Good Guys Never Win - A Family Business in trouble

Introduction

Smithtown Ford in the San Francisco Bay Area is one of the leading sales producers in the country. They had a variety of incentive mechanisms to motivate the sales staff. Some of these incentives were recurring incentives and were expected each month. On other occasions the sales managers would create teaser one-time incentives to stir up competition. On the surface it appeared that the various sales teams were working well together, and customers were experiencing exceptional customer service as they search for their new car. Beneath the surface however the various sales teams viewed each other as stark adversaries, and the competition between the teams was met with increasingly dirty tactics. Rules that governed what was supposed to be healthy competition were consistently violated. The dirtier and craftier team usually became the victors. The old motto “good guys never win” was a popular saying amongst the rank and file sales reps. The managers were equally dirty or dirtier than their underling sales reps however they maintained a false sense of comradery with each of the other sales managers. Very rarely was there any sort of negative remarks about the other teams if two or more sales managers were within an ear shot. On the other hand, if the sales manager was by himself with his or her team he would freely insult and devise ways to gain an upper hand against the other teams. The remainder of this story will illustrate the adversarial culture and the negative consequences against the dealerships bottom line. Poor leadership or lack of leadership will be highlighted as the source of the broken company culture. Even as upper management attempted to reign in many of the overt unhealthy behaviors, they couldn’t identify some of the covert or less obvious behaviors that continued to fuel negative energy and maintain the cycle of dysfunction. Consequently, after failed in house change management initiatives designed to reduce the dysfunction, Jonathan the owner of the dealership introduced an employee and organizational development concept that was pitched to him by the founder of Leanfulness Strategies. The story will tell the tale of the radical culture transformation as a result of working with Leanfulness Strategies. A transformation that resulted in a culture of accountability, respect for people, and inspirational leadership.

One Saturday at this Smithtown Ford Dealership the lot of cars was full of potential buyers looking for their new ride or family car. Jacob, one of the most successful sales managers pulled a team member aside and whispered in his ear. Stop being so timid, he said. These other idiots aren’t paying attention when the ups come in. An up is the common term for a new customer just arriving to the dealership in search of a new or used car. Company policy for taking ups was driven by a fairness principle. The sales reps would rotate in order as the ups came in. Each sales rep is expected to work the sales process that his or her manager developed all the way through to a close. Closing the deal is always the goal. It doesn’t matter how long you spend with the customer, even if your up only lasts five minutes you go to the back of the line of sales reps still waiting for their next chance to work the sales process. Sales Manager Jacob was always keeping his eye out for what he called day dreamers. Since he was a manager, he doesn’t work the early stages of the sales process, such as showing the cars, test driving, and filling out the credit apps. Jacob is the closer for his team. The sales reps don’t close their own deals in this dealership. The sales rep would hopefully get the customer all the way through the sales process to a completed credit application. He or she then hands the credit app that is armed with personal information to be used to leverage against any customers negotiating tactics. Even if the customer wants to pay cash, the dealership required the sales reps to get the customer to fill out the credit app. The sales process was a standardized process and each sales rep was required to follow the script. Once the sales manager took the hand off and began his or her small talk with the customer as a pretext to the negotiating phase the sales rep that has built up the rapport with the customer becomes the customer’s advocate essentially. The role for the sales rep transitioned from working a sales process or script into the comforter and emotional support person for the customer especially during the negotiating phase. This phase in the sales process is the most stressful phase of the purchase for the customer and is the make or break phase for the sales team. Closing the deal is why the sales teams exist. Closing the deal is what gives an auto manufacturer the edge over the competition Someone is going to close the deal with that customer at some point in time. A successful sales team has a rate of at minimum 30% close rate.

Back to Jacob the sales manager. Jacob told his sales rep Bob to be aggressive and as soon as you see a day dreamer when an up comes in, you better give that customer the service they deserve. They aren’t coming here to be ignored. Take the up and don’t worry about what the day dreamer thinks or says. I’ll take care of that part. Bob and Jacob have opposite personalities. Bob is a charismatic person that most people like when they are around him. He never imposes his will over anyone else’s. Even the thought of it makes his stomach sick. Jacob on the other hand views this job as a strategy game with the superior strategist winning the game. Jacob viewed exploiting the competitions weakness as an essential strategy, and an acceptable strategy. He wasn’t offended if his team’s weakness was exploited. He thought this was fair game. On the other hand, Jacob would berate and condemn his team member that allowed the other team to take advantage of them. Therefore, Bob was having a classic case of cognitive dissonance. His personal values, ethics, and personality conflicted with the demands of his boss. Bob responded to Jacob after a few minutes of soul searching. Bob told Jacob; you know the problem with this place is guys like yourself. Your style of management creates an environment where cheating is acceptable. Bob continued and told Jacob that cheating never has a place. The dealership would fare better and sell more cars if all employees were honest representatives of the company with the goal of providing the best customer experience. The problem for Bob even though he was standing up for what he believes and feels comfortable of doing. Bob will likely never be the successful high achiever that Jacob established for himself as he worked his way up into management. Bob has so many strengths as far as connecting with the customer, providing an amazing buyers experience up until the negotiating phase, but even then Bob is skillful at keeping the customer comfortable and encouraged as the customer faces every sales tactic that the sales manager has up his sleeve to get to the close. Jacob being a seasoned sales manager and watching guys like Bob come and go in this business didn’t respond harshly to Bob’s defiance. Jacob patted Bob when he was done complaining on the back and said I hear you. I’m going to go get burritos. What kind do you want? Rather than having a rift with his team member he deflected and was using a gift to create even more confusion for Bob. Bob was thinking, geez I don’t get Jacob. He is such a jerk but then he does things that are extremely generous and kind. I don’t even know what to think right now. It took Bob several minutes to be sure he wanted the burrito from Jacob. When Bob decided he did want the burrito he told Jacob, I’ll take a chicken super burrito, and by the way. Thank you, sir. I appreciate you doing that. Bob then found his spot in line for ups and waited patiently for his next turn.

Jonathan the owner of the company was observing some of these tactics during his periodic walks through the showroom and his strolls around the lot. Jonathan liked to do this without warning and frequently to maintain his own sense of how his business was being run by his sales teams. Bob and Jacob were oblivious to Jonathan’s surprise pass through the showroom. Jonathan stopped about ten feet behind Jacob as he new he wasn’t spotted by either of the two involved in their energetic discussion. He was close enough to hear the lowly spoken words that Jacob said to Bob. Now Jonathan had a lot of love for his high performing Sales Manager Jacob. Jonathan was himself a high performing sales rep during his early career, that became a high performing sales manager, then became the owner of his own dealership. Jonathan knows the business and every tactic that a salesperson could drum up. Therefore, Jonathan didn’t involve himself and walked away as if he never heard a thing. One thing that Jonathan always desired and surely even the most ruthless salesperson desires to some degree was to be more ethical in his or her sales approach. Ethical regarding how he or she would deal with customers, but also ethical regarding how he or she deals with the other team members. Influenced by this deep desire to be ethical, Jonathan decided to try an experiment. He knew this might be impossible to achieve but he was going to call a meeting with his sales managers. Jonathan began developing the agenda for this meeting. The agenda or the purpose of the meeting had one simple motive. He was going to encourage and incentivize in some way ethical behaviors that would hopefully change the negative energy into positive energy, and quite possibly the positive energy will lead to more sales and a better customer and employee experience in his dealership. Jonathan scheduled the meeting for the following Wednesday evening. For some unknown reason, Wednesdays were typically the slowest day of the week. He wanted a quick but impactful meeting to get these highly needed closers back to their available status. Jonathan was selling his vision for change and hoping he could get his managers to buy into the vision. The managers will then be tasked with the job of being his voice and messengers of the vision across each of their teams.

Jonathan listed a variety of behaviors that he witnessed himself, and some behaviors that got back to him through other conversations with employees over the years. These behaviors he told his managers are a normal part of selling cars. Selling anything he exclaimed. Sales are sales. Get to the close. I need you guys to close. You guys are the best closers in the industry. Does that mean we can’t do better? Of course not. I know we as a company, a dealership can do far better. Especially with your skills. With that said, I want to try something different. I want all of you to help me think of ways we can incentivize the teams and team members that are eliminating these behaviors that I just listed. I want to incentivize ethical behaviors. I know some of you are thinking this is a horrible idea. I was in your shoes. You want to earn. You want to be successful. You want to win at all costs. That’s why you are in the position I put you in. But deep down inside of each of you. You think about how it might be if everyone played fair. Would we do better. Once someone cheats then the system breaks down. However, if we all seek to be high achieving ethical sales professionals and create competitive incentives that are won by behaving more ethical than our counterparts, we just might provoke each other into increasingly higher levels of ethical behaviors as we provide the most amazing product and the most amazing customer experience. Will you join me on this endeavor he asks his managers? There was silence for several minutes. Jonathan waited patiently with a gentle smile on his face. Jacob, arguably the most ruthless manager on staff was the first to say, I’m in. Then the next manager said he’s in, and so forth and so on until all had committed to this experiment.

The following day the managers were tasked with selling this experiment of ethics to their team members. This attempt was met with more dissension than acceptance across the team members. It was almost impossible for the sales reps to take the managers serious after all they have witnessed and taken part of over the years. Many of them thought how in the world can we trust the other team members to follow through with this. I have a mortgage to pay said one team member. I can’t sell cars by being a nice guy. All we ever knew is that “Nice guys don’t win.” Most of the team members said I can’t agree to this. I don’t trust anyone in this company. I don’t even trust our own team. I don’t trust my manager if you really ask me the truth. No, I am out. I am selling the way I know how to sell cars. Most of the craftier managers waited until the energy and responses cooled down then introduced the concept of incentivizing the ethical behaviors. The teams were presented with the new idea that all previous incentive models were going away. So, it won’t benefit to maintain the same tactics. The team members were informed that the team members and the teams that exhibit the most ethical behavior are the winners of the incentives. Well, that is if they close the deals. Closing the deals was still the driver and requirement. As the new information began to seep into the minds of the teams, the collective sentiment across all the teams began to shift but reluctantly as each team member faced the reality that their pay would be highly influenced by how ethical they behave. For these guys, pay is their motivator. These guys were conditioned to sell, sell, sell at all cost. Selling paid their bills. Now they would have to rethink every aspect of how they sell. At the end of the team meetings the consensus was unanimous across all teams to participate in the experiment.

While they were having their team meetings, Jonathan knew he had to have some incentives ready for the next day of business. He created a variety of incentives that he would introduce to each sales team prior to their shift starting. As the team members strolled into their workstations the next day Jonathan greeted each of them with a huge smile and a handshake. He gave a very short description of the newly revised incentives and left a white board on the manager’s desk containing the new incentives so the team members can reference as much as they need to guide their new behaviors. Each team began to take ups and tried out their new skills of ethical sales. Customers came and went, more came and more went. The first team by the end of their shift didn’t close one deal. The team left extremely frustrated. Each team that followed over the next few days shared the same experience. Customers came and went, more came and more went. The struggle to create any sense of urgency in the customer and build a sense of value in their product over any other competitors seemed impossible with this new ethical approach. Three days went bye and the dealership only sold five cars. It was also identified that these five sales were the very rare slam dunks. These customers new what they wanted already, didn’t haggle too much on the price, and had great credit. Those aren’t credited as legitimate sales to the sales professional. Most sales professionals view the slam dunks as just taking orders and processing them. One of the team members mentioned, so after three days we sold zero cars. Zero! How can we make money doing this? As time went on over the next several weeks the learning curve began to work itself through and sales slowly started to increase. After a month of the experiment Jonathan processed the sales performance metrics for the month and found that as a dealership, they only closed 10% of the deals. He was sick to his stomach. Not only was he worried about overhead costs and other financial consequences of such a poor sales cycle he was going to have to answer to Ford executives about the radical drop in sales. This was going to be a hard sell to Ford executives as a good idea or an effective business model. He knew he would be pressured to revert to whatever works at all costs by Ford.

The next day was a beautiful sunny Spring day and Jonathan psyched himself up for whatever he would have to face and wanted to maintain a positive demeanor to model for his sales teams to see. A casually dressed man entered the showroom and appeared to come with another purpose than buying a car. He had a leather brief case strapped over his shoulder and a smile that made Jonathan’s attempt to smile and remain positive look like Jonathan lost his dog. He asked the front desk clerk can I speak to the owner of this dealership. The clerk said I can take your information and have him get back to you. The gentleman responded and said I won’t take much of his time and it will be well worth the few minutes I will need from him. Jonathan heard the very likeable and confident tone of the gentleman’s voice travel through his open office door. Jonathan got up from his desk and said I am the owner. Come on in. I ‘d love to talk to you. The gentleman walked in and introduced himself. He said, Hi, my name is Christopher Boasso. I am the founder of Leanfulness Strategies. I know your time is extremely valuable, so I won’t take more than three minutes of it. Can I have three minutes of your time sir? Jonathan at this point was so desperate and thought what the heck. Sure, go ahead. I am all ears exclaimed Jonathan. Christopher said my company is designed to help companies of your size and type. You probably would never pay a consulting firm for the services that we provide because you may never get the return on your investment. I am not trying to turn you off to me I promise. We created a system that provides you with employee development and organizational development but at a price that it will be impossible for you to not have enormous return on your investment. You pay a small monthly subscription fee to have 24/7 access to our web-based platform. We are your virtual support for your change management initiatives and organizational development. You will have access to me. Your virtual coach by appointment. Our platform has a diagnostic phase that will help Leanfulness Strategies understand issues that you typically will struggle to identify related to your employees, organizational structure, organizational culture, and any other elements that influence behaviors in your business. I know my three minutes are up. I am a man of my word. I am on my way out. Let me ask you one question as I leave, and I’ll put my card on your desk so you can ask me more questions when you’re ready. Have you ever tried to identify what is causing unhealthy behaviors in your company, think you know what they are, and tried to change those behaviors? OK. I leave you with that question to think upon and I look forward to hearing from you. Have a nice day sir. It is a beautiful one, so is this dealership. You guys do a great job I can tell here.

Jonathan was rarely lost for words, but this was one of those times. He was so impressed with the presentation and ethical approach that this gentleman from Leanfulness Strategies just exhibited in his own sales pitch. He realized that the consultant sold a compelling vision for how Leanfulness Strategies can help support the process that Jonathan is trying to succeed at. The question that Jonathan was left with played over and over in his mind. He thought the timing was extremely odd and how the heck did that consultant know what he was trying to do and failing at. He concluded that someone must have put the consultant up to it. All these thoughts raced through his mind as he picked up the consultant’s business card and began to dial the phone number on it. After just one ring the same voice he just heard in his office picked up the phone call. Christopher said it’s nice to hear from you so soon Jonathan. How can I help you? Jonathan said, I don’t know but I need help. Christopher replied with, that is the most humble and brave request that an owner of a company can ever make. I am very flattered that you would be so honest with me, said Christopher. I will hold your hand Jonathan from this point forward as your partner and support you in whatever you are attempting to achieve at this time and for future change events as well. I am not the expert in your business, however the Leanfulness Strategies approach will very likely interest you and the cost is a no brainer. That was the only way I thought I could serve the most vulnerable and bravest sector of business owners. Namely, small businesses. My passion is for companies like yours, mine, and any other small business. We have the same big issues that the corporations do but don’t have the support of the expensive consultants that they do. How can we logically pay that kind of money we typically ask ourselves before we quickly eliminate that option? I had to take that dilemma away from the equation and instead replace it with a method that allows us to serve our clients at such a low cost. I can’t be everywhere. Right? However, you can reach me and our resources from wherever you are. The process is streamlined to ensure ease of use and ease of access. Let us support your endeavor. Log into www.leanfulness.com and you can subscribe to the diagnostic platform right now and we can begin helping create positive change in your business. I will say this Jonathan enrolled in the Leanfulness Diagnostic platform. He received the email with the attachment. The admin assistant printed enough copies for the entire company, and he planned one meeting with all hands-on deck to roll out the information. Once he had everyone present the next day, he read the script that was created by Leanfulness Strategies to ensure that all necessary information is conveyed during the introduction. He described to the entire company a summary of the Leanfulness approach, why this approach is different, and how the Leanfulness System can support their change process beyond what they can for themselves. Immediately, people started responding with positive comments. They saw their leader, owner, and founder of the dealership attempting to do whatever is necessary to cause positive change that would benefit everyone. It only benefits if they sell cars thought most of the members, but a collective sentiment of inspiration was starting to happen as their boss sounded authentic and the message was clear and easy to grasp.

Several days later all the employees and managers participated in the diagnostic phase right from their smart phones. The diagnostic phase consists of very brief assessments that produce powerful insights. A few days later Leanfulness Strategies provided a formal report with descriptive statistics in the form of charts and tables to support a formal summary of findings. Jonathan immediately noticed in this report that although he discovered several of the issues diagnosed in this report on his own, there were issues that were more covert issues or not so obvious that he didn’t know existed. It became immediately evident that even though all the team members gave the experiment a legitimate chance but some of these hidden issues were still present and confounded the entire attempt. Without resolving some of these issues the desired change just can’t happen. Jonathan was excited with how much he already knew and the process of working through the platform was just beginning. An example of the covert issue was obvious but not discussed. For example, trust was one of the less obvious or covert issues that was identified. Consequently, trust was likely the biggest problem the team members struggled with. The trust issue was brought up by one team member initially during the introduction of the experiment, but it wasn’t addressed and dealt with. The trust issue hampered any effort that was attempted thus far.

We help create positive change from the bottom up. We found that getting buy in at the bottom is much more successful when the bottom is part of the change strategy planning. When they have a voice and ownership of the change process it is much more likely to garner most of the support at that level. Your middle managers will likely go along with most of what you ask of them if you are a convincing owner that can sell a vision. You strike me as that kind of leader Jonathan. Where most of these change initiatives fail is at the operations level. Most do fail. I hate to say it. But we can’t stop trying. I mean most change initiatives fail in general not our change initiatives though. Our approach isn’t validated yet with statistical support for success. However, I can at least tell you anecdotally that most of our initiatives do not fail, and during our post assessment 6 months to a year later we find growth and sustained positive change. I think that’s what you want. So, lets do it. I’ll have my staff walk you through the process if you need. It is a very user-friendly enrollment process, but we want to support you from now on. Jonathan said, yes sign me up. I’ll do it myself. It seems easy. Christopher replied, O.K. as soon as you enroll you will receive a welcome email with next steps. You will also find an attachment to download and print. This document is your pitch to your employees across the enterprise about the Leanfulness Strategies approach that everyone will be an active participant. The document will guide your talk as you work toward preparing each member of your organization and the subsequent action steps required by all members. After which as your organization members follow the steps that you just descried the design of the platform will help your company maintain the correct course across each essential layer of the platform. Your organization will have a sense of continued support from Leanfulness Strategies at every step and layer of the process. Your virtual coach will be available to your organization especially during critical times. Leanfulness Strategies will continue to be your support for as long as you want us to have your back.

As the company progressed through the platform, Leanfulness Strategies developed a guide to start developing the change strategy based on the findings of the diagnostic tools. The bottom up approach began with the sales reps as the initial voice to influence and begin the development of the change strategy. The sales reps were thrilled that they were called upon to influence and be a part of the change process. Many of the team members that were cynical when the change due to the experiment was being forced on them were at this time behaving extremely positive. The source of the positivity derived from the fact that they were able to provide their own thoughts and various challenges they expected as the change initiative would be rolled out. The middle managers were the next influencers of the change, then the upper management, then the owner. After compiling all the input that each level contributed to the cause the platform guided the organization through several iterations of focus groups that involved members from each level. Sales reps had the unique chance to collaborate with the upper level sales managers, including the opportunity to collaborate with upper management. All three levels worked equally together toward engineering the change strategy. The result of these focus groups created such a cohesiveness, and positive energy across the various roles. Leadership began to sense that the initial goal to create a positive culture, respect for people, and leadership development was well on its way to success. As part of the leadership development phase, Jonathan selected individuals that he thought could benefit from coaching. He set these individuals up to join in on the virtual coaching sessions with Christopher. Additional support for the managers, and owner was also available in the area of the platform called the manager’s corner. Downloadable content related to any of the organizational or employee issues are readily accessible in the manager’s corner. The manager’s corner contains what a manager or owner might need for immediate action items and additional supporting information.

Simultaneously as the teams were involved in the change process, they were also involved in doing their job. The sales teams were closing deals again. Even within this ethical environment the sales professionals overcame the previous challenges they faced during the experiment. Also, customers were seeming to buzz from all this positive energy that was becoming contagious and felt as soon as you entered through the doors of the business. The negativity that came from fighting for ups no longer existed. Additionally, sales reps and managers were observed laughing, and talking about how they were enjoying their jobs again. Similarly, customer feedback was indicating evidence that the new company culture was aiding the customer experience. Consequently, as incentives were being met at such high rates, Jonathan was handing out money hand over fist. This was a problem that Jonathan welcomed with open arms. The newfound success created other problems that were positive problems for any organization to have. The problem was too much business for the current staffing load. Thus, Jonathan had to hire more sales staff, service staff, administrative staff, business development staff, etc. Smithtown Ford was experiencing such a radical transformation and growth trajectory that was a direct response to the culture change, positive energy, and the development of inspirational leaders with vision for even greater achievements. This was another win for small businesses. Leanfulness Strategies again helping create positive change one person at a time.