Wednesday 18 September 2019

Toyota Plus driving successful change through collaboration

If you are a motor dealer, you need to keep your used car stock turning over. If the ideal selling time is inside 30 days, anything over 90 days means you're close to losing money. Photo: Getty Images/iStockphoto
If you are a motor dealer, you need to keep your used car stock turning over. If the ideal selling time is inside 30 days, anything over 90 days means you're close to losing money. Photo: Getty Images/iStockphoto

Alan O'Neill

There are countless uncertainties about Brexit that leave us all confused and impatient. But there is one outcome that we know already. Sterling has dropped 15pc since the Brexit vote. Markets commentator Peter Brown predicts that due to the mess of Brexit, sterling could weaken by another 5pc in the medium term.

Living in the eurozone, we can get value when we buy in sterling. Some of the more obvious examples are when buying branded goods online. But let the buyer beware as there is more to buying across borders than meets the eye. My retail clients here in this country warn of hidden costs. If you should want to return your purchase, the costs can be onerous.

The other common example is with used cars. I know friends who have saved thousands of euro by importing directly from Britain or Northern Ireland. The Society for the Irish Motor Industry figures show that second-hand imports are actually up 40pc.

But here's the 'watch out' message … there is some anecdotal evidence to suggest that up to 20pc of these imports are 'clocked' (meaning the mileage reading has been tampered with). The VRT office has surprised some purchasers with higher than expected tax - and there are questions around emissions.

That all leads to a risk/reward question and how willing you are to take the chance. The alternative is to have peace of mind that you get from buying locally through a registered dealer.

One of the top two car brands in Ireland, Toyota has been a major player in the Irish market since 1975. Tim Mahony, the founder, was a leading light for the marque, even globally. Senior executives from Japan would call him up on a regular basis, seeking his advice on all sorts of global challenges.

Now his eldest grandson Paddy Ward has led the launch of Toyota Plus to bring rigour and security to the used Toyota market.

Recent Challenges

If you are a motor dealer, you need to keep your used car stock turning over. If the ideal selling time is inside 30 days, anything over 90 days means you're close to losing money. That slow moving vehicle is tying up capital and real estate in the lot. When it sells, that money is reinvested and the space is freed up for more stock, so the quicker the better.

In order to compete effectively with imports, Toyota Plus has been developed to give reassurance to both the dealers and the consumers. There is a 100-point check with each car, one-year guarantee, full service history, database check for mileage accuracy and financing, road side assist among other things.

However, it's a nationwide initiative that needs the support of all dealers to have impact and consistency and Paddy Ward is nearly there. But, there is an added cost to the dealer for each car. The challenge for Paddy and his team was to engage the dealers. He needed to change their thinking and the way they sold in the past.

Change Tips

Change is a challenge for many. In my programmes, I encourage following the tried and tested steps originally defined by Harvard professor Dr John Kotter. These are the main points.

Get Ready…

1 Have a solid reason for the change that is tangible, relevant and easy to communicate.

If the burning platform of growth in used car imports wasn't an issue, then why would dealers engage?

2 Create a cross-functional team, and develop a clear vision of what you are trying to achieve.

Focus on the end before you start. Paddy collaborated and brought a team of people together to design the initial concept. This included a number of dealers to represent the customer base. It also included some of the internal Toyota team, as they were also facing change.

3 Build a detailed plan of action and take account of all obstacles in advance.

This requires a level of honesty and openness. In such circumstances, you need to be non-defensive and willing to listen. You may hear challenges and ideas that are completely at odds with your past way of doing things. But with reasoned debate, you will collectively agree.

4 Communicate more than you think you need to.

It is often said that people resist change. In my experience that's not always the case. People do resist coercion. If managers keep this in mind and treat people with respect, they will find that most people are reasonable. They may not necessarily like the change but if the context, the case for change and the plan is outlined in relevant detail, most will go along with it.

5 Celebrate and communicate successes at milestones along the way.

Don't stop…

6 When the change is bedding in, don't revert to old ways.

This is where real leadership is needed. Leaders need to support, embrace and role-model the change consistently - even though the change may be difficult for them too. Remember, behaviours are caught, not taught.

Summary

The motor industry is going through multi-level change. Dealerships are now sophisticated businesses run by very professional managers. Strategic in their thinking and closely aligned with their distributor, they are independent nevertheless and make their own decisions.

Collaboration was the key to success in this instance. Toyota Plus is up and running. The level of participation is high and the feedback from dealers and customers is already very positive.

Alan O'Neill is a change consultant and non-executive director. For 25-plus years he has been supporting global and iconic brands through change. Alan-oneill.com. Business advice questions for Alan can be sent to sundaybusiness@independent.ie

In association with RGON, specialists in Employee Engagement Surveys www.rgon.ie

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