A major area that’s suffering is the work of identifying, and then developing, the next generation to step up and manage. Add in the capital needs for tomorrow’s principals, and we may be at Code Red on the Readiness Scale.

The looming “readiness crisis” has two fronts, says Jerkins. On top of the “readiness” of ranking leaders to yield control, there’s a gap on which next-generation candidates have been prepared to take the wheel.

Transitioning the business is a universal, costly (“in the millions,” says Jerkins) and complex problem, which is why we’re devoting our biennial Dealership Minds Summit to the topic.

According to Jerkins, only 20% of dealers (of all sizes and brands) have a realistic view of their succession challenges. And only a tiny portion of their execs could go 2 weeks without calling into the dealership — the proof-point of when necessary structures are in place, he says.

What separates the top-planning dealers from the rest, he says, is a willingness to pull their heads up and deal with root causes. For instance, the world’s best aftermarket performance plan sinks if parts and service managers can’t sit down to lunch together. That’s where work often needs to start, he says. Another trait of the top-tier planners is a personal involvement in designing the solution.

A mentorship movement is needed, he says. “We need our senior people to be mentors and teachers.” Among the obstacles are insecurities stemming from a self-importance or fear of what happens “if the youngsters know what I know.” This “soft-side” work requires champion-level attention, especially in a business where “developing” takes a back seat to “doing.”

Jerkins lent advice to dealers serious about developing the next generation:

Senior-Level Executives: Execs need to draw, on paper, a boxed matrix of non-negotiables. The “must-have” legal/ethical guidelines go on the left and the operational characteristics (i.e. financial performance, customer experience, etc.) are on the right.

Once limits are set, dealers need to let their upstart managers “go,” he says. “As long as they stay within those boundaries and the risks aren’t too high, just watch and coach them.” Most must unlearn micromanagement to evolve into a leader and then into a coach. “Good coaches know it’s the players who execute. To what detail you coach depends on what they need, but you must allow them to run.”

Next Generation Leader: Communicating (including “up”) is job one, and Jerkins says it needs to be done in a businesslike, non-complaining manner. The mentoring meetings should have only 2-3 agenda points, with the youngster articulating the challenges and then proposing a solution. And as “greener” managers learn to facilitate change with fellow employees, they must learn that “the solution must always be good for the entire business, not for one department or branch.”

Dialog with dealers on our Editorial Advisory Board indicate that more businesses get transitions wrong than right. Jerkins (the keynote presenter at the 2015 Summit) adds that the failures are almost always due to communications and expectations.

“The preparation is the first part and many dealers make the mistake of waiting until the transition time is upon them,” says Doug Neufeld, CEO of 2014 Dealership of the Year PrairieLand Partners. “If you aren’t working on the preparation side, the transition won’t be good.”

If your dealership can benefit from peer-sharing of solutions (and anticipation of trouble spots) in your management transition, we hope you’ll join the community we’re assembling at the Summit in January (see www.dealershipmindssummit.com).