How to Groom Successors

A cartoon depicts a man telling his son as they gaze at the family business, “Someday this will all be yours, unless I can come up with a better solution.”

That echoes the sentiment of many dealers I've worked with who worry their son or daughter is not prepared to lead the company if something happened to the parent.

So, what needs to happen to rectify that problem. Here are some suggestions?

Get Educated

This seems basic, but all too often children are able to convince their dealer parent who might not have a college degree. But today's world is harder to navigate without one. A higher education needs to also involve industry training, such as is offered by the National Automobile Dealers Assn. Northwood University and manufacturer programs.

Work Somewhere Else First

It teaches what it means to be an employee where your name doesn't give you advantages. Also, when starting out it helps to be able to make your mistakes in someone else's sandbox, rather than in mom's or dad's dealership where many managers still remember you as a small child.

Every son and daughter of a dealer is constantly under the microscope. Employees look at work ethic, attitude, aptitude and whether someone is taking advantage of his or her status. It helps to have experience at another dealership before taking a position at the family store.

One dealer that I have worked with for 20 years was so excited about the prospects of his son joining him in the business after college.

“We are going to be partners together,” he said.

He resisted my advice for the young man to work somewhere else first.

The son came into the family dealership right out of college and had trouble establishing himself because he was inexperienced and still seen as the boss' kid. He floundered. Dad finally was willing to listen.

We decided that since the used-car department was the weak link in his dealership, he would send his son to work for a 20-Group dealer friend in Florida who did a great job with used cars.

After a year, the son returned to work at the family store. His understanding of how to run a great used-car department built his confidence. He began to act like a leader, gaining a lot of respect along the way.

Take the Stairs, Not the Elevator, to the Top

Promoting someone too quickly is a recipe for disaster as they are bypassing crucial learning benchmarks needed to sustain long-term productivity, especially in the difficult market conditions that they will eventually experience.

Once promoted, no one wants to go backwards to pick up this crucial experience and knowledge. Some things can only be learned through experience. Moving a successor up too quickly may deprive someone of vital experience.

Earn Your Pay and Title

Play by the same rules as the rest of the staff. Often, parents increase the pay of their child, wanting to share the good life. While this is understandable, there are other ways of providing income rather than high wages that might undermine relationships with other employees.

When you promote your child who is not ready, this does not help him to become the leader you want him or her to be.

Respect Is Earned

Hard workers that are talented, committed and motivated usually succeed. Unfortunately, my partners and I have been brought in many times to resolve issues in family dealerships where fair-play “rules” were violated by offspring. As a result, havoc reigned supreme.

It is our experience that 100% of dealer children who fail, usually do so because one or more of the above “rules” were violated. To be the successor leader of your dealership, your child will need to achieve success the old fashion. By earning it.

Hugh Roberts, CFP is a partner with The Rawls Group. He is at 818- 702-0889 ext. 155 and [email protected]

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