The Cobalt Group, a provider of e-business software and services to the automotive retail market, on August 19 announced the results of its 11-month study of 1,200 top-performing automobile dealerships. Cobalt found that while dealerships shared similar challenges in e-business they used widely different strategies to manage their online sales and operations.
Excerpts of the research and analysis have been published in the article, "Seven Performance Drivers," by The Cobalt Group's senior instructional designer Dr. Linda Ross in the April, 2003 volume of the journal Performance Improvement.
"Although Cobalt's research yielded no single silver bullet for success, we found that top-performing automotive dealerships shared common approaches in several key areas of their business," said Kevin Root, vice president and general manager of The Cobalt Group's Dealer Advisory Services. "We combined these findings with recognized performance improvement methodologies to identify seven essential performance drivers. Together, they form the foundation for e-business success for any size dealership."
Seven Performance Drivers
CONDITIONS: Conditions refer to the employee's work environment, including resources, working hours, staffing levels, and empowerment to make decisions. Of all the performance drivers, problems with conditions were found the most frequently and were often the least expensive to rectify. Cobalt researchers found when analyzing poor performance, conditions are the first place to look.
STANDARDS: Standards are clear and repeatable methods to execute key business processes and tasks and performance expectations associated with a specific role, duty or responsibility. Cobalt found it is essential that these benchmarks are tracked over time, updated to reflect actual performance, and directly related to a corresponding change in performance incentive.
INCENTIVES: Incentives motivate employees to perform to the best of their ability. The Cobalt study concluded that for incentives to be effective, they should be performance-based and tailored to individuals when possible.
CAPACITY: Capacity refers to employees' natural abilities and attributes, both physical and cognitive, that enable them to perform job-related duties. Cobalt found that these skills and abilities are ones that cannot be taught, and should be addressed prior to hiring the employee.
KNOWLEDGE AND SKILL: Knowledge and skill are those things than can be taught that enable employees to perform their jobs effectively, and can be acquired through a combination of formal and on-the-job training. The Cobalt study showed that knowledge and skill deficits account for roughly 20 percent of all performance challenges. The remaining 80 percent can be attributed to deficits in the other six performance drivers.
MEASUREMENT: Measurement refers to the collection and analysis of data to accurately gauge the effectiveness of the employee, the department, or the dealership. The research showed a sound measurement system should enable management to see a summary of performance, as well as the ability to drill down to the performance challenge.
FEEDBACK: Feedback is the process of systematically providing employees with information about their performance. Cobalt found useful feedback is timely, specific, objective, and constructive.
Application
The research results and seven performance drivers form the foundation for Cobalt's instructor led classes available across the country, and the new online Cobalt University Web-based courses.
Methodology
Cobalt's automotive experts surveyed more than 12,000 dealerships across the country and received responses from more than 1,200.
Of the respondents, 15 percent were determined to be high-performing dealerships based on the following criteria: posting a minimum 12 percent of total retail sales from e-commerce while holding an e-commerce closing ratio of 12 percent or greater, and maintaining an Internet gross average greater than or equal to showroom gross average. From this group of top dealerships, 23 were selected for extensive on-site interviews to provide the basis of the study.
For more information about this study, or about Cobalt's Dealer Advisory Services, contact Cobalt at (800) 909-9244 or e-mail das@cobaltgroup.com.
About The Cobalt Group
The Cobalt Group (www.cobaltgroup.com) works exclusively in the automotive retail market developing integrated e-business programs designed to help manufacturers and dealers increase their profits and operational efficiencies.
Cobalt offers products and services including enterprise software; customer relationship management (CRM) applications; e-commerce applications; an OEM parts locating and marketing service; and e-business best practices training and consultation.
Cobalt's network includes 12,000 franchised dealers and more than 72 of the 100 largest dealer groups. Cobalt is the only software technology provider ever endorsed by 18 manufacturers and the National Automobile Dealers Association (NADA).
