How to Properly Create a Chain of Command

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Creating a Chain of Command
How to establish a company hierarchy of reporting relationships that’s embraced by employees

When Joe Bosco scans the facility at Audi Richfield (Minn.), he has a hard time finding any weak links among the staff. That’s because the general manager has worked diligently to create a rock-solid chain of command.

His methods have fortified the facility, helping produce a CSI score of 977 out of 1,000.

In Bosco’s experience, when a dealership has a solid, unquestioned chain of command—one that clearly defines a company’s lines of authority, from top to bottom—the business usually runs smoothly.

“When [the chain of command] is right, all the people come to work every day with a level of comfort,” Bosco notes. “They say, ‘This is a great place; they have people that know what they’re doing and know what they’re supposed to be doing.”

Of course, constructing a business’ chain of command doesn’t happen overnight. And, if it’s not done correctly, a dealership’s operations can become unwieldy, with employees uncertain of whom answers to whom.

It’s imperative, Bosco says, to, “make sure that everybody understands their limitations, based on what their position is.”

Bosco, a veteran of 32 years in the industry, explains how to properly create a chain of command.

As told to Kelly Beaton

Start by making sure you have the right people, that are competent. If we’re going to hire from within, let’s not set them up for failure; let’s get them training and make sure we think that that’s the right person. If we’re hiring from the outside, make sure we’re talking about people with experience. From there, you’ve got to build the respect. When we talk about the chain of command, we talk about people going to other people for directions and then people making decisions at various levels; and people have to have respect for the levels below them or above them.

Our chain of command focuses mainly on job description. In fixed operations, you’re going to have technicians, service writers, the service manager or parts manager, and a general manager. And they’re all responsible for what their job description states. That chain of command begins with me, and I hold my, say, service manager accountable for certain analytics. But I respect his position. And then he holds his service writers accountable. I tell the service writers they work for the service manager. I still have a relationship with them, but the service manager’s responsible to run his department.

We use the word "accountability" a lot when talking about a strong chain of command. Make sure that all employees know what they’re responsible for in their positions. Then, look at it every day. We have five profit-producing departments in our dealership—six, if you’ve got a body shop. We have new cars, used cars, F&I, parts, and service. I look at the statistical data every day for all those departments and discuss it with our managers. If something doesn’t look right, I’ll ask why. Say our parts inventory is supposed to be at a 45-day supply, but we’re above a 45-day supply. Why? If the parts manager says, “let me tell you why,” that means he’s aware of what’s happening in his department. If you do that on a regular basis, your business will run efficiently.

Inform employees of what they have authority over. If service writers think they have complete autonomy to do anything they want, that’s a problem. They have to know what their limitations are. If you need to give something complimentary to a customer, we’re good with that, but just make sure it’s signed off by your superior. And, if employees do something that’s outside of their job description, we’re going to discuss that and ask why it happened. And, if my service manager felt like they needed to get somebody else involved, it would come to me and then we’d fix it.

Sometimes you need to change people when there’s a problem with the chain of command. It’s an uncomfortable thing to do, but sometimes it’s the right thing to do. In that scenario, say we bring in a new service manager, I’d be happy to answer questions if employees have them, as to why we made a change. Because people are going to be curious, and there’s no reason to hide that from them; you want to be inclusive. You can’t just pound your fist—that’ll get you nowhere. You won’t get long-term respect from people by doing that. You can’t demand respect, you have to earn it.

Remember, everyone’s here for the same purpose. We want to make that customer experience good. And, if everybody’s doing what they’re supposed to be doing, ultimately you’re going to have happy customers. If everybody does their job and follows their job responsibilities, there’s nothing better.

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