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People power

As most readers of this blog will know, I now wear two hats – one as the MD of ICDP, the other as the MD of Auto West London, a dealer group in the making, established by Cetas Otomotiv, a long-standing member of the ICDP research programme.  At the moment we’re recruiting for both businesses which brings home the importance of people and how they fit into the organisation.  The job postings are here for ICDP and here for Auto West London in case you’re interested or want to apply!

The image that I’ve chosen this week is usually associated with political movements, but I’m actually not convinced that the voice of the people is necessarily heard by those in power.  I won’t get into specifics here as I’m sure to upset somebody, but my observation would be that mass demonstrations create awareness of issues, but the ability to make change happen is with those at the top, and they often have strong-vested interests to maintain the status quo rather than respond to popular pressure.

In business, the position feels quite different to me.  I struggle to think of any business where the people within it do not have a significant, often the greatest, influence on the performance and ultimately the value of the business.  You can see this in the two examples with which I am directly involved.

It is an oft-repeated view that in a consultancy business, the value of the business walks out of the door every evening.  The brand of the consultancy clearly helps in terms of being invited to bid for work and gaining access to the senior executives who typically commission consulting work, but in the long term, this is both created by the people in the organisation and can be destroyed or devalued by them.  The current woes of McKinsey related to their work in the pharmaceuticals industry, or the collapse some years ago of Arthur Andersen due to their work with Enron are both examples of that.  Over time, a consulting firm also accumulates and creates intellectual capital in the form of the lessons learned from previous work, and leveraging that and some original thinking to develop a view of how an industry will evolve - where the opportunities lie for incumbents and new entrants.

I witnessed this directly within A.T. Kearney (now without the A.T.) where I was part of the team that built up our global automotive practice to become the largest globally.  This was not the effort of one person, but the result of tens of people in the core team and hundreds of people in the extended business doing great work over multiple years that built the reputation and the intellectual capital.  When changes in the organisation outside of the automotive practice led to most of the individuals moving to a variety of other organisations, the strength of the automotive practice was gone.

Turning to dealer organisations, and looking at that through both my ICDP and now hands-on Auto West London experiences, people are again critical to the success of the business.  The influence is perhaps not so direct as we are selling a tangible product – a car or a service – and regardless of how good or bad the fulfilment process, the customer will get that product.  This is not the case for consulting and research organisations like McKinsey, Kearney or even ICDP, with an intangible service.  I think where the quality of people and how well they function as a team makes a difference in a dealership or dealer group is in building long term success and value.  Whether your customers come back to you and recommend you to friends, whether manufacturer partners want to increase or decrease the scope of their relationship with you and whether your employees stay with you and recommend to their friends and former colleagues that they should join you, are all related to the quality of people.

Numbers are important in many different ways – click volumes, lead volumes, test drives, registrations, workshop hours sold, upsell and so on.  However if the focus is primarily on driving the numbers like the commander of a Roman galley whipping the slaves pulling at the oars, then your boat may pick up speed for a while, but it is not sustainable.  On the other hand, if you succeed in building a culture where the team work together to win and retain customers, then the numbers will follow.  I see this in the best groups, and aspire to achieve the same in Auto West London.  It is critical to growth.  Unless you are growing the future leaders of the business to move into new dealerships and franchise opportunities, you will always be looking to hire a new slave master for the new galley.  It is more demanding on the top management as the risk profile never changes, whereas moving people with proven talents allows you to delegate more and focus on the strategic opportunities that can only be the responsibility of top management.

Coming back to where I started, whether you are (or know someone who is) a thinker that enjoys making sense of a business issue or opportunity and communicating that to others through research outputs and consulting assignments, or a doer that wants to be at the sharp end of delivering great customer experiences in a would-be dealer group with a hopefully bright future, please get in touch!

Steve YoungComment