Well, good morning, everyone. My name is Rob Park from the Kappa Star Group, and on behalf of the Associated Equipment Distributors, I want to welcome you to the Breaking Down Departmental Silos AED webinar. This is our first in a series this year of parts and service webinars, and this one's pretty much all about communication. And I think it's pretty timely that we have this discussion, specifically because we just did finish up delivering both a Level 1 parts management program in Chicago and Level 2 service manager programs, and it was very interesting to hear the different groups. So they were separated, right? The first two days were parts managers, and the second two days were service managers. To listen to the perspectives and the expectations about communications from the other department that wasn't there, as you stand back and kind of catalog all those comments, parts talking about service and service talking about parts, I don't want to say it was funny, because it isn't funny, but it certainly is, I guess, alarmingly obvious that in a lot of dealerships, these departmental silos do exist. So our main message for today is really how we can recognize and, more importantly, repair any kind of internal communication issues that there may be between all the different departments at our dealerships. And the real reason for this is that it helps us to serve customers more effectively, and at the other side of it, because we spend so much time with each other at work, improve our own quality of life. So that's our perspective today, is to recognize, repair anything that may exist with some silos, and just so we can perform our jobs better for our customers and have a better time ourselves doing it. So as I mentioned, my name is Rob Park, and I am the owner of Capistar Group, who has been blessed with giving the responsibility of delivering parts and service programs for the AED members. This is our second year now. And also, I am one of the co-founders, along with George Russell, of the Machinery Advisors Consortium. It's a group of eight other consultants and individuals, all with like mind, to serve dealers and what we do at the dealerships. So let's move on to this, and let's talk a little bit about maybe a definition side of what is the silo effect. So this is a term that's been used for, I don't know, probably close to 20 years in communication of organizations. And the silo effect actually talks about the lack of information that flows between departments or groups or any individual parts of a business organization. Of course, those of you that may have a farm background, like myself growing up in Illinois in the Midwest, you know, on the farm, the grain silo, so they're there to store grain. And we have different silos for different grains. We don't want them to be mixing. And so in an organization, using that analogy of the farm silo, grain silo, the silo effect starts to limit the communication and interaction between those members, just like protecting grains from each other, between members of the different branches or departments of the company that ultimately does lead to reduced productivity, reduced customer satisfaction, and I think profitability as well is something that we should include in that. So that's what we mean by using the term the silo effect. We've been talking about this in a lot of training programs the last couple of years, and it is surprising the number of people that aren't really familiar with the term, but once you start to describe it, the lights come on and they say, ah, yes, that definitely exists within our dealership. So that's what we mean in terms of the pure definition of what the silo effect may look like. So specifically to our world of the construction and lift truck dealerships, what does the silo effect look like? I've just popped up three kind of scenarios, I guess I'll say it this way, in terms of departments, maybe battling is maybe too strong a word or maybe not strong enough in terms of how it looks at the dealership. So let's talk a little bit about sales versus service. This is a classic battle, right? So the service department really looks at the sales, sometimes department, maybe sales individuals as somewhat as prima donnas, much more self-interested in terms of what's going to happen with their equipment, with their customers. They don't want any pushback from customers, and so a lot of times there isn't a lot of great communication with the sales department communicating to service when machines may be coming in from the factory that need to be pre-delivered, that need other attachments or other installations performed on that, as well as the pre-delivery inspection before that gets delivered to the customer on the job site or they come pick it up at the dealership. And so sometimes that the sales department does a really poor job of communicating to service what expectations are, what work is coming down the pike, and it puts service in a disadvantage to be able to perform how they'd like to for the sales department or the customer. So in that context, there can be a lot of rub. In fact, if something does fall down, maybe you had to do a job a second time in the service department. Many times if there is a high silo effect between sales and service, the sales people again may get a call from the customer, and what do they do? They turn right around and call up the service department and start a pretty unhealthy discussion and argument with them about how they didn't do their job and how it's affecting that salesperson's relationship with the customer and their income, being a commissioned salesperson. I know maybe some of you have had those kinds of discussions in the past. So that can be a rub between sales and service. Service and parts definitely exist as well. From the standpoint of that maybe service cops somewhat of an attitude with parts because maybe we use this ultimate phrase of they never have all the parts that I need when I order parts for a particular job in the shop. Well, there's a lot of things that we should be looking at in that scenario, too, in terms of how long did the service department know that they had that work coming, what kind of heads up did they give the parts department, did they give them the opportunity to order those parts if they weren't a normal stocking part item on a stock order to get better pricing, no freight, all those things that good communication could deliver if service did a better job of letting parts know what's coming down the pike. Because the reality is the parts department within a dealership is the service department's biggest and best supplier. But not always are they treating each other that way. Moving to the third one, parts versus service. Well, what's the rub that they have? Well, it's always a last minute item. There's never any planning. You expect me to have way too many parts on the shelf. You order many more parts than what you actually needed for the job. You don't send me those parts back, or if you do, they come back with boxes damaged, I can't put them on a surplus return, all those kinds of issues that parts looks at service as they're falling down in their communication. So there's lots of opportunities for this silo effect to pop up just in the way the dealership operates on a day-to-day basis if there isn't good communication and a real healthy attitude towards helping each other to perform and deliver for the other department. I've got a couple of stories that come to mind from my dealership days of how some of this can actually really get very remedial, elementary, and ridiculous. I remember one location, it was a remote location in our multi-store complex where the service manager and parts manager, we'll just call it what it is, pretty much hated each other, had it out for each other on a regular basis, and one of the ways that this showed up was either in the winter or the summer, and they would have what I called thermostat wars. Every single day that parts manager would go out there and set the building temperature inside at a particular temperature on the thermostat, and the minute that he went back to his office and was out of sight, the service manager would jump up and go change it to what he wanted. As goofy and crazy as this sounds, pretty much all day long, that's what the other employees watched were these two adults, using the term loosely, getting up and going and changing the thermostat just to kind of battle with each other. The solution, believe it or not, was that we had to put a cover with a lock on that thermostat to stop that particular little war going on. I had another case where we had a parts manager pretty much at least ten times a day would say to customers or to his counter people or even the sales people to their face, he would just make some kind of derogatory comment about sales people. Oh, darn sales people, or maybe use an expletive worse than that. We tried everything that we could to turn this parts manager around. I would come in early every day and take the parts that UPS would drop off in the breezeway and carry all of them and put them on the counter so that he wouldn't have to do that, all kinds of things, and the only way that I finally got this guy to turn around his attitude was to invite him in the field to make calls with me for two days. After understanding how difficult it is in the field for sales people to continue to get out of their truck on an hourly, every other hour basis and go create a conversation with customers about selling or renting equipment and to see the miles and the hours that sales people put in was the way that he finally started to get an appreciation for what it's like working in the other person's shoes. So those are usually the classic battles between sales and service, service and parts, parts and service. So let's talk about how this impacts our customers and how they view this silo effect when they recognize it. What would you think, if you put yourself in the shoes of a customer, what would you think about a dealership that really doesn't have it all together and unified with the common goal, which I believe that we are in a service industry, the common goal of serving the customer? Here's some of the things that I think, as a customer, that I would think about. For starters, it appears that you're more interested in fighting with each other than having a commitment to my business and serving me. So that lack of commitment to my business as a customer is something that would creep into my mind and start to question about doing business with you. It also would make it more difficult to do business with. I can't begin to tell you how many times I've heard someone in the parts counter, if there's a comment made about service, well, here's how the counter person handles it. Well, what you'll have to do is go back and talk to somebody in the shop. As vague and as rude as that comment can be, I hear it all the time. So that makes it difficult to do business with the customer, where you've basically lobbed the problem over the fence at the other department with no heads up and really treating your customer very rudely. I also think that if they're more interested in just doing their own job and not understanding the whole picture of how the customer views the dealership as the entire dealership, not departmentally or by silos, it also shows up in inconsistent policies and how those policies are carried out or performed. So that's confusing for customers as well. Well, last time when this issue came up, this is how you handled it. Now you're doing it a completely different way. I don't even understand how you guys are organized to do business here. That frustrates me. We say that if we're going to create repeat customers, and there is an old adage there that says, sales sells the first machine, parts and service sells all the rest, based on how they perform. This repeat business aspect, in fact, I like the definition of a customer, is someone who came back and purchased from us a second time. They gave us a shot the first time to try us, but based on how we perform, whether they want to come back or not, is really what defines them as a customer. So if any of these things are happening, we're creating doubt, which we're trying to take away in the mind of a customer, but creating doubt about, should I or shouldn't I come back here the next time when I get in a jam and I need help from the dealership? They do have other options and choices as to where they go. If this silo effect becomes too high and too obvious for customers, they'll probably take their purchasing dollars elsewhere. You can literally feel the tension. I think in my career, based on the dealerships that I've worked in and the dealerships that I've called on and they're clients of ours now, there's probably several hundred that I've walked in. I literally think that sometimes you can just feel the tension in the dealership lobby when you first walk in there. I always say, boy, if I can feel it, if I'm not in there that frequently, I'm sure customers can get that same coldness as they walk in. They're watching and observing how people talk and treat each other to see if they like each other, to see if they even get along. The other thing, too, is are we putting on a different face for customers than we are with each other within the departments instead of treating them just like another customer as well? That's one thing I'd ask you to just consider is when you walk into your dealership, what's the vibe or the feel that you get if you put yourself in the shoes of a customer? Is there a certain level of tension that you sense or feel? I want to share with you five steps to tear down silos if this is an issue within your dealership. The first thing, if you see that little piece of clip right there on the slide on the left, the definition of team, it's together, everyone achieves more. It may be a trite little phrase, but it really is a powerful impact message there. The first step to tear down these silos is we must create what we call a unified vision within the dealership. Many people have mission statements, vision statements, and that's really the first step towards breaking down these silos. There was a really good book written on this by an author named Patrick Lencioni and the title of his book, Silos, Politics, and Turf Wars, he says that silos and the turf wars that they enable devastate organizations. They waste resources, they kill productivity, and they jeopardize the achievement of the goals that we've established. Patrick goes on to talk to leaders about how to tear down these silos by getting past some of these behavioral issues that I talked about, like the thermostat story, and address the context issues that are present at the heart of any organization. That means that not only all the employees of the company need to row in the same direction, but the executive teams, the departmental managers, like sales managers, service managers, general managers, parts managers, they all have to be engaged dealer principles at the forefront to steer the boat. You've heard that expression, it starts at the top. If we haven't created a unified vision as to what is our purpose, what are we there to do, why are we doing it, then we're going to already start to have silos start to creep up just because we are not unified in this vision. Let's look at step two. We've got our vision, now we have to work towards achieving a common goal. Patrick says once the leadership team has agreed to the overarching unified vision now it's important that the team determine what are the root cause problems that might be creating a ripple effect of the silos. What are the issues? Just to sit down with the meeting in a don't laugh at me environment and do what I call a mind dump of what are all the things that maybe we're doing to shoot our own foot off, or what are the root causes of the problems. Maybe it is that our parts inventory isn't what it should be, or maybe we don't have processes and communication things set up in the service department or sales department to be able to work towards this common goal. So what are some of those root problems? A lot of times there are multiple tactical goals and objectives that we identified, but it's really up to the leadership team of the dealership, and those are the folks that are on this call today listening to this talk. It's up to us as the leadership team to stay on task and define what single common goal that we should share and communicate that as the top priority of our dealership. I'll just suggest one to you. I really truly believe that in the dealership business model in that environment we sell products, but we truly are a service organization because we are serving people. We're serving customers. We're serving companies, and we should be serving each other. Number three talks about motivation and incentivizing. So hats off to the executives and the management teams that are able to successfully establish that unified common goal and understand how all the different departments and parts of the whole work together. That's more than half the battle, I think, is one at that point. The final steps in eliminating silos are all about execution and implementing the plans and the processes that we put in play. Motivation can vary across teams, and it says most importantly across individuals. Not everyone is motivated just by money, right? There's recognition. There's a whole bunch of different ways to do it. One of my favorite business books that I share with dealers all the time is one called A Thousand and One Ways to Incent Employees. Lots of great ideas in there in terms of touching on motivation and incentivizing. So it says what really defines a successful manager is the one who's able to identify the key components that motivate each of their people and how they can communicate this effectively to a wide range of audiences or people. So that common goal that's been identified, every member of the management team must incentivize their employees accordingly. That will help towards tearing down the silos. A little bit later in this talk, I'm going to talk about the fact that this DuPont model, which is how most of your dealerships were built upon, of different key performance indicators of different departments have a tendency sometimes to work against each other and actually create bigger silos. So we can adjust this by doing some what I call cross-incentivizing, which we'll talk about in a little bit. So executing and measuring, number four. Like any established goal, it's really important that once we define the goal, we have to measure it. That's just the basics of a SMART goal. Specific, measurable, achievable, realistic, and with a time frame. That old SMART acronym. So the leadership team must establish a specific time frame to complete the goal, what the benchmarks for success look like, and then delegate what are the specific tasks and duties that we need to everybody on the team in terms of who's doing what and when so that we can achieve that objective. And I think regularly scheduled meetings with the intention to hold each other accountable against their assigned task should be held. Now I want to make a comment about these accountability meetings. Regular for some dealerships means we meet every morning and we lay out what's coming up this week so that we can get organized. Others do it as a little huddle every morning. Maybe it's a monthly meeting. I don't think you want to get much past monthly because it's so dynamic at a dealership. Things change so often. So whatever that regularly scheduled meeting looks like for your organization is something that's extremely important. And the other thing that I wanted to say about these meetings as well is that there should be some ground rules established. What I call a don't laugh at me environment. There are no bad ideas. No one should be ridiculed for an idea or bringing up a task. And everyone should give, and this is a key component too in terms of making these meetings work, you need to give the other people permission to hold you accountable. If I'm not doing my job, I give, as a parts manager, I give the sales person or sales manager or service manager permission to call me out on it because I've committed to do whatever that task is. And if I haven't done it and I've let you down, then you have permission from me to call me out on it in a professional way, not a demeaning way. So just some kind of basics of how those meetings can work. Number five is all about collaborating and creating. The famous quote that Francis Bacon made, knowledge is power, has a pretty pivotal role in our modern organizations and our dealerships today. So the four key things that are factors that are mandatory for creating what we call a thriving and productive team, and here's what these four basic factors are, knowledge. So let me elaborate on this a little bit. Knowledge to me means this, it means having a solid onboarding process where new employees understand what's important to the organization, what's the vision, what are our processes. I'm trained not only in my position, but maybe I'm cross-trained in someone else. We're big believers, as an example, for new sales people coming on board to organizations that they should spend some time working in parts, spend some time working in service, for a couple of really good reasons. One, to understand those different departments and how they operate so that if questions come up in the field, a salesperson can answer that question right on the spot. Also, it's important to walk in another person's shoes and appreciate what their life is like on the job. I mean, everybody has challenges and difficulties, and if I've understood that because I've done that job and I've had some cross-training, I have a much more open mind and willingness to work together once I've experienced that. Same thing for parts, they should work in service and understand that and vice versa to start to break down some of these silos. So knowledge is a very basic factor that's got to be in play. Collaboration, my definition of that is simply a willingness to work together. So not compromising so much as giving up, but collaborating, working for common good to develop solutions and the willingness to listen to the other person's point of view as you collaborate together to come up with solutions. Also, creativity is a major important factor. Sometimes these problems are not simply solved by just establishing a policy. It can be a difficult situation and creative thinking is something that needs to be encouraged without throwing cold water on it so we can come up with creative ideas that will work for our customers and ourselves. The last piece is confidence, confidence knowing that we're not going to be ridiculed for trying to do the right thing, confidence that we know what that vision is and we know what the process is and we know how to handle issues. Those are those four basic factors that any team that doesn't have working in play could possibly be destined to fail. So we need to encourage the teams to exhibit all four of these traits and it's recommended that the managers allow and foster what I call as much cross-departmental interaction as possible. Going back to that comment I made earlier this morning in terms of those two level one programs, we're talking about different skill sets because it is a training program, but the reality is if they had been able to hear each other talk, I think already they would have understood they have some of the same issues and once they start talking, some of those issues start to go away by an appreciation of the other person's perspective. So let's talk about some fundamentals to reduce those silos. For starters, I think life is hard sometimes and things that happen in our personal lives sometimes have a tendency to creep into our business lives. There is another module that we deliver sometimes in train-the-trainer sessions in terms of what can you expect of people coming into a training session and one of the comments that we make in that train-the-trainer session is, we use this term, we say, the outside always comes in. So whatever is happening in your personal or outside of your business life, when you come to that business environment, you come to the dealership, you're bringing that baggage with you. So one of the fundamentals to reduce silos is to truly make a solid effort as much as you can to check your attitude at the door, to try and park some of those personal or other issues that may be affecting your attitude before you start work at the dealership and just check it at the door. Second point, making a personal commitment to truly serve others. As I stated earlier, if you believe that you're in a service industry, a service business, that means that you have made a personal choice to make a commitment to serve other people. And if that isn't something that you like to do and enjoy doing and don't get satisfaction from that, then I would ask you to maybe rethink your career choice. The third bullet is simply good listening skills in communication. The phrase is, seek first to understand and then to be understood. So many times, people consider listening, being quiet long enough to listen to the other person's point of view and have them stop talking so that I can make my point understood. Truly listening to what the other person is saying and communicating and asking follow-up questions to verify that you have understood their point of view first is the key to being an excellent listener as a skill. Then after that is when it's appropriate to make your point understood. Walking in your team member's shoes. We've talked about that in terms of some of that cross-training and having lived through some of those difficult experiences and challenges that the other departments have. I think it's a lot easier to appreciate the other person's point of view and your silo effect comes down if you have had that opportunity in your onboarding or your training or even just riding with others on a regular basis, visiting customers to walk in that other team member's shoes. Understand expectations. Truly understand what the other person expects. That's actually a key in collaborating. It's almost like playing poker, right? Make sure that you get the customer or the other person's point of view and expectations down on paper first before you offer up solution. It truly will help reduce those silos. Then that frequent communication, both on a frequent basis as well as open and honest communication really rounds out some fundamentals of how to approach your life at the dealership to reduce the silo effect. Some of the best practices of dealerships that do have low silos, and I want to say this, I would say the expectation is to not ever have a silo effect in the dealership. They'll flare up every now and then, but depending on what vision and execution and strategies are put in play like we've covered in those five steps, they have a tendency to go away quickly versus start to grow. The very first thing in terms of a best practice of a dealership with low silo effect is that the message has to come from the top. I have actually seen some dealer principals that think that's a healthy thing to foster departmental wars at a dealership. From our perspective, we don't agree with that management style at all. We think that that also contributes to poor messages to customers. It actually can lead to turnover. People will leave the dealership just because of the interdepartmental squabbles. That message has to come from the top that we're in the service business. We're here to serve ourselves and serve each other and treat each other well. Once we do that as employees and team members, then we're in a much better position to serve our customers. That message has to come from the dealer principal, from ownership. Interdepartment and interdepartment meetings. Whatever frequent looks for you, check your frequency and see if that's in play. Check the reason for the goal. A lot of times we establish goals. Is that goal a valid reason? Does it violate any of our mission or vision statements? Also, I'd ask to consider cross-department incentives. In part of our consulting practice with Capistar and a lot of our machinery advisor engagements that we have with dealerships, we write and craft a lot of compensation programs. The ones that we're doing lately have all had some kind of cross-departmental incentive element to it. I'll give you a couple examples here. For a sales manager, we like to also put, there's usually an inventory turnover piece to it, there's a gross profit, there's a gross revenue, whatever the main goals are. Also, we like to put in there maybe some goals for service and parts. How can a sales manager drive his sales team to help those departments as well? We can sell more extended warranty. We can also sell more maintenance contracts that drive both service and parts. All the kinds of things that the sales department does have in their control that will help with the parts and service sales, we can actually incent that sales person to have that on the top mind awareness to not just sell the machine, but let's sell the services that support that machine afterwards up front. As it applies to parts and service as well, I'll just give you two quick examples here. We like parts departments that also have some kind of incentive on service billing efficiency for service departments. How can a parts department help drive that? Being good in terms of communicating with the service department, what jobs are coming up, let's make sure that we have the right parts there, and not really penalizing a service department by charging them a restocking fee if they don't use all the parts that they use. Because we know sometimes we have to order parts that we're not sure of, especially on a troubleshooting or diagnostic basis, and especially if it's for a field service technician. Same thing for service. We can incent the service department for parts department goals. To hire the parts department stock order percentage for parts, let's incent service to hit that, and the best way that they can help the parts department hit their goal is to again communicate what kind of jobs do I have coming up. When you have that cross department incentive as well as the communication, it works out great. Lastly, to celebrate each other's department. To give you an example of this, it reminds me of a story. At one of the dealerships that I worked at, we made a point of on a monthly basis, we celebrated each other's department. What that meant was we just had a cookout. As an example, the parts department would celebrate the service department. The parts department would pay for burgers and brats, potato salad, baked beans, whatever else it is, a nice big cake, and we would fire up the grill and serve the service department. Thank them for the business, because service is the parts department's largest customer. Let's thank them. Let's celebrate them. Same thing goes for service and parts. One of the funny things that we noticed is that when customers were coming into the dealership and they were saying, hey, what's going on here? You've got a cookout. Did I miss my invitation to the open house? We'd say, oh, no, really, it's not an open house today. You're welcome to jump in line and grab some food, but today we're celebrating the service department, or today we're celebrating the parts department. It's just to thank you for all the hard work and the extra things that they do for us to make this dealership work for you, our customer. When you have that kind of conversation with a customer, they know that you're getting along. You work as a team, so the teamwork is in play, and that shows up in the great service that they receive, and they want to come back. They want to give us that repeat business. Celebrating each other's department is another great best practice. To think about this a little bit deeper as we conclude here, I want you to check your personal dealership location's silo effect. Ask yourself the question, how much of an issue is poor communication because of silos at your dealership? What ways is this causing you more difficulty in just performing your own job, and how is the silo effect showing up in how you service your customers and how they're responding? In summary, determine the extent that the silo effect at your dealership is having, and what its impact is on both relationships and performance between dealership team members. Also on the relationships and performance with your customers. Make a personal commitment to serve others in everything you do all day long. Be intentional in how you communicate in terms of wanting to be understood and listen, and watch how that silo effect can start to come down by consistently making the solid effort to communicate. We want to thank you for your participation today. I want to encourage you. I know we have an audience day, and if you have any questions that you'd like to type in the chat window, we'll stay on for a little bit longer. I also invite you to join us next month for another Capistar Group MAC AED webinar on April 28th at the same time. The title of that will be How to Properly Onboard and Train Service Technicians. Rebecca, on behalf of Capistar, thanks very much for the opportunity to address your audience today and your members. I'll turn it back over to you.

departmental silos

communication

teamwork

silo effect

customer service

unified vision

cross-department incentives

assessing silo effect