Things have seriously changed in the past 6-8 years in the parts & service industry. There was a time when as a store manager the DM's were our friends ( partners). Today most store managers in this industry have trouble dealing with DM's and RM's. This could be discussed for hours but the fact is as the economy tightens in 08 and corporate fools put pressure on store level management rather than train & support the outlook isn't too good for the morale and especially poor in the retention area. Is it possible people were smarter in the 90's ? Or maybe just better managers with less rules. If I were the COO of one of these companies ( AAP included but not solely) I would look into creating an environment and culture similar to one of the past that succeeded. Stocks in this industry are down more than the DJIA so its not just a poor market. There is an industry wide management philosophy problem. After 29 years in the industry I am comsidering a career change. I am finding it difficult to abandon ways & ideas that Have always been successful and still can be forones that have a dark outlook. AAP is typical of this but not solely. Similar problems in AZO, PBY, and many service chains.
But it's not just AAP. It's everywhere. The cause is greed and rapid communications (computers) have made it possible for people at corporate levels to have enough information to be dangerous. Short term is everything and nobody thinks long term. This is a consumer initiated "recession" so the "fix" is to address the consumers problems. Instead George and John McCain is talking about corporate tax credits etc. It doesn't matter how well corporate America can produce goods and services if the consumer cannot afford to buy them. And yes, the consumer has spend his/her self into this situation by buying everything they see.
Someone once asked Henry Ford why he paid his workers so well? He said so they could to buy his cars.
Mid.....I agree wholeheartedly. I use to be a DM who created the atmosphere and environments you discuss. Henceforth my teams and I have walls full of awards and trophies because we treated our subordinates with kindness, caring discipline and RESPECT. When upper management changed the culture of the company and started the results first, people second behaviors our philosphies were challenged covertly and directly. I was kicked to the curb as an underperfomer( after 25 years of service) and now the situation worsens. They have failed to address for years (at least 7 yrs) the new competition (OReillys) factor as "It doesn't effect your business and what you do." You control your own sales destiny even when three new stoes open beside you.
The Board of directors protects executives who harrass indiviuals weekly, commit crimes civil and moral, lack positive communication skills (except when on display in front of the board) and can't identify a heater control valve from a propane gas valve for my grill....you tell me where they went wrong.
They keep the upper management people who intimidate, harrass and usually deal in the fire fast and hire slow mentalities. Anyone from AAP who doubts that...follow the track record of hundreds of solid DMs, Managers and others who no longer work there..the proof is in the facts as AAP/ Larry C. likes to say...BE FACT BASED. The fact based reality of this company is that they forgot what treating people fairly and respectfully meant and protected the so called leadership. Results reflect standards and disciplines of a company...standards and disciplines reflect the quality of supervision and the quality of supervision reflects their UPPER MANAGEMENT. Look at the sales disciplines they lack...Their stores remind me of morgues or museams..EXTREMELY CLEAN AND NEAT but everything inside is dead and slow.
They need a total change of leadership, their sales driven former team members rehired and a course correction pronto. Otherwise you are looking at a CSK # 2.
I'm glad to hear some other people speak out on this. Nice post PM! You sound like the DM who originally recruited me. I personally saw the individual harrassment you speak of... and you are dead on about the lack of communication skills. I would add back stabbing to your list. After all the changes kicked in... 3 DM's and 2 RVP's later... I began documenting policy violations by my latest DM... everything from forcing us to clear/pickup PDQ/solo orders that haven't been picked up by the customer (making sales look better than they actually were), to physical threats by the DM to other store managers... even doing store payouts to ex-employees to get planograms caught up before RVP visits. My DM, RVP and HR manager were constantly in contact with each other (trying to protect each other and undermine anyone who threatened their posse). When my last DM was breaking policy, I contacted HR and risk management through email (trying to get a reply in writing so I would have proper documentation). I got a phone call from HR telling me to drop the situation.... and was audited by risk management within 2 weeks (upper management was trying to find a reason to fire me). I received one of the highest audit scores ever in division history. My DM said these were random audits... but when the risk manager and I went to lunch, he told me he didn't understand why he was asked to audit my store. Hmmmm... sound random to you? I'm not trying to b*tch here, but I want to show fellow investors how dramatic the philosophy change was. I thought maybe these problems were just in our region... but when the turnover at all levels became so high, we knew it was a company wide problem.
I'm sure you have more stories PM... just thought I'd add another to the list...
Very Enlightening !!!!! The DM that drove me out for the final time had several annoying habbits. One was using the expression " Fact Based". I always said to myself "not oly doesn't he know what the real facts are but he is too dumb to recognize them if they hit him on the head" Now I know where the moron copied it from. He was a corporate asswipe with no talent. Guess what ? He drove me to a better paying job and AAP promoted him. These are the people running the company today. I worked for them in 4 different states successfully.....opened new stores & districts and trained and managed. None of my methods were "fact based"-----all were "people based" and very successful. People was our most important part !!!
All you have to do is look at the folks who are doing well in this nervous economic climate... the NAPAs, the Federated Auto Parts, the Carquests, etc... etc... They are doing well because of their great service, their dedicated customer base, and from the folks frustrated with AZO and AAP. Many may think that we are old fashioned in our thinking... but those old 90's AAP models that we refer to are still in action today and working very well at AAP's competitors mentioned above.
I think the changes that occurred were all about the new CEO in town. Changing just to prove a new sherriff was in charge.... whether it was needed or not. I had 5 years of service with AAP and AZO... and close to 17 years in automotive business in general. I can't tell you what to do about your career change thoughts. It was a tough decision for me, but my stress level is down to nothing. I miss being at AZO and AAP because of the interaction with the customers.... but I do not miss the lack of foresight with mid-upper level managment. I'm satisfied with my career change but I'm tempted nearly every time I receive a phone call from an AZO or AAP DM asking if I would like to come back. I liked being at AAP the best, but the changes I endured simply didn't match my business philosophy.
Thanks for your input. I am still having trouble understanding how a retail auto parts store can capture commercial business away from a NAPA or Carquest who may have not just one truck, but a fleet of trucks servicing an area. Does the sales process start with a walk in commercial customer who receives special treatment/ pricing in the store? Does the DCSM just goes around to shops and pitches " Hey I'm with XYZ Auto and we want to sell you parts? " I just don't see the retailers penetrating this marketplace unless they are settling for the crumbs..... "Can you drop off a set of 4 spark plugs please.....right now!" The CEOs of these retailers make it sound as if this vast growth market is there for the easy pickings. I perceive the DIY market as doomed; forget the recession BS on prolong usage for used cars. Hell, most of us old guys who are capable of fixing our own cars..... its the last thing we want to do. And the average kid today.....WORD!....Wax Only Repair Da? Bottom line: How would you guys go about increasing commerical sales at a retail auto parts store if given the chance? Again thanks - Riggy
Don't know your timeline CJ but somewhere around 2003 / 2004 the company changed the basis of its judgements. Instead of running off the Taubman advance philosophy that was successful for decades they decided to follow an industry trend of " run off the numbers". Extensive training of managers on how to interpret the P & L and no training on values, HR and employee relations. This change brought about lower stock prices, cutbacks on payroll, discontinuation of programs like in store TV and generally a downfall. Don't know if it is reverseable but it doesn't look like they are interested in doing that anyway. Alot of people miss Nick. More miss his business philosophy. And eventually the "newcomers" will go away but unless they get some "old timers " back in charge they will never recover
MID, I didn't realize you had so many years tied up in this industry. May be you can help me understand some of the numbers behind securing commercial business. Is it true that before a store starts a commercial operation, it first assumes that it must deliver at least $ 4000. a week to justify the truck and driver? How are outside commerical reps compensated for bring in new business and what are these guys expected to earn? This would really help me with my research! I would appreciate any input from anyone who is actually in the business, especially if they have first hand knowledge of commercial ops. Bottom line... nice post writing MID, a like the change in style. Riggy
Riggy... when I left AAP in mid '06, AAP wanted a $4000/wk truck average. If you had 2 trucks, AAP wanted expected $8000 per week average. If your commercial dipped below that for a couple of periods, you were in jeopardy of having your truck shipped off to a more promising commercial program in another store.
In order to procure the first truck, the store must show a good amount of walk-in commercial business and a vote of confidence from the DCSM and DM. To procure the 2nd truck, you will need to push an average of $7K for a few months and make a bunch of phone calls complaining and trying to convince the big boys you need a 2nd truck. To procure the 3rd truck, you'll probably need commercial accounts to phone your DCSM and DM daily... it's nearly impossible.
As for district commercial sales manager (DCSM's), they are there as support for store commercial managers... no authority to hire or fire without agreement from the store manager and/or DM. The DCSM is used for larger equipment sales, procuring new business, and as the go to guy when complaints arrise on the commercial end. Their compensation is based on straight salary plus bonsuses based on district sales and profit goals. All the DCSM has to do is show some improvement year to year... and they're in good shape. Basically, if their store commercial managers were doing terrible jobs, then they count on their base salary only. I'm not sure if any stock options were available to DCSM's, but at this point in time, they'd be worthless as well.
Mid's discussion about robbing Peter to pay Paul is dead on. The payroll for the store is lumped in one big number so there is no real separation of commercial and the do-it-yourselfers.
Once again, this was in '06 so some of this may be dated.
AAP compensation program for a DCSM is similar to DM but less money. Not sure of todays numbers and bonuses but it would be a safe guess that in a metro area they should make around 60-65 G. Pep has a commission & draw system based on accounts of the OSR's assigned stores. Again final number depending on the area should be similar or slightly less but they are probably easier to work for. The 4000 / truck number has varied to around 6 and in some cases stores have been told to hit 8 before having a second truck. I guess its just business but I think the numbers are arbitrary and often not sensible. Years ago I opened a new district for AAP and also installed a first in the area commercial program. Granted things have changed some in procedure but not in principle. They were at the time 85 % correct in format now they are around 20 % but thats just an opinion. One of the flaws is that they rob peter to pay paul by taking commercial payroll from the store side in the name of "cross-training" That is about as effective as cross dressing. AAP has been often more successful in commercial than PBY but largely because of pricing & the number of locations. Guys like Tony M and Joe D with PBY have more on the ball than anyone in AAP. I now work for neither if you are wondering ( and for skeptics I have never been fired or asked to resign). If I was to go back to work for either I think the choice would be a close race but PBY is easier to work for generally. Hope this helped.