Trusting your intuition—aka, following your gut—is important, but the top-performing companies use hard data to give them a competitive advantage, maximize performance and minimize risk. It’s especially true in the automotive industry.
Consider this: Publicly traded auto dealers trade at 2x, 3x or even 4x the normal multiple for a privately held car dealership. What percentage of their decisions are made on gut instinct? Hardly any, because nothing is left to chance. Their bottom line depends on it.
Although you may have fewer stores than the big guys, there’s no reason why even the smallest dealership can’t adopt the data philosophy that makes them so successful. Here are the four key steps I recommend any dealership take to incorporate data-driven decision-making into their management practices.
Four Steps to Increase Performance through Data-Driven Decisions
- Unify your reporting source. When managers bring in reports from different sources, you have no consistency of data. And, if they’re creating spreadsheets from those sources—using sometimes faulty assumptions and formulas—then you’ve got real problems. Disparate reporting sources are a sure-fire way to kill the effectiveness of your meetings, reduce accountability and help poor performers hide.
- Set iron-clad expectations in the form of metrics and process. When you have great processes and crystal clear expectations through metric benchmarks, your people will also have a crystal clear understanding of what you expect. Use your unified reporting platform. Whether public or privately owned—the best dealerships never leave things to chance with key metrics.
- Hold weekly manager meetings. Make them short—30 minutes should be enough—and just cover the high points. Find out where the managers are today versus benchmarks and forecasts, and, if they are short, determine how they will make up the difference. Accurate reports are critical to having productive meetings and driving accountability.
- Eliminate the “reasons.” I think getting rid of “reasons” is, perhaps, the most important key on this list. A wise man once said, “There are two things in life: reasons and results—and reasons don’t count.” Eliminate the reasons and you remove the excuses. Eliminate the excuses and you’ll see better performance. Facts leave no wiggle room—and that’s a good thing.
Are you a data-driven decision maker? Tell us here how you made the transition from trusting your gut to going with the numbers! Want more guidance on data, reporting and management? Check out more training opportunities from the NCM Institute.