Culture Change & Innovation: How a Long-Standing Auto Dealership Remains Relevant in a Mature Market

Innovation at any functional level involves a shift from the status quo, and while some companies appear to excel in this regard, more often than not it is industry-driven. Take Google, for example. We expect this type of organization to be forward-thinking when operating within its particular market! If it wasn’t, its competitors would crush them at the blink of an eye. But what about more traditional companies? Those that have been long-standing, which are generally bound by upper and lower limits, that prevent it from developing some ground-breaking new technology? These organizations, while likely stable, are almost guaranteed to suffer from redundancy, outdated practices, and almost certainly experience some sort of stigma.

Enter the automotive dealer.

Yes, there are bad ones and there are good ones. However, let’s not open that can of worms just yet and consider how, or why, a particular dealership might be able to instill a level of innovation within its company when operations are so tightly bounded by manufacturers and competing stores. With so many constraints, as with many mature industries, the central focus for innovation must start from within. Sure, technology can help, but only to a particular extent. Instead, the focus should be on people. And why not? It’s the people that make the business run. It’s the people that cost the most. It’s the people who bring customers back. Human capital considerations are one of the most highly disregarded innovation measures out there today, yet it is one of the most influential measures to achieve “the next level.” That’s the mindset that you must have when operating in a mature market, and carefully crafting a positive organizational will not only deliver internal benefits, but flow through to external stakeholders and customers alike. Nobody wants to do business with a company when its employees are dismal to deal with, and word of mouth is still, in many regards, the most powerful marketing tool that exists. That’s why a strong organizational culture is so important; it flows through to a company’s customers, clients, and partners!

Companies seeking to achieve a culture of innovation do not find it through specific plans, but rather, by its “pattern of commitments, decisions, approaches, and persistent behaviors that facilitate doing new things” (Goffin & Mitchell, 2017). This is an important distinction, as it highlights the importance of action behind ideas. In the ever-evolving business environment today, mere thoughts or ideas are not enough to achieve an innovative culture. Instead, companies must make commitments across its business units while considering the cultural levers that influence its core culture (Young, 2000). These cultural levers include management control, motivation, authority and influence, customer management, strategy formulation, and conflict management (Young, 2000). Together, they comprise the core culture. Within each lever, specific attributes can be found that may be assessed and modified to change an organization’s culture as it aims to shift towards a more innovative one. Amongst these attributes, three present as perhaps the most prominent that drive organizational culture in both visible, and invisible, manners:

1. Customer-centricity
2. Openness to new ideas
3. Well-defined processes

With this is mind, lets take a look at how this long-standing automotive group, based in the Southeast, utilizes these attributes to support its culture of innovation.

Customer-centric firms “flip the script” and place its customers at the center of all decision-making processes, rather than itself. Perhaps the most important consideration involved with this process is the prevention of assuming what customers want, and instead gather customer insights and feedback to generate ideas and solutions based on such data (MacDonald, 2020). In fact, by utilizing a customer-centric strategy and placing them at the core of the business, this auto dealership is able to drive positive experiences and build long-term relationships…a key element of a sustainable business (Schein, 1992). As a result, the organization has been able to enjoy 92 years of business within its local market. How exactly does it achieve this, though? By placing customers at the core of its strategy, the store empowers its front line to generate insights from the bottom-up. According to MacDonald (2020), this allows the organization to truly understand its customers, gather feedback that drives continuous improvement, and design a personalized experience for each customer…all key aspects of a positive customer-centric firm. Moreover, its employees are valued for their insights, ideas, and suggestions that stem from a deep level of customer understanding, which feeds into its openness to new ideas.

At this store, its employees and management meet every morning to review the previous day’s activities, formulate daily strategies, and collaborate to achieve its goals. Throughout these meetings, employees and managers alike are offered the floor to discuss new ideas and speak about their customer interactions. As a result, a strong level of knowledge sharing exists through which its employees can build upon and find creative solutions. Further, top management gains a deep level of understanding of their customers to help guide decisions for new tools, technologies, services, and processes. As Boyd (2019) describes, “an innovative culture is one that supports the creation of new ideas and the implementation of those ideas…leaders must help employees see innovation in practice as a regular part of how the company does business.” Thus, management at the dealership becomes capable of identifying areas through which the organization could benefit through new ideas, encourages creativity, and integrates all members of their team to formulate new strategies and find the proper tools to achieve its goals and overcome the problems that present during normal business operations (Goffin & Mitchell, 2017). Being open to new ideas with regularity allows the store to recognize innovation as both systemic and opportunistic, due in many parts to championing new ideas through to execution, taking ideas to make connections to internal processes, and piloting new ways to achieve its goals (Boyd, 2019). Therefore, its management and employees collaborate through high levels of trust to develop its well-defined processes that provide customers with an exceptional experience.

These well-defined processes across both service and sales departments are backed by consumer insights and results. However, while they are distinctly defined, they also allow for flexibility within a range of parameters to provide personalized experiences. This creates a sense of ownership within each employee through autonomous functionality, yet ensures accuracy, speed, and profitability are realized during each customer interaction. From the moment a customer pulls onto their lot, employees have a process to follow to move customers further down the purchase funnel. The steps within each stage, however, are entirely based on the unique customer. From a more tangible perspective, following the sales process ensures that the organization profits the most that it can from a customer interaction. From a customer perspective, it delivers a professional, informative experience that places their needs at the center of all discussions. This helps to avoid doing useless work or discussing matters that are irrelevant to the situation, avoid crises, improve efficiency, and take the guesswork out of situations (Flury, 2015). As a result, both sides benefit when employees adhere to its sales and service processes, therefore leading to positive experiences, repeat and referral business, and a trusted working environment.

Combined, these three organizational attributes enhance the store’s ability to provide the highest quality sales and service with its goal of earning customers for life. Operating within the same community for over 90 years, it is safe to say that it has achieved this goal and will continue to do so by adhering to the cultural elements described in this paper. Going forward, while new tools, technologies, products, and shifting consumer demands may alter what it takes to maintain its culture, this automotive dealer will be able to adapt and overcome any changes that present if it continues to follow the cultural guidelines currently in place.

References

Flury, B. (2015). Tangible Benefits of Having a Well-Defined Process. Retrieved from https://forwardmomentum.net/tangible-benefits-of-having-a-well-defined-process/

Goffin, K. & Mitchell, R. (2017). Innovation Management: Effective strategy and implementation. New York. Palgrave Macmillan. 2017. 1137373431. pp. 295–344. Retrieved from https://lgapi-us.libapps.com/ld.php?er_attachment_id=884730&site_id=2457

MacDonald, S. (2020). How to Create a Customer-Centric Strategy for Your Business. Retrieved from https://www.superoffice.com/blog/how-to-create-a-customer-centric-strategy/

Schein, E. (1992). Organizational Culture and Leadership. John Wiley & Sons: San Francisco.

Young, D. The Six Levers for Managing Organizational Culture. Business Horizons. September-October 2000. Retrieved from http://www.davidyoung.org/Resources/Docs/ManagingCulture.pdf