Culture counts

Right after completing Spader Business Management’s new, five-day Total Management 2 workshop, Rachel Cerekwicki went back to Bow Cycle & Motor Co., the powersports business she and her husband own in Calgary, and redid all of the job descriptions for the dealership.

First she asked each of her 35 employees to write down their job tasks and what they considered to be their priorities. Managers were asked to make the same list for each of their reports as well as for themselves. At the same time, Cerekwicki wrote her own lists of duties and priorities for each position.

When she sat down with her managers to compare lists, Cerekwicki wasn’t surprised to learn that while everyone knew what they should be doing, there were key differences among what some of them thought their priorities should be and what she, or the managers, considered to be their priorities.

“We came up with totally new job descriptions as well as a new review system,” Cerekwicki said. “Now each of the staff has key result areas that translate exactly to what they are reviewed on, so there are no surprises. It takes all of the gray areas out of the equation.”

Taking those gray areas out of managing people and culture is what Total Management 2 is all about.

“It is a complete system that puts on paper everything from the dealership’s vision, mission and goals — where the dealers want to be in the future — down to the actions they need to take to manage their people day to day,” said John Spader, president of Spader Business Management, Sioux Falls, S.D.

TM2 complements the organization’s Total Management 1 workshop, which focuses on fundamental financial
management principles, as well as its network of 20 Groups. But it is also more than a workshop. Not only does it provide a broader, more comprehensive perspective for the organization’s clients, helping them to better manage all aspects of their businesses, TM2 is the natural evolution of Spader Business Management, a company which has proven time and again how well it knows its markets.

“TM2 was a dream my father, Duane, and Dr. Michael O’Connor [an internationally recognized expert in people management who helped develop much of the TM2 material] started working on 20 years ago,” Spader said. “I’m just lucky enough to be the person to evolve it. While we partnered with Dr. O’Connor to bring these topics to small business clients years ago, the markets have not been ready for them until now. One of our clients, in fact, said it best: ‘If you would have tried to get me to address these issues 10 years ago, I would have called you crazy, but these are the issues that now plague my business everyday.’ So the market is right for it now.”

Managing in good times and bad
Within the marine industry, as well as some of the other eight industries in which the Spader organization has a presence, most dealers have focused more on their financials rather than on evolving their skill sets of processes and systems for managing people and culture.

Some dealers believe it is enough to just follow their instincts when it comes to managing their employees. For others, the concept of managing the culture is simply too intangible to get a good handle on.

Whatever the reason, not putting good processes and systems in place can be a costly mistake, especially for dealers struggling to grow or even just hold their own in today’s soft U.S. economy. Only by managing all assets, including people and culture, can dealers maximize their opportunities.

Chris Hodges is one of four owners of Sacramento-based Brothers Boats, which has had to shrink its employee base from 35 to 16 employees over the past several months, given the hit California has taken from the housing crisis. Aspects of TM2 have given him confidence in the decisions that needed to be made as the business downsizes.

“Coming out of the TM2 training, we put our vision, mission and values statements in place, which has helped us with what we are going through,” Hodges explained. “It is especially important when you are changing personnel and that sort of thing to keep your core values in mind so that you are consistent with them in making decisions and keeping your priorities straight.”

Those at the other end of the spectrum — such as the Cerekwickis, who will be opening a second location in booming Calgary in September — need processes and systems in place that are sophisticated enough to grow with them. These tools help to ensure that their return on investment in their people is as profitable as the return on investment in other facets of their business.

Merv See, co-owner of Guarantee RV, in Calgary, which has more than 100 employees at several locations, is asking different questions and looking for a different attitude during the hiring process since attending TM2.

“Probably any dealer has a story about a great salesperson who just wasn’t good for the dealership,” he explained. “I’m now looking for a lot less technical ability and a lot more attitude. For example, I have a lady here now who worked as a hairdresser for 20 years and who is now doing an extremely good job for me at the retail parts counter. Because of her attitude and transferable skills, I took a chance that I never would have before and have a great employee as a result.”

TM2 offers what is called the Big 6 Job Performance Factors to help dealers define the ideal candidate for a particular job. The factors include three capabilities and three motivations. Capabilities include job expertise, transferable capabilities, and adaptability; motivations include personal style, personal values and work interests. Each category has subcategories and defining characteristics. For example, included under the category of work interest are the sub-categories of entrepreneurial, humanitarian, technical and so on.

“These factors allow dealers to determine the must-haves, important-to-have and nice-to-have characteristics of each job,” Spader said. “Where most businesses get into trouble is by not profiling the jobs and knowing what they need in a person at a detail level. They hire because they like someone or trust them and put the person into a job that often does not fit their capabilities and motivations, and ends in failure.”

A paradigm shift
In addition to helping with the hiring processes, job profiles transform annual performance reviews, a process many dealers find to be very frustrating, into a more effective tool.

Spader tells of one dealer, for example, who started the review process so unhappy with a sales person’s performance that he intended to discuss the man’s possible termination. As it turned out, much to the dealer’s frustration, he ended up giving the salesperson a raise because they both agreed the salesman did very well in about 27 out of 30 ranked areas.

After working with Spader to profile the job and identify the priorities — the performance characteristics and tasks that would deliver the biggest impact for the dealership — the dealer realized that the salesperson ranked high in all the nice-to-have and some of the important-to-have performance factors for the job, but was doing poorly in all of the must-haves.

Making use of the Big 6 for hiring and performance evaluation forms the cornerstone of the more intangible cultural shift that typically occurs in a dealership following participation in TM2.
“What happens with the culture is really a paradigm shift,” said Spader. “The owner begins to see things differently. Like the client who looked at those 30 areas in the salesperson’s review, he’s now looking at the same items but in a new format, so he knows the right questions to ask for the right solution.”
The result is internal clarity and more focused results.

In light of the TM2 principles, Spader has recently reviewed its own vision, mission and values statements, and changed one of its four core values to help clarify and speed the evolution of its current priorities.
“It will be one of those small changes with big results,” said Spader. “Our goal was to get more focused, not to change the spirit of the company. We are constantly evolving, but our core fundamentals remain the same.”

Spader’s products and services are based on its four-quadrant Total Business Success Model that addresses all facets of a business. The quadrants include:

Quadrant I, Financial Strength and Profitability

Quadrant II, Customer Base Loyalty and Growth

Quadrant III, People Productivity and Morale

Quadrant IV, Economic Forces and Business Trends.

Quadrant I and Quadrant III are internal issues that dealerships can control. The other two quadrants are external issues that dealerships need to adjust to or try to influence.

“Spader’s history has been primarily in Quadrant I with TM1,” Spader explains. “With our evolution as a company, we now address Quadrant III with TM2. We already offer some products and services to address external issues, and will be adding to those, but our main goal is to fully round out our services to help dealerships manage their internal aspects.”