What: Implemented financial literacy training for managers

Results: Boosted the credibility of parts and service managers and increased the number of new customer sales by 10 percent in one year

GM parts and service managers felt as though their sales engines were idling. They were responsible for analyzing financial statements and suggesting ways for GM dealerships to increase parts and labor sales and profitability–yet their understanding of financial statements and accounting principles was limited.

"They weren’t confident that they could explain the numbers on the dealer’s operating report to counsel with their dealers," says Dick Block, manager, GM Parts and Service Operations, Non-Technical Training. So the company revved up its sales engines by implementing financial literacy training that is now provided to each of its 205 area parts managers and 411 area service managers.

As a result of the training, managers earned credibility with the dealers, and their dealerships experienced a measurable increase in service revenue, he says.

How It Works

In 1999, GM introduced a basic, web-based, financial training program that taught parts and service managers how to read and understand dealer operating reports, according to Block. The company soon launched a 5-day beginners’ program to build financial awareness among its managers.

In 2002, it added an intermediate level of training for those who had worked for the company for at least 1 year or who had completed the beginners’-level program. Roughly 70 percent of the 4-day intermediate program is dedicated to financial analysis, while the rest of the time is spent teaching managers about marketing and consulting with dealers, Block says.

GM ran 2 pilot workshops at the intermediate level in 2002, 15 workshops the following year, and 6 in 2004, according to Block.

Among the requirements for intermediate-level training is completion of The Accounting Game^®, a 1-day course provided by training and consulting firm Novations Group Inc. The course uses the metaphor of a lemonade stand to teach accounting concepts and to help managers gain a better understanding of financial statements.

Last year, Novations also helped GM develop an advanced, 2-day financial class in which each manager conducts an in-depth financial analysis and presents it to a dealership. GM started offering advanced training in the fall of 2004 and completed nine workshops before year’s end.

The beginning, intermediate, and advanced training classes take place throughout the country in each of GM’s five regions. All GM parts and service managers are required to complete the classes (except the beginning class, depending on their experience level).

Block acknowledges that some GM parts and service managers were initially skeptical that they needed financial literacy training–particularly the more experienced ones.

However, once they completed the training, they realized how beneficial the program was, and they gave it high ratings in post-training surveys. For example, at the intermediate level, participants rated the program a 4.8 on a 5.0 scale, and Block says the advanced program is "on track" for similar results.

Block credits the intermediate and advanced courses with helping parts and service managers improve their working relationship with dealers.

"Now when reviewing financial reports with dealership personnel, our managers sense a renewed respect and credibility extended to them, which they attribute to their improved understanding of the dealer operating report and financial key performance indicators," Block says.

In addition, he says the training has boosted revenue significantly. Nationally, GM dealership customer pay growth rate increased by 10 percent in 2003, and similar results were expected for 2004. Customer pay growth is the percentage by which the company increased the number of new customers spending money on parts and labor at GM dealerships.

What to Do

You don’t have to be a Fortune 500 company like GM to offer financial literacy training to your managers. Block identifies some critical success factors that companies of all sizes should consider when implementing such a program:

• Identify a specific goal. GM recognized that its parts and service managers needed a basic understanding of accounting procedures and financial statements to help the business grow. Since one of their main job functions is to counsel dealers about ways to become more efficient and profitable, improved financial literacy was key to their peak performance.
• Start small. Don’t try to implement a multitiered training program all at once. Start with a basic program and build on that foundation by gradually adding more in-depth training.
• Minimize class size. "You don’t want the group to be too big," he says. Fifteen to 30 GM parts and service managers participate in each of its financial literacy classes.