Distributor executives tell us. . .What they really do. . .Identify
critical skills. . .and explain. . .How to fill this key role.
By Bill Sitter
Branch Managers may be best described as an AED Distributor’s equivalent of a utility infielder or an all purpose running back. At AED’s request, Jordan-Sitter Associates surveyed a broad sample of US & Canadian distributor executives to gain valuable insight into this pivotal role. We thank our survey panel and will use their responses to benefit the readers of Construction Equipment Magazine.
WHAT ROLES DO TODAY’S BRANCH MANAGERS REALLY PLAY?
The clear answer is that at the typical AED dealership the Branch Manager wears many key hats. Following are the most common roles, ranked in order of importance:
- There was a first place tie between P&L responsibility, facility management, and preparation of the annual forecast/business plan.
- Another tie between overseeing parts and/or service department, credit and collections, and hiring and firing.
- Doubling as Branch/Area Sales Manager with some dealers including responsibility to oversee the branch rental department.
- Performing an additional role as a Sales Representative.
- Conducting some training.
If we step back and study all the elements of the typical branch manager’s position description, one might easily conclude that these men and women have the broadest range of duties and responsibilities of any managerial role at a modern distributorship. They are asked to be “all purpose managers at the point of contact with most customers”.
After learning what roles AED executives ask their branch managers to play, we felt it appropriate to see how these managers’ actual skill levels line up with their wide ranging duties. This led to the next question:
WHAT CRITICAL SKILLS DO YOU FIND MOST LACKING IN BRANCH MANAGERS?
- People management skills and the ability to develop others topped the list. This response was consistent with a 1998 JSA/AED survey which stressed the critical need for interpersonal and team building skills. We can surely agree that equipment distribution is still a people business and that it is people who build relationships, solve problems and sell machines and product support. Therefore, it is not surprising to see our dealer panel place such a high premium on these soft skills.
- Financial knowledge and overall business management skills showed up as critical needs. This points to a real problem because, in our first question, we saw that dealers want branch managers to be responsible for a branch P&L and to prepare forecasts and business projections, and they expect them to manage facilities and oversee product support departments. Each of these areas of responsibility require solid fiscal management skills and an awareness of how various actions really impact the bottom line.
- It seems that our industry can genuinely benefit from enrolling branch managers in financial courses. AED offers several programs that could help solve this skill shortage.
- After the top three critical skill shortages: people management, people development, and financial skills, our panel rated the following skills as most lacking:
- 4th Parts & Service knowledge.
- 5th A tie between good decision making and communications skills (written/verbal and listening), and good hiring skills.
Fortunately, our panelists seemed to be fairly comfortable with their branch managers’ skill levels in the following key areas: sales abilities, customer service orientation, positive work ethic and good character traits.
HOW TO FILL BRANCH MANAGER VACANCIES?
Last month’s CED Magazine included considerable content on the Branch Manager role. Needs for these managers arise when dealers expand or for a variety of reasons. Our survey asked distributors to rate their best source of branch manager talent. It is a tribute to AED dealers that internal promotions have proven to be the best source. Sales representatives seem to be the number one choice for elevation to branch manager, with promotion from parts or service roles as a strong second choice. Only as a last resort do dealerships look outside when filling these key slots.
IF YOU DO HIRE A BRANCH MANAGER FROM OUTSIDE, WHAT SOURCES PROVIDE THE BEST RESULTS?
As executive recruiters who have served this industry for over 21 years, we know there are times when dealers hire from outside. However, where these dealers go for top talent may be news for some. Hiring from competitive dealers was a very strong first choice. One large dealer in the Northeast includes hiring from dealers outside their area. Then there was a dead heat for our remaining 3 choices: hiring a factory representative, hiring from a contractor, and (surprisingly) hiring from totally outside the equipment industry. Some respondents made it clear that they avoid hiring from customers.
One Canadian dealer executive pointed out that the branch manager role is a very difficult role to fill. A challenge in promoting salesmen is the realization that in good times they may earn a good bit more than the compensation plan for the branch manager role. “Our new focus is on value added performance at each branch based on return on invested assets.”
A heavy equipment dealer in the US reports: “There is no single formula other than to always work with people you trust, who have values shared by the company, and who can make good decisions”…sure sounds good to us.
These insightful survey responses prompt a few observations intended to help our readers.
- The recent trend toward hiring from outside our industry was birthed from necessity…an acute shortage of talented managers.
- This influx of new leaders can be very beneficial to our industry’s growth, because we need new people and we should welcome fresh ideas.
- We feel that many of the equipment/technical skills can be taught by good AED leaders with years of industry experience.
- What this survey proved, and our observations support, is that we must find new sources for bright men and women who will join this industry and help lead our dealerships in the future.
We encourage all AED distributor executives to do what our helpful survey panel did. To examine the role of branch manager at your company. Then develop a comprehensive position description and a regular performance assessment. Invest in a skill development process to help these hard working branch managers develop the tools they need for the future.
Again, we thank our survey panel who contributed with one goal in mind, to help AED distributors survive, grow and prosper.
We hope that your distributorship’s Branch Managers will all become the star level performers you need for the new century.