The Dealer's Performance Comes Back to One Thing: People PerformanceBy R. Dale Vaughn
Article Date: 01-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.
Cutting all professional education out of your 2010 plan could be a dangerous proposition. As AED Foundation Chairman Dale Vaughn concludes his term of service, he reflects on just how valuable our people are to our profitability.
Where did 2009 go? It was an eventful year, however, in all honesty, not one that I am going to miss. We are living in interesting times and my New Year’s Toast to the AED membership is: May you find success and fortune in your future.
Chairing The AED Foundation the last two years has been an interesting experience. In the spring of 2008 we introduced Vision 2012, a workforce development endeavor of the Foundation structured around the framework of our four strategic pillars: Industry Image, School Partnership, Recruitment, and Professional Education. However, today I see our industry in a conundrum, where we must plan for a tomorrow that projects a shortfall in the number of available workers, or workers with insufficient knowledge and skills; meanwhile, today most of us are just dealing with ways to be here tomorrow.
The AED Foundation’s purpose is to support the construction equipment industry. Our products are designed to help dealers not only be here tomorrow, but to help them grow and be profitable. The Foundation’s success is measured by dealers that take advantage of its offerings. However, like all 501(C)(3) nonprofits, in order to improve what we can provide, the Foundation relies on the philanthropy of individuals and companies that have dug into their pockets and supported it during these trying times. To each, I personally want to thank you for that support.
The economic climate we are dealing with today is very challenging, and it is not difficult to garner opinions on the effects of administrative policy, governmental involvement, or even what tomorrow may look like. That topic is best left to the arduous work our Government Affair Committee. I will say, however, it seems that every ounce of oxygen is being siphoned out of Washington, D.C., on the health care debate instead of putting America back to work.
As an industry, we have gone from growth, to sustainment, to survival almost overnight. Some markets have been at it longer than others to the point that just covering the overhead of brick and mortar is a challenge. In the past, many dealer business plans consisted of doing the same thing as last year, only better. However, going forward, developing a meaningful business plan has never been more important.
I used to coach my daughter’s basketball and softball teams. Our teams were like most youth teams, put together mostly with kids who went to school together or had no other options. While there were a few "select" teams that were recruited and hand picked, we never knew the talents we had until we started practice. Teaching fundamentals was imperative in order to be competitive. More important, teaching that defense wins championships and offense sells tickets, was a lesson that gave kids with less ability the chance to contribute.
While scoring is important, it is the little things – using proper technique, playing your position and having a team chemistry – that make the difference between having fun and being competitive versus just showing up and getting a team drink after the game. Applying this sports analogy to our businesses, the principle is no different. Offensively, it’s analogous with sales and market share. "Scoring" is a great mental boost, only a little more difficult to come by these days. Therefore, relying heavily on defense is imperative in order to be profitable.
I equate playing defense with business fundamentals; like balancing personnel, operating expenses and inventory levels to business activity. Today, it is both a painful quantitative and qualitative exercise. It’s quantitative when measuring sales per employee requires scheduling hours with fewer people and getting the operation down to fighting weight. However, it’s qualitative when you look at your people and are asking them to do more with less. These are the people who must be productive and understand what it takes to survive. It’s the quality of your people that will make the difference. While there may be no championships, it sure helps with the bottom line.
Luxury Vs. Necessity
It’s been my experience that one of the areas hit hardest by budget cuts is the training function. Unfortunately, training is a term that is many times misunderstood. Be careful before considering it as a luxury or a "nice to have" item, unless it is a miscellaneous catch-all line item where inefficiencies are buried. By cutting your training budget just to save money in order to ride out this economic storm, you may actually be doing more harm than good to your organization’s bottom line.
Training in its simplest form consists of technical and transactional processes. How does the business system work, how does our product differ from the competition, what are the company policies, etc. Even in the service department, managers may place excess time into training, instead of policy, because it is easier to explain. Unless you’re planning on increased hiring this year, this function has minimal need. However, when it comes to professionalism, acquiring general knowledge, or acquiring particular knowledge or skills, then education under the term "training" is something to consider. After all, these are employees who help keep the organization running. If you have poor performance on their part, it could mean poor performance for the organization as a whole.
The AED Foundation, with its Personal Development Plans, Self Study Courses, Certification Programs, and Seminars do not merely train your people. It’s available to help you educate and develop them. What’s the distinction between training and education? Education is what you receive after you have been trained. You see, when you train someone, you teach them what to do. When you educate someone, you teach them how to think. When your kids go to school and learn how to count, that’s training; when you teach your kids what counts, that’s education.
It may be a cliché, but people are our greatest asset. If you value your employees and trust that they will be the ones who keep the company running and successful during these difficult economic times, you are ahead of most companies. Keeping them is important. Show them that you believe in them with professional education and development.
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