Summit Auto Group in the UK grew by acquisition, creating a hodge-podge of geographically dispersed sites and franchises that lack management controls. Its parent company, Sumitomo, picks you to be CEO, and your mission is to stop the red ink and standardize operations to enable future growth by acquisition and by adding new dealerships for existing franchise partners. What do you do? (Before you click to read more, for the fun of it, mull this over in your mind.)

M&A Background.

For consultancies, M&As are fee-mines. I worked in several mother-load shafts in my career. The pattern goes like this:

• Acquire small companies from all over a nation or the planet, as fast as possible within an industry (video stores, garbage haulers, beauty salons, medical equipment manufacturers, car dealers…)
• Paint new logos on the doors and trucks, decide to do the merger stuff later
• As you “grow” in revenues, number of employees, market size, and geographical reach, the stock price goes up and up.
• Executive bonuses kick in; yachts and mountain homes become popular topics at country club lunches.
• Then, the profits tumble. It’s a mess: There’s no way to get the financials straight, redundant suppliers, duplicate systems, possible fraud. Stock price drops like Wile E. Coyote over a cliff.
• Bring in the consultants: financials, processes, operations, technology, and strategy.

The typical solution is to select, configure, and implement enterprise systems such as financials, ERP, CRM, and wide-area networks to force controls and standards on the acquisitions. It takes at least 12 months to buy, install, and configure the systems. It takes another 6 to 18 months to fully roll them  into the field. All the while the company is handing gold bricks to the consultancies, exacerbating financial losses. After years of pain, the company pulls itself up from the grave, to become an average company.

Back to the Summit Auto Group Story.

Remember, the mission is to stop the red ink and to standardize operations to enable future growth. (This is a true story, a classic M&A story, with a non-typical solution, an Engaging Change like solution. To read the full article, see

http://www.am-online.com/misc/summitautofeature.asp)

Sumitomo picks Bin Haga to take over the CEO role at Summit Auto Group. (Sorry, they didn’t know you were available back in June of 2004.) He spends the first 3 months, visiting each of 85 managers to conduct two hour interviews. His first question is, “What was the best day of your life?”

Clever Question

This is a very clever question, perhaps more clever than Haga realizes.

Haga asked questions designed to make managers think about quality customer service, employee motivation and the role of managers in the business. Haga’s strategy was to connect making customers feel good to customer loyalty, to see the value of human relationships, and that it takes empowered employees to make customers happy.

When I was doing personal development workshops, we had a saying, “the change starts before the seminar starts.” Once people decided to attend, we gave them a series of questions designed to spark thinking about the state of their current lives, and what would have to change for them to have different results. The questions and what went on inside the minds that answered the questions jumpstarted the change. I use the same technique to trigger change with executives for Culture Tune-UpsTM and coaching. I give Haga an A+ for using provocative face-to-face interviewing to fire off new synaptic connections.

I like his initial question, ““What was the best day of your life?” for several reasons. It puts the listener in a strong positive state, with time travel. The time travel is a hypnotic technique to open the mind to suggestion. The strong positive state opens people to possibility. Creativity is only possible when people are in a positive mood, and as Haga intended, remembering a great personal moment could easily be transitioned to imagining the way customers should feel when buying a new car.

Vision Card

Haga’s next technique is to create a vision card. The vision is “to be the best quality service provider in the UK”. Also on the card are the company’s core values. He then uses these values as a checklist against each touch point with customers, and Haga works this exercise with dealers.

As you can imagine in a company where every dealership has its own history and procedures, this is eye opening. Odds are they never systematically looked at the customer’s experience before, and it’s unlikely they aligned their values with the customer experience. Again I give Haga an A+.

Train to Empower

Next Haga trains managers to learn coaching and facilitation skills, because the employees will be empowered to improve and manage the customer experience.

Again, Bin Haga is doing the right thing to create a quality, customer focused culture.

Scale

Finally, Haga develops a standard method to merge new dealers into the Summit Auto Group way of doing business.

From my experience, this is the key to scaling M&As. Do the mergers at the moment of acquisition. The best approach is to have a merger-makeover team. BTW, Cisco is the M&A god of acquisition integration.

Results:

Bin Haga, in 18 months, at about 5% of the cost of implementing enterprise systems, has turned a profit for Summit Auto Group, and laid the framework for scalable growth.

Bin Haga's approach is beautifully aligned with Engaging Change's^TM  method and techniques. It's a wonderful example of improving financial results and creating fabulous places to work! Bravo!

Keywords: Change leadership, business culture, organization culture

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Michael Cushman, The Engaging Guru, wants you to master enrolling others in your truth, get the goodies of life, and change the world.  www.engagingchange.com