“Innovation is hard. It really is. Because most people don’t get it. Remember, the automobile, the airplane, the telephone, these were all considered toys at their introduction because they had no constituency. They were too new.”
—Nolan Bushnell, entrepreneur, founder of Atari and Chuck E. Cheese
Hindsight is 20/20. Just ask Blockbuster.
By now, most of you know the cautionary tale of the movie rental company that turned down a partnership with a company that was only a few years old—Netflix.
Today, this has become a common example of a company that failed to see the potential of innovation and because of it, went extinct.
But, is that really the case? How was Blockbuster supposed to know? How is any company supposed to know? Why do some companies fail to evolve and others seemingly come out of nowhere to become industry leaders?
Some of it’s luck. Being in the right place in the right time. But the majority of it is looking ahead at trends and finding ways to adapt, evolve and anticipate the needs of the consumer.
That’s the thesis of Clayton M. Christensen’s book, The Innovator’s Dilemma. The book, if you haven’t read it, posits that companies can do everything “right” and still fail when a new competitor enters the marketplace.
The book has many takeaways, but one of the overall themes is the importance of identifying a need and then finding a way to provide that need to either a new market or an existing market in a more effective way, something that that the two dealerships profiled in this article have done. Rather than starting from scratch, business leaders can learn from the likes of Christensen and other leaders who were ahead of their time—many of which are quoted within this feature, and other dealerships that have found success.
Innovation doesn’t necessarily need to be groundbreaking technology. Peacock Automotive and Carousel Motor Group aren’t replacing their people with robots. Instead, what they’re doing is paying attention to what is and isn’t working with industry leaders and listening to their customers. This wait-and-see approach has helped both to identify small tweaks in their processes that allow them to keep up with customer demand without risking it all on an industry disruptor that may or may not pan out.
Innovation doesn’t have to be scary. It doesn’t need to involve a huge risk or an insane amount of money. Small innovations can happen on a daily basis, as these two dealer groups prove.
Follow them through their process, from the leader that encourages ideas to brainstorming to implementation—and then starting fresh again.
1. Decide on innovation.
Life can be much broader once you discover one simple fact: Everything around you that you call life was made up by people that were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use.
The most successful companies take something that is working and either find a new way to deliver it or disrupt the industry completely, according to The Innovator’s Dilemma. Getting around by horse and carriage worked just fine—until Henry Ford envisioned the carriage without the horse. An idea will not come to fruition unless there is someone willing to stand behind the idea and keep trying.
Jill Jauch, marketing and advertising manager for Peacock Automotive, describes the owner, Warner Peacock, as a true visionary. Jauch even jokes that Peacock’s philosophy is, “Go big or go home.”
Since joining Peacock in 2006, Jauch says the group has basically doubled. What started as a single dealership has developed into 19 dealerships in three states—Georgia, South Carolina and Florida—with more than 700 employees.
Did we mention Warner Peacock also owns a successful physical therapy clinic?
“When he has an idea, he makes it happen,” Jauch says.
Businesses need to be willing to evolve, or they’ll fall by the wayside and to do this, the leaders of these organizations need to be open to new ways of thinking.
2. Solicit ideas.
Capital isn’t so important in business. Experience isn’t so important. You can get both of these things. What’s important is ideas. If you have ideas, you have the main asset you need, and there isn’t any limit to what you can do with your business and your life.
—Harvey Firestone, Businessman, founder of Firestone Tire and Rubber Company
“All processes start with people, and this is the people business,” says newly appointment fixed operations director of Peacock Automotive Group, Mark Ventrillo.
Ventrillo has been with the group since May, and he’s already comfortable making and executing decisions. In fact, he says that Peacock trusts him to make decisions and lets him run the show, a sentiment that collision repair manager Joanie Iaco and Jauch echo.
“They [Peacock Automotive] are very receptive to my ideas,” Iaco explains.
Within their own departments, Ventrillo and Iaco encourage the sharing of ideas with their direct reports. Ventrillo, who oversees operations in three states, says although he may not see each employee every day, he’s in constant communication and makes it a priority to touch base at least once per week in person. The first thing he does? Ask for ideas for new processes and ideas.
“We always bring up ideas. I interchange ideas that we have with different stores,” Ventrillo says.
3. Get buy-in.
To succeed consistently, good managers need to be skilled not just in choosing, training, and motivating the right people for the right job, but in choosing, building and preparing the right organization for the job as well.
—Clayton M. Christensen, author of The Innovator’s Dilemma
Often, the most difficult part of implementing a new process or a new piece of technology is getting buy-in from staff, especially in this industry, a fact that Wayne Pisinski, vice president of fixed operations with Carousel Motor Group, a seven-location dealership in the Minneapolis area can attest to.
When Pisinski joined Carousel, it was multiple dealerships operating on their own with different processes. He took on the task of changing that and creating a streamlined approach.
“We wanted everyone to figure out the best way to do something and then find a process that ensures the results would be the same. Find the best way and make sure it’s done every time,” Pisinski explains.
Pisinski says that the hardest part of all of this was not in finding the best way, but getting buy-in. Doing this required a re-education, which, although it was a huge undertaking, paid off in the end.
“You go through everything that you see and point out the flaws and what needs to be done moving forward,” Pisinski says. “A lot of that takes meetings. Getting everyone in the room and giving everyone the opportunity to voice an opinion. Give everyone the opportunity to buy in and understand. Sometimes, you lead a horse to water and sometimes, you need to hold their head under.”
Pisinski breaks down his formula for getting buy-in with one particular process: tire sales.
The problem, he explains, was that the advisors at Carousel didn’t believe the dealership was competitive with tire sales and because of that, tires weren’t being sold.
“Everyone was giving their best effort, but a few stores with specific processes were overachieving so we looked at those processes and got everyone on the same page,” Pisinski says.
In order to get buy-in, Pisinski explains that he needed to convince the advisors before customers could be convinced. So, they compared prices and made the move to sell tires at $5 over cost.
“If they believe we’re $5 over cost, it’s hard to believe we’re not competitive,” Pisinski explains. “We don’t have to be the lowest price in town; we just have to be competitive.”
Once the price was set, Pisinski needed to provide his staff with reasons why customers should be buying.
He gave them a few reasons, and noted that price matching was an option:
- The right tires would always be in stock
- Three different options
- An affordable price
- Best quality
- Best road handling
4. Evaluate your success.
Success is stumbling from failure to failure without loss of enthusiasm.
When it comes to new ideas, Jauch says it’s all about finding the best solution. She says that Peacock doesn’t give up when an idea fails—he just finds a better solution.
For example, the dealer group had an old Land Rover building that it tried to turn into a used car store a few times, but it never worked. Rather than give up or refuse to change direction, Peacock drew from his own experience and created a physical therapy clinic after he had back surgery.
The idea, which may seem unorthodox for the owner of an automotive group, has grown from seven employees and three independent contractors to 15 employees and three independent contractors. The clinic works well because it’s located in a 55+ community and there’s a need for that kind of service.
If something isn’t working, Jauch says Peacock Automotive simply stops doing it.
“We shift direction and do something else that is functionable and profitable. That’s the goal. Sell cars, make a profit,” Jauch says. “He’ll [Peacock] will do whatever he can to get things right.”
5. Think of the future.
The air is full of ideas. They are knocking you in the head all the time. You only have to know what you want, then forget it, and go about your business. Suddenly, the idea will come through. It was there all the time.
In order to continue to be successful, innovation needs to be constant. One change to your process or a new service will only last so long. That means you always need to look to the future to anticipate what your customers will need. One way that Ventrillo does this is by attending car shows and any type of training they’ll send him to (he’s even attended Disney training) as well as reading industry publications and attending clubs and participating in all of his manager meetings. Another resource for him has keeping in close contact with vendors and suppliers.
“They keep you privy to what’s going on,” Ventrillo says.
One of the biggest struggles with innovation is deciding whether something is worth investing in or if it’s just the hot topic of the week. Ventrillo says that he waits for a while to see if something will catch on. It’s not necessary to be the first to adapt it, in fact, that’s often too risky.
Here’s what Ventrillo has to say about what he views as some of the biggest disruptors coming down the line and how he’s preparing his team to handle them:
Advanced Vehicles: When it comes to technology in vehicles, Ventrillo’s biggest thought is, “When will the technology surpass the value of the vehicle?”
What he means by that is that everyone is talking about self-driving and flying cars, even, but the average person still needs to be able to afford to drive a vehicle, which can’t happen with all of this additional technology. Because of this, he’s not stressed about it.
Think about it: a windshield used to cost $200–$500. Now, it’s upward of $1,000 because of all of the additional safety technology. Because there will always be a need for the average person to own a car, all of these advancements can’t happen at once.
Ventrillo believes some of this technology is worth investing in. Advancements in air bags, obviously, will always be needed. Some of the other technology, however, Ventrillo is more cautious.
Take sound systems, for example. First, it was cassettes, then CDs and now it’s phones. OnStar is another one; it was a hot item for roughly a year, but now it’s Apple CarPlay.
“I’m selective of stuff that seems here and now; I like to wait and see,” Ventrillo says.
In order to predict what will come down the line in the next few years, as far as vehicle technology, Ventrillo suggests going to trade shows and looking at the prototype vehicles.
“To prepare for it, you need to train,” Ventrillo says.
So, that’s exactly what he and the team at Peacock do. As an owner, Ventrillo says that Peacock is ahead of his time and does whatever he can to work with the manufacturers when it comes to training.
Competition with the Aftermarket: For Ventrillo, this is the issue that he views as the biggest disrupter and the area that he’s most focused on combating. As a dealership, you have to buy all of the software and tools required by that OEM, while aftermarket companies sell products for much less to independents, which allows those shops to basically purchase the same thing for less, explains Ventrillo.
“I have to train a tech, and they [independents] can download instructions from the internet,” he says.
So, how exactly can dealerships compete with the lower prices that independent shops can pass along to their customers? Ventrillo explains it’s all about treating the customers that come through the door right so they keep coming back. Sell them on the value of the service that’s being provided.
“If you’ve won a bunch of different awards, that needs to be known,” he says.
If a customer sees the value in your service, they will continue to come back even if the price is higher—especially if they’ve been treated in an exceptional way, which is something Peacock Automotive stresses.