Learning to lead
Yearlong program teaches general managers the AutoNation approach
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FORT LAUDERDALE, Fla. -- Gary Davis poses a question to the 24 AutoNation Inc. managers assembled in a 15th-floor classroom at the company's headquarters here: Which of 10 scenarios will drive the biggest profit gain for this hypothetical dealership? Would it be increasing new-car sales by 10 percent? Cutting compensation? Boosting parts-and-service gross by $500 per day?
The managers confer in groups of four. Some suggest ideas based on initial gut feelings. Others scratch out calculations on scrap paper. They debate, sometimes loudly.
When Davis asks for conclusions, each group gives its answer and reasoning. Davis, AutoNation's vice president of planning and analysis, then clues them in: In this case, increasing finance and insurance income by $100 per vehicle would add the most profit to the bottom line.
Not everyone answered correctly, but that's OK. Here at AutoNation's General Manager University, one of the points is to challenge established ideas and get managers to think about the business in a more holistic way. An even bigger goal is to teach managers how to succeed in the AutoNation world using its proprietary systems and prescribed processes.
"It's very difficult for someone outside the AutoNation organization to come in and be effective even if they have good car skills because our systems and our processes are defined," AutoNation COO Michael Maroone says. "We have a lot more data and a lot more information," and managers must "know how to manage and use those resources."
Since General Manager University's launch in 2006, every general manager hired or promoted at AutoNation, the country's largest dealership group, must go through the yearlong program. Department managers tapped to run a store soon also attend. They go through three- or four-day sessions five times during the year. About half of the company's current general managers are graduates.
Not easy
AutoNation executives teach the classes. Maroone, CEO Mike Jackson and CFO Mike Short make presentations and mingle with each class at social outings. Graduates are treated to a celebratory dinner at Jackson's or Maroone's home.
The company has similar, but shorter programs for other disciplines: Used-Car Manager University and Service Manager University consist of three or four multiday sessions over four to six months.
Employees are admitted to the general-manager program by making it through a rigorous succession-planning process. The company, with 215 dealerships spread over four regions, aims to have a half-dozen candidates ready to step into the general-manager role in each region.
Store leaders nominate high-potential employees they think are capable of more. Maroone and other executives visit the region and spend a long day studying the background and performance record of candidates. Gaps in their readiness for the next step are identified, and a plan is developed to remedy them.
"It's not easy to get into GMU, and we don't want it to be easy," Maroone says.
Taking ideas back
Kevin Riche, general sales manager at the group's Dobbs Nissan store in Memphis, Tenn., started in the program last November and says he has taken valuable ideas back to his store. A March session on parts and service -- known as "customer care" in AutoNation parlance -- opened his eyes to the power of the department as a sales center.
"It's always looked at as the second or third thing in the store, when it's really the No. 1 thing," Riche says. "Most people think selling, selling, selling [of vehicles], but they don't realize service ties customers to the dealership, and if they're treated well, they're going to return to buy their next car."
Before that session, Dobbs Nissan didn't do vehicle walk-arounds with customers or call customers who failed to show up for service appointments. The dealership now does both, and customer-pay business has grown, Riche says. Tire and battery sales are up, as is the percentage of customers showing up for appointments.
Pete Small, general manager at Maroone Chevrolet of Fort Lauderdale, says F&I income rose more than $100 per vehicle and service contract penetration increased by 10 percentage points after his F&I session at General Manager University. With a greater appreciation for what his F&I managers do, Small began talking to them more often, earning their respect for his deeper knowledge.
"You want to improve your job, have someone ask you about it every day," Small says. "The No. 1 line of defense to improve something is just to start talking about it."
No glass ceiling
The atmosphere during classes can be jovial. Students and instructors crack jokes. When instructor Ian Swartz, regional vice president of finance, uses the term "fixed operations" instead of the "customer care" label, the students immediately call for him to put $1 in a penalty jar.
"I knew I had my wallet here for a reason," Swartz says, throwing in a $10 bill that he says will cover his next several slips.
Yet attendees know it's serious business. What they learn at General Manager University can put them on a path to higher rewards.
"At AutoNation, there is no glass ceiling. There are no friends and family," Maroone says. "It's a meritocracy. The best way to demonstrate it is to invest in the people you have."
You can reach Amy Wilson at awilson@crain.com.
