Jul. 13, 2009 – Bold Idea No. 8: Doing as much (gross profit) with less (employees)
July 13, 2009
Filed under Features
At budget time last winter, Mike’s Famous Harley-Davidson store in Groton, Conn., was in a predicament familiar to many U.S. dealers. Their fall and winter retail sales had slumped more than anticipated and the Motor Company was talking about allocation cutbacks.
“We said, ‘Let’s control what we can control and forget about the rest,’” said Jim Taylor, the dealership’s general manager.
Using a system that relied heavily on crosstraining, the dealership made dramatic cuts to its personnel and its business operations. The store, which also sells KYMCO ATVs, downsized from a seven-day operation to being open just five days a week. The longtime dealership also cut its staff by almost 30 percent to 19 employees.
“We wound up with a core group of individuals that had experience in multiple departments,” Taylor said.
Using that dynamic plus further investment in training, the dealership began relying on its staff to operate in different profit centers. A parts counter person was trained at Harley-Davidson University to know the ins and outs of Harley motorclothes so they could effortlessly move from one customer to another, regardless of it was for parts or apparel. The registration/title clerk took a refresher on F&I and now serves as a back up in the F&I department. The store’s controller learned how to do titling work. The service manager works on the store’s Web site and even helps with marketing.
The only store area not affected by the cross-training effort is the sales department, where the emphasis has been on being more consistent with the store’s sales system and effectively using a lead management system more.
Taylor himself has been part of the cross-department effort. He now is the finance manager along with his continued general manager duties.
“Everybody stepped up to the plate and worked a little harder than they had to work,” Taylor said. “The alternative was to lay off some of these people. And in this economy, they would rather work a little harder than be unemployed.”
Rather than just assign people their new duties, however, the dealership was proactive with training, including having several employees take leadership training courses.
“It got them feeling good about what they were doing,” Taylor said. “All of a sudden everything started to click.
“We went into January, February and March making money.”
The result of the training and the employee acceptance of moving from department to department: “We are profitable,” Taylor said. “Our market share has grown.”
Not to say there haven’t been some obstacles with the reduced staff size. Open houses and other marketing events suddenly became huge hurdles. Who would oversee food preparation and run to the grocery store for the little necessities of such events?
Taylor and his staff ultimately decided to rely on the local HOG chapter, which the dealership has supported throughout the years, and its advertising partners, including the local radio station, to take care of many of the Open House needs.
“We just had one a couple weeks ago,” Taylor said, “and it was the best one the dealership has ever had, and none of the employees had to actually be a part of what was going on outside. We were all in here selling bikes, selling parts. It went off without a hitch.”
The end result is perhaps the best news of all.
“We’re turning the same type of net profit on 400 motorcycles that we used to turn on 500,” Taylor said. “That’s all through expense control and cross training and all these things we put in our business plan this year.”
— Neil Pascale