A Case for Change, Part I: Reasons for Embracing the Continuous Improvement Movement

Change is never easy, especially when you’re dealing with individuals who are entrenched in their beliefs. It sometimes feels like trying to make a U-turn in the middle of a narrow street without the maneuver of a three-point turn; stopping, backing up and then going in another direction, yet that is exactly what is needed in most cases. The consensus is that no one has had the time to do anything besides what they did yesterday, last month, last year, and so the dysfunction continues. The retail showroom in the automotive industry has functioned as an island separating itself from known successful business practices from the time of its inception. The belief that this is the car business and this is how we do things here are two belief systems that have been responsible for the industry’s paradigm paralysis.

By challenging the status quo and by asking questions regarding how to achieve better results more questions began to surface such as: How are you, as a manager supposed to impact sales when it depends so heavily on external factors like marketing and advertising? How do you define the management of salespeople? Are you managing activities? If so, what activities? Is it their behaviors? If so, what behaviors are you trying to improve or affect that will impact sales? Maybe it is their skills? If so, what skills and what resources do you use to improve them? How do you correct and develop salespeople on the fly? How can you verify what a new hire knows about selling? What measuring tools are you using to evaluate your salespeople? How are you supposed to impact repeat and referral business? How do you affect customer loyalty? And the list goes on…. In essence, where do you begin? The net result of being a manager without having a road-map for your people to follow is a sales team out of control whose results are dictated by external factors and most of all luck!

The Case Study - In the 1950’s a gentleman by the name of C. Edward Deming introduced a philosophy of improving quality and increasing productivity to Japan. His approach so greatly impacted the Japanese manufacturing and business industries that he was later recognized by the emperor of Japan for his work. Deming’s contribution was responsible for helping Japan rise from the ashes after WWII to become an industrial giant, and ironically for many years he was largely unknown and unrecognized in his own country of origin, the United States.

Approximately twenty years after he received the award from Japan, he was featured in an NBC documentary titled, “If Japan Can…Why Can’t We?” This was due to the fact that the Japanese were producing far superior products than the Americans, and when they researched why this was the case; there he, Deming, was at the center.

Around that same time period, transmissions for certain Ford models were being built in Japan as well as the United States. To Ford’s surprise, customers were requesting the cars that were made with the Japanese transmissions and were willing to wait because they ran smoother and had fewer problems. Why? They were both built with the same specifications, so what was the difference? After examining both transmissions, Ford’s engineers found that the specifications of the American made transmissions, although within acceptable range, were not as precise as the Japanese, which made a significant difference in their performance. Tolerance is normal when writing specifications, however, the Japanese utilized a consistent process to build their transmissions the same way every time resulting in a more stable and reliable product. Although the Americans used the same specifications to build their transmissions, they took advantage of the tolerances that were written into it, thereby producing transmissions with varying performances. Shortly thereafter, Ford Motor Company, one of the first corporations in America, sought help from Deming. He was charged by the company to jump-start a quality movement, but to Ford’s surprise Deming questioned its culture and the way its managers operated, not how they built cars. By changing management’s view regarding people, process and then product, Ford became the most profitable American auto company, outperforming its arch rival General Motors by the mid-eighties.

The Take Away - After I understood Deming’s approach, the lights went on as I realized that the sales process was no different from the manufacturing process in that it was comprised of steps that, if properly documented, organized and taught as a system, would produce more predictable results. I finally understood why the road to the sale as it is being taught around the globe is so severely flawed and why, without specific activities identified for managers to manage, they, through their salespeople, were incapable of producing consistent results that are predictable, repeatable and track-able. It became apparent that in the absence of definitive activities to address business development, business management and customer relationship management, it is left up to the salesperson’s interpretation of the activities they should engage in, resulting in varying and disastrous outcomes.

Selling as it is being taught in the automotive industry has always focused on the “event,” that moment in time when the client engages the dealership in order to exchange dollars for a product or service. The problem with this type of approach is that the focus has always been at the surface level of the transaction, “the sales process”, and has missed the most critical part of the whole exercise and that is the human interaction.

In Part II we will outline the action plan, stay tuned.

This is an excerpt from Lessons from the Concrete Garden by Kurtis Smith, published in 2010

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