I’ve received more emails asking “Why so much emphasis on break-even pricing?” than any other topic. There are three reasons for what seems to many to be my obsession with this fundamental and critical pricing principle:

1. Break-even pricing is the foundation upon which all for profit business decisions are made.
2. Business survival, now more than ever, depends on understanding and being able to use this principle effectively.
3. From dealerships to corporate boardrooms, the importance of this fundamental principle is misunderstood by a majority of leaders and managers whose decisions influence every dealer’s pretax profit and every employee’s paycheck.

Support for these assertions is seen in the creations of, and continued participation in, such corporate marketing programs as $9.95 LOF promotions, and suggested list pricing practices that result in insufficient gross profit margins on vehicle, accessory and wholesale parts sales.  Furthermore, there’s nowhere we see this misunderstanding more clearly than in the continued dealership practice of pricing parts and labor sold internally at less than full retail.

Most everyone understands that selling something at break even results in neither a profit nor a loss.  As an effective strategy, break even pricing is not about how many vehicles or labor hours or parts sales are required to break even for a given month.  And, it’s certainly not about achieving so called industry “benchmark” sales and margins that, by the way, aren’t true benchmarks at all. They’re the calculated averages of the best and worst performers across our entire industry.  Do you go to work every day and bust your chops just to be average when the day is done?  Do you think that’s how those who’ve gone before us built the strongest and wealthiest civilization in the history of the world?

Knowing the necessary break-even selling price for a product or service is the starting point for evaluating all investment and marketing decisions.  It’s the basis for deciding whether you can afford to buy a product for resale or pay the cost to produce a service and realize the pretax profit required to sustain your dealership going forward.  Note the term pretax profit being used here.  Pretax profit is the dealership’s bottom line and that’s where you start when developing your pricing strategy.  We’ve seen too many dealerships go out of business recently because no one was paying attention to whether various departmental pricing strategies were sufficient for the well being of the whole dealership.

Knowing the necessary break-even selling price for a product or service is the starting point for evaluating direct and fixed expenses.  It’s the basis for deciding whether you can afford everything from wages to toilet paper.  Why?  Because a share of a department’s direct and allocated fixed expense must be recovered in the selling price of every one of its sales transactions.  The higher your expenses, the higher your break even, and the higher (less competitive) your selling price must be.

Knowing each sales account’s break-even markup requirement is the starting point for setting up parts price matrices, labor pricing grids, menus, and all sales promotions.  This is a puzzle top-notch managers pride themselves in being able to solve.

Solving the Puzzle

I don’t think I’m obsessed when it comes to talking about this fundamental pricing principle.  However, training is what I do and I am passionate about it.  So show me I’m off base.  Show me I don’t need to be obsessed with whether you understand this principle and can apply it to feed yourself and those who depend on you for their livelihood.

The starting point for solving this puzzle is being able to calculate a break-even markup factor for each of your product and service sales accounts and using them to create selling prices that ensure dealership pretax profit goals are achieved.  The document below provides all of the financial data you need to accomplish this task.  Download the worksheet and see if you can solve the puzzle for yourself.  Pass it on to other managers and see how they do.  Then, in the comments section below, just enter in the break-even markup factor you used to price the part, the labor operation, or both.  Good luck to everyone!

Break-Even Calculation Puzzle

Effective pricing strategies begin with knowing each sales account’s break-even point.  What’s your break-even for Customer Pay Repair Order (CPRO) parts and labor sales?  What’s the lowest price you can sell a CPRO part or labor operation for and be absolutely sure that the dealership does not lose net operating profit?  How sure are you?  With just a few entries from your financial statement, this Excel spreadsheet answers the question for you.

Designed for use by both Parts and Service Managers, this worksheet has calculators for determining the break-even selling price for parts and labor operations sold on CPROs.  You can also determine the correct selling price to ensure a specific dealership net operating profit for CPRO parts and labor operations.  You choose the bottom-line net you want, the worksheet gives you the selling prices.

This worksheet also automatically calculates and presents a year-to-date parts and labor repair order analysis showing average sales, cost, department expense, allocated expense and net operating profit per CPRO.  There is also a What-If speculator showing how much dealership and each department’s gross and net operating profit will increase with a given increase in monthly CPRO parts sales.

$9.99 USD

The only way to know that a part is not being sold at a loss is to know your wholesale sales account’s break-even point.  What’s the lowest price you can sell a Counter Wholesale (CTR-W) part for and be absolutely sure that the dealership does not lose net operating profit?  How sure are you?  With just a few entries from your financial statement, this Excel spreadsheet answers this and many other performance questions for you.

Designed for use by both Dealer Principals and Parts Managers, this worksheet has calculators for determining the break-even selling price for CTR-W parts sales.  You can also determine the correct selling price to ensure a specific dealership net operating profit for CTR-W parts sales.  You choose the bottom-line net you want, the worksheet gives you the selling prices.

In addition to an overall financial summary and break-even pricing mark-up factor, this worksheet automatically calculates and presents the following metrics:

1. Wholesale Sales and Gross Profit Mix
2. True Gross Profit Margin (accounts for factory purchase discounts and selling allowances)
3. Average sales and gross profit per CTR-W Ticket.
4. A wholesale employee productivity summary showing average department sales, cost, selling gross and true gross profit, expense; and dealership operating profit/loss per employee.
5. A delivery route performance summary showing average department sales, cost, selling gross and true gross profit, expense; and dealership profit/loss per delivery route.

There is also a What-If speculator showing how much operational performance will improve with a given increase in monthly CTR-W parts sales.

$9.99 USD

KNOWLEDGE IS POWER: Powerful Inscape DiSC® assessments can help people:

• Increase personal influence, improve effectiveness, and succeed more easily
• Close more sales, increase referrals, and build customer loyalty
• Communicate better with prospects, customers, co-workers, their boss, friends, and family
• Direct and coach employees more effectively to build high-performing teams
• Implement change faster, more easily, and with less stress for everyone

Extensive and insightful DiSC assessments identify and measure behavioral traits and the motivations that drive them.  They tell us why people do what they do and how to use this knowledge to be more effective salespeople, managers, and leaders.  With this knowledge, you can attend to the motivations another sees as positive and avoid motivations they may see as negative.

DiSC APPLICATIONS: LSN is proud to be an Inscape Authorized Distributor.  For over 30 years, Inscape Publishing has pioneered DiSC-based assessments – bringing the theory out of the textbook and into the workplace. Today, Inscape’s solution-focused products help people worldwide in thousands of organizations of all sizes, major government agencies, and Fortune 500 companies.

Inscape’s extensively researched and time-tested products help individuals and organizations unlock their full potential.  Every year, more than a million people worldwide use Inscape products.  Translated into 25 different languages and used in 50 countries, Inscape solutions offer consistent, researched-based training across organizations and around the world.

DiSC-application assessments are personalized profiles.  These personalized profiles give our users insight into their own behavior and help them understand the needs and motivations of others.  These are the most in-depth DiSC®-based advanced-level sales and management training solutions available to automobile, heavy-duty truck, and recreation vehicle dealerships.

Dealer Principals Take Action Now: Review the sample reports below and imagine how this kind of personalized information can help each of your salespersons and department managers increase their performance results.  Print some copies.  Share them with your staff.  Get their feedback on these reports.

Everything DiSC is a registered trademark of Inscape Publishing.

There’s no doubt that everyone gains valuable knowledge from our Everything DiSC Applications Library personalized sales and management reports. But, if you really want to take performance to the next level, host your very own DiSC sales and management team workshops.  There’s no better way to harness the power of DiSC strategies than to have everyone on these teams thoroughly understand them.  Our full-day workshops give participants an in-depth and hands-on experience with DiSC in a fun-filled interactive learning environment.

Everything DiSC® Sales Workshop: DiSC sales strategies enhance performance and improve results regardless of the sales system you use.  In fact, helping salespeople understand how to flex their natural selling style to the preferred buying styles of their prospects is missing from even the best-rated systems. Give your sales team the powerful advantages of DiSC and watch closing rates increase and customer loyalty grow.

• Module 1 & 2 – Understanding Your DiSC Sales Style
  • Discover the Everything DiSC Sales Map
  • Identify the priorities that drive your sales style
  • Explore how DiSC can improve your sales interactions
• Module 3 & 4 – Recognizing and Understanding Customer Buying Styles
  • Learn a process for placing customers on the Everything DiSC Sales Map
  • Practice the customer-mapping process
  • Explore the priorities that drive customer buying styles
  • Map the buying styles of your customers
• Module 5 – Adapting Your Sales Style to Your Customer’s Buying Style:
  • Explore how failing to adapt can interfere with your sales process
  • Discover how to adapt for better outcomes during the following sales processes:
    • Meet and Greet
    • Interview
    • Selecting a Product
    • Features/Functions/Benefits Presentation
    • Demonstration
    • Trial Close
    • Negations
    • Closing
    • Turn Over
    • Delivery
    • Follow up

Everything DiSC® Management Workshop: Management is the practice of getting things done with and through people.  Lee Iacocca said it best,

“In the end, all business operations can be reduced to three words: People, product and profits.  People come first.  Unless you’ve got a good team, you don’t do much with the other two.”

To get the best from people requires an understanding of human motivations and what drives them. Give your managers the powerful advantages of DiSC and watch team performance soar.

• Modules 1 & 2 – Understanding Your DiSC Management Style
  • Learn about the priorities that drive your management style
  • Explore the influence your management style has on how you manage time, make decisions, and approach problems
  • Learn how to recognize others’ DiSC styles
• Module 3 – Directing and Delegating
  • Learn about your natural directing and delegating style
  • Identify the directing and delegating needs of different styles
• Module 4 – Motivation
  • Learn how you affect the motivation of others
  • Recognize what different styles fine motivating and demotivating
• Module 5 – Developing Others
  • Learn about your natural style for developing others
  • Identify the development preferences of different styles
• Module 6 – Working With Your Manager
  • Explore how your managers might see you
  • Discover different approaches for getting buy-in from your manager

To host an on-site workshop for your organization, call 248-432-7615.  We’ll discuss your particular needs and help set things in motion with you.

Everything DiSC is a registered trademark of Inscape Publishing.

Customers decide to trust or not based on what they hear and see dealerships do.  They then evaluate whether the practices they observe are in keeping with their sense of what is trustworthy.  To be trustworthy, dealerships must demonstrate trustworthy practices.  While we each have our own set of cues we’re looking for, there are four practices that are universal and make up the pillars upon which trust is built.

Congruence: Although a word we don’t hear often, it best describes practices that are always in agreement with stated intentions and values.  We say organizations are congruent when they “say what they’ll do and do what they say;” when they “walk their talk.”

To be a trusted organization, the agreement between stated intentions and values and observable practices must be congruent throughout the dealership.  My wife drives a Toyota.  She trusts her Service Advisor and the dealership because they have proven themselves to be congruous.  However, given recent events, she has some serious doubts about Toyota as a trustworthy organization.  Interestingly enough, whether she, and thousands of others, remains loyal to the Toyota brand depends more on how Service Advisors behave and dealerships respond to customer needs than on how Toyota is positioned in the media.

Is your organization congruent?  Are it’s intentions and values in full agreement with everyone from the Dealer Principal all the way through to the Porters?  Are employees seen as being congruent by your customers?  Are their processes and behaviors in full agreement with the dealership’s stated intentions and values?  Do they say what they’ll do and do what they say?  Do they walk the organization’s talk?

Openness: We’ve heard a lot lately about this term and it’s easy to understand how a lack of openness leads to distrust.  Hardly a day goes by when we don’t hear someone saying we need more openness, transparency, and full disclosure, from our governments, our politicians, the healthcare and insurance industries, and especially from Wall Street.

Dealerships demonstrate openness by a willingness to disclose relevant information and provide whatever it takes to remove doubt.  Service Advisors do this when explaining the difference between the factory recommended and the dealership’s recommended maintenance schedules.  They also do this when explaining the need for additional services during work-in-process.  Advisors demonstrate a willingness to be open during an active service delivery; not when passing delivery off to a Cashier.  Openness is especially called for when a customer expresses dissatisfaction.  Not being open leads to doubt and where there’s doubt, there’s mistrust.

Acceptance: This may be the least recognized of the four pillars.  Yet, acceptance facilitates and makes possible the other three.  Our culture is, always has been, and always will be one of diversity.  Acceptance of the differences diversity holds is essential.  Our collective trust depends on it.  When we know and feel we’re respected and accepted for who we are, we’re more open, more likely to be congruent and act in agreement with our values, and more likely to be reliable as keepers of our commitments.

We don’t trust organizations that don’t accept us for who we are.  If a dealership treats me differently because of the color of my skin or my gender or my dress or my mannerisms, I won’t trust anyone there to give me a fair deal.  I won’t give it my business.

Reliability: Trust requires reliability, which is not the same thing as trust.  We tend to say organizations, people, and brands are trusted; while products, services and processes are reliable.  But, it’s not that simple.  The two are co-dependent.  Reliability fosters certainty and certainty reduces doubt.  When there’s less doubt, there’s more trust…in the brand, in the organization, and in its people.

Customers need to know they can rely on a dealership to meet its commitments to their needs.  Customers should have no need for favoritism.  They should be able to trust one Salesperson as much as the next, one Service Advisor as much as another.  As authorized representatives of vehicle manufacturers, customers rely on dealerships to provide the best advice, parts, maintenance, and repair services available anywhere.  These are their expectations.  Fail to meet them and the organization is seen as unreliable; one that can’t be trusted to consistently meet their needs.

We all want to trust.  We need to trust to feel safe.  Trust is more complex than I’ve presented here and the subtleties by which we judge trustworthiness are infinite.  We do know this, however.  It takes a lot for an organization to earn someone’s trust.  It takes vigilance to maintain it.  It can be lost in an instant.

Are the four pillars of trust in place at your dealership?  How strong are they?

• Long-standing customers could interpret a non-promotional price-cut as proof that your prices have been too high all along.  It may encourage speculation that additional cuts are on the way and cause them to take a wait-and-see attitude – hold out long enough and get a better deal.
• Cutting prices during a sales process can imply that you can only compete based on price; that your parts and services can’t be sold any other way.  You then position yourself as something less than a provider of premium brand, high quality parts and customer services.
• Non-promotion price-cuts erode your company’s profit margin.  Because there’s always someone willing to “go one better,” it can also mean that you may need to cut prices again and again to stay in the game.  Better to decide first if you want in the game to begin with.
• Lowering your prices may be a good strategy but only once you consider the end result of your actions.  Everyone meets with price objections in one way or another.  When you do, you have several options: (1) Cut your prices; (2) Increase the perceived value of your products and service; (3) Make the offer at the requested price but for additional purchases or volume; or (4) give up the sale.  Price cutting is only one option.

When you cut your price you cut your gross profit margin.  This also has a dramatic influence on sales, gross, and net profit dollars.  When you’re thinking of lowering your prices, a good question to answer is: “How much more do I need to sell to keep gross profit dollars at the same level?”  For example, a 10 percent price-cut has to generate a 66.7 percent increase in sales just to keep gross profit dollars at the same level.

Here’s how the math works selling $20,000 a month in Widgets with a gross profit of $5,000 at a 25 percent margin (Proof: $5,000 / 0.25 = $20,000).  To continue making $5,000 in gross profit after a 10 percent reduction in price requires $33,334 dollars in sales (Proof: $5,000 / 0.15 = $33,334).  That’s an increase in sales of 66.7 percent (Proof: $33,334 – $20,000 = $13,334 / $20,000 = 0.667 or 66.7).

The greater perceived value your parts and services have, the fewer price objections you encounter. Research tells us the following about pricing.  Consider how they apply to your parts and service sales.

1. In the absence of all other information, prospects and customers feel that OEM brands are still the best indicator of quality.  Position your OEM parts and dealership services as true premium brands – not as “same as the other guy’s – just more expensive” brands.
2. Market leaders can charge more than less-well-thought-of competitors.  Your prices can be 9 to 12 percent above market average if your reputation for quality service and customers support earns it.  Make sure they do.
3. If you charge more, prospects and customers tend to perceive greater value.  If your prices are too low, prospects and customers tend to perceive there is something wrong with the product or service.  Most buyers do act on the belief that you get what you pay for.
4. Fewer than one in ten prospects and customers make their buying decisions based solely on price.  Trustworthiness, quality, reliability, and convenience come before price.
5. Some prospects and customers have compulsive personalities, and getting a bargain is more important to them than the purchase price.  A bargain is getting high value for a good price.  Start by make sure your products and services have high perceived value.
6. Some prospects and customers are situational price shoppers.  They may be temporarily dealing with limited funds or available credit.  Wisely working to help these buyers through their temporary situation tend to produce some of the most loyal customers you’ll ever have.

Finally, we’ve all learned that it’s harder to raise prices than it is to lower them.  Think before you lower yours.  You do have other options.

The Automotive News World Congress was held in conjunction with the show featuring the current views and perspsctives of 19 OEM CEOs and influencial industry leaders.  The focus was on where these leaders think the industry needs to go and how they plan to get there.  I found the presentations by Mike Jackson (AutoNation CEO) and Roger Penske (Penske CEO) particularly interesting.  PDF copies of their presentation slides are available here.

Alternative Transportation and X Prize Contest Entries

The Progressive Insurance Automotive X Prize has chosen the State of Michigan to host an intense multi-stage competition that aims to pit some of the world’s most fuel efficient vehicles against one another in a quest to win their share of a $10 million prize.  Participating teams must design, build, and sell cars that a mass market wants to buy and that get a minimum of 100 MPG.

X PRIZE’s Peter Diamandis video blogs at the Detroit Auto Show

Green Vehicles Triac
All electric; 3-wheel; Two seat, side-by-side configuration with steering wheel. 80 mph top speed; Up to 100-mile range; Zero-emission. Charging takes 6-hours.  More on the web »

Triac Exterior

Triac Interior

Triac Front

Blue Sky Designs BugE
All-electric, three-wheel, single-person configuration with handlebar steering. 30-40 mile range per charge; 50 mph top speed. Operational cost is about $0.01 per mile. More on the web »

BugE Exterior 1

BugE Exterior 2

Commuter Cars Tango
All-electric, 4-wheel, two-seat tandem configuration with steering wheel. Zero to 60 mph in 4 seconds; Standing ¼ mile in 12 seconds at 103 mph. Rage of about 60 miles per charge with lead-acid batteries; over 200 with lithium-ion batteries. More on the web »

Tango Exterior 1

Tango Exterior 2

Tango Interior

Revenge Verde
400hp hp2g engine; Mid-engine configuration; 100 mpg e-hybrid. Runs on E85 fuel. More on the web »

Revenge Exterior

Revenge Exterior 2

Zap Alias
All electric; 3-wheel; Two seat, side-by-side configuration with steering wheel. 75 mph top speed; Zero to 60 in 7.8 seconds. Up to 100-mile range per charge; Zero-emission. Charging takes 6-hours. More on the web »

Zap Alias

SABA Motors Carbon Zero Roadster
Plug-in all electric; Zero to 60 in 5-seconds; Top speed 105mph; Range on a single charge: 120 miles city, 140 miles highway. Average driving cost $0.03 per mile. More on the web »

SABA Carbon Zero Roadster

Edison2 Very Light Car
Not much information available at the show or on their website. Perhaps they have perfected an anti-matter drive and are keeping it under wraps until they win the big prize in September. More on the web »

Edison2

Some Domestic Newbies

The Detroit-3 represented themselves very well at the show. The Chrysler-Lancia Delta Concept and the 2011 Ford Focus drew consistently large crowds and were among the most popular exhibits of the show. One thing’s for sure – the excitement is back across all segments. There were over 700 vehicles on display so I just took pictures of new and/or unique products.

Chrysler-Lancia Delta Concept
This concept is a five-passenger hatchback with a well appointed interior. The design exercise shows a potential blending of Chrysler and Lancia, which is owned by the Fiat Group. Some are speculating that this may be the next generation 300. I doubt it very much as this would be too drastic of a departure from the already well accepted and distinctive 300 styling. Why would Chrysler launch the very market-limited Fiat 500 when they have this in their stable?

More details in this article and the video below:

Chrysler-Lancia Delta Concept

Chrysler-Lancia Delta Concept Grill

Chrysler-Lancia Delta Concept Exterior 1

Chrysler-Lancia Delta Concept Exterior 2

Chrysler-Lancia Delta Concept Exterior 3

Chrysler-Lancia Delta Concept Rear

2012 Ford Focus
Likely launch date is first quarter 2011. Targeted at the high-end of the small car segment and to be loaded with standard features currently considered as options for this segment. The current segment leader is the Honda Civic. I believe that lead will be cut considerably by the new Focus. Check out the rear fender flair and molded tail light – very innovative for this segment. The Focus has a clean finish and actually looks better than it photographs. Just picture this coming up in your rear-view mirror – lights blazing.

Ford Focus Exterior 1

Ford Focus Exterior 2

Ford Focus Exterior Rear

Ford Focus Exterior Front

2011 Ford Fiesta
Planed launch is this summer. 1.6-liter, 4-cylinder engine averaging 40mpg highway. Targeted at markets around the world with a sales potential of two-million units. Stateside pricing will start at $14,000 and extend to $23,000 fully loaded. While the front-end is clean but understated, the back is unattractive and disappointing – who says a “world-car” has to be so plain Jane and generic?

Ford Fiesta Exterior 1

Ford Fiesta Exterior 2

2011 Chevy Cruze
A very nice replacement for the Cobalt. Scheduled for European launch in March and mid third quarter here in the US. Choice of 1.4 and 1.8-liter engines with 6-speed automatic or manual transmissions. The 1.4 engine is rated at 40mpg on the highway. Similar to the Malibu in styling and the interior is several grades above previous GM models for this segment. Standard features include ten airbags, stability control and ABS, rear disc brakes remain an option. Like the Malibu, this may more than surprise the competition.

Chevy Cruze Exterior 1

Chevy Cruze Exterior 2

Chevy Aveo RS Concept
Hopefully, GM will get enough positive buzz from this concept to see a market justification for a production version. Who knew this much cool was hiding in an Aveo?

Edmunds’ Inside Line: Chevy Aveo RS Concept

Chevy Aveo Concept

Honda CR-Z
It looks great but the specs are disappointing compared to others already in this segment.  The CR-Z has a 122-hp hybrid (zero to 60 in 9.7 seconds) but only gets a disappointing 36mpg city and 38 highway. And, since there seems to be some confusion out there:  yes, the CR-Z is only a two-seater.

The 2011 Honda CR-Z Sport Hybrid Revealed in Detroit

CR-Z Exterior 1

CR-Z Exterior 2

2010 Ford Transit Connect – North American Truck of the Year
With the expected growth in the number of small business service companies operating in urban environments, this opens new markets for Ford truck sales. The Transit has a 2.0-liter Duratec I-4 engine mated to a 4-speed automatic with overdrive; 22mpg city, 25 highway; 135 cubic feet of cargo space and 1,600 pound load capacity.  More info is available on the Transit Connect portion of the Ford website.

Transit Connect Exterior

Transit Connect Interior

Acura
Can you identify this and how it differs from… say, a Formula 1™ racing vehicle?

Acura

Acura 2

Show Highlights

Ford Focus

Buick Regal GS

Toyota FT-CH

This question has great relevance for dealership management teams, especially as we move towards economic recovery and into a new decade.  As you look at your job and the people for whom you’re responsible, it’s worth asking, “What will I do to make things better?”

What you offer will depend upon your level of responsibility. A Dealer may consider initiatives that transform the way the dealership does business.  A manager may come up with process improvements to optimize departmental efficiency, or new ideas for how to attract and keep loyal customers.    The specifics will vary but there are some things you can do to increase the likelihood that your suggestions are implemented.

Be Imaginative. Leaders are responsible for encouraging their followers to think outside the box. Facilitating innovation is a leader’s role and so as you consider what you want people to do differently, think in broad terms.  The challenge is to encourage employees to think creatively and allow them to implement useful ideas they believe will work for the good of customers and the dealership.  They work with customers and know them better than anyone else. They do the processes and know what’s necessary to improve or change them.  Get them involved.  You don’t have to be the only “smart one” in the group. And, you definitely shouldn’t do it all alone.

Be relevant. Consider your dealership’s vision and mission.  Specifically, think about how it delivers value to customers and provides a secure future for employees. Ask yourself what you can do to deliver on that mission more effectively.  Managers can provide relevancy in three ways.

1. Ensure that everyone knows how their jobs complement the mission (Focus and Teamwork).
2. Encourage employees to find ways to do their jobs more efficiently (Time and Cost Management).
3. Recognize employees for making positive contributions (Praising and Support).

Be Specific. While it’s necessary to think big, it’s also necessary to break big ideas into manageable parts.  For example, a General Manager challenged to make good on the goal of having the best employees might consider how the dealership recruits, how it fills new positions, and how it develops employees once they’re hired.  Making aspiration specific is critical to seeing a project’s manageable parts.

Be Actionable. Specificity opens the door for turning good ideas into projects and action plans.  This is management’s opportunity to implement good ideas as formal objectives with completion time lines. Assign employees to carry out approved action plans.  Provide them with resources as well as adequate time to do plan steps. Allowing enough time is important because continuing to work using an outgoing process while at the same time installing a new one takes time. Make certain you don’t hand off all responsibility.  Staying engaged is critical.  Be available all the way from start to finish as a coach and as a cheerleader.

Be Accountable. As a leader, you need to hold yourself accountable.  It’s not enough to suggest how others change; you must be ready for change yourself.  It’s one thing to ask others to change; it is another thing to make changes yourself.  Your personal sense of accountability will add credibility to your suggestions for improvements this year. People take their cues from those in charge and when followers sense their leaders are willing to make changes, then such changes have a better chance of success. When a leader invests his or her credibility in personal actions, the payoff can be significant.

What advice do you have for members in our community seeking to make a difference in 2010?  Share your views on this topic by leaving your comments in the reply section below.