Journey to Improvement
When presented with a dealership’s financial statement that showed a net profit of $25 for the entire month, most people would see a bleak future and run in the opposite direction.
Not Jerome George.
He saw an opportunity.
When asked if he could help turn fixed operations around at the dealership, George responded, “In my sleep.”
A response like that may sound arrogant. But George isn’t arrogant—he’s good.
In total, George says he’s helped turn around three different dealerships as a parts and service director of operations and has worked with a number of others as a consultant. George is currently the parts and service director of operations for Village Toyota-Cadillac (a part of Dimmitt Automotive Group) in Homosassa, Fla., a dealership that runs at 25 percent net to gross (it was at 9 percent when he started), is three times higher in customer-paid growth than all of Southeast Toyota’s region for 2018 and was No. 1 in the region for CSI for the past two years.
When George walks into a dealership, he looks for results. No excuses. That’s the exact approach he took when he walked into Germain Toyota of Naples, a dealership that was on the verge of an audit that would cost them significantly and was doing five percent net to gross.
Here’s a look at what George did the first 90 days he was at Germain that allowed the dealership to avoid the audit and also lead it to its best month in gross profit ever—and then how you can do the same.
When George entered the facility, he didn’t take action right away; he observed. In each of the dealerships that he’s helped turn around, he doesn’t make any changes the first couple of days. Although he had to work quicker than normal at Germain due to its circumstances, he used the first day to get acquainted with the staff.
Morale was low, so George knew he had to get everyone on the same page and see what he was doing as a positive. He began meeting with the service advisors daily for an hour (which continued the first six months and then switched to every other day) and met with the entire shop twice per week.
“I could communicate the direction I was going and the things we were going to be doing,” George says. “Everyone could hear the same message.”
Put plans in place.
“I don’t like to start making changes right away, but with that store, I had to take corrective action very fast to stop them from going into a warranty audit that could have cost them hundreds of thousands of dollars,” George says.
He took a few days to observe the processes of the departments and immediately began crafting a roadmap for himself and the individuals in the store.
“Walking into a new store, you don’t know what you’re walking into,” George says. “You have to create the roadmap based on what their performance has been over the past few years and the internal issues that are going on within the facility.”
The first week, for example, he realized there was an issue with the rental vehicles.
“They were giving those out to anyone,” George says. “By day 10, I realized how huge of a problem was and changed that whole procedure.”
When he got there, there were 15 advisors that each had three to four keys they could give out, which clearly wasn’t working. George made two people responsible for renting out the vehicles and made sure they were the only ones that were able to. He also made sure that inventory was done on a regular basis.
30 Days In:
Once George had had adequate time to observe the advisors, he began meeting individually with them.
“I don’t want to condemn an advisor without knowing who they are,” George says.
During his meetings, George praised what the advisor did well and provided tips for how he or she could improve.
45 Days In:
There were already teams put in place when George came to Germain, but he could see it wasn’t working. He took the first month and a half to get to know the staff and evaluate leadership skills. At the 45-day mark, he replaced three of the six team leaders.
“One of them was upset and threatened to quit—he never did,” George says. “Once the new teams got into place, it flowed better so I think they actually ended up liking it.”
60 Days In:
Art Note: Photo with George looking over one of the roadmaps that he’s created
Although he had worked on the roadmaps and implemented changes since day one, George says it took him a few months to get the roadmap for the dealership complete. He tackled everything he saw a problem with—from parts obsolescence to CSI—and created a concrete plan for each.
90 Days In:
Complete the turnaround.
At the 90-day mark, Germain Toyota was out of the red zone with Toyota and was no longer in danger of an audit. Not only that, but at 90 days in, the dealership set a record for the month of January and, a few months later in March, it went on to set a record for the best gross profit month it had ever had.
8 common mistakes made in fixed operations and what can be done to fix them
“Every area gets touched when I walk in,” George says.
George will walk into the dealership and look at each department and focus on a few common “target” areas that he’s found are often the determining factor between a successful and an unsuccessful operation.
“I go through and I analyze. I analyze pay plans. I analyze warranty dollars. I analyze technician’s productivity, inventory dollars as far as their labor dollars. I look at their marketing campaigns, I look at parts obsolescence. All of this becomes my blueprint,” he says.
George identifies a few key areas that he frequently sees issues with and what he’s done to combat those.