Compliance Atrophy

You won’t see it coming. You won’t know how it got there. Then one day, when you least expect it, it will hit you right between the eyes. I’m talking about compliance atrophy. Merriam Webster defines “atrophy” as “a wasting away or progressive decline.” A degeneration. And, if you’re not careful, it will happen to you.

It’s not enough to bring your operations into compliance. The real challenge is in keeping it that way. Here’s a tale I hear a little too often. It goes something like this:

After hearing stories from other dealers in his twenty group, dealer gets serious about compliance and coughs up the dough to send some of his employees to get compliance training from a reputable trainer. Employees go to training and quickly learn that some of the techniques that they have used for years aren’t exactly above-board. In fact (Holy smokes!), some of the techniques are flat-out illegal.

Employees and dealer have an emergency meeting, and employees rehash everything they learned at training. Dealer is thrilled he spent this month’s balloon money to send employees to training. Dealer and employees agree that these illegal practices must stop, and dealer sends employees back to their posts. Dealer feels like he dodged a bullet.  

Employees reel in the questionable behavior and try their best to do things by the book. However, it becomes quickly (and readily) apparent that employees don’t have the skills they need to be both compliant and profitable. Penetration rates fall. Employee commission falls. Employee paychecks shrink. Employees panic and go back to old habits. Non-compliance reigns supreme. 

Let’s face it folks—the car business has been around a lot longer than most of the laws and regulations that have crept into our industry in the last several years. To top that off, very few lawmakers have spent time in the tower or in the finance office. The result? Compliance isn’t natural or intuitive. It takes work to avoid sliding back into old habits.

So, how do you keep compliance atrophy from setting in at your dealership? Here are some thoughts.

Provide the right tools. Equip your employees with the right tools to make the changes you’re suggesting. Bad habits are hard to break, and in most cases, employees will need to re-learn the way they do things. Consider compliance-minded trainers who can teach employees new techniques to close deals and increase profitability with menu sales. The good trainers will be able to help employees take the leap from the old way of doing things into the new. (How ‘bout that? Make money and avoid lawsuits!)

Hold steady. Change isn’t easy. You’ll need to make sure that your employees understand that you support them in their efforts to take compliance up a notch. Support them through the short-term bumps in order to achieve long-term gain. If your employees don’t feel that you support the change, they’ll go back to the old way of doing things. 

Put your money where you mouth is. Don’t forget about compliance when establishing any employee compensation plans. Too often, compensation plans are set up to reward employees who produce quantity, not quality. If compliance is a dealership priority, the dealership should reward employees who are thorough, deliberate and conscientious in working deals.

Now is just as good a time as any to start flexing those compliance muscles. Act fast before the atrophy sets in! 

Vol. 2, Issue 3