| Bobby Rahal Automotive Group : The Long View |
| Automotive | |||
| Written by G. Jeffrey MacDonald | |||
| Tuesday, 01 April 2008 | |||
 This unusual dealership group features engaged employees with many reasons to feel good about where they work.
Ferris has honed the art of management in his role as CEO of Bobby Rahal Automotive Group, a family of eight dealerships in Pennsylvania. Under that corporate umbrella, 16 franchises specializing in imports sell enough cars to control substantial segments of the market in the areas of Pittsburgh, Harrisburg, and Lewistown.  Rolen Ferris, CEO “Very rarely will you see a business where the customers are delighted and the employees are miserable,” Ferris said. “You have to have employee satisfaction before you’ll see customer satisfaction.” Embracing realistic goals At many auto dealerships, as in other industries, a central office issues targets that branches must meet on a monthly, quarterly, and annual basis—or else. That’s not how Ferris’ firm sets the ambitious revenue targets that have made it a $450 million company. He brings together sales staff and store managers to come up with their own targets. The process ensures that workers feel included and embrace realistic goals. “If I hand a forecast down, they might say, ‘Well, these are pie-in-the-sky numbers. They don’t make any sense,’” Ferris said. “If they’re involved in putting the numbers together, they have ownership, which is important. Then they can’t tell you the numbers are crazy.” Once targets are established for sales as well as service volume, employees of Bobby Rahal Automotive Group go to work knowing they can offer reasonable deals to customers. That’s because the company maintains an ethic of pursuing “fair profit” as opposed to what Ferris terms “excessive profit.” The latter may bring a momentary windfall, but it doesn’t keep customers coming back. Ferris instead encourages sellers to do a lot of volume at a “fair profit” level with each customer. “People expect you to make a fair profit. That’s why you’re in business,” Ferris said. “Excessive profit comes at somebody’s expense. And we’re the fool if we sell someone just one car. The secret is that car after car after car, you come back to the same dealer for a purchase or service. Why? Because you trust them. Why? Because they aren’t after that excessive profit.” Get engaged Ferris recognizes that pay rates need to be competitive to retain talent, but he’s not convinced that every incentive should be monetary. That’s because he’s learned something by reading Gallup research on engaged employees: the biggest factor dictating levels of employee engagement is whether that person feels he/she has a good relationship with his/her boss. With that in mind, Ferris makes sure every division (sales, parts, service, human resources, IT) has the tools and structures necessary to foster good manager-employee relationships. This means making sure technicians have all the instruments and training they need to fix cars well. It also means managers don’t ask employees to do things they wouldn’t do themselves. When Ferris looks at which general managers are making the grade, he considers customer satisfaction ratings on surveys issued by automobile manufacturers and monthly revenue figures. But he’s just as concerned with whether or not a manager is effectively developing personnel. That’s because some of the company’s best leaders have risen through the ranks, such as two general managers who started with the firm as car washers at age 18. Other employees have spent nearly half their lives with the company, and they’re only 34 years old. This reservoir of committed talent ranks among the company’s greatest assets, Ferris said, and today’s managers need to keep enabling workers to climb upward if they’re able and eager to do so. For those who show promise and dedication, a taste of the spoils of ownership may be in store. At a new dealership in Lewistown, for instance, Ferris took a 25% stake in the company and divided it equally among 12 upper-level employees. Now each one has “skin in the game,” he said, in terms of a stake in the outcome. “When I say to them, ‘We’ve got a new project. We’re going to be doing this,’ they look at it a little bit more enthusiastically,” Ferris said. Today, Bobby Rahal Automotive Group has a lot to show for its approach. For instance, its Pittsburgh dealerships, which are just 10 years old, have attained more than 60% of the city’s marketshare for Volvos and Mercedes. The company continues to add dealerships, and the firm’s scale has made it possible to efficiently manage the Web sites, internal networks, and computers that an auto business requires in 2008. One five-person IT department services all 16 franchises. Employees seem to appreciate the environment, Ferris said, and that gives him confidence in more good times ahead. G. Jeffrey MacDonald is a correspondent for the Christian Science Monitor. Based in Newburyport, Mass., he can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
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© 2008 American Executive - RedCoat Publishing. All rights reserved.
American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
