Tag Archives: managing people

How TrueCar.com Caught Car Dealers Off Guard

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The Internet is (finally) introducing progress to the car business… whether automotive retailers like it or not.

While the Internet itself has so far been little more than an evolution of how car dealers do business (think about it: dealers have been receiving and responding to sales leads from Internet customers for more than fifteen years, yet most dealerships still see less than thirty percent of their sales coming from these online customer inquiries), what TrueCar will bring to dealers is nothing short of a revolution… and most dealerships aren’t prepared.

TrueCar’s business model is designed to eventually eliminate car dealers. For now, they seem content with just getting rid of the pesky commissioned car salespeople. If TrueCar gets their way, every car dealer in the country will provide the actual selling prices of their vehicles up-front; with no haggling. This, it seems, has gotten some in the industry a bit peeved.

“It’s not too late to put this beast down,” commented one such peeved industry veteran about TrueCar on one of the leading automotive dealership forums, DealerElite.net. Others on the site are calling for government investigations and dealer boycotts of TrueCar.

Can they put the beast down?

Forget for a moment how good their model of showing a guaranteed selling price is for consumers, TrueCar still needs car dealers to pay them $299 to $399 per vehicle sold or TrueCar will simply go away. If dealers truly abandon TrueCar, then what?

Unfortunately for the TrueCar detractors, there are two unstoppable forces at work that guarantee that even if TrueCar crashes and burns, the TrueCar business model will not only survive, but eventually become the industry norm. These forces are competition and consumers.

While there have probably been hundreds of dealers who have dumped TrueCar as a provider of sales leads since the industry call-to-arms officially began in November, there have likely been hundreds more who’ve signed on. Dealers, you see, want to sell cars; TrueCar, it seems, actually helps them do that. The competitive nature of car dealers simply won’t allow them to leave these sales leads to their competitors.

From a consumer perspective, one might ask “what took so long?” Why is it we can discover the actual selling price of everything from iodine to iPads before we ever leave for the store, but with cars we still have to haggle as if we’re walking through the Istanbul Grand Bazaar? With or without TrueCar, consumers were already moving toward no-haggle pricing for their vehicle purchases. TrueCar accomplished just one thing that had not been successfully deployed before: displaying the final selling prices of identical vehicles from competing dealers… and this, you see, removed the dealers’ greatest advantage in the car deal.

Why would dealers ever knowingly give up their advantage?

It only took a few car dealer indiscretions to allow TrueCar to get into the position of radically reforming the way new cars are sold to the public; and nearly all of these are examples of failed leadership at the dealer level.

Because most managers of car dealerships got to their level without the assistance of a solid training program or a heavy focus on process or process improvement, it’s no surprise that they “lead” with virtually no focus on these, as well.

Automotive retail provides some of the best examples of bad leadership, likely due to its history (“no one trained me, why should I train anyone?”) and its unbelievably high turnover rate (“why train my salespeople, when they’ll just end up working for someone else in a year?”). Additionally, car dealers have survived for years without the need for formal training programs or progressive leadership; why should anyone think they need these today?

With no focus on training or continuous process improvement, most dealership Internet sales managers – the ones who should have seen TrueCar coming and warned the others – were so busy playing with Facebook and Twitter; so busy thinking they were in the technology business that they never even realized they were in the business of selling cars at a profit. Of course, for most Internet managers, it didn’t help that since they receive almost no respect or support from the other managers in their store – including their direct supervisors – it is doubtful anyone would have listened to them about TrueCar anyway.

Interestingly, the dealerships that wasted (and continue to waste) countless hours and dollars to perfect some social media identity generally feel that social media is a revolution in the auto industry – while missing the true revolution: transaction price transparency and the guaranteeing of transaction prices via the Internet.

Not all dealerships want to put the beast down…

The dealership owners and general managers who never fully embraced the idea of selling cars online are the ones that are the most annoyed by TrueCar. They are the ones rallying their local state associations and regulatory agencies to protect them from themselves. Progressive dealerships – those organizations where everyone is pulling toward the same goal; and where the future brings opportunity, not uncertainty – are comfortable with the move to TrueCar. Many of them got rid of commissioned salespeople years ago.

In his book, Adapt Or Die: How The Internet Is Destroying Dealer Profits And What To Do About It, Kurt Baumberger warned of this phenomenon three years ago. Did any dealers listen? Perhaps a few, but for the most part, dealers continued to run things as they always had: heavy on telling and yelling; light on teaching and improving.

What is most surprising to me is that anyone is surprised. There has been a race to the bottom in automotive retail since the first online listing of vehicles became available. I think what is also surprising is that it’s taken until 2012 for this to become a reality in automotive retail.

Progress happens…

TrueCar is merely the first. Soon, industry leaders like Cars.com and AutoTrader.com will have to insist that dealers post guaranteed pricing on their new vehicles or consumers will simply flock to TrueCar (and the soon-to-emerge clones) to avoid the hassles of negotiating.

To those outside of automotive retail, the TrueCar detractors are probably starting to resemble what the horse-drawn carriage makers, smithies and groomsmen must have looked like as the first automobiles started rolling off assembly lines over 100 years ago. Cursing progress does nothing but make those doing the cursing seem small-minded and naïve.

The thing about progress is that it progresses – whether those in the way of progress like it or not. The progress that is radically changing the car business today has been moving like the lava flows of Hawaii’s Kilauea volcano. It has been slow and deliberate, but it’s gaining strength. You can try to divert it; but you cannot stop it. It is steady and it is devouring everything in its path.

So is TrueCar a consumer’s best friend?

I think there might be genuine concerns over how TrueCar acquires and manages private customer data; but I think the real threat they hold over car dealers is their guaranteed up-front pricing. They could get rid of their silly bell curve and no longer aggregate sales transaction data; and their effect on the industry would remain unchanged. They could also stop telling consumers what dealers paid for their cars, as this information is irrelevant in the transaction and has been available online for years, anyway.

(In the interest of full disclosure, I was first exposed to the TrueCar bell curve in 2009 – which showed what consumers had paid for similar vehicles – and I was impressed. Back then, I felt it would be a game-changer for TrueCar.com. Since then, TrueCar has expanded their online offering to include certificates guaranteeing what consumers would pay from member-dealers for a given vehicle. This innovation, coupled with pitting dealers against each other on a single webpage, made the bell curve unnecessary. Now the TrueCar bell curve is nothing more than worthless eye candy.)

With some in the industry mad as hell about TrueCar’s use of data, it is interesting that as recently as this past weekend, TrueCar CEO Scott Painter was quoted bragging in a New York Post article about the plethora of data sources his company employs to produce their useless bell curve. “We collect information from consumer reports, insurers, lenders, government records and other industry sources in addition to what the 5,400 US dealers provide so we can decipher the true cost of a new car,” said Painter; clearly oblivious to the government’s and the public’s feelings about data privacy.

Everyone is missing the point…

Consumers, if asked, would likely tell you that they don’t care how much dealers paid for a car; “just tell me how much I’m going to pay.” Dealers, because they hid even the latter information from their buyers until they’d successfully worn them down in the dealership for a few hours, have no one to blame but themselves for the growth of TrueCar.

When we buy a book on Amazon.com, we don’t care how much Amazon paid for the book or how much profit they make from the sale. We only care about the transaction price, the delivery terms and the service before and after the sale. The same is true of buying a car. Why should I care if the dealer who sold me my last car made $5 or $5,000? All that mattered to me was the price I paid, the delivery terms and the service before and after the sale.

If TrueCar wasn’t so busy trying to get every scrap of data from every consumer vehicle transaction, they might realize that the TrueGold they provide to consumers occurs when they pit dealers against each other to post guaranteed selling prices. Of course, just as car dealers suffer great leadership voids, so does TrueCar, it seems. CEO Painter comes across as an egomaniacal prick (which, more often than not, means he probably is an egomaniacal prick to everyone around him); he also seems to truly relish his role as the villain to his paying customers: the car dealers. (Not a smart move, if you plan to withstand the inevitable competition for the long term.)

Sincerely, TrueCar Dealer Development Team…

To their dealer-customers, TrueCar behaves more like a government agency than a trusted partner; and their customer communications are signed by divisions and not people. It will be easy for dealers to dump them once real competition emerges or the major online classified websites begin posting guaranteed prices for new and used cars (and thus start driving leads and sales, instead of just expensive branding).

What won’t be easy for dealers is to get this horse back in the barn. If comparison shopping is a way of life for consumer seeking a $500 HP, what makes anyone think it won’t quickly become the norm for someone considering a $30,000 Honda? The leaders in the automotive space understand this, because leaders understand progress and they take advantage of it – even if it means destroying a business model that works today.

The leadership lesson in all this for those in and out of automotive retail is two-fold: First, business owners and their senior leaders must take a stake in the innovations brought on by technology (and not leave this to some “Internet manager”); and these same leaders need to find ways to leverage the inevitable change to their advantage (or they need to be ready to do something else with their lives).

Like it or not, progress has come to automotive retail; and it’s not going away.

 

Young Managers Working in a Small Business: What Can They Do To Get Respect From Below and Above?

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For Young Managers, it’s not Just About Gaining the Respect of Subordinates

One of the most common questions from our readers concerns how they as younger managers can lead older subordinates – all while maintaining respect and sanity. Where we felt we could help, we’ve provided these youthful leaders advice and guidance as recently as last month when we responded to a question posed by a reader named Sourabh from Mumbai, IN. He was curious how he could convince a firm he was interviewing with to hire him despite his age. Prior to that, we’ve explored possibilities for other young leaders in responses dealing with young business owners, leading grizzled older subordinates, and also how a young manager can keep from being run over. Recently, a new reader found our site and posed her own questions after exploring our advice about how a first time manager can gain respect:

Hi, I stumbled across this site as I was searching for some help. … I am not only the manager but the youngest technician at my company. … I work in a small family owned salon where everyone is on top of each other all the time. Here are my concerns that I am hoping you will be able to help me with:

As I mentioned, I am the manager of the salon but unfortunately I don’t get any respect from some of the older employees as well as the employees that are around my age (25). It seems that no matter what I ask them to do or how I say it, as soon as my back is turned I am a “bitch” etc. My requests usually go ignored until the very few times I have yelled at my employees. Which trust me is not many. I have worked for people that were demeaning and constantly yelling and my goal when getting this position was to be assertive but fair and never intimidating. It is getting to the point where if things don’t change I might snap.

I know I am young but I put in more paid and unpaid hours into the salon than any other employee. I work really hard to make us the thriving spa we are becoming and it frustrates me when people cannot reciprocate. I spend the majority of my time (when I am not with my own clients) ordering the supplies that the techs need, coming up with marketing ideas to make their books more solid, building our website, etc. But all I get back is arguments over why they have to do this special for the price I gave them when they want to charge more, or complaints when things they need aren’t ordered (they usually don’t tell me what they need I have to figure it out myself).


I am becoming resentful because I feel like I am constantly doing for them with no respect being given back to me. With the employees that are my age I am just blatantly ignored or told I am being a bitch. But when everyone wants something i.e. to leave early or come in late the next day all the sudden they are calling me “Miss Manager…”

How do I get the respect I not only desire but deserve?

My boss is way too nice to everyone. It really is out of control. I love her and consider her a great friend but at the same time my role as manager has been blurred by her as well. Sometimes I feel like I am not the manager just her personal assistant. She doesn’t want me to reprimand employees when it needs to happen.

How do I establish with her what my role as manager is?

I have asked her this question before with no real answer. I don’t think it’s fair for me to be telling the staff what to do but unable to say anything when things are not getting done. It would be one thing if she dealt with the issues but she is way too nice for that. I get upset because the employees take advantage of her and I don’t like watching that happen without being able to do anything about it.

Please help!!! – MM, USA

Ms. MM, may we call you M? Our apologies on the length of time it took to effort a response, but your questions were so specific and your situation so intriguing that we wanted to ensure we got this one right. (Not that we don’t try to answer all questions correctly, it’s just that you so completely described your issues that we felt compelled to reciprocate just as completely.)

We’ll tackle your issues and questions one at a time, and in the order you presented them…

I work in a small family owned salon where everyone is on top of each other all the time.

It’s always easier to manage large than it is to manage small. We often laugh when we hear about the tremendous “leadership” provided by this Fortune 500 CEO or that one – when you’re armed with a seemingly unlimited budget, surrounded by Yale and Harvard MBAs and staffed with more Administrative Assistants than Congress, you’re going to have very little trouble executing – provided, of course, that you have a brain, a plan and your ego in check.

Contrast this to a young manager trying to get the most from a group of high school graduates and having to do all the heavy lifting herself. It’s clearly easier to manage large and we feel your pain, MM.

It seems that no matter what I ask them to do or how I say it, as soon as my back is turned I am a “bitch” etc. My requests usually go ignored until the very few times I have yelled at my employees.

On the surface, it seems to us that there is no consequence for either insubordination or inaction by the employees. People yell when they are out of options, and if there were consequences at your workplace, you would certainly never have to yell.

Our advice here is two-fold. First, never yell again. When you lose your cool with someone you are telling the world that you are not in control and that you can be controlled by others. In your case, you are ceding your power to your employees and they are likely getting a big laugh at your expense. Second, it’s time to sit down with the owner and create your version of an operations manual. This manual need not be fancy, but it must detail the policies and procedures for the company, and especially the consequences for poor behavior. (Of course, no business rules are worthwhile if they’re not enforced.)

I work really hard to make us the thriving spa we are becoming and it frustrates me when people cannot reciprocate. I spend the majority of my time (when I am not with my own clients) ordering the supplies that the techs need, coming up with marketing ideas to make their books more solid, building our website, etc. But all I get back is arguments…

This piece of advice is probably going to seem odd, but it might be time to empower this team to make many of their own decisions. Where possible, ask the techs to carry some of the weight. For example, if you like to order supplies on Fridays, then create and distribute a simple Supply Order Form to everyone on Wednesday, and ask them to tell you what they need by Thursday night. Those who fail to order the proper quantities and run out could be docked the express shipping charges or the retail price difference required to get their supplies in on time.

For the marketing decisions, encourage all complainers to provide you with what they would like to see next month. Do this in a non-confrontational, sincere manner in front of everyone, and be sure to give serious thought to their ideas. If you choose to implement one of their marketing schemes, be sure to let everyone know before, during and after the promotion that the idea came from so-and-so by thanking them regularly. They will likely take ownership and do everything in their power to make sure it is a success.

But when everyone wants something i.e. to leave early or come in late the next day all the sudden they are calling me “Miss Manager…”

There’s a Latin term that applies to this situation, M: Quid pro quo. Literally, this means “something for something,” and in business it means “scratch my back and I’ll scratch yours.” Each time one of your charges is looking for a special favor, you have a golden opportunity to do some coaching.

If the employee is the loyal, hardworking sort, then you grant their favor (when possible) and you reinforce their good behavior by saying something like “I have no problem letting someone who accomplishes so much go home early now and then.”

When the person requesting the favor is someone who has made your life miserable, you should take time to explain some of your needs before deciding whether or not to grant their request. For example, you might say something like “I appreciate that you would like to arrive late tomorrow, though I think you’d agree that allowing special treatment to someone who rarely cleans up their own work station sends a bad signal to the rest of the team. If you were in my shoes, what would you do?”

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How do I get the respect I not only desire but deserve?

This, M, might be the real question. Certainly, we feel that if you’re able to incorporate the advice we’ve provided so far, you will begin to build respect with your team. Of course, respect is a lot like love: The more you give, the more you get.

Make a pact with yourself to begin each day by respecting your team. This means listening to their ideas (especially the hair-brained ones), and soliciting their opinions about the company’s direction on issues that are important to them (even if you don’t care). As you begin to respect them, they will (eventually) begin to respect you.

While this is a great first step, the behavior of your team could very well be only a symptom of the real problem. From what we can gather from your comments, the underlying problem you face likely has more to do with your relationship with the owner than it does your relationship with your team.

The Real Question is How to Gain the Owner’s Respect

Let’s get some facts about someone who owns their own company on the table: Right or wrong, the owner is the boss. The goal of every company is to make money for the owner. If the owner is crazy and wants you to waste money, for example, you have two choices: Get another job or waste the money. It’s not passive aggressive behavior to give the owner what they want – even if it’s not in their best interest. This is not to say that you shouldn’t attempt to do what’s right; though in the end the owner is the owner and you are just an employee. If the owner wants to allow people to take advantage of her, that is her prerogative (and not your concern). Like the customer, the owner is not always right, but they are always the owner.

M, your issues may appear like they start and end with your subordinates, but in fact, they seem to be caused by the company owner. In our opinion, you are suffering from a lack of respect for your leadership from your boss; and this lack of respect transfers onto your fellow employees. Now, before you march into her office and demand some R-E-S-P-E-C-T, you need to understand that the owner’s behavior is consistent with someone who wants to please everyone. In her effort to please her employees, she is unwittingly minimizing your authority.

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How do I establish with her what my role as manager is?

While the owner certainly thinks you’re qualified, she has likely been continually undercutting you since the day you were promoted – and all of this undermining was occurring without her knowledge. She possibly has no idea what she’s doing, and that’s why we think it might be time to have a very serious, though friendly, meeting with her.

We suggest you seek the guidance of others before acting, though our advice is to sit down with the owner at an offsite location (to minimize distractions) and to ask her a few pointed questions. In a concerned, friendly tone, you may want to ask her:

  • Do you value me as a leader?
  • Do you believe I possess the necessary skills to manage the team?
  • Do you think I am capable of growing the business?
  • What are your expectations of my roles and responsibilities?
  • What are your goals for the business and how do you see my role in that?

Based on her answers to these questions, you should know where you stand. If the meeting is going well, you may want to finish with a simple statement about how much you love working for her, how much you respect her, but how you sometimes believe her leadership style is diminishing your effectiveness as a manager. Explain to her that in order for there to be rules, there must be consequences. Without consequences, or her backing, you will not have the respect of the employees.

Not surprisingly, once the owner begins to respect your leadership, so will the employees. Unfortunately, this reverse is also true (as you discover every day). On the bright side, if your boss chooses to keep the status quo, you can mimic her style and become “too nice” in an effort to win over your charges. Because it’s always easier to change your style from “strict” to “relaxed” than the other way around, you stand a good chance of still becoming a semi-effective leader even without your boss’ respect.

How Does a Young Manager from the Outside Convince an Interviewer that He Can Lead?

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How Do You Convince an Interviewer That You Can Lead?

Recently, a reader posed a question after finding our article explaining how young managers can lead older subordinates. Because his question (posted below) required more than just a passing comment as a response, we decided to dedicate an entire post to properly address it.

Recently I interviewed for a leadership position in a big and reputable organization. The company is considering internal candidates also for the position. This position is likely to lead a huge team which also includes experienced and older team members, many of whom would’ve been interviewed for the same position. The interview panel felt that it would be a humongous challenge for me to lead such a team. Although the panel seemed satisfied with my professional exposure, they considered the people challenges to be the most difficult part of the job. In the subsequent round of interviews, what do you think my approach should be to the people management aspect? – Sourabh De in Mumbai, India

Great question, Sourabh. Our answer is going to assume that you’ve previously led a large team and/or subordinates with more experience. If neither of these is the case, you’ve got a tremendous uphill battle ahead of you. Companies – especially large, reputable ones – are exceedingly unlikely to gamble with important roles like the one you’ve described. If they rolled the dice and hired the untested from outside for key management positions they certainly wouldn’t be large or reputable for very long. While it is perfectly acceptable for these companies to promote an inexperienced top performer from within, it would be institutional suicide if they put unproven outsiders in important leadership roles.

Keep the Focus on the Interviewers, Not the Interviewee

As you are obviously neither untested nor inexperienced, you should still have a shot at the position. To help keep your focus on the task at hand, it’s important to understand there is a reason you are being interviewed in the first place. Certainly, we can assume there are no clear frontrunners currently employed with this company; because great companies don’t waste their people’s time assembling a panel to interview outsiders who have no chance of joining the team. We also have to assume, however, that your skill set is similar to at least a few of their current employees.

How will you stand out and convince them you are capable of leading their team?

The key for anyone attempting to join a new company is to make yourself seem indispensable without having to explain just how much they need you. Telling the interview panel why you’re more qualified than those they already employ makes you seem arrogant and seemingly questions their ability to organically grow talent. The trick is to get them to see you as crucial to their success all on their own.

This is accomplished by keeping the focus on those conducting the interview; and by you keeping quiet when possible. Just as there is a greater likelihood of being successful on a sales call when you let your prospect dominate the conversation, you stand a better chance of landing a job when you allow the interviewer to do most of the talking. People love to hear their own voice, and when you ask their opinions and genuinely listen to their answers with interest, they perceive you as much brighter and more likeable and qualified than if you spoke non-stop during the interview.

In your next interviews, be sure to ask well thought out questions and listen carefully to the responses. This will make you seem mature beyond your years, and may help them see you as the leader of their large team.


What Are Their Goals?

As you prepare your questions for your next round of interviews, it’s important to know as much as you can about the goals of the company and, especially, the individual needs of those on the interview panel. Do you have a “coach” or friend who works for this company? If so, ask them about the hot buttons of each member of the interview panel, and then fashion your questions so that you allow the interviewers to showcase their strengths and fully explain their desires. If you do not have a coach, then you’ll have to use what you already know about the panel to determine their wants.

Obviously, it’s easier if you’re dealing with a single interviewer, but the key to getting people to tell you their goals is to ask them. In cases where you’re dealing with an interviewer one-on-one, you could probe for goals during the interview by asking the right questions and paying attention to the responses. Posing questions such as “assuming you hire me for the position, how will you know if I am successful?” may allow you some insight into whether the interviewer expects only mediocre results from the role or genuinely believes it could chart the future for the company. It also helps the interviewer picture you in the role (this is critical).

Play To Your Strengths

Because we can assume there are no insiders who are truly frontrunners for the position, it’s time to identify your unique strengths and play to them. Without sounding arrogant, you’ll want to align your strengths with the needs of the company and of the interviewers.

More than anything Sourabh, it’s important to present your strengths in a way that ensures those doing the interviewing that you will be an asset because 1) you are an expert at gaining trust and assimilating a new team quickly; 2) you excel at leading large groups; and 3) you are especially adept at leading older subordinates.

The best way I’ve found to give interviewers a sense that you possess these qualities is to identify these as potential pitfalls for whomever they choose. Whether they ask you directly or not, you should find the opportunity to state that the major challenges (as you see them) for the successful candidate are points 1, 2, and 3 above; making certain to provide examples when you 1) quickly gained trust; 2) excelled at leading a large group; and 3) you successfully and joyfully led older subordinates.

Stay Positive

Above all else, stay positive. This company certainly doesn’t want someone in the role who is going to hurt the morale of the team or undermine the authority of their peers. A negative attitude, even if it’s toward a competing candidate, will make you seem disingenuous.

Although you’re certain that you are the best person for the position (or you have no business getting this far in the interview process), you must avoid comparisons that paint the other candidates (either individually or collectively) as unqualified. In their minds, the interview panel has assembled a diverse group of highly talented people; any of whom might be a perfect fit. If you acknowledge this with a positive attitude and highlight where you will be able to overcome the major obstacles, you stand a much better chance of landing the role.

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Best of luck and please let us know how it turns out.