Question: What are the keys to motivating store managers to attain that same high level of commitment, passion and drive that dealer-principals bring to work every day?
“I am a firm believer in the store manager model. Some dealers that are merging are starting out without store managers and just have roving managers or regional managers because they want the merged company to work as one business and have the same philosophy. I understand that, but that is the dealer-principal or CEO’s job to make sure store managers are on the same page. My two cents on that.
“The keys to motivating store managers are to let them make decisions/mistakes. Also, give them some profit sharing so it forces them to watch the income statement. (Keeping in mind, they need to watch that location’s income statement, but also recognize the entire company needs to benefit, not just that location). We as owners need to provide them with the tools to be successful. Communication is key. As owners/managers, we need to express to our store managers how we want each location run and what our expectations are. Plain and simple, they need to be ready to put the hours and hard work in. And be compensated for it, if they do the job for us.”
— Name withheld by request
“I don’t think the same level of service and commitment to the customer can be obtained if the owner is not active full time in the dealership unless it is a rare case of an exceptional store manager. If that is the case, the owner should find a way to make him part owner.”
— Ronnie Lott, Talladega International Tractor Co., Talladega, Ala.
“The most successful operations will have store managers who shift their thinking from ‘being an employee’ to ‘operating as an owner.’ If companies want their management to operate with the commitment, passion and drive that dealer-principals brought to work every day, then management must have ‘skin in the game!’ One way to accomplish this is for companies to offer stock ownership options to their key employees. Don’t be surprised to see more preferred offerings and ESOPs emerging to help fund dealer growth, secure succession planning and most importantly, enforce an ‘ownership’ mentality in dealership employees.”
— Dusty Patterson, H&R Agri-Power, Hopkinsville, Ky.
“My initial thought is, if you are a location manager, you better have the commitment, passion and drive that an owner/principal would have or you have no business being in that position. At 21st Century Equipment LLC the location managers are instructed to operate their store as if it were their own. Our owners take a hands-off approach. Each location manager is responsible for making his dealership have the ‘hometown feel’ for both the customers and the employees. Pride should be one of the key motivators of a location manager.”
— Kent Lachman, 21st Century Equipment, Alliance, Neb.
“It starts with the hiring process. It is in the attitude, background, and history of the person. Behavior can be modified with incentives, but the drive to go the extra step, and the dream of how to improve customer satisfaction is more innate in the person. Mentoring younger managers is helpful, and modeling the desired behavior is critical from the top down.”
— Clayton Camp, West Kern Machinery, Buttonwillow, Calif.
“First off, you have to have a manager who is committed to the business and pay a good wage with built-in incentives so the manager has a real stake in the dealership. Then let him manage the business. If the principal tries to micro manage, the manager’s dealership will not grow and be profitable
“Managing a dealership is not a job, it is a way of life if you intend to be a success. Always keep all lines of communication open. Manager and principal may not always see eye to eye, but must work out the best solution for the dealership.”
— John Smith, Kuhn’s Equipment, Gibson City, Ill.
“If store managers are not owners/shareholders, then you need to start with employees motivated by success. Then you need to define what success is very clearly and make sure there is a balance in your definition. I have always worked with five or six general areas. They are: Increased sales and/or market share, financial performance (net profits), employee productivity, asset management, and customer and employee satisfaction.
If you set your goals and benchmarks with these, then you probably have an enthusiastic manager working on achieving most of them. Then you might need to put in some weighting on which ones are most important, but that is how we organize our goals for store managers.”
— George Keen, New Virginia Tractor, Charlottesville, Va.
“The most important thing is that the correct person is hired in the first place. They must be customer focused and driven to provide the ultimate in customer satisfaction. They must be properly compensated and rewarded for high performance and customer satisfaction.”
— Bernie Chabot, Chabot Implements, Elie, Manitoba
“By creating an upbeat environment with ongoing communication followed by reward for a job well done.”
— Mark Huntington, Service Motor Co., Seymour, Wis.
“We are only a $120 million sales a year dealer with three stores, but we have a shareholder as a manager in each store so they have a reason for the whole operation to do well.”
— Ken Kay, Agland Corp., Llyodminster, Alberta
“To be adequate, effective and efficient in these mergers you need to put your neck on the chopping block. I believe the general manager of any store — in any industry — needs to have stock in the company … yes, ownership. By doing this, their name is on the dotted line, and they in turn have something to work harder for than simply a paycheck. Our industry consists of clients who want the ability to go to the top at their own discretion, for any reason, so by implementing this type of owner/manager, this all becomes possible.”
— Brad Walden, C&K Equipment Sales, Sheridan, Wyo.
“I would like to stay anonymous since I am a store manager, but here are my comments on how to motivate store managers.
“The person who runs a multi-million dollar operation and is in charge of tens of millions of dollars in assets, many times lays awake just as much as the person with ownership of those assets. He has accepted a huge responsibility compared to other industry managers due to the size and dollars he must deal with. We are then expected to be one of the best salesmen in the dealership, know all of the rules and regulations of government and administrate human resources. As you can see, about the only thing we are not in control of is the financing of the dealership.
“I understand that store managers in the retail business, like Shopko, usually are into six figures for salaries with some coming from volume bonuses. To motivate me, I need to have the ability to make a difference, not only in the business, but in my take home pay. Set the guidelines, set the goals, and don’t be afraid to pay the piper. To limit the pay, you are limiting the profit. To change the rules of the game in the middle is surely suicide if you see someone making too much money. It goes back to what is too much fun — too much money, you know the song.
“I have in the past had partial ownership in dealerships, yes plural. I had two outstanding salesmen who were going to make more money than I took home as a salary, so I changed the commission schedule. Since I am just a store manager now, you can see that was one of my biggest blunders in my life. I knew within a couple months that I had made a grave mistake and lost both salesmen. The dealerships never recovered those high unit sales. I had limited their passion, their excitement and their drive for excellence.
“To keep an honest, hard working, thoughtful manager you will need to put him in a position to share the good times and the bad. We understand cycles and just want to be treated fairly and honestly as this just is what is expected of us.”
— Name withheld by request
“It can’t be done, because they don’t own it. They won’t do the necessary things it takes like a dealer-principal would.”
— Eric Howell, Texas Outdoor Power Sales Inc., Conroe, Texas
“You have to give them a percentage of ownership.”
— Tom Janson, Janson Equipment Co., Reese, Mich
“The first step is to hire highly motivated people who are competitive and want to ‘win.’ However, that is just the beginning, the key is to keep them passionate and motivated over the long haul.
“I believe they must be compensated fairly with a base salary, but then have an incentive package that rewards them for performance in all areas of the business all the while making sure you share vital financial information with them. In doing this, you must be willing to invest the time with them and assist them in areas that need improvement.
“In summary, hire the right person on the front side, make sure you compensate them well with a fair system, and be there to counsel and coach them so that everyone is a winner.”
— Mark Foster, Birkey’s Farm Store Inc., Attica, Ind.
“I, as many, come from a little different place. I’m a retired Deere employee who had called on Gooseneck Implement and provided product support for them prior to going into store management.
“Truly understanding the vision of the organization and the rewards to all involved are keys to this motivation. We have constant communication between store managers, quarterly meetings, and all management to ensure we are focused on the right things. In fact, we just completed two days of training for all our employees on providing the ‘Gooseneck Experience.’
“I know many organizations are structured by functional areas and don’t really have store managers. For us, we have store managers that ‘run the show’ at each store and are tasked with delivering the customer experience. Kevin Borud and Jamie Melgaard, our general managers, still make regular visits to all the stores and are very good at getting all engaged and on the same team.”
— Brad Meyer, Gooseneck Implement, Williston, N.D.
“We are one of the holdouts, going against the grain. I really don’t think we will either buy or sell. I might be wrong but here’s my take on that. The ag industry is going extremely well and has been for quite some time, but the industry operates in cycles. We are still on a high but things will adjust, and when they do, look out.
“I’m really not sure the multi-store plan is for the best. We have comments from customers about this all the time. Seems like our customers — we deal with mostly smaller farmers — don’t care for the bigger dealers. I think it would be hard to find managers with the same mind set as owners. When you’re in a multi-store operation you’re tied more to your bottom line, profit, inventory turns and so on. I think sometimes some customers slip through the cracks. Just my opinion.
“AGCO would really like all the dealers in southern Illinois to be under one ownership. I hate to say, but there isn’t much sympathy between dealers for that move. I think if you talk to any of us in this part of the country, we are dead set staying on our own. Why? Not sure. Maybe we are just knot-headed. But I think we do provide better customer service than the mega-store operations.”
— Jeffrey Suchomski, Suchomski Equipment Inc., Pinckneyville, Ill.
“We are a small- to medium-size dealership in Tennessee. I am a multi-tasking individual and am not in the store much at all. I rely on store managers to be ‘me’ when I am not available. I have driven my managers by incentives and a feeling of ‘ownership’ in the company. Each individual that works for us understands that, as we grow, they will grow as well. This leads to better customer service and better service turn-around. The idea is to release some control to the managers without micro-managing. Our mangers are capable of making many but not every decision about daily business. Each year we have grown as a company, and each year the managers have grown in pay and each employee has grown in position. We do not have multi-stores, but hope to in the near future.”
— Jared Head, Grassmaster Lawn & Landscape Springfield, Tenn.
“I think this is the worst thing that could happen.”
— Wayne Kuhl, Kuhl Equipment, Granton, Wis.
“I am working with my managers and the young aggressive people we have hired. We are working on giving them a minority interest as part of their compensation with a five year plan so we have stability in the stores.”
— Lance Carlson, Quincy Tractor LLC, Quincy, Ill.
“Good question! Whether we like it or not, this is something that the survivors in this business will probably need to deal with. My opinion is it will take an open book style of management, and the dealer principle will need to spend more time providing guidance … not dictating. It will also take an individual who expresses the need to service the customers, to the employees and customers alike. I know that is a short answer, but hopefully it helps.”
— Jay Funke, Del-Clay Farm Equipment, Edgewood, Iowa
“Most likely the success of larger dealership is a result of who expanded rather than the difference in functioning size of dealerships. Performance of any class should greatly improve if the lowest performers are eliminated provided increased cost of management is not greater than the level of increased performance.”
— Larry Roeder, Hiawatha Implement Co., Hiawatha, Kan.
“In my opinion, the only way to compensate a manager in a situation that you describe, would be tied to store gross profit, and controlling direct/indirect expenses.”
— Craig Youngs, American Equipment LLC, Farmington, N.Y.
“They are here to stay! I believe that multi-stores are killing small farmers and small dealers … taking away jobs in small towns. The impact if a multi-store dealership fails is 10 times more harmful to the farming area then a few small ones. Big farms and big dealerships will double our cost of food supply within 10 years. Just my two cents.”
— Ralph Klatt, Klatt Farm Equipment Inc., Shawano, Wis.
“The key in my opinion is the individual motivation. How one was raised has more to do with it than anything I know of. Farming background people tend to be the best managers and salesmen I know. They understand time, and are more aware of the essence of that more than the average individual. Being there for the people and how they see themselves drives them more than a monetary element. At least that is what I have seen in my 35 years of doing this.”
— Larry Brannon, B&G Equipment, Greeley, Colo.
“My partner and I each run a store so that’s all we know.”
— Gord Thompson, Moker & Thomposon, Prince Albert, Saskatchewan
“In my opinion, stores that rely on managers instead of owners become like the Caterpillar stores and these guys hang around for a while, get more experience and then move on to the higher wage offers from other competitive chains, which in the end is good for them but creates inconsistency with customers.”
— Morris Drummond, Drummond’s Farm Services Ltd., Holland, Manitoba
“It’s really quite simple for our locations and that’s ‘profit sharing.’”
— Donald Rempel, Northstar Spraying Systems, Oak Bluff, Manitoba
“Great work place, salary and freedom and flexibility to work and not feel someone is always looking down your back. Let them be included in some work-related plans and ideas. They need good communication and contact with the owners.”
— Jan Schraufnagel Schraufnagel Implement, Lomira, Wis.
“Having been employed for over 25 years in the farm equipment business, a lot has changed. Empire Tractor presently has six locations, five that are primarily agricultural. Two of the stores are managed by non-owners, including myself. Both of us started with the company and worked our way up. Generally speaking, I feel that drive, commitment and passion are acquired attributes that stem from a mentor of some sort, not something you are necessarily born with. The management team or leaders above you need to have these attributes for the business to be successful. If some do but some don’t, that becomes the dilemma with multi-store dealerships. Getting everyone on the same page and following through is the day-to-day struggle.
“Real motivation comes from being challenged at your job and enjoying what you are doing, and it can become contagious with good leadership. Above average monetary compensation for a job well done enables the store managers to concentrate on the job at hand more so than acting as a motivator. If the other attributes are already in place, success lies with the direction of the owners. The manager can only do so much.”
— Jon Enright, Empire Tractor, Cortland, N.Y.
“While we didn’t always agree, I would have taken a bullet for the store owner that hired me. Why? He respected my opinion; was willing to accept suggestions and try outside the box processes to improve; paid me well; and we believed in one another. It was my ultimate goal to make him as successful as possible, because we BOTH prospered in that scenario. I worked seven days a week in an effort to win him and his wife a trip to Europe. When we won the trip, he gave it to ME. That’s the kind of guy HE was. Look in the mirror — what kind of owner are you? Oh, and I wasn’t a relative or in-law of his. I was hired from outside of ‘the business.’”
— Ron Hull, Charter Software, Littleton, Colo.
“It is impossible for an employee to have the drive and passion to work everyday like existing store owners. Unless they have a monetary interest in the business, they will be watching the clock. When we can’t visit with the store owner, their days are numbered.”
— Len Blatz, Crawford’s West Inc., Camrose, Alberta