How to Make the Four Disciplines of Execution Work for You
Although John Guido Jr. has been an integral part of his family’s dealership since 1988 (only four years after it was founded), he was still surprised at the fountain of ideas that he came home with after a week spent at NADA training. Sixty-two ideas, to be exact.
“I still keep that list and we chip away every month and work on a couple,” says Guido, Arlington Heights Ford’s general manager. “It’s always difficult for the senior one to let go of the way things were. We’re a pretty progressive store. We were the first Ford store in Chicago to have a website. We were the first to do the remodel. We’ve always been a progressive store but we still have that family, old-school flavor.
“We weren’t making as much money as we used to. Market compression, the availability of information to the consumer ... all those things lead to lower dealer profitability. I needed to find ways to turn that around without cutting people and without cutting benefits.”
That’s exactly why Guido took back to Arlington Heights Ford in Arlington, Ill., the concept of The 4 Disciplines of Execution. First a Stephen R. Covey concept and then developed into a book by Chris McChesney, Sean Covey and Jim Huling, those four disciplines are key to executing a plan in the midst of what the authors describe as “the whirlwind of distraction.” That whirlwind, they argue, is what keeps businesses from meeting their goals in the long term by focusing only on today.
Achieving your “wildly important goals” through mindful execution is key, while that whirlwind of the day-to-day aspects of the job is what keeps many organizations from working on those goals.
While day-to-day tasks are important, they will not help you progress or prepare for what is needed to succeed tomorrow, Guido says. And that approach is exactly what he took upon returning from NADA Academy and beginning to work on his list of 62 ideas. It’s an approach that has helped his dealership improve sales, gross profit, effective labor rate, customer reviews and CSI.
Discipline 1: Focus on the wildly important
Exceptional execution starts with narrowing the focus—clearly identifying what must be done, or nothing else you achieve really matters much.
Ask yourself: If every other area of your operation remained the same, what is the one area where change could have the greatest impact?
That’s what Covey defines as a wildly important goal, or a “WIG.” It’s a goal so important that not achieving it makes other achievements moot.
To first truly understand what the WIGs for the departments should be, Guido says it’s important to understand the dealership as a whole. That’s why he’s worked in every department in the dealership over the years to familiarize himself.
“A lot of dealer families don’t make everybody go through everything. They don’t have a good idea of what the people are experiencing,” he says. “If someone is telling me they were having problems, they couldn’t just talk about what decisions they wanted to make.”
That’s also why he invested in training and went to the NADA Academy and manufacturer training.
“It’s been very eye opening for me,” he says. “I thought I had a pretty good grasp of what I was looking at, but as it turned out, I had a lot to learn.”
That week is where those 62 ideas came from. But, instead of tackling all of those at once, Guido stuck to that first discipline.
“My goal as dealer is I want to increase my profit for cars, my customer satisfaction level and increase my dollars per RO and I want to have 1,000 five-star ratings this year,” he says. “If you focus on too many things, nothing is going to get done. We try and say, ‘Alright, we just want to focus on one or two things as an organization.’ Each manager has one or two things they’re allowed to work on.”
Guido has a WIG board in all of his departments that list both departmental and individual goals. The WIG can come from within the whirlwind (fixing or improving something), or it can be something new outside the whirlwind. However, there are clear stipulations to setting WIGs: no team should set/focus on more than two WIGs at the same time, the battles you choose must win the war in the most efficient manner possible, senior level leaders can veto but not dictate the action items to accomplish the WIG, and all WIGs must have an end date.
Discipline 2: Act on lead measures
Twenty percent of activities produce 80 percent of results. The highest predictors of goal achievement are the 80/20 activities that are identified and codified into individual actions and tracked fanatically.
Great teams invest their best effort in those few activities that have the most impact on their WIGs. For Guido, that started with identifying what kind of business they wanted to be.
“We’ve been here 35 years. We had to make a decision to be a store that was throw-them-into-a-car and make as much money as you can, or go the customer satisfaction route,” Guido says. “We were going to measure that route and take care of the customers. Regardless of price or profit, sometimes you’re going to win or lose. But with most customers purchasing 9–12 vehicles in their lifetime, in turn, profit will come.”
Discipline two defines the actions (referred to as lag measures and lead measures) that will enable the team to achieve that goal. While a lag measure tells you if you’ve achieved the goal, a lead measure tells you if you are likely to achieve the goal. While a lag measure is hard to do anything about, a lead measure is virtually within your control. Once you have defined your wildly important goal, create a detailed plan listing all of the speci!c tasks and sub tasks required for achieving the goal in the coming months.
Discipline two requires you to define the daily or weekly measures, the achievement of which will lead to the goal. Then, each day or week, your team identifies the most important actions that will drive those lead measures. In this way, your team is creating a plan that enables them to quickly adapt, while remaining focused on the WIG.
Here’s an example: Guido’s service director’s WIG was to increase the amount of customer walkarounds and multi-point inspections to 90 percent. To accomplish that goal, however, Guido needed to take a hard look at his scheduling system, as being overloaded throughout the day was leading service advisors to skip doing those inspections. He looked at his DMS report and identified which days he was most and least proficient. Then, he set goals of trying to schedule more appointments on those least proficient days.
Discipline 3: Keep a compelling scoreboard
People and teams play differently when they are keeping score, and the right kind of scoreboards motivate the players to win.
Back to Guido’s WIG of increasing the number of multipoint inspections: He needed a tracking device to be able to track each advisor on a daily basis and coach based on those results. That’s where the third discipline of engagement and tracking comes into play. Covey writes that the team plays at their best when they’re both emotionally engaged and understand if they’re winning or losing. If you’re not keeping score, you’re just practicing.
“If you got the number up to 85 percent, they need to see here’s what would happen to ELR (effective labor rate), hours per RO and gross,” Guido says. “We put some basic calculators that are Excel spreadsheets. They’ve been extremely effective. We’re seeing some huge gains and it wasn’t by making a whole lot of big changes.”
In addition to tracking, he also posts all of the results on a daily basis in the employee room and ranks them from least to most proficient.
“No one want to be on the bottom,” Guido says. “We really focus on that and I’ve seen a bigger buy-in. We have 100 full-time employees and 27 have been here for more than 20 years.”
However, getting that buy-in relies on two keys to tracking:
A coach’s scorecard is not a player’s scorecard. A coach’s scorecard is complex. A player’s scorecard is simple. It shows a handful of measures that indicate to the players at a glance if they are winning or losing the game.
The purpose of the scorecard is to motivate the players to win. The more the team is involved in designing the scoreboard, the more likely it will instill their ownership.
Discipline 4: Create a cadence of accountability
Great performers thrive in a culture of accountability that is frequent, positive, and self-directed. Each team engages in a simple weekly process that highlights successes, analyzes failures, and course-corrects as necessary, creating the ultimate performance-management system.
Finally, the fourth discipline is that of accountability. Without consistent accountability, Covey argues, the team will never give their best efforts.
Arlington Heights Ford has won the Ford President’s Award for 28 years in a row—and that’s no coincidence.
“It’s really the culture. It’s the culture in the store,” Guido says. “You have to treat every customer as a guest. It’s on every document we have. Without fail, no exception.”
That culture has been vital to making sure that the process implemented—such as the five foot, five second rule, where a team member must greet a customer within five seconds and five feet of entering the dealership. In turn, that’s resulted in the dealership increasing its monthly number of online reviews from less than 10 to more than 70.
The dealership has also made transparency one of its core values.
“The stigma in this industry is that we’re selling people what they don’t need,” Guido says. “There is a lot more suggesting and conversation of, ‘Let’s take a look at this together.’ We’ll go over that with them. We save old parts and give them back to the customer. There’s never a question of integrity.”
Guido notes, however, that integrity is not something that can be taken for granted. It needs to be worked on continually, which is why he also emphasizes employee appreciation. He sends out a monthly internal newsletter, and offers gift cards and rewards to employees.
"It shows that, yes, we’re paying attention and that you’re doing more than what you can and should do,” he says. “Recognition in front of your peers pays dividends.”
That consistent effort relates back to a core principle of the fourth discipline: WIG sessions, which refocus the team on the WIG despite the daily whirlwind. It takes place on a regular basis and has a fixed agenda that aims to review the scoreboard, report on the past week, plan the following week and clear any potential obstacles, and re-focuses on those lead measures.