What makes a dealership good? And what does it take to move a dealership from good to great? These questions are our subject for this column in 2020. Over the year, we’ll discuss each element of the Sustainable Dealership Flywheel, and how they link to build the momentum that distinguishes a “Good to Great” dealership.
Mike Lessiter, second generation head of Lessiter Media and editor/publisher of Farm Equipment, wrote in his “To the Point” column on March 11 about a short but powerful book titled Turning the Flywheel – Why Some Companies build Momentum … and Others Don’t – A Monograph to Accompany Good to Great by Jim Collins.
I propose the elements of the flywheel for a sustainable, Good to Great, farm equipment dealership. These are my opinions based on working with dealerships since 1975 and observing which one’s survive and thrive through the ups and downs of the business and through several generations.
Mike’s articles sparked at least two dealerships that I work with to apply this thinking to their own dealerships. One told me their flywheel is very close to what I propose here.
Pulling It All Together
Over the year we’ll dig deeper into each element and will refer back to earlier themes and articles. The Flywheel will pull these all together into a logical strategy to implement.
The first 3 years of this column, the theme was “Planning for Profits” with the focus on numbers — the metrics, KPIs, ratios and processes that the best dealers achieve. We’ll integrate these in the Flywheel elements of:
Leveraging New to Used Cascade
Absorption Funds Growth
For the next 3 years, the theme was “Technology for Profit,” which presented various leading-edge technologies used in farm equipment dealerships. We discussed the “2nd Machine Age’”which includes precision farming, but is also more than that. Note that underlying the Flywheel is:
For the next 3 years, the theme was “People & Profits.” This emphasized that all aspects of operating a successful, profitable farm equipment dealership are clearly centered on people and performance. We culminated this theme with the challenge to dealership leaders for them to make 2018 the Year of Investment in Human Capital. The Flywheel element is
Invest in People & Processes to become the Employer of Choice
2019’s theme was “Leadership Lessons” which focused on development and growth of dealership executives. The challenge in a fast-paced world with consolidation, technology, demographic changes and new business models, is for the leader to be in a position to lead through the changes through their own self-learning. Again, underlying the Flywheel is:
After 5 elements of the Flywheel, there are two others.
Building a Balanced Dealership that provides a Package of Value.
This is Solutions Selling when everyone in the dealership, no matter the department, contributes to working together to satisfy the customer’s needs.
A Balanced Dealership has 2 main goals
First, Creating Repeat Customers — not just first sales but repeated ones.
Achieving High Return on Assets — you must make money.
Build the Brands with all Segments
Creating Repeat Customers is done by building brands — yours as a dealership and those of the manufacturers you represent.
All segments means new and used, with farmers, rural lifestylers, contractors, early adopters as well as those who are last to buy a new technology.
The core concept of the Flywheel is the impetus of each element reinforces the others. Success in one element builds the momentum for the next. For example, success beyond selling new equipment and participating actively in the cascade to used equipment will help increase absorption. High absorption provides the capital for growth, which allows a Good to Great dealership to invest in people and processes, which in turn makes them more attractive to hiring and keeping new employees and managers.
I’m looking forward to 2020 and helping you consider ways to build momentum to take your dealership from Good to Great. Let’s get turning that flywheel!