Store cred Products Processes Management Business focus PitfallsBy Sigmund J. Mikolajczyk, Managing Editor
CLEVELAND—No, you don't have to be the proverbial “tree hugger” to manage a single tire store, or a rash of them, for that matter.
But take it from a guy who's quite well versed in keeping, oh, 900 or so balls in the air at the same time—the art of running a multi-outlet dealership lies, in part, in the obvious little word “control.” Bill Ihnken, president and COO of TBC Company Owned Retail, said that no matter if a dealer runs one store or many, the key is being an “environmentalist.”
That means “you control what happens in your stores—their environment—every single day,” he said. And, sure, the foundation for that environment starts with the owner, but unless employees are in on the game plan from the ground floor, you're itchin' for failure.
Mr. Ihnken, who's in charge of TBC's 900-plus retail store network that includes Big O Tires, Midas Inc., Tire Kingdom Inc., Merchant's Tire & Auto Centers and NTB (National Tire & Battery) chains, spoke at the recent International Tire Exhibition & Conference (ITEC) in Cleveland. He promised dealers attending his seminar, “Tips On Managing Multiple Outlets,” that he'd take a look at some old styles of managing, and some new technologies. That he did in an all-encompassing tour de force of not only what it takes to successfully run a chain, but some of the pitfalls that can stop an owner in his or her tracks.
He described the tire business as an “extremely dynamic” industry that requires quick reaction to changes in the retail environment.
“If you're on the right track but sitting still, you're going to get run over,” he warned dealers. “You've got to adjust, you've got to recreate yourself and stay on top of your game every single day...to not only be there for your employees, but to meet your customers' needs, as well.”
Whether an independent owner, a store manager, a franchisee or part of a dealership's senior management “all the way up to the CEO of a company, “You're an environmentalist,” Mr. Ihnken said. “Your goal is to create an environment in which your people will be successful.”
Perhaps one of the most crucial pieces of advice Mr. Ihnken offered was that owners and managers must always think about the consequences of what they say to employees.
“What we have to understand as business runners is, that's a huge responsibility. If you believe the economy is bad, guess what your people believe? The economy's bad. That's a fact. If you believe there are all these distractions and hurdles to get through, your people will believe the exact same thing,” he said.
Don't elicit a positive attitude in the store? Neither will your team.
“So it's extremely key that, as a leader...you're very focused on the power of your words and leadership because you're an environmentalist.”
That brought Mr. Ihnken to another of his many salient points: “Nothing is more important than your people.”
They are, he emphasized, “the greatest asset we have.... They're pressing the flesh of our consumers every day.”
He called employees the “conduit for how we can be very successful and give great customer service.” They're also the force that drives sales or can drive away business and be a big turnoff to customers. Owners and managers must recognize that employees are “the single most-important element of your business.”
Noting that TBC has added, through acquisitions and expansions, many stores and chains over the last several years, Mr. Ihnken said he stands before every new team of employees and tells them: “The asset in the store is not the bricks and mortar. The asset in the store is you, the people. That's what's going to make the difference.
“What these folks look like, and the image they project to the public, is very important to your company's image.”
He then showed a photo of a tattooed, pierced young man.
“He's probably a good guy,” Mr. Ihnken said, pointing out the kid's probably a whiz with a computer, may be well-liked, and likely is a competent worker. “But between the hours of 6:30 in the morning and 9 at night, if he works for me, he can't look like that. He must look like a professional who is clean-cut and can communicate with the consumer.”
“What these folks—your employees—look like, and the image they project to the public, is very important to your company,” he continued, pointing out the importance to “hire the attitude and train the skill.”
There's never been a better environment than today to find quality employees, he said, and he urged dealers to look outside of the tire business for good workers.
“Some of our most successful store managers have worked in the restaurant industry, worked for Home Depot, believe it or not.
“What you're looking for is the attitude. Acquisition of new customers and taking care of existing customers is the No. 1 goal of your people. If you want long-sustained profits and sales, you have got to have great people who are focused on taking really good care of your customers.”
Mr. Ihnken said TBC's store managers “are the single decision-making spot in our retail stores.” They have to worry about inventory, personnel, asset protection, billing, customer service, technicians, staffing and scheduling, among a host of things. So their performance is critical to a store's success.
He urged dealers not to treat the manager as simply another employee, but rather as a “profit partner.”
“Hire tough and never just settle.”
And, he added, doing the right thing, the right way, right now is impossible without the right people.
“You have to empower your folks to be the agents of change,” he said, adding: “I empower 900 store managers to do whatever it takes to take care of the customer.”
As for not constantly being on the prowl for good talent—say, when the economy is in the tank and a store has a full complement of talent—Mr. Ihnken stressed that owners instead should “always be on the lookout for opportunities to upgrade your team,” whether or not they're hiring.
The owner “has to build the culture, set the tone, the mission, the passion, the goals and direction of the company,” Mr. Ihnken said. “People don't leave companies—they leave people.
“If you as leader set a standard, and then employees see you flinch, they know that standard is not important any more....”
Employees are looking to their store's owner or manager all the time “as the leader, whether you operate a couple stores or 900.”
That's where becoming the “employer of choice” is so crucial to a company's success. “When the needs of employees are met, the needs of customers are met and the company meets its goals,” Mr. Ihnken said.
How does an owner get to that point? He laid out the following advice:
c Surround yourself with the very best;
c Build a culture;
c Take care of the “internal customer”—the key to the hierarchy of needs;
c Invest in training to “muscle build” your team;
c Build a sound framework for growth;
c Evaluate and use a competitive compensation package that works for you; and
c Use performance evaluations to understand what employees perform and how they perform.
Mr. Ihnken said stores must offer the “right products, at the right price, at the right time.” That requires that owners and managers understand their customers and position offerings accordingly.
“Become intimate with the marketplace and maximize market share potential,” he said. “Know your market segments—maximize the store network to become the retailer of choice.”
It also is essential to grab hold of the reins when it comes to inventory/category management so a store can “maximize turns and minimize costs.”
Being specific about how things should operate also is essential to success. Clearly define the processes that drive the desired results both in sales and operations, Mr. Ihnken said.
Manage the numbers—such as sales, gross margins and expense control. Develop and benchmark KPIs (key performance indicators) and expense metrics.
But don't keep those numbers to yourselves, he told dealers. Train and communicate the expectations “to every member of the team to ensure all understand their role and impact” in the process. And then demand “accountability”—meaning institute “proper disciplinary processes that change behaviors.”
In an eight-month period TBC acquired more than 400 stores—including NTB, Big O and Merchant's—and Mr. Ihnken admitted, “We didn't have a cohesive 'best practices' at all of them.” Each chain seemed to do things in a different way with no common foundation for processes that, inevitably, had to be determined, such as:
c How do you take care of the customer?;
c What are your work flow procedures?; and
c How do you initiate vehicle inspections with customers?
“That whole process has to be ingrained and clearly defined,” he said. “When you get to that point, you have the opportunity to grow, add more locations. But you have to have a common process in all of your locations.”
It may seem obvious, but Mr. Ihnken emphasized that “you have to be in your business” in order to manage it. “You have to be focused and driven everyday. If you get too far away...if you flinch or back away...things will slip.”
Focus, instead, on what he called a “must-do” list that includes:
c Manage from the front line—be accessible and grounded in your business;
c Fair and consistent direction earns trust in a leader;
c Clear, thorough and frequent communications with employees;
c Defined goals and objectives punctuated by execution of them;
c Time management efficiencies are critical; and
c Strive for organizational excellence at all levels.
A leader must constantly, instinctively ask: “What can I do to make the team successful?” Mr. Ihnken said, adding that everyone in an operation needs to be on the same page as to the business' goals.
“Time management and efficiencies are critical.
“This is a very fast-paced business—you're always moving because there are a lot of moving pieces,” he said.
“Some in this industry are reactive rather than proactive. They wait until a crisis happens to take steps.”
A diligent owner or manager needs to “be way out in front of that. You have to be reacting to the marketplace way in advance—before any trouble or problem is on the horizon,” he said.
That requires an owner to zero in on the hours he or she is actually spending at the stores and determine if that's enough time and whether the hours are being spent most efficiently.
Mr. Ihnken is fond of saying, “It's very important to look ahead of your headlights.”
In focusing on the nuts and bolts of an operation, Mr. Ihnken highlighted the following:
c Understand the power of planning, forecasting and budgeting;
c Practice prudent cash flow management;
c Leverage vendor relationships to support the stores;
c Balance the sales and operational emphasis appropriately, focusing on the importance of adaptation; and
c Build on successes—always strive for improvement, refinement and efficiencies.
However, he warned leaders that “you can checklist yourself to the point of becoming stagnant.
“It's not all about checklists and reports—it's a balancing act.... You need some of that for control, but the other side of that is, 'We've got to get out there and sell something.'”
So things are humming along nicely. The dealership has expanded. Employees seem to be happy and the balance sheet is smiling.
Yet, there are some common pitfalls that are always lurking and can kill success. Mr. Ihnken cautioned that they can include:
c Growth without the “bandwidth” will result in overextended resources. Keep a wary eye on cash flow while relying on management expertise and supervision.
c Owners can lose touch with the nuts and bolts of the business by distancing themselves from the daily operations.
c Not reinvesting in the business. “Cash from the business belongs to the business,” he said, pointing out that some owners feel entitled to have big cars, big houses, big boats and other toys. “An owner feels some success and begins to feel, 'The business owes us something....'”
That's OK—but don't dwell on them while starving the business. Just make sure you're on good solid financial ground, Mr. Ihnken said, adding: “You must save for the inevitable downturns.”
c Underestimating the costs of compliance with regulatory agencies such as the Occupational Safety and Health Administration (OSHA). “They are there in everybody's store, big or small, looking for folks who aren't doing it right. That can bankrupt your business,” he warned.
c Not being affiliated with known industry groups such as the Tire Industry Association (TIA), Rubber Manufacturers Association (RMA), Motorist Assurance Program (MAP) and National Institute for Automotive Service Excellence (ASE).
c Beware of “passing the buck” on customer service—be the one and only point of resolution.
“Your customer can't leave mad, unhappy, disgruntled or feeling buyer's remorse,” Mr. Ihnken said.
With all the ways—on the Internet, via email and social media websites, etc.—that people have to vent about what they perceive as bad treatment, “that can hurt your business substantially,” he said. “Empower your folks to be agents of change and take care of the customer any way necessary.”
He singled out McDonald's Corp. as a model of a business with a good, strong foundation, and reiterated that “when you get all these elements I've talked about in place, then your operation is scalable and you can take on more outlets.
“If you stop learning, you stop growing, and if you stop growing, you start dying.”
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