectations of what they want out of the used car department.

I can tell you until the PIC takes ownership along with a solid used car manager, it’s never going to happen.

So, now you know the secret. What are you going to do with it? That’s all I’m gonna ask, Tommy Gibbs

Doing More

I hope you’ve had some great mentors in your life. I’ve had some of the very best. My business partner for over 30 years, Ashton Lewis, Sr., taught me some of the best leadership skills I could ever have hoped for.

Ashton taught me nothing is more important than always doing more. More than is necessary, more than is fair. When in doubt as to whether you’ve given enough, give some more. Yep, I’ve had some great mentors. I hope you have too.

Great mentors develop great leaders and they all teach, Do More:

1. They do more than they know is necessary.
2. They do more than they know is fair.
3. They do more because it’s the right thing to do.
4. They do more not expecting anything in return.
5. They do more even when they know it still may not save the day.
6. They do more even when they know it may not save the customer.
7. They do more because they know it’s a teaching moment.
8.They do more because they don’t want to leave this earth owing anything.
9. They do more because they can.
10. They do more because they see the big picture.
11. They do more because if not them, who? Maybe you!

I wish I could do more, that’s all I’m gonna say, Tommy Gibbs

Not Knowing

I see some strange leadership models as I travel the country. One that I often run into is “Not Knowing.”

There are two sides to “Not Knowing.”

1. Upper management, owners, owner/operators or dealers have a plan in place to keep the staff in the dark. They only want them to know what they consider are those things that they think they need to know. They don’t teach, they don’t coach, they don’t lead; they just say do your little job, pat them on their head, send them on their way and frequently pay them very well.

In addition, upper management doesn’t seek out B players to help turn them into A players. And thus the B players don’t seek out the C players to help them get to the B level. The theory is by keeping people in the dark they will perform their assigned jobs better.

2. Managers don’t bother to learn. They don’t seek out information. They come to work, do their job and go home.

I’m often appalled, surprised and shocked when I ask questions at all levels and people don’t have the answers. It occurs at the top and down the chain of command. I’m not talking complicated questions.

I will sometimes ask the most basic question and people don’t know the answer. I’m left to assume:

1. They don’t care enough to know.
2. They just don’t have the knowledge to know.
3. People don’t know what they don’t know.

In all cases, these are the same people who complain about things that never get done around here. No one is held accountable. There are no consequences when people don’t perform.

What else can you expect when you don’t know? That’s all I’m gonna say. Tommy Gibbs