POLICY VERSUS PROCESS
An automotive retail development company.
Convergent Alliance, Automotive retail development company, dealership remodel, dealership assembly, dealership profits, dealership software, automotive industry, dealership construction
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POLICY VERSUS PROCESS

  |   Business

We tend to streamline our activities by establishing policies that we hold employees accountable for. In the automotive industry particularly and due to strict regulatory measures this actually became an industry that is offered to retailers as a service. These services not only provide boiler plate policy manuals that covers most the legal compliance matters but they can also be customized to each clients specific policy requirements and incorporated into a fancy policy manual that becomes either an online or a printed tool that employees are made aware of when they are hired and are required to comply with. This is in essence what we call the cover your rear end part of the activities in case there is a legal battle with an employee, customer or a vendor so that they can say “this is our policy and it is strictly enforced”. Here is where the problem lies, No matter how forceful a company may profess to be, most of these policies do not get past being a document and people mostly keep ignoring it.

As in most of the other areas of business where you would like to make a change, improve efficiencies or enhance an application, retailers find themselves right back to where they started and all the effort, energy resources and time ends up being wasted. This is still based on the same principal fact that without changing the culture and or the self image of the organization, policies and other operational changes end up being futile and they never take root.

In this example however, there may be a relatively simpler way of implementing policies without enforcing them as the law of the land. This is the difference in definition between creating policies versus process applications. Most everything in a car retailer requires defined processes rather than the policies. Policies describe what the rules are with very little if any attention to the application. Process on the other hand however describes step by step how a specific task is supposed to be performed in detail. Process manuals will assist and allow employees to understand how to do their jobs and still remain in compliance with policies without specific reference as to what that policy might be.

There is a specific procedure that needs to be followed when creating processes for any activity that requires a consistent behavior pattern by the employees who are responsible to perform these tasks. First and foremost before creating a specific process for a certain task, all the people involved with performing the task whether they are supervisors or employees must participate in a discovery workshop to identify all of the steps necessary to perform a task and identify the people who would be responsible for it. Once all of the steps are detailed out, the entire process must be reduced to a very simple and easy to follow instructional steps and either posted and or printed as a reference material for everyone who needs to go and find out. There are also basic guidelines in writing processes so that they are easy to understand and practical to apply that will create accountability without ambiguity. Following are some of those basic guidelines:

Ease of application                                              Consistency                                           Written Policy

Training                                                                 Efficiency                                               Accountability

Reliability                                                              Flexibility                                               Results Driven

By following the guidelines to create processes, you will have established a procedural consistency that will not only train your staff properly but everyone who is involved with the application of a specific process will become, efficient, accountable and empowered. Following are some of the highlights of areas in a retail environment that would require specific processes:

  • Prospecting                                        Deal Process                                             Sales procedures
  • Pay plans                                             Inventory Control                                   Customer relation
  • Marketing activities                         Service Drive Activities                           Parts procedures
  • Shop procedures                               Legal Liability                                           Human resources
  • Cash control                                       Receivable/Payables                                Facility Maintenance
  • Expense Control                                Safety                                                          Training

So do yourselves a favor, while it is legally sound to have a good policy manual, have your leadership team master the art of putting together process instructions, you will be amazed how much buy in and participation you will get when everyone gets involved.

See you next month.

Arlan Tarhan