This post was written by NCM Institute instructor Fred O'Dwyer and was originally posted on the Up to Speed blog

clarirty

Not too long ago as I was listening to someone talk about how fundamental clarity is in fueling growth in a company. A bell went off somewhere inside me, for I knew I had heard something similar about the virtue of clarity inside growing businesses, even though it was a long time ago.

And then I remembered: Over 25 years ago I was taking a graduate level program at a local university on weekends, here in Kansas City, and was placed on a team with four other working professionals. Two of whom were senior executives at Marion Labs, founded by Kansas City’s most famous entrepreneur, Ewing Marion Kauffman. Kauffman, like many wildly successful American tycoons, began operations from scratch in his home. There, he started a pharmaceutical company and called it Marion Labs. It was 1950 and he began with all he could lay hands on, $5,000. About 40 years later, the company’s annual revenue was closing in on the $1 billion threshold, and was valued at $6.5 billion when it merged with Merrell-Dow. The employee count exceeded three thousand.

How did Marion Labs manage to sustain such a furious growth rate and still maintain almost unparalleled success along the way? I know the two execs with whom I shared several courses could tell you exactly why. They would attribute Marion’s success to the vision, principles, drive and energy of their founder, “Mr. K,” as they called him. Not only did my classmates feel a personal allegiance to Mr. K, they also felt they could follow Mr. K’s direction even when he wasn’t close to their divisions. And that’s because they could quote verbatim (and did so numerous times) their founder’s three core values and three clarities. Six simple principles that Mr. K developed for himself and for his business, and managed to instill in the Marion Labs associates to a remarkable degree. Not only could my buddies quote them, I knew they were part of their own core principles as well. I was able to find these six practices that guided Mr. K’s approach to business; practices that were in no small part responsible for the company’s huge success:

The Three Core Values

  1. Treat others as you want to be treated.
  2. Those that produce should share the rewards.
  3. Give back to the community.

The Three Core Clarities

  1. Clarity of Direction
  2. Clarity of Organization
  3. Clarity of Measurement.

Let’s take a look at how these six items might work for an auto dealership today.

The Three Core Values

The three core values are simple, right? Can you check them off this list with the thought that “Yep, we already do that.” Truth be told, for a long time now, growth-minded auto dealers and dealer groups have indeed adopted the same core values Mr. K. fashioned for his business a long time ago. Look at your ongoing efforts and programs to improve CSI and customer retention, as well as to offer more convenience and value when selling and delivering your products and services. These efforts easily fit into the first core value, which customers are quick to recognize and reward with continued business. Likewise, many of you have crafted excellent pay plans that handsomely reward those that produce, and in turn are rewarded with their loyalty to you. And auto dealers in general take a back seat to no one when it comes to developing ingenious programs to give back to the community in ways that not only help the community but energize a dealership’s customer base as well. If you have been focusing on instilling these values into your operations, you know that what goes around truly comes around. Mr. K. would be proud of you.

The Three Core Clarities

Can we also so easily put these on our “We already do that” list and move on? I think not, at least not in many cases. Each month I am privileged to present a few of NCM Institute’s core courses to a wide swath of dealership managers, ranging from seasoned veterans to newbie leaders and even to some soon-to-be leaders. While most of them exhibit strong leadership aptitudes and interpersonal skills, in my opinion, not all of them could recite their companies’ core clarities, like my Marion Labs friends of so long ago could so well deliver.

As a call to action for you today, consider for a while the following questions that, in my opinion, relate well to Mr. K’s Clarities of Direction, Organization and Measurement in an auto dealership today:

Is my management team, let alone my entire team of associates, absolutely clear about the direction in which we want to lead the company this year? The next five years?

Do we hold regular meetings with managers – and other meetings with the entire staff — to update them on progress toward our goals? Can my leadership team credibly and enthusiastically present company goals to those who report to them? Do they?

Does our company celebrate victories and work together as a team to overcome difficulties?

Do I assume that because I know who reports to whom inside the company, that everyone else must know this as well? Do I have and use organizational charts that clarify the company’s structure to all associates?

Do I have written job objectives that clearly outline each associate’s responsibilities and performance expectations?

Does each employee receive an individual consultation with his or her manager (at least monthly) so the manager can clarify how the employee’s efforts contributed to the company’s success – and to receive feedback from the employee as well?

Do my managers clearly understand the portion of the financial statement for which they are responsible? Do they realize what affects the financial data and how to improve results?

And do my managers daily measure the core activities in their departments that will clarify the financial results at month end?

There are without doubt several more clarity questions to ask ourselves here. Mr. K’s Clarities, in my opinion, are harder to instill into an organization than his Values. Perhaps it’s because Clarities are more like blocking and tackling, and not as flashy as running and passing. And that’s why otherwise good companies sometimes don’t work on them, or let them slip. Should they be surprised then when expected growth slows way below expectation? Could lack of these three simple clarities be the culprit?NCM Institute believes strongly enough in the principles behind these and other similar questions are presented to students in almost all our courses. In short, we wholeheartedly agree with Mr. K’s Three Clarities.

I do believe Mr. K. knew what he was doing when he developed these six basic principles for his business so long ago. If you want some more information about them, click here to learn more about Mr. K’s Formula for Success.

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