The heartbeat of any retail business is the point of customer contact. In a motor retail business that is the dealership because it is at the dealership where new and pre-owned vehicles as well as parts are sold, cars are serviced, and finance and insurance are provided. So the success of a results-driven motor retail group is reflected in the health of every dealership in the group.
In 2008 the Legitimate Leadership framework was introduced into a motor retail group business which offers a number of automobile brands out of dealerships in South Africa.
The Legitimate Leadership Model was expected by group management to provide the backbone (act as the spine) for a number of people interventions in the group aimed at improving employee retention, employee and customer satisfaction, and dealership performance (both in terms of sales and service).
The generic Legitimate Leadership implementation process was instituted over an initial 18-month period.
Firstly everyone in a command role in the group, including the CEO, developed an understanding of and commitment to the Legitimate Leadership criteria.
Each leader then committed to a remedial action plan based on feedback received from direct reports on how he/she was actually experienced by them against the Legitimate Leadership criteria.
Thereafter managers attended a series of application modules, run on a drip feed basis over a number of months, which gave them the tools and skills to translate the Legitimate Leadership principles into day-to-day leadership practice.
What made the difference
What made this Legitimate Leadership intervention distinctive however were two factors, namely:
- On a regular basis (about every 18 months over an 8-year period) the CEO commissioned what was called an Employee Satisfaction Index (ESI) based on the Legitimate Leadership criteria. The purpose of the ESI survey was to gauge employee opinion across the dealerships. A representative sample (15–20%) of employees in each dealership was chosen at random for one-on-one interviews with a Legitimate Leadership consultant. These employees rated the managers in their dealership on their level of concern for employee welfare, trustworthiness, responsiveness to employee problems, effectiveness of communications, and devolution of decision-making authority – and they were invited to give reasons for their views. The findings from these surveys were taken very seriously. Remedial action plans were put in place and executed for every dealership where action was required. The person tasked with supporting the Dealer Principal and his management team with the actions they needed to take was the senior Human Resources professional in the group. His role was critical in effecting the shifts required.
- In due course the senior Human Resources professional was released from his normal Human Resources responsibilities to focus full time on the implementation of the Legitimate Leadership principles in the group. In addition to supporting and helping to drive the remedial action plans in those dealerships put into “ICU” (intensive care ) as a result of the findings from the ESI surveys, he effected the following changes in people practices and systems in the group, supported by Legitimate Leadership:-
- He developed, with the full participation of employees in the group, a set of five values – Care, Honesty, Excellence, Passion and Respect – along with their behavioural indicators. Allied to this, “Values Calibration workshops” were designed and run with Legitimate Leadership. These in effect calibrated leadership behaviours on a day-to-day basis with the agreed five values.
- He worked with managers to drive decision-making authority down to the lowest levels. Real empowerment impacted positively on morale. This was seen in, for instance, warehouse supervisors who were given the authority to discipline their staff, and technicians who became responsible for test-driving vehicles after they had serviced them (a task which previously was only done by the workshop foreman).
- He worked with Legitimate Leadership and managers in the group to define accountability at all levels as well as the Means and Ability prerequisites for contribution to standards in particular roles. As a result, each level in the group had a unique value-add. With no duplication of accountability it was now possible to hold individuals accountable for the contribution to the results that it was appropriate for them to be making at their level in their business.
- Managers and supervisors were trained in disciplinary processes which were aligned to the Legitimate Leadership criteria.
- Management appointments were made based on candidates’ abilities and willingness to care for and develop their staff.
- Group processes from sales through to warrantees were redesigned and used as the basis for instituting best practices into core group activities.
- At the instance of a brand sales manager, quarterly awards functions were instituted, at which top performers – from sales executives through to apprentices – were recognised.
The results achieved are testimony to the power of effectively implementing the Legitimate Leadership principles in a results-driven retail environment. These results included the following:-
- Several different dealerships won Dealer of the Year awards year after year in the period 2008–2014, awarded by specific original equipment manufacturers (the manufacturers of specific brands).
- Customer satisfaction, in terms of both sales and service, was excellent. The group consistently scored above the national average of 90% (as measured by an independent group).
- Formal union relationships improved as evidenced by a decrease in disputes referred outside of the group and acceptance of retrenchments in a part of the group.
- Employee turnover declined, particularly at managerial level, where annual turnover fell to lower than 10%.
- The results of the ESI surveys showed steady improvements in trust in management, in perceptions of managers living the values, and in improved communication at all levels.
- Overall, the group consistently not only met but exceeded its profit targets.
Two comments from managers in the group sum up the positive impact of the Legitimate Leadership Model over time in the organisation:-
A Services Manager: “Legitimate Leadership has really worked for me. My people are more motivated than in 20 years and I don’t have what is a traditional problem in this industry: retention of staff. My CSI (customer service index) is the best in the country across all dealerships dealing with my brand.”
A Finance Executive: “The best management–employee relationships that I have ever seen in my career I have experienced first-hand in this business.”