BHPH Dealer THE
OFFICIAL
NIADA
PREMIER
SUBPRIME
AUTO
RESOURCE
•
OCTOBER
2016
MAGAZINE
NATIONAL BHPH SUMMIT
REACHING NEW LEVELS OF EXCELLENCE
DECEMBER 6-8 DALLAS, TEXAS
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M A G A Z I N E
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BHPH Dealer THE
OFFICIAL
NIADA
PREMIER
SUBPRIME
AUTO
RESOURCE
•
OCTOBER
→
2016
MAGAZINE
F E AT U R E S C O L U M N S 14 Management
David Brotherton, moderator/consultant for NIADA Dealer 20 Groups, offers practical tips on hiring the right people for your dealership.
16 Cover Story
Learn how to reach new levels of excellence at the NIADA National BHPH Summit, coming up Dec. 6-8 in Dallas.
4E ditor’s Message
ow do you spell success? Chuck Bonanno, NIADA national H director of 20 Groups and editor in chief of BHPH DEALER, says it’s spelled P-E-O-P-L-E.
6 BHPH Advocate
Is your worker an employee or an independent contractor? NIADA senior vice president of legal and government affairs Shaun Petersen explains why knowing the difference is vital.
8 Best Practices
Tim Byrd, founder and president of DealerRE, offers a letter from Joe Warranty to illustrate the benefit to dealers of having their own reinsurance company.
10 Technology
ow much risk are you willing to take? Spireon executive vice H president David Meyer explains how GPS systems can help cut costs and mitigate risks.
12 Training ADVERTISERS
Magazine Layout: Christy Haynes
AMERICAN CREDIT ACCEPTANCE / SPARTAN FINANCIAL PARTNERS 15 ARA GPS 13 AUTOZONE 05 BERKSHIRE RISK 13 CLIFTONLARSONALLEN 15 DEALERRE 08 DEALERSOCKET INSIDE FRONT COVER PASSTIME 09 PERITUS 11 QUOTEPRO 07 SPIREON 10 STARS GPS 12
NIADA Dealer 20 Groups moderator Mark Dubois provides practical tips for getting the best results from your BHPH training.
18 Management
re you a game changer? Dave Anderson, president of A LearnToLead, discusses the types of team members and what to look for in evaluating your team.
ONLINE www.niada.com/bhph_dealer_magazine.php Click on ads to link directly to their websites. For advertising information, please contact Troy Graff at troy@niada.com.
OCTOBER 2016
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EDITOR’S MESSAGE
How Do You Spell Success? During my 28-plus years in the Buy Here-Pay Here business, I have tried to find the key to success. During my dealership and finance company days I tried to hone our business model, our processes and our policies. I spent money, time and energy on finding, implementing and using the best tools available. I tried to continually educate myself in the hope of improving my business. During the past 15-plus years as a consultant I’ve had the privilege of working with some of the best dealers in America. I’ve examined, studied and analyzed their businesses looking for
Great people can overcome the worst environment. Bad people are bad people no matter how great the work environment.
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common traits so I can train and educate the next generation of dealers. What is interesting is as I reviewed successful dealers, I found no common business model or corporate structure. I found extreme differences in car models, sales processes, collection philosophies and even underwriting guidelines. I’ve seen highly successful dealers manage one location or dozens. I’ve seen successful dealers sell high-end cars and I’ve also seen them sell “hoopties.” I’ve witnessed some dealers who have extremely formal and rigid policies and procedures and some who are “loosey-goosey.” They come from metro areas and small towns. Some use all available technology and some use very little. The commonality among them all is high quality, value-driven, team-oriented people. Great people can overcome the worst environment. Bad people are bad people no matter how great the work environment. Someone once wrote, “I can’t pay my good people too much, but I always pay bad people too much.” There is truth in that statement but it goes beyond pay plans. If your team won’t produce without a pay incentive, you will create an environment where it is every man and woman for themselves. I have found people with high values, a moral compass and a solid work ethic will do the right things and work hard for no other reason than “it is the right thing to do.” So all you have to do is find those individuals – easy, right? Of course, it is not easy. In my analysis of highly successful dealers, I looked at the recruitment process for answers. Some did every background check known to man and extensive temperament (personality) testing, some did skills and aptitude testing, some checked references and some had
P-E-O-P-L-E
extensive interview processes. Some dealers did none of the above. They went with a feeling, with the thought that a person of character who wants to work can be taught everything we do. What can’t be taught is being good people, happy people, kind people or energetic people. I tried both scientific and unscientific methods with moderate success each way. No path guarantees quality people or good team members. Great resumes and solid interviews are not conclusive. Resumes are typically fiction and, if not fiction, they’re the best possible version of the employee prospect. The same goes for the interview. You are undoubtedly seeing the best version of that person. My experience has taught me resumes and interviews are great at weeding out poor potential employees but are not good determining factors in projecting future success. So how, then, do successful dealers find the best people? It’s really not that hard – but it takes work. First, we must hire team members – individuals who want to be a part of something. That is typically everyone except those who only want to know how much they can make at your business. Second, we should look for enthusiasm and energy. We cannot create those traits in employees. Next we look for basic learning skills. We are not rocket scientists or brain surgeons. We can teach anyone this business in a relatively short time. We won’t cover every eventuality, but this is simply a service business. Next we must provide that education and training while giving feedback to create a competent employee. We must be able to objectively evaluate the team member’s skill set, weaknesses and potential. It is our job to draw out their best.
Employees typically thrive when they understand their job, feel a part of something bigger than them and feel appreciated. The final trait successful dealers have is the discipline and courage to end a relationship by terminating an employee or moving him or her into a more suitable role. That sounds easy, but I can assure you the inability to make hard choices in personnel is a major reason some dealers are marginal achievers while others are high achievers. I know it is difficult to fire people, and I know it is easy for consultants to come in and say, “Hey, your mom needs to go for the good of the company.” Those are the realities of business. Not everyone is a good fit for you. It does not make them bad people, nor does it make you a bad employer. Great dealers do not keep people for wrong reasons. If you keep someone for the following reasons, ask yourself if that is the best course: • They show up almost every day. • They have worked here a long time. • They need this job. • It is hard to find replacements. The last bit of advice I give you is one my first boss out of college gave me. Before you terminate people or even start down that path, ask yourself a few questions: • Did I give them proper training? • Did I give them sufficient feedback? • Was I clear in my explanation of expectations? • Is there no chance of redemption or turnaround, or even improvement? Your answers to those questions will help you make the right decision.
→
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CHUCK BONANNO EDITOR IN CHIEF, BHPH DEALER
→ OCTOBER 2016 9/26/16 9:38 AM
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BHPH ADVOCATE
Employee or Contractor? Do you W-2? Several years ago, I was helping a dealer with some litigation in which a former body shop technician claimed he was wrongfully terminated. The tech was seeking back wages and unemployment compensation from the dealer. As I began to sift through the facts with the dealer principal, I was repeatedly told the tech was not an employee of the dealership – he was an independent contractor whose income was reported to the IRS on a Form 1099. I filed that statement away and didn't think much about it until I was at the dealership a few weeks later. The dealer principal walked me around the sales lot and then took me behind the office building to an old warehouse he designated as his body and repair shop. While giving me the guided tour of the shop, I asked the dealer principal about oversight of the tech’s work. He told me the tech came to the shop every day and generally put in an eight-hour shift. The tech was required to submit a time sheet to dealership management and inform the dealership if he was not going to be in on a given day. The tech furnished his own tools, but the only cars he worked on were those the dealership provided him. Armed with that information, what say you? Was this tech an independent contractor or should he have been classified as an employee? Your ability to properly answer that question, either on your own or with legal assistance, is becoming more critical. According to the Department of Labor, misclassification of employees is on the rise and leaving workers without key benefits and protections such as overtime and minimum wage. Currently, DOL, the IRS and a majority of state governments are collaborating in an effort to ensure workers are properly
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THE ANSWER MATTERS
classified. During Fiscal Year 2014, that collaboration resulted in more than $79 million in back wages being paid to more than 109,000 workers. DOL has clearly indicated its intent to investigate companies’ misclassification of workers and pursue enforcement. So for you small business owners who must properly designate your workers: How do you answer the question of employee vs. independent contractor? DOL recently issued an interpretive document from the Wage and Hour Administrator’s office intended to provide guidance on how you can answer that question correctly. The guidance document starts from the premise that most workers should be classified as employees because the employer is "suffering or permitting" the worker to work. DOL relies on a federal court decision that states an employer "suffers or permits" an individual to work if, as a matter of economic reality, the individual is dependent on the entity. So how does one determine whether something is a matter of economic reality? Have no fear – DOL pulled six factors from the federal court decision and instructed companies to consider them in determining whether that worker is in business for himself/ herself (independent contractor) or is economically dependent on the employer (employee). No one factor outweighs another, but all should be carefully considered.
Is the work an integral part of the employer’s business? If you answer yes, it is more likely than not the worker is an employee.
Does the worker’s managerial skill affect the worker’s opportunity for profit or loss? Independent contractors in business for themselves face the possibility of not only making a profit, but also experiencing a loss. They are ultimately responsible for determining
the jobs worked, contracts negotiated, etc. Employees generally do not have such a burden.
How does the worker’s relative investment compare to the employer’s investment? Independent contractors typically make investments that support their business as a business beyond any particular job.
Does the work performed require special skill and initiative? A special skill offered to a variety of entities can be indicative of an independent contractor relationship.
Is the relationship between the worker and employee permanent or indefinite? Permanency or indefiniteness in the worker’s relationship with the employer suggests the worker is an employee.
What is the nature and degree of the employer’s control? A
worker who controls meaningful aspects of the work performed, such as wage earned for work performed or when the work is performed, is likely to be deemed an independent contractor. Now that you know what factors Uncle Sam will look at in reviewing your workers, should this dealer’s tech have been designated an employee or an independent contractor? As it turned out, the court never got to make that decision – the case was settled before that. If it had, though, it’s a safe bet it would have ruled the tech was an employee. Don’t be the dealer who cuts corners trying to save a few bucks – the one who replaces two tires instead of all four, ignores the brakes because they’re really not squeaking that badly and pays his mechanic as a contractor because he has his own tools. Those decisions can come back and deliver a severe bite. →
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SHAUN PETERSEN IS NIADA’S SENIOR VICE PRESIDENT OF LEGAL AND GOVERNMENT AFFAIRS.
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BEST PRACTICES
A Letter from Joe Warranty C.S. Lewis was a fantastic author or, better yet, a fantastic explainer. He is probably most recognized for his Narnia series, the first of which was The Lion, the Witch and the Wardrobe. Well-known among Christians is another book he wrote called Screwtape Letters. It is written in a satirical style and, while fictional in format, the plot and characters are used to address Christian theological issues, such as temptation and resistance to it. So here’s a letter from Joe Warranty, also written in a satirical style to address issues dealers encounter daily, such as the temptation to stay in an expensive rut, and to bring awareness that there is a better way.
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Joe's Warranty Company 1 Palatial Way Cha-ching, USA Dear Mr. Dealer, This letter is to thank you for all the warranty money you have sent us over the years. It has been difficult to convince you over and over again why you should continue to do business with us. Especially after you sell your customer a warranty and send us $800 to $1,000 only to have us deny that gray-area claim, which you then end up paying out of your pocket to keep that customer you worked so hard to get in the first place. You could say our loss ratio with you has run so low we have gotten fat and happy. Truth is, your loss ratio is well over 100 percent because you paid us the full premium for the warranty and then paid the claim out
THE BENEFIT OF YOUR OWN REINSURANCE COMPANY
of your pocket. I just upgraded to my third boat thanks to dealers like you. Thank goodness you haven’t heard about setting up your own warranty company. Heck, if you had, you would be the one getting the bigger boat. Do you realize that for every dollar I don't pay for your customer’s claims, I get to keep that money? Really! You send me $50,000, I pay $20,000 for your customer’s claims and I pocket the other $30,000. Man, I love this business! In fact, when your next check earns out, baby needs a new pair of jet-skis. By the way, we will be providing you with the very best in desk calendars, notepads and pens, because we appreciate your loyalty! Love, your best friend, Joe Warranty
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Why not have a system in place so no matter where your customer drives that vehicle, if it should break down, you have a plan and the money set aside to get them back on the road? When vehicles break, the payments are going to stop unless you fix the cars and get them back on the road. As the saying goes, “Customers don’t pay for cars that don’t run.” Consider how much it costs to get a customer in the door the first time. Consider that payments are the lifeblood of the BHPH business. Why not have a system in place so no matter where your customer drives that vehicle, if it should break down, you have a plan and the money set aside to get them back on the road? The beautiful thing is, with reinsurance, your customers continually and painlessly reserve for the unexpected breakdown. They are reserving for it via your reinsurance company. A prorated portion of the cost of the warranty is collected from the customer’s payment and forwarded to
your reinsurance trust account. That will provide a constant stream of reserve to ensure that when problems arise there is a well-funded system in place. Problems are taken care of, your customers stay on the road and they continue making payments. Plus, you – not Joe Warranty – get to keep the underwriting profit. Retail or BHPH, reinsurance is a must for you. But if you just can’t bring yourself to pull your head out of the sand, don’t worry about it. Not everybody gets it. And hey, Joe still loves you.
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Does this look familiar? Franchise, retail or BHPH – it doesn't matter. There is a better way – with a dealerowned reinsurance company. Let me share some insight into how reinsurance can help you, the BHPH dealer, sell vehicle service contracts without going broke doing it. In fact, you can improve your profit while doing it. For the BHPH dealer, your reinsurance company will provide premium finance for your customer’s warranty, therefore not requiring you to pay the full price of the warranty up front, which would deplete your lending pool. Statistics show one third of failed relationships with customers are the result of a mechanical breakdown. They buy a car, it breaks down and they cannot afford to fix it.
TIM BYRD IS FOUNDER AND PRESIDENT OF DEALERRE, A GLOUCESTER, VA.-BASED MANAGING AGENCY, AND AN AUTO INDUSTRY EXPERT ON DEALEROWNED REINSURANCE COMPANIES, BHPH OPERATIONS, AND DEALERSHIP AND F&I DEVELOPMENT. HE CAN BE REACHED AT WWW.DEALERRE.COM OR (804) 824-9533.
OCTOBER 2016
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TECHNOLOGY
How Much Risk Are You Willing to Take? After years of declining sales, the automotive industry is once again on the rise. Fueling much of the resurgence in vehicle sales is the recent growth in subprime automotive financing. So what is fueling the increase in subprime auto loans? In the wake of the recent economic crisis, increasing numbers of car buyers found themselves saddled with poor credit resulting from job loss, foreclosure, bankruptcy and other financial woes. While still struggling with low credit scores, many of those customers are now moving toward financial recovery. They’ve found new jobs and careers, are earning decent salaries, have wiped the slate clean and are lowering their debts. Despite that progress, those creditchallenged customers still cannot qualify for traditional auto financing. But they still need vehicles. To meet that demand, increasing numbers of dealerships and lenders are
CUT COSTS AND MITIGATE RISK
approving more subprime auto finance, and are going deeper and deeper in the process. According to a recent report by Experian, “The percentage of auto loans to buyers with the poorest credit ratings is growing faster than the rest of the auto finance market.” Almost 21 percent of open auto loans are held by individuals with subprime and deep subprime credit ratings. However, with the uptick in auto loans, we are also witnessing one of the largest increases in auto loan delinquency rates on record. According to Fitch, increased loan originations, higher lender competition and looser underwriting standards in the subprime loan market have caused an influx of higher auto delinquencies. That’s a problem. More delinquencies mean higher rates of default. Which leads to the question: How can you better manage your portfolio and risk for success? As subprime auto lending continues to gain momentum and loans dive deeper,
the associated risks continue to rise. Dealerships and lenders that offer subprime auto financing should be prepared for an increase in delinquencies, defaults, repossessions, collection staff time and resources – all of which come with significant costs that cut into profitability. BHPH dealers and lenders are now turning to GPS tracking as a smart business strategy that cuts costs and mitigates risk while also encouraging their customers to pay on time and improve their credit.
e u l a V s d d A t S e P k G c r o a t P S r u d l o o Y G d n A s t e s s A r u o Y To Spireon is a proud member of the NIADA Diamond National Corporate Partner Program.
To find out more about Spireon GoldStar GPS call 855-867-2684 or visit spireon.com
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→ GPS tracking, in its most effective form, is a system that enables dealerships and lenders to verify customer information faster, ensure more on-time payments and locate vehicles in real time to manage their liability with high-risk vehicle collateral. The more advanced GPS vehicle tracking and collateral management systems include additional features such as payment reminders and advanced reporting. Those features further reduce business costs while also promoting on-time payments that help customers stay in their vehicles and rebuild their credit. In a study conducted on Spireon’s GoldStar GPS vehicle tracking, 87 percent of vehicle finance customers saw an increase on their return capital. Further, 77 percent saw a significant improvement of their customers’ credit ratings. The right type of GPS vehicle tracking can improve business profitability, reduce risk, help maintain CFPB compliance and help customers improve their credit.
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DAVID MEYER IS EXECUTIVE VICE PRESIDENT OF SALES AND CLIENT SERVICES FOR SPIREON, BRINGING MORE THAN 28 YEARS OF VEHICLE FINANCE AND BHPH INDUSTRY EXPERIENCE TO HIS ROLE OVERSEEING THE COMPANY'S AUTOMOTIVE SOLUTIONS GROUP.
If you missed the National Leadership Conference last month in Washington D.C., we have all the education filmed, edited and available for viewing on NIADA.TV under the BHPH tab. Some of the highlights include the U.S. Department of Labor speaking about the new overtime rules and other wage issues, the FTC talking about marketing, the Department of Justice discussing fair lending regulations and servicemember issues, and the CFPB covering collections. YOU CAN VIEW THESE AND OTHER BHPH RELATED EDUCATION SESSIONS 24/7 ON NIADA.TV.
OCTOBER 2016
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TRAINING
How to Get the Best Results From Your
T
he first lesson I learned in becoming a certified sales trainer was you can’t make someone learn. They have to want to learn. The second lesson was learning new skills requires change, and most people resist change. So if you can’t make someone learn and most people resist change, how do you get the best results from your BHPH training?
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JOB-SPECIFIC TRAINING
Probably the biggest mistake employers make is trying to find a “one size fits all” training solution. The most effective training programs provide job-specific training. For example, the training required for a sales position will be substantially different than the training required for a mechanic or a collector.
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TRAINING FOCUS
For any training to be effective, it should answer four simple questions: • What actions or results do you want to improve? • Why do you want to improve those actions or results? • How will you improve those actions or results? • What will be the benefit from improving those actions or results? If we apply that to training for a BHPH collector position, the answers might look like this: • We want to improve our average monthly delinquency from 30 percent to 22 percent. • Improving delinquency will increase our cash flow and reduce the number of accounts that are contractually late. • We will implement specific policies, procedures and operational forms from our training workshop that will improve our collection results. • Improving delinquency will increase the monthly bonus for collection staff, increase cash flow and free up money to buy more vehicle inventory. →
WHY SOME DEALERS DON’T TRAIN
A big reason employers don’t train their staff is they see training as an expense rather than an investment. Investing in your staff by providing the tools to do their job effectively is a key driver to success in any business. Many employers believe if they train their staff, a competitor will steal their employees and the investment will be wasted. But the alternative is having untrained staff operating key positions in the business. Does that really make sense? →
RESISTANCE TO CHANGE
It is human nature to resist change. Change is uncomfortable. Try wearing your wristwatch on the opposite hand for a day. Count how many times you want to go back to the old way. For some people, change creates fear of the unknown. That kind of person would say, “I know how to do my job this way. Doing my job a different way makes me uncomfortable.” If the new way of doing the job is tied to a pay plan or bonus, employees might fear the change will cost them money. To overcome resistance to change, employees must be open to learning new ideas and understand that job-specific training will provide the tools they need to be more effective at their jobs.
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BHPH Training →
INSPECT WHAT YOU EXPECT
The key to improving performance after a training program is monitoring the employees’ actions and reviewing their results. In other words, inspect what you expect. That does not mean you have to sit beside your employees for the next three weeks while they do their jobs. It does mean you need to review their performance and discuss their progress. In the example of collector training, the plan after training would be similar to this: • Listen to their interaction with customers during collection calls and payments. • Make sure they are using the word tracks, forms and procedures provided during the training class. • Provide coaching on specific tasks that are weak or need improvement. • Provide encouragement and positive support. • Continually reinforce and review the key steps to effective job performance.
Performance reviews are another key step to getting the best results from your training. A performance review should be a formal meeting with a consistent format and process. The objective is to help the employee understand if he has “moved the needle” on his performance and results. The employee should be able to express questions or concerns. Any additional help, tools or coaching he might need should be documented and provided. Goals or targets for the next review should be defined and agreed on. The important thing is giving the employee an opportunity to have input and agree on the plan for improving results. Getting improved actions and results from employees requires time, effort, consistency and a lot of positive reinforcement before and after the training program.
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With training, the result should be higher job satisfaction and improved earning power.
TRAINING IS AN INVESTMENT
MARK DUBOIS IS A MODERATOR FOR NIADA DEALER 20 GROUPS AND AN AUTO INDUSTRY VETERAN WITH MORE THAN 35 YEARS OF EXPERIENCE, INCLUDING SALES, MANAGEMENT, RECRUITING AND TRAINING, E-BUSINESS, MARKETING AND BHPH MANAGEMENT. HE CAN BE REACHED AT MARK@NIADA.COM.
OCTOBER 2016
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MANAGEMENT
Hiring the Right People Today An almost universal complaint from dealers today is they can’t find enough people worth hiring. Finding applicants who actually want to work, take pride in their accomplishments, have the talents and skills necessary to be successful in the position and can pass a background check has become something akin to searching for the Holy Grail. Many dealers have come to the conclusion that applicant doesn’t even exist any longer and, as a consequence, have become extremely reluctant to deal with needed corrective actions in their organization out of fear of not being able to fill the position. Hiring good people today is definitely a challenge. Furthermore, it is a full-time job. If all you do is throw an ad on Craigslist or Indeed when you have an immediate need, all you will be doing is wading through all of the unwilling and unqualified. Successful recruiting requires commitment and consistency. So much so, in fact, many larger organizations have invested in a full-time recruiter to maintain and update the pool of candidates to draw from for current and future needs. I understand adding additional non-productive overhead isn’t the answer most dealers are looking for, so let’s take a look at some tips to help define your recruiting efforts.
Always be on the lookout:
High-energy people who can hold an intelligent conversation are becoming increasingly rare in today’s technology-driven environment. When you come across one, start a conversation about his or her goals. You might find a fit.
Recruit when you don’t have an immediate need: Successful organizations should always be searching and adding to their applicant pool. Run ads regularly. Email and talk to applicants often with the goal of maintaining an up-to-date talent list. Build your bench: When you
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do find someone qualified who will be a good fit for your culture, by all means hire him. Organizations typically turn some of their staff over regularly. Bring people on board before you really need them so they can learn the job in a more structured environment rather than when you are buried up to your eyeballs trying to contend with your job and theirs because you weren’t ready when you lost someone.
Pre-screen candidates by phone and email: Get to know
candidates initially via phone and email. How to conduct a phone conversation or compose an email is critical for almost any position you have. If they aren’t engaging when you are trying to hire them, how will they be when they are contacting your customers? Prepare a short list of interview questions for your pre-screening calls. They should be more about you getting a read on the applicant than the applicant’s ability to handle a complicated question. Save those for the faceto-face interview.
Learn how to interview:
Many, many employers fail at this critical step. To have the best, most consistent information available, you should develop and use a standard set of interview questions for your organization. A standard, consistent question list allows you to evaluate all candidates objectively based on their responses to the same questions. Don’t ask about family, religion, politics, sexual orientation or anything else that might directly or indirectly create a negative impact on a protected class. Interviews are a two-way street in which you have to sell your organization while the applicant simultaneously sells himself or herself. That said, inexperienced interviewers tend to do too much talking and not enough listening. Identify red flags: The interview process is designed to reveal red flags that should make
an employer wary such as: • Spelling and/or grammatical errors in an email, cover letter or resume. If prepared communications are sloppy, how are they going to be with casual contact? It may suggest inadequate attention to detail. • Your interview process isn’t a high enough priority for the applicant. This can be evidenced when applicants aren’t on time or appear disorganized. • Not putting their best foot forward. Even in today’s business casual environment, job applicants should be putting their best foot forward regarding dress and hygiene. Applicants should “dress for success” and should care enough about the potential opportunity to come to an interview clean and well represented. • Unprepared. The applicant didn’t take any time to learn about your business before the interview. He or she doesn’t have questions about what you do, where you are headed, etc. • No questions. Beyond not taking the time for the basic step of looking at your website or Facebook page, the applicant has no questions at all. That suggests not only lack of preparation but lack of interest as well. • Most interested in what you can do for him. The applicant will have questions. The problem is they center on compensation, time-off policies and other perks, and suggest your position might just be a stop on his path to something better. There is a time and a place to discuss compensation and time off, but it typically isn’t at the first interview. • Short on details. Questions about past employment experiences elicit vague responses lacking in detail. Unwillingness to share details about past experiences suggests something to hide. • Short time at previous positions. Anyone can make a mistake, but when an applicant
TIPS IN SEARCHING FOR INTEGRITY
consistently moves from place to place without developing significant tenure, it suggests the possibility he might be a problem employee. • Negative energy. Bad things can and do happen in business. Too much detail about previous negative employment experiences and too little acceptance of responsibility can reveal someone who might become a problem employee for you as well.
Interview as many people as possible for a position: You can’t afford to limit your exposure. There are too many applicants who want the pay and the perks but don’t want to do the work. Interview.
Conduct multiple interviews:
Have someone else in your organization interview applicants as well. They may see something you missed. Ask different questions (but still from a prepared list). Also, don’t do all of your interviews in the same location. Applicants are generally prepared for an interview at your offices. Go across the street and talk to them at the coffee shop instead. It can be revealing. Ask tough questions: This is your chance. Ask applicants to explain something complicated they are familiar with in five minutes or less. Ask them why they are there. Have them sell themselves, or the pen you are using to take notes. Ask them to detail their three greatest professional accomplishments and their two largest professional failures. Questions of that type are about revealing intelligence and honesty.
Use social media outlets to research applicants: Check out
your applicants’ online presence. It constantly amazes me what people will post on their Facebook pages. Do people not realize once it’s on the Internet, it’s there forever?
Look for a cultural fit but also embrace diversity: Finding
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people who will fit your culture is important. But there is also strength in diversity. Too much of a cultural fit can result in managers simply hiring people just like them, which isn’t good for the organization, either. Ultimately, my recommendation is we all search out integrity. Don’t take the easy path. It’s easy to rehire former employees (whom you probably fired for very good reasons) because they know the job and it’s easier than training. But just because someone sold a lot of cars doesn’t change the fact he showed up to work drunk, curbed customer trade-in vehicles, faked income documentation or withheld critical information to get a deal done. Don’t just look for people with perfect resumes. We all know people who have bounced around an industry yet have not managed to learn how to do anything. Hiring someone just because you think you won’t have to train him is pretty short-sighted. Be aggressive. Work to attract non-traditional hires who can contribute unique talents and skills. Ultimately, this is a people business and we need good people to make it work. Good luck.
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DAVID BROTHERTON IS A MODERATOR/CONSULTANT FOR NIADA DEALER 20 GROUPS. HE CAN BE REACHED AT DAVID@NIADA.COM OR (941) 371-7999.
ADVISORY | OUTSOURCING | AUDIT AND TAX
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OCTOBER 2016
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2016
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MANAGEMENT
Are You a Game Changer? There are normally three types of team members on an organization’s payroll: caretakers, playmakers and game changers. The behaviors associated with each category go beyond skills or talent – they are primarily mindset issues that determine how well the skills and talents of an individual will be applied. While those characteristics can typify any position, we’ll focus on helping you evaluate yourself and the other leaders on your team. Here’s a partial list of character traits for each mindset. While each person might demonstrate a blend of these mindsets from time to time, there is normally one mindset and corresponding set of behaviors that dominates his or her performance. →
CARETAKERS • Caretakers are baseliners. More often than not, they do what is required of them and no more. • Caretakers are steady and dependable. You can count on them to consistently “soldier
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on” in their role and think and act as maintainers – not really innovating or rocking the boat in the process. • Caretakers might make an occasional great day, but they are not going to determine the month’s outcome. They are also quick to encourage and cheer others on, but aren’t going to personally take what they do or lead to a new level. • A caretaker might secretly covet the spotlight, but when he gets it he doesn’t normally handle it very well. People come to understand they can’t count on the caretaker to get fired up enough – consistently enough – to rattle the status quo or shake things up in a meaningful way for long. • Caretakers don’t initiate. They wait to be told what to do. Their strength is dotting “i’s” and crossing “t’s,” not creating the script or writing the story. • Caretakers focus on holding ground, or not losing ground, but haven’t developed the killer instinct to take new ground. They will, however, do a diligent job of tending the ground they have been given. There are roles for caretakers within an organization in positions that require a steady, dependable, “holding down the fort” mindset, but certainly not in a leadership position in which they are expected to grow people and elevate a department to the next level. Note: Caretakers can be groomed for playmaker or game changer status, but something must first change within them – their mindset. At some point they must become less content with being good or desiring to be great at what they do and must want to be the best at what they do. Sadly, most people never flip the inner switch to make that transition, or they just aren’t interested in working that hard, so they drop anchor at the caretaker level.
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EVALUATE YOURSELF AND YOUR TEAM
PLAYMAKERS • Playmakers normally have more energy and drive than caretakers. They might also have more talent, but are primarily differentiated from caretakers by how their mindset enables them to apply their talent. • Like caretakers, playmakers are not great initiators – or innovators, either – but will energetically attack what you give them to do. • Playmakers on the team will help you have a great month from time to time, but aren’t high-impact enough to carry you to a great year. In the sports vernacular, they win an occasional game for you, but don’t have the game-changing horsepower to carry a team to the championship. • Playmakers are prone to promote themselves and love getting credit and attention. They have a tendency to worry more about themselves looking good than impacting others for the collective good. • Playmakers are prone to borrow credibility from past great plays and can lack the unyielding focus to prove themselves over and over again, day after day. • Every organization needs playmakers. With tweaks in mindset, playmakers can grow into game changers. Just as a shift in mindset can lift one from caretaker to playmaker status, a bigger shift in mindset is necessary to leap from playmaker to game changer. Most don’t flip that switch because of the complacency their success as a playmaker creates for them. Note: Playmakers are prone to push back against your process and often shortcut it. They believe that because of their talent, they don’t have to do what others do – or do it as often as they do it – to get results. That flaw in their mindset is often what keeps them from ever becoming game changers.
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GAME CHANGERS • Game changers are relentless. Relentless is defined as being “oppressively constant, unyielding or incessant.” In other words, being relentless is about becoming unstoppable as you pursue not only your goals in business, but your dreams in life. • Being relentless is more a mindset issue than a talent issue. Many people have immense talent but lack the mindset to fully develop it and invest it without holding back. • A key is being committed to fully developing your talent and consistently applying that talent daily. The adage is true: Hard work beats talent when talent doesn’t work hard. • Game changers measure themselves less against others and more on whether they are better than they once were. • Game changers are driven beyond the desire to be great at what they do. They aspire to become the best at what they do. And becoming the best isn’t a passing interest, but a consuming obsession. • Game changers don’t depend on external motivation. A game changer’s motivation comes from his own reasons. A pat on the back is nice, but it’s not necessary. • A game changer might not love the process any more than the caretaker or playmaker, but she loves the outcome the process brings so she follows it – every time, every day. Note: Game changers are so focused on results, so in control of their emotions, so confident of success and so committed to winning that everyone else feels empowered when around them. Game changers are the “go to” leaders. When everyone else panics and pukes, they are who others look for, look to and look up to. They are the go-to people and everyone knows it. →
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DAVE ANDERSON IS PRESIDENT OF LEARNTOLEAD.
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HIT YOUR YOUR HIT MARK MARK APPLYTODAY TODAY APPLY
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The National Independent Automobile The National Independent Automobile Dealers Association’s recent acquisition of Leedom & Associatesrecent Dealer acquisition Twenty Dealers Association’s Groups will provide NIADA members 17 of Leedom & Associates Dealer Twenty different group optionsNIADA to joinmembers to help your Groups will provide 17 dealership improve profitability and identify different group options to join to help your opportunities for growth. Whether you dealership improve profitability and identify are an independent retail dealer, a BHPH opportunities for growth. Whether you dealer, a store manager, or if you operate are an independent retail dealer, a BHPH a franchise new car store, NIADA’s Dealer dealer, a store manager, or if you 20 Groups program has a group to fitoperate your a franchise new car store, NIADA’s Dealer needs and expectations. Whether you are 20 Groups has a togroup to fitlevel, your trying to takeprogram your business the next needs and expectations. Whetherfor you are train your staff or arrange financing your trying to take yourhelp! business to theDealer next level, dealership, we can The NIADA 20 Group dedicated to finding train yourprogram staff or isarrange financing for your the perfect group to fithelp! your The dealership dealership, we can NIADA size, Dealer sales volume and overall operation. 20 Group program is dedicated to finding
the perfect group to fit your dealership size, sales volume and overall operation.
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