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Effective Managers Must Be Psychologists Too

As the economy remains robust, and unemployment figures maintain a level below 5%, the bulk of dealer problems I’m called upon to resolve are centered, more and more, upon employee relations. Not only is it difficult to find competent, experienced managers, salespeople and technicians, I’m told, but those already on the team must be carefully managed today, or else they’ll be working for the competition tomorrow.

That last part of the problem was brought home to me recently when, at the dealer’s request, I visited a one-store, million-dollar dealership to conduct a three-hour sales training and customer relations seminar for the shop’s five salespeople. Prior to the start of the session, in a half-hour private meeting with the retailer himself, I was told to pay particular attention to the conduct of a salesman named “Claude” — not his real name, of course, although it’s the only part of this column that’s fictitious.

Claude, I learned, went in one month from being one of the dealership’s best producers to having the lowest percentage of sales closes, with the lowest contribution to the store’s gross profit. Furthermore, my client said, Claude’s relationship with his fellow employees, and with his boss in particular, had sunk to less-than-friendly.

“It all started when Claude first suggested that we open a second outlet on the other side of town,” the boss stated. “He made a pretty convincing argument for doing just that, until I told him that he was ignoring certain demographic factors such as a very noticeable population shift away from that area. If that continued, Claude and his family would be among the few individuals living there, I said. Then I concluded with, ‘Thanks but no thanks for the idea.’ “

“It was certainly not one of Claude’s better ideas,” the dealer continued. “What was I supposed to do — tell him it was great?”

“Precisely,” I said. “You could have told him that the idea made some sense. After all, it could get you more bang for your advertising buck and for other fixed expenses. Then you might have asked ‘From where will we get those additional prospective customers?’ ” In other words, I suggested that he ask open-ended questions designed to make the employee review his or her proposed activity before replying. It’s not that much different from the questions a good salesperson asks a prospective customer.

“Employees like to know that the boss thinks highly of them and their ideas,” I added. “It makes them look good in the eyes of their fellow workers, and even more important, it’s a boost to their self-esteem That, as you may remember, lies at the very top of the hierarchy of human needs, according to psychologist Abraham Maslow.

“Certainly you don’t have to act on the suggestion if it doesn’t make sense to you,” I told the retailer. “However, it’s a wise boss who manages the conversation so that the employee reaches the same conclusion himself. I call that ‘positive management.’ It’s like my telling you that asking me to address your sales crew on the subject of customer relations was a good idea — but what do you think of asking your office staff to sit in on the meeting?”

After a 30-second pause, which seemed more like a half-hour, the dealer rose, smiled and extended his hand. “Thanks,” he said. “Now I know why I called you!”

Jules Steinberg is president of Jules Steinberg & Associates, 425 Sunset Road, Winnetka, Ill. 60093. Phone: (847) 446-7312.
He can also be reached online at[email protected].