Last week I sent out a two question survey and got a tremendous response. The questions were in regard to forecasting and monthly management meetings to review the numbers, make adjustments, etc.
Question #1-Does the Dealer/GM hold management forecast meetings annually plus review and adjust the forecast on a monthly basis predicated upon market conditions, inventory, and staffing? 70% said “Yes.”
Question #2-Does the Dealer/GM meet each month with all the department heads to review the previous month’s production? 87.7% said “Yes.”
It’s apparent that most Dealers are doing a good job of forecasting and attempting to review their monthly numbers with their staff.
Because of the way the survey was worded and especially some of the comments it is not totally clear if the forecasting and certainly the monthly reviews are as productive as they might be. One person commented, “It’s a joke son, I said a joke” regarding their forecasting and monthly meetings.
I’m certainly a big proponent of forecasting. It lays out a map as to where we are going. Although there are detours along the way it gives us a chance to get to our final destination.
I’m an even bigger proponent of department head meetings. I believe your job as a leader should be to teach, educate, coach and encourage your team to seek ways to improve your operations. I tend to take a common sense approach to most things in life and I approach forecasting and monthly management meetings no differently.
I want you to think about this and I welcome your comments: Dealers, or any business for that matter, tend to forecast based on what they would like to do in the upcoming year. Oftentimes it’s based on statements such as “we need to increase our sales by 10%” and/or “we need to reduce expenses by 15%.”
Saying you want to increase your business by 10% sounds good, but if you don’t have a plan to get there what good is it? I’ve always been baffled by annual forecasting.
If we can agree that in order to do a realistic forecast you have to take into account staffing, inventory, and market conditions, how can anyone do a forecast and predict what those three pieces of the equation are going to look like 3, 6 or 12 months down the road?
I’m not saying you shouldn’t do an annual forecast, but doesn’t it make more sense to adjust that forecast each month or quarterly based on those three fundamental elements?
Because most leaders don’t make those adjustments it frustrates the management team and defeats whatever good intentions there might have been. Everyone eventually loses respect and confidence in any type of forecasting and concludes “Why bother?”
While it makes good sense to do a monthly or quarterly review of the actual numbers, managers become disillusioned with these reviews in that they become a “beat up” session rather than trying to figure out what went wrong and how “we” can fix it. People know when they didn’t perform. What they want from upper management is leadership that gives well defined ideas and direction on how to “fix it” or make it better.
I know you’re either working on your forecast for 2011 or already have it done and that’s a good thing. What you need to think about now is how you’re going to deal with those forecast and review meetings as you move forward.
If for some reason you have gotten away from going over the numbers with your staff, then you need to get back to it in order to find solutions to fixing those areas you are not performing well in.
People want to be a part of “what’s going on.” They want to be part of the team. They want to be part of the solution. When you don’t share information with them they think you are hiding “the truth.” When you don’t help them find solutions to their problems they feel lost, puzzled, and frustrated. As time goes on they feel less and less relevant.
Using more common sense with your forecasting and monthly management meetings will also make you more relevant. That’s all I’m gonna say, Tommy Gibbs