What’s the difference between family-owned auto dealerships in which the family works effectively and harmoniously and those in which stress is a daily experience?
For over 40 years I’ve had the privilege of working with family-owned dealerships, helping dealer principals develop and implement their succession planning. In the best of situations, the challenges of operating a dealership can and do create stressful relationships. But, there is a difference between those who navigate through the problems and those who seem to be in ‘battle’ or ‘avoid’ mode most of the time. This is what I’ve observed that has helped dealer families succeed at the dealership and at home, a huge accomplishment worth striving for.
1. Family Members Have Earned Respect
This usually means the next generation has paid their dues, coming to work with a ‘can do, will do’ attitude, working hard and demonstrating to dealership employees that they are team players, not taking advantage of their status as future successors. These successors understand the value of serving alongside, volunteering for the less glamorous jobs, learning dealership operations through experience. They have been willing to take the stairs, not the elevator, to the top and in doing so have earned the respect of those they will lead in the future.
“Would you be the partner your family members would choose if you weren’t related?”
Assuming there are more than one member of the next generation working in the dealership, by earning respect, each has successfully answered this question. Partnerships will only work in the long run if each partner, of their own volition, chooses their partner/s. Unfortunately, in dealer families, Mom and Dad or Aunts and Uncles give you your partners and say, “make it work.” It won’t work if one partner is carrying the load. It will work if all partners have earned the respect of their partner/s and other employees.
2. Commitment to the Dealership’s Mission, Vision and Values
Watching 8 man or woman crew in the Olympics is exciting as each rower strains to keep pace with the rhythm of the driver shouting commands. When in sync the boat literally appears to slice through the water propelling the team to victory. A family-owned dealership without vision is doomed as each rower tries to take the ‘boat’ in a different direction. Family-owned dealerships must determine the ‘WHY’ we’re in business, ‘WHAT’ separates us from the competition, and the ‘non-negotiables’ of ‘HOW’ we do business. Each family member must be in sync with these key elements if the dealership has a generational future.
One of the biggest challenges is continuing to adhere through generational change. Often, family-owned dealerships allow non-active family members to own stock in the dealership or related real estate, which gives them a stake in what’s going on. However, if they have not bought in to the bigger picture of why the family owns and operates the dealership, then it’s likely you’ll hear complaints like, “why am I not getting more money?!” To avoid this from happening, a lot of effort must be made to include all family in regular Family Business Council meetings designed to keep everyone informed and committed to the same principles.
3. Ability to Resolve Conflict
Healthy relationships demonstrate their ability to resolve conflict, not avoid conflict. Otherwise, all you get is ‘artificial harmony.’ It is inevitable in a family-owned dealership that dealer principals and their families will differ on issues, leading to conflict. Since most people would love to avoid conflict, this is a problem.
TKI Conflict Resolution demonstrates the five ways we address conflict, namely: Compete (I win – you lose), Collaborate (I win – you win), Compromise (We both lose, but are willing to do so for the greater good or at least to find a solution), Avoid (I’m not playing), Acquiesce (I lose – you win, but I’ll get you later). We all use all five of these at different times and each may be appropriate depending on the circumstances.
However, if the issue is significant, then our focus needs to be on Collaboration or at least Compromise. Collaboration has at its core ‘co-labor’ in which individuals work together to find solutions, sometimes via out of the box thinking, designed to be win-win solutions. This requires a willingness to listen carefully to the other person’s perspective, without impatiently pushing for your turn to give your retort. It also involves curiosity instead of criticism, trying to understand where the other person is coming from and figure out how you can build upon the other person’s ideas.
I asked two extremely strong opinionated brothers how they had successfully managed their partnership over 30+ years. The younger replied, “A long time ago we agreed we can argue vehemently for our position on an issue, but we must do it behind closed doors. Once we reach a solution (and this may involve agreeing to the position of the one most affected by the decision) and leave the room, the decision becomes OUR decision. If it goes well, we celebrate together. If it goes badly, we own it TOGETHER. We never say, ‘I told you so’. We have to fix it together.”
Since conflict is inevitable in a family-owned dealership, if you are struggling in this area, you would be wise to seek expert counsel to help you and your family develop the tools necessary to address issues before those problems tear your family apart.
4. Clarity Regarding Expectations
Families that successfully navigate dealership ownership and their personal relationships usually have clarified what they expect of each other. In some families they communicate so effectively there is no need to write down what they expect. Unfortunately, those families are rare.
We all know what happens when we make assumptions, which all of us are guilty of doing, especially in family-owned dealerships. Often explosions occur!
At The Rawls Group, we believe in developing written Operating Covenants which describe what two individuals can expect from each other. This process involves each individual writing down what they need/want from the other person and the more granular the better. Here are some examples: “I need to meet weekly for an hour with you uninterrupted to discuss dealership matters” or “I expect you to discuss decisions with me involving dealership expenses over $50,000” or “I acknowledge my father is the dealer principal and has the last say in decision making” or “I expect my daughter as dealership GM to have decision making authority in these specific areas”.
Depending on whether this process is being utilized to help repair relationships or prevent issues, it will be important for agreement to be found regarding what is reasonable and unreasonable. Once we agree on these reasonable Operating Covenants, the individuals are to meet regularly to determine whether they are living up to their commitment. These are not legal documents; they are morally binding agreements to help clarify expectations and improve working relationships.
5. Commitment to Prioritizing Family Relationships
If you want to work well together, you need to ‘play’ well together. All too often the demands of a family-owned dealership result in families not spending much time together. Even at work, family members are around each other a lot but do not prioritize spending uninterrupted time together to work on the dealership. “I can’t get enough time with my father – he’s always too busy for me.” If your son or daughter represents the future leadership of your dealership, then what could be more important than finding an hour a week to focus on your child and discuss the dealership together?
One of the biggest challenges of being a dealer principal is the amount of time required to make your dealership successful, especially in the formative years. However, one of the advantages of being the dealer principal is that you get to determine your schedule and now that you’ve developed your successful dealership group, maybe it’s time to make sure you have time for your children and grandchildren.
Make time at the dealership to meet individually with your children – it will pay dividends big time! Make time to play with your family – they will never forget the special times you spent together.
Families that work well together experience the best of all worlds – success at work and success at home. Isn’t that the legacy you want!
5 Things That Help Dealer Families Work Well Together
- Family members have earned respect
- Commitment to the dealership’s mission, vision and values
- Ability to resolve conflict – versus ‘artificial harmony’
- Clarity regarding what is expected of each other
- Commitment to spending time together discussing the dealership – “I can’t get enough time with my father – too busy or off traveling, golf, I need his advice and help.”
Related Stories: