Using Responsibility Statements For Business Planning & Systems

The following real life examples are drawn from within a UK vehicle dealership as the young Dealer Principal began the process of developing Responsibility Statements with his team leaders. This is an interesting look at how to elicit KPI’s and develop each Team members understanding of their contribution to the business. This is an essential part of business planning for the implementation of systems for productivity.

The Principal, Parts Manager, Service Manager, Marketing Manager, Sales Manager and Accountant were each asked to write out their view of their individual responsibilities in a single paragraph.

Below, are their initial attempts, followed by their “negotiated” final Responsibility Statements.

As you read, take note of the difference in the language, focus and rigor of each stage of the process.
Parts Manager
First Draft
My responsibilities as a Parts Manager are to keep the Department running sweet at all times, reduce the amount of Stock Holding to a minimum workable level and review on an ongoing basis. Try to manage the staff inherited by me (this Manager was new to the role, and had issues with an incumbent assistant). Reduce the Company’s obsolete stock to the bare minimum. Make the company money. Make sure a working atmosphere between the Parts Department and other departments is always maintained.
Final
My responsibilities as a Parts Manager are to:

1. Achieve better than 95% 24-hour fulfilment on parts working with a maximum stockholding of £50,000;
2. Keep obsolete stock to less than 3% of holdings;
3. Develop and grow my staff to deliver a level of service to other departments that enables them to meet their responsibilities and which earn us a CSI of 95 or better from them; and
4. Generate a monthly gross profit of more than £10,000.
Accountability
Such a Responsibility Statement automatically creates a “6 dial dashboard” for the Parts Manager, as follows:

1. Percentage of order fulfilments achieved within 24 hours of placement. This entails balancing stock (instant fulfilment) against supply chain constraints which, in some cases, can mean a delay of 6 weeks in supply).
2. The value of outright stockholdings
3. The value of obsolete stock
4. Internal client service satisfaction rating (Numerical score provided by monthly survey, cuts both ways, as spares would report on service in terms of courtesy, accuracy of request, etc)
5. Divisional monthly GP
6. Return on Investment (ROI: divide the GP by total stock holdings for a score indicating performance against assets).

At team meetings, the Parts Manager would introduce his contribution to the discussion by reciting his current “6 Key Numbers” and movements up or down within them, before getting on to any other topic.
Service Manager
First Draft
My responsibilities are to conduct myself and the service team in a professional manner that is required of the standard of service we want to achieve. Also by meeting the criteria set by management as regards to hours sold and to continually improve areas of profit making. I will succeed in this by monitoring, setting and achieving performance, encouraging service team and ensuring each member knows and carries out their responsibilities. Ensuring our customer retention, satisfaction where possible while maintaining profit for the company.
Final
As Service Manager my responsibilities are to lead my team:

1. To deliver service that earns a Customer Service Index (CSI) above 95%;
2. To achieve a productivity level of more than 90%;
3. To maintain average gross profit per job of more than 40%;
4. To achieve sales of more than £100,000 per month; and
5. To continually develop their technical expertise through more than 4 hours of specialist training per member per month.
Accountability
Such a Responsibility Statement gives the Service Manager the following Key Numbers:

1. CSI (determined in exactly the same manner as for the Parts Manager);
2. Productivity (percentage of available or paid technicians’ hours booked to jobs)
3. Gross Profit per Job (the accounts were reworked to ensure that all labour-related and goods/parts costs were allocated to the Cost of Sales, thus making a high GP a challenging goal);
4. Sales (with the other percentages in place, this figure will control outright profit)
5. Technical Expertise (an in-house measure in terms of rework hours, personal productivity, formal or in-house training hours, competence rating by Service Manager).

At each staff meeting the Service Manager starts with his 5 Key Numbers indicating whether have improved or slipped week-on-week.
Accountant
First Draft
It is my responsibility to monitor & measure the efficiency with which the business as a whole operates. To ensure each department and each employee has a common goal as well as a desire for constant improvement. I must offer my full support and dedication to the senior management team and provide them with timely and relevant information, upon which decisions on the future of the business can be taken. In the long term, my presence must secure increased levels of both financial prosperity and profitability within the organisation.
Final
I am responsible for monitoring the overall financial health and profitability of our business; for collecting quality and relevant financial data across the Company; for organising that data so as to meet our compliance and management needs; and for assessing and interpreting it from financial and management perspective as my contribution to our management team decision making.

I am also responsible for providing each member of the senior management team with:

• Accurate and timely measures of their individual key performance indicators;
• My professional support, observations, assessment and interpretation of data relevant to their responsibilities.
Accountability
Such a statement as above would imply KPIs like:

• Monthly Reports, analysis and observations on:
o P&L
o Aged Debtors and Creditors
o Cash flow
o Key Balance Sheet items
 Current Assets
 Current Liabilities
o Taxation returns, commitments, etc
o Contingencies, provisioning, accruals, etc (stuff that creeps up on you)
o Finance (floor plan leases, etc)
• Monthly summary of team leaders individual KPI performance for team and Principal alike
• Overall financial analysis (those key Financial Ratios that are relevant to this industry and business)
Marketing Manager
First Draft
My responsibilities are to ensure the professional outlook of the company through all adverts produced, web sites used and documents sent to our own customers. By ensuring all our adverts are produced to the highest standard and cars that we advertise are photographed and described to be as eye catching as possible will entice customers to our showroom ahead of the next car, ideally producing greater sales/ profits.

I will use my knowledge of the business computer systems to utilise the customer database to its full extent, ensuring a constant connection with our own customers, and keeping the customer retention rate as high as I possibly can.
Final
As Marketing Manager, my responsibilities are to ensure that, through our behaviour, presentation, service and advertising we communicate our Vision, Mission and Values so clearly and effectively that every potential client within our catchment area:
• Thinks and talks favourably about us;
• Contacts us when thinking about buying a new car or servicing their existing car;
• Is made to feel one of our family;
• Buys from us; and
• Refers other people to us
Accountability
I know I am succeeding when:

• We receive more than 20 phone sales enquiries a day
• We welcome more than 20 prospective purchasers to our showroom
• Our sales team’s close rate is higher than 70%
• Our sales are greater than £800,000 per month
• We receive more than 5 referrals a week

Dealer Principal
The Dealer Principal did not do an initial draft but began with a very general statement of his role during discussion with his Business Coach and, at the end of the session, had settled on the following Responsibility Statement covering his two “hats” – that of Dealer Principal and that of the hands-on Used Car Manager.

Having retained the latter role to date because of the deep industry expertise required to make this vital part of the business profitable, nonetheless, the Principal had the realisation after the exercise that he could start to devolve some of the responsibilities to other team members and to work himself out of this role.
Final
As Dealer Principal I am responsible for:

Creating, then sharing the Vision for our business; projecting and protecting our values; making a profit for the company of more than X% on Sales Income; attracting good people to our team; and creating an environment in which people grow and achieve their goals.

As Used Car Inventory Manager I am responsible for:

• Ensuring a stock turn of greater than 9 times a year
• Keeping within our finance credit targets
• Achieving a GP of greater XX%
• Ensuring a used car readiness averaging under 4 days
• Presentation that exceeds our Manufacturers Used Car Policy
Accountability
• Total sales income of more than £XX million
• Net Profit of more than X% on Sales Income
• All departments at or above their goals.