Can you imagine a world where business systems are augmented by artificial intelligence, maximizing efficiency and leading to positive change in the marketplace? Join our conversation with John Andersen, who recently published his dissertation on the state of the market and business systems, and explore how innovations in AI-driven technology have the potential to revolutionize the way we live and work.
From AI-assisted travel planning to cutting-edge diagnostic sensors and telematics, we discuss the incredible advancements in technology and the lack of vision that has held back their full potential. We also touch on the need for evangelists and product specialists to drive the adoption of these technologies and explore why dealerships haven't fully embraced these innovative solutions. Furthermore, we delve into the challenges of passing leadership to younger generations and the untapped opportunities that lie ahead in bridging the gap between Baby Boomers and Gen Z.
Don't miss this thought-provoking episode as we dive into the future of business systems and the potential for innovation in the marketplace. With John Andersen's insights, learn about the importance of collaboration in the industry, mergers and acquisitions, and the need for a more employable marketplace of people with jobs that are changing. Let's work together to create a world where artificial intelligence enhances our lives and drives positive change in business systems.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Can you imagine a world where business systems are augmented by artificial intelligence, maximizing efficiency and leading to positive change in the marketplace? Join our conversation with John Andersen, who recently published his dissertation on the state of the market and business systems, and explore how innovations in AI-driven technology have the potential to revolutionize the way we live and work.
From AI-assisted travel planning to cutting-edge diagnostic sensors and telematics, we discuss the incredible advancements in technology and the lack of vision that has held back their full potential. We also touch on the need for evangelists and product specialists to drive the adoption of these technologies and explore why dealerships haven't fully embraced these innovative solutions. Furthermore, we delve into the challenges of passing leadership to younger generations and the untapped opportunities that lie ahead in bridging the gap between Baby Boomers and Gen Z.
Don't miss this thought-provoking episode as we dive into the future of business systems and the potential for innovation in the marketplace. With John Andersen's insights, learn about the importance of collaboration in the industry, mergers and acquisitions, and the need for a more employable marketplace of people with jobs that are changing. Let's work together to create a world where artificial intelligence enhances our lives and drives positive change in business systems.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Hello everybody and welcome to another candid conversation. We are going to open a rather controversial door today with John Anderson. We posted a blog today on his most recent dissertation relative to business systems in the state of the market. He titled it The Last Hundred Days. So with that as the introduction, john, what's going on?
Speaker 2:Well, it struck me last week, ron, that 100 days ago you and I had a discussion. I was in Florida, you were in Hawaii and we were talking about, i think what started the conversation was chat, gpt and some of the things that are happening there, and then it progressed to what's new in the business system world. That was a short conversation And I think it was at that time that we kind of threw down the gauntlet and said where's the innovation? There's been a million buzzwords innovate or die and start looking at AI And the real frustrating part was that was 100 days ago, and everything today in the market that we're working in, in the world that we're living in 100 days is the equivalent to when you and I were doing forecasting, to what was a year forecast or, in some cases, a two-year forecast.
Speaker 2:Everything is moving at the speed of technology. So my question is really simple In the last 100 days, what's happened? So I kind of sat back and took a look. There's been a lot of changes in the last 100 days. I mean, what's changed for you in 100 days, ron?
Speaker 1:Not considerably, but let me give it a little bit more background. A good friend of mine, Alex Sussler, was the founder of Smart Equip, and he coined a phrase that I like to use a lot, where all we've done with business systems has gone from paper to glass. We took a form and five, six parts that people used to write out, and we put that template on the screen and people, instead of writing them, type it into a keyboard And we took away the instantaneous data that was available on CardX And it took us about 30 years to the point we got to interactive online computers, so that we got that back.
Speaker 1:But we really haven't done much in business systems period And I don't care whether it's Oracle or SAP or N4, or Microsoft or DIS or CDK or whoever the emphasis or whoever it is. They have not served the industry well, and the dealers are complicit as well because they've lost the best practices, thinking that we really got going in the 80s.
Speaker 1:They've left it behind, so everybody's kind of fat, dumb and happy sitting back waiting for I don't know why. So in the last 100 days we use artificial intelligence for closed captioning on our film clips. We can do that in 130 different languages. We use artificial intelligence in creating voice audio tracks from Word documents. We can do that in 130 languages.
Speaker 1:I'm exploring a company that will allow my daughter and I to be created as avatars by going to a studio and being filmed for about an hour talking, and then they can emulate our voice. So, instead of having a camera studio and making videos the old fashioned way, i can create Word text 15 slides long, 500 words a slide, characters a slide. So it's about a seven or eight minute film clip without being present. So I can inject film clip. Now you would expect us in the education world to be leading the parade a little bit in the use of artificial intelligence. Our classes are all credit approved in schools. We're way ahead of what the schools do and how they monitor and manage their classes. So Caroline and I were talking about it today. I don't think that we're really doing anything exceptional, but we're committed to staying ahead of what the market is looking for. I don't see that with business systems, people anymore.
Speaker 2:Well, and I think that's where the vision is lost, because I don't even think it has to be necessarily a huge application game changer, as much as it can be an iterative change where somebody can start slightly using the technology and just exploit it beyond there And your examples were great This affects people in their daily lives. Now I was working on planning a trip to Europe. I'm going to a few countries I haven't been in before. Instead of getting on the internet doing a whole bunch of research and everything else, i just use AI to tell it that I'm going to land in a particular city on a particular day in time and I'm going to leave after that. And what's your suggestion for the world's best vacation? And it handles everything from travel arrangements to restaurants, to where I should get my money exchanged and how much it's going to cost me, gives me a budget, asks me how much I want to spend.
Speaker 2:So this is all this game changing world that concerns me.
Speaker 2:So when you talk about what is a business system doing right now, well, let's see, we're working on new analytics, or we're working on a fresh set of reports, or we're working on APIs and integration to be able to work back with a third-party software application or a bolt-on.
Speaker 2:This is the same thing that we've been doing for 30 years. I got to feel if your life is changing at home and my life is changing at home, then it's a pretty sure bet that the end user of the equipment's life is changing at home and the distributor that's supplying him that equipment and the parts and service their life is going to change dramatically too. So at what point does everybody start to take a look at not even reinventing systems, just augmenting the systems to work with the current technology and the current expectation of the customers. And you know what? I think you said something really interesting. I would say the equipment dealers themselves need to be held accountable for this, because they're not challenging the supplier to come back and say this is what we need, this is what we want, this is what we expect, and if you don't change it, we're going to go find it somewhere else.
Speaker 1:Yeah, the other thing that seems to be going on, joan, is much more single-purpose software market coverage, data analytics, financial reporting, call reporting, crm, all of these little things. You know DBS got a dealer business systems from Caterpillar DBSI. They stopped supporting it when they had so many disparate packages bolted on. We now also have business systems that don't talk to each other. Salesforce, as an example, has a customer profile on it. Most of the major business systems have a customer profile on it. They need to be maintained separately because those two systems don't talk to each other To the point of the dealership.
Speaker 1:I remember back and this has forgiven me for doing this, but I remember back when I'm starting 50-something years ago. We had really talented, pushy people running in those days data processing to improve things. It wasn't just financial, it wasn't just parts, it started delving right into the guts of the business. You know what you're talking about Ian Sharp, who was the founder of IP Sharpen Associates, who created APL in the community and sold his business to Reuters and that caused Bloomberg to be created. He had a package back in the early 70s to help women or men in their kitchen relative to their inventory of food and had it all on the computer and shopping list created menus that they liked. He would just, you know, remove all the rest of the stuff. That's 50 years ago. Today you've got a fridge that has a screen on it that'll tell you what's in there. If you want to get a menu, you push a button and ask for it. Like Google, it's right on the fridge.
Speaker 1:There's so many things that systems now are using to enhance the lives of people. So we've got diagnostic sensors in the equipment, we got telematics, we got geofencing, we got electronic catalogs, we have service, repair and maintenance instructions. We have all of this stuff. How are we using it? We started with the storefront in the late 1980s and they still haven't got any dealer. Over 10% of the parts business coming through the internet. What's going on?
Speaker 2:Well, that's a simple answer to that. The answer is nobody's using it because nobody's delivering it. All of this stuff has to be delivered first. It's real simple and you've heard me go on. It's a lack of vision, it's a lack of evangelists, it's a lack of product specialists. You need to have somebody, and it's not, you know what. Since we're in the blame game, so we started with saying the software development companies, and then we said well, we'll also blame some of that on the customers. I'm going to blame it on the OEMs too, because the OEMs are just as guilty.
Speaker 2:I think I might have mentioned to you that one of the major OEMs is talking about doing a warranty program now and being able to turn their warranties over faster and see when machines are in warranty and get the claims done electronically, and to think about this. This is stuff that has been done and has been exercised and has been worked on over the last 20 years. Somebody should be holding this up as a flag. This would be the same thing if you came home at night and said hey, today I drove my car home and celebrated by it. It's nothing that's going to be celebrated. The fact of the matter is, it's expected every day that you're going to arrive home from work in your car And, i think, the same problem. We're all just kind of stuck in this rut right now and nobody is willing to push the envelope.
Speaker 2:I did, and we very clearly in the last discussion said come to us with what that changes. And I had one solitary phone call And I would love to call them out, but I don't want to share their trade secrets either at the same time. But I can tell you it was somebody who said, hey, we can start to use these AI language modules And we can use an AI language module to allow a dealer principal, a financial person, a store manager, a parts manager to speak in real terms to the computer and have it generate whatever their analytics reports are. So, instead of having to have a report writer and to understand how query works and to do all your selections and things like this, just using something as simple as common speech modules And again, it doesn't have to be chat, it could be, it could be beard, it could be anybody But to be able to have somebody that's going to allow people access to the information so that they can make decisions, and then, personally my advice to them, whether they, heated or not, was to go one step further, then don't just give them the data.
Speaker 2:Offer them a solution, offer them a suggestion, because we know that most of these AI models, they're kind of emotionless on being able to report the data back to you. So if you're asking about sales of a particular part or stocking levels for particular product lines and things like that, it'd be a wonderful question to pose back and say does this make sense long term?
Speaker 1:Now let's just talk about an application for a second. Just to get out there, We have job codes for repairs and maintenance from just about every brand. Unfortunately, they're all different Automotive. They use a common coding structure.
Speaker 1:But, that also means that when I open a work order I can segment the job to a particular component, operation, et cetera. I can also then start collecting data history on how long it takes to do those things and what parts are concerned. So, wave-a-wand. When I was at Finning in the 70s I'm responsible for exchange, the re-manufactured product line I was a time and material customer for our service department and I desperately pushed for about a year to get fixed pricing. Well, they finally gave me fixed pricing So we started a flat rate system in 1979 from zero.
Speaker 1:People are required that file of 300,000 job codes in paid Finning to purchase it. So over a number of years let's call it 20, they've developed 300,000 job codes. If we start today, five years from now, we could have a technician go out and inspect the machine, make a determination of what needs to be done, open up a work order with job codes on it, have the parts be ordered automatically that are on the bill of material and assign the technician who has the skills to when his next available opening is. We can do that all without anybody other than that inspector. The computer systems can't support that today.
Speaker 2:Well, so I'll push back a little bit. It wouldn't be a discussion between you and me if I didn't, because all of that information today is stored. All of that information is in place across multiple systems. I worked in prototype with a company that I won't tell you about I'll tell you after this blog is done that actually had already figured out that not only did they keep the dealer information from dealers that were using their systems, but they were able to import from other systems as well, huge volumes of history and information.
Speaker 2:The technology is there that it doesn't matter whether it's a John Deere service pricing guide or a cat service pricing guide or the job codes match or not. The intellect is behind the system to be able to parse that and match them up. In fact, technician can quite simply feed in the symptoms as opposed to the solution and have it come back with the proper solution and come up with a proper parts list and continue on and do the sale. The fact of the matter is somebody needs to be out in front of every distributor and every OEM saying this is what you expect, this is what your customers expect, because somebody's going to change this game, ron. I'm hoping they still do it in our lifetime. But somebody's going to change this game, just like the EVs are changing the game.
Speaker 2:Detroit's not the motor city anymore. All the new development and everything that's happening and everything that's driving the whole automotive industry is happening out of California. It's all pushing back into Detroit. If you drive through Detroit right now, you know exactly what you're seeing is a city that's on the edge of extinction. Because they didn't see the change coming.
Speaker 1:The other thing that's interesting is EV. Is the excuse? EV is not going to be here? in 10 years time It will all be hydrogen. The President of Ford just recently came out with answering questions relative to the electric vehicles. He said if you've got two or three cars, one of them will be for shopping locally and that's an application for an electric vehicle. The rest of your vehicles you're going to need internal combustion engines. We've got all these things, but going back to that data warehouse, you're talking about MD Anderson, which is one of the major health institutions in America, and others are doing the same thing. They're digitizing patient health records for the last 20 years.
Speaker 1:Just imagine I go to my doctor. I've had my blood work, i've had X-rays or MRIs or CT scans or whatever the devil it is. He knows my age, he knows my body conditions. He can tell me exactly what I'm short nutritionally, my weight condition and what my life expectations should be. I tease my doctor because we talk this way. He says you're too heavy. I said, yeah, well, i enjoy my Scotch and wine. Are you telling me to slow down on Scotch?
Speaker 2:and wine. He says well, you'd live longer.
Speaker 1:I said that's cool. How much longer do you think it would be? He said, well, maybe a year. My response to him and he started laughing. He said well, it's not worth it. I'll get one more year on life and I have to deprive myself of my Scotch and wine for the rest of my life. Go away guys.
Speaker 1:Business systems, equipment dealers and this is not just equipment, it's automotive, it's material handling, it's marine, it's all the capital goods industries We're going to have to sell differently. Our customers are already changing the relationship between the manufacturer and the dealer because the dealers aren't big enough to handle the funding that's required to run the business anymore. Somebody was telling me last week that Caterpillar's goal is to have 19 dealers in the United States and Canada. There's two in Canada. That means there'll be 15 in the US. There's something around 30 there today. Who are the 13 that are going away? Businesses already reduced, except for agriculture. John Deere's reduced. The number of dealers is way down.
Speaker 1:Everybody comes back and say well, gee, my sales are up, congratulations, the number of people competing with you has gone down by 50%. Should you not expect your sales to go up Then? what do I give to salesmen I used to joke about. You hire a guy, you give him a customer list, you give him the keys to the truck and you point to the door and say there's your. You got what you need. Well, go sell. That's what we used to do 50 years ago And guess what We're way from that today. Here's your customers, here's your customer history, here's their purchases over the last 20 years. We have that data, but we don't share that with the customer or with the salesman, or with the parts department. So, yeah, the OEMs, the dealers, the business systems are going to respond to what the customers need and want, and they're not asking us for anything.
Speaker 2:Correct. Yeah, but they're going to. I mean, the customers are going to have to ask for this.
Speaker 1:We talked about the big resignation or the reshuffle or whatever, with people changing jobs right a couple of years ago. We're going to have unbelievable changes in the distribution channel.
Speaker 2:There's a lot of dealers today.
Speaker 1:That won't exist 10 years from now. Volvo is going complete electric vehicles. How the hell do you stay in business? It's an interesting question, isn't it? Well?
Speaker 2:I think it comes back to that old saying innovate or die. Again, if you want to be that dealer, ron, you've got to be on the edge and ready to push the OEM, ready to push your dealer business systems supplier and say this is what I'm going to need in order to stay in business for five more years. Five years is an eternity. Right now, again, i don't think anybody sees it coming and I feel like chicken little running around saying the sky is falling Because everybody's saying, well, sales are up and times are good and we've got data and everything's going along just fine. It's not going to be that way indefinitely. The rate of development is horrible. That's the point. Coming back to the 100 days again, in 100 days nobody has released anything and nobody has talked about anything new, anything exciting.
Speaker 2:I mean, you and I have, and that's great for us to do, but I'd love to see a developer on this call who says, yeah, we could do that. Yeah, i'd like to do that. Yeah, there's no reason we can't do that.
Speaker 1:Yeah, three of our buddies and they're all retired and might be a good subject. Three men who were responsible for software development for one of the major business suppliers, one for mobile apps, one for interfaces with OEMs and one for basic system development. All played golf the other day. They're all retired and I asked the question of one of them. I said OK, who are your replacements that are at the job today? Now, they're not that far removed from the company and they couldn't give me the answer. They couldn't give me the answer.
Speaker 1:Yeah if I'm looking at Microsoft, they probably have a stable of people that do nothing but look at equipment houses, whether it's automotive or material handling, etc. to enhance the software to go forward. Look at Amazon. you can buy parts on Amazon, John Deere parts on Amazon. What's going on? The customer will find a hole, They will find a way and the dealers or OEMs that don't get ahead of that are going to be out of business.
Speaker 2:And I think it's really that simple, ron. It's an innovator die mentality. And the problem is and maybe that's what people want to do is they say I'll just continue on status quo. We kind of know how that ends. I mean, we've seen the dinosaurs before. We know exactly how that's going to end. I'm desperately trying to find the people that want to do something different, that want to see something different, and I think it's really important if I had a message to dealers right now, that the message to the dealers is it's time to push back, it's time to demand change and not accept excuses. I don't want to hear that your architecture or your infrastructure can't handle it.
Speaker 1:So let's get specific. What would be one area that you'd like dealers to explore to provoke them into action? Where do you think they're most exposed?
Speaker 2:I still think they're most exposed in understanding and underutilizing. I'm just going to call it machine metrics, So that's the entire machine history and machine metrics and all the service work that's gone into machine population.
Speaker 1:So let me turn that into a buzzword. Let me call that life cycle management, that I know what the expected life is of every component and every part on every machine and every application, right, correct. So let me translate that then and put a challenge out to the dealers. And let's do it for the product support crowd, because I'm on more solid ground there. I'd like every product support salesman to bring me back an accurate machine ownership list, including our meter readings and purchase date for every machine, for every customer that they cover.
Speaker 1:number one, number two, i would say for every. you can go back to your manufacturer and find out what the standard time is for all of the services maintenance services, 250, 500,000, 2000, whatever they are And based on that hour, meter reading and application and hours of use, that salesman can tell the customer how much money they're spending on maintenance on each machine. Step two is over the life of the machine. the expenses that a customer who owns a machine pays are roughly split equally between maintenance parts and maintenance cost and repair costs. So whatever that maintenance cost component is in hours is equal over 20 years to the repair costs in hours. They might have different labor rates so we can get so each. where I'm heading is every salesman can calculate what the potential business is for each of their customers. I'll bet you 100 bucks right now I won't find 100 salesman in the country that do that.
Speaker 2:I won't take that bet because I'm smarter than that. But I'll tell you. The reason I won't take that bet is not because the information is not available wrong. It's that Because I'll tell you, having had a camp in a foot in just about every single camp right now, i can tell you without doubt that information is in every single dealer's business system The need and understanding for you for them to have it. You can pontificate about it, and so can I. They're just going to look at us and go yes, i'd love that. That would be perfect. That's everything that I need.
Speaker 2:So the challenge then becomes and has been for the last 10 years well, how do I get the data out? How do I get it out into a meaningful format? How do I get it out so the salesman can understand it? I need to get a report writer. I need data analytics. I need to hire a guy who can sit there and do nothing but generate what the salesman need.
Speaker 2:That's the missing piece. That's the self-preservation of dealer business systems, where they should be employing other AI modules to go against their databases, just like you mentioned in the medical field. Go against that database, then let the salesman, in his own vernacular, in something that he doesn't have to spend 30 years to learn. Get the data out of the system in the simplest form I mean, i gotta keep coming back to it The things that you can ask a simple language module and get accurate and complete results. And this isn't a complicated question, because all you're asking it to do is assemble records and distill it down to something meaningful and give me the information back. This is not and I hate to say this this is not rocket science. We don't need SpaceX to do this. I mean, quite frankly, any one of the business system suppliers could do it, but they're so busy doing what.
Speaker 1:Yeah, i think they're asking themselves the same question Again. If you go backwards, ibm made the statement 40 years ago that they were going to get out of the software business. They were going to stay in the hardware business. And then they had a change in leadership and they reversed course. So they got rid of personal computers and stayed with the huge microprocessors, the Cray computer world. But software is their business. And look what? you know, nobody really paid much attention to Big Blue, did they? when they started beating Casper off as the best chess player in the world with the computer, you know, people really weren't paying much attention. That's kind of neat.
Speaker 1:A machine can be smarter than a person. Well, look where we are with artificial intelligence. Machines are far smarter than people today, only because they've got. They're making decisions based on array of data that you talk about and that every dealer has. But there isn't anybody in the dealership that's responsible for technology anymore. Developmental technology. They'll maintain the phones, they'll maintain the network, they'll maintain the computer system, the laptops, the PCs. They'll replace them, they'll repair them. But who's determining what the software direction is of a dealership?
Speaker 2:Well, i think nobody in the dealership. No, there's the question of the dealership. How many dealerships right now have a chief information officer, not a chief technology officer?
Speaker 1:None that I've been able to find.
Speaker 2:And that chief information officer. So now you get me all excited again, because this is the primary asset of the dealership. We can talk about all the ways they can be killed. We can talk about how they can not innovate and how they can not keep up and how somebody else will come in and eat their lunch, whether it's the likes of an Amazon and Uber. It's some kind of a disruptor or game changer. What's the ultimate value in that dealership now is all of this historical information and context that they have, and the fact of the matter is they just kind of let it languish and sit there. They don't use it, they don't exploit it and I don't even think they protect it. And I think that's now comes back to the dealer business, assistant suppliers again. They should be sitting in front of those dealers saying, okay, listen, here's how we see the future going. And I prototyped a product with a company I'll just leave it at that that did exactly this from the service side, so you could send an entry level technician into the field, as long as he had connectivity. He was prompted with enough questions that eventually it got right. I mean, it could be taken care of.
Speaker 2:The same thing is happening in the medical industry today. I was at the ER the other day and the doctor said I said who's your biggest competition? This is a locked up market. He said have you met Dr Google? He said I have people coming in already telling me what their symptoms are, what they've already diagnosed, why they're not feeling well and suggesting what medication I should give them a script for. I said well, that's got to be frustrating. He said it's not. It helps me funnel down and I can deal with the real problems because somebody's already gone through the effort of doing this. If you continue to ignore it, it's just going to be a case of you have the information. You'll give the information to somebody else.
Speaker 2:I think I mentioned in the blog article. There's a company in France right now who is pioneering some really interesting AI distillation of data and they're working with the lift truck market and they're not doing it to try and sell more lift trucks. They're trying to own the lift truck market by actually reducing the population so that redundant machines don't have to be put in place, because they could do predictive analytics and find out when a machine is going to fail. A number of warehouses and large operations in the US, canada, europe. They literally have six or seven machines that they don't require only in the event that one fails, because they have to be able to step something in. By being able to do a predictive analytics and find out what your failure rate is, just like you would do a PM on a project, they're actually talking about reducing the number of machines required.
Speaker 2:Now the sales pitch is different. When you go in, you don't say, hey, you need new machines. You say I'll replace your five machines with my three. No, i need five. No, you don't, you only need three. And here's the data to prove it.
Speaker 1:We're on the verge of that type of activity for sure. Back in 1973, i was sent over to Europe for the first trip to look at warehouses. We were a material handling manufacturer in Quebec and we were starting to have serious penetration with love trucks. Europe had a shortage of land and had a shortage of labor. Canada didn't have a shortage of land or labor. But the owner of the dealership that I worked for said wait a second. We got to be prepared for 10 years down the road when this city gets so big that there's no way we have enough land to put up warehouses. It was amazing.
Speaker 1:I went into a warehouse in Stuttgart, germany, for Kodak. It was the main distribution center for Europe for Kodak. The guy that took me over to the building was a huge building, i'm going to say somewhere in the 6,800 feet square, 60 feet tall. And we go over there. He says don't be surprised. So he opened the door and we walked in and the lights went on. There was nobody in the building. Machines were working, parts were being picked, parts were being packaged, parts were being shipped, but there was nobody there. Nobody. Automated Blew my mind. That is 50 years ago.
Speaker 1:I went to another place in Chicago, same type of circumstance and this blew my mind too. A person coming into the warehouse to pick parts that day was given their orders for the day when they arrived And the statement was here's your 500 part numbers, or whatever the number was, and when you're finished with that, you can go home. Imagine that. I mean, the world has changed but we haven't adapted. It's exactly the point that you're making, that the business systems aren't keeping up. But I'm not going to blame the business systems as much as I'm going to blame the customer. Northstrom morphed from being a shoe company to being a pretty high class store And in selling shoes the old joke was if you're a good salesman of shoes, you take the old shoes off the guy who's wanting to buy shoes Women are slightly different, i'm told, but you take the shoes from the guy and you put it a little further out of his reach so he's not going to get up and leave you And you just go get shoes and bring them to him and ultimately he buys them.
Speaker 1:Everybody has a stick. Everybody has a methodology. The trick that we're not dealing with is all of those methodologies have a life. There's a beginning and an end. They have an expiration date. We're past our expiration date on a whole bunch of things that we live with every day as people in America and Canada. It's not true around the world. We're very blessed here with the kind of economy and availability of things that we have. I'm in the Palm Springs area right now and just driving around looking at the cars. It's a very wealthy community. The people go out to restaurants, they have good quality food, they have good entertainment, they have good grocery stores. That's not true in every city in America or Canada. So how do we change this? You've heard me say I'm like a mule brain in a tin barn. I make a lot of noise but nobody's listening.
Speaker 2:So I've actually given this one some thought, okay.
Speaker 1:That's scary, by the way.
Speaker 2:Yeah, it should be. First of all, the dealers have to take this 100-day look at themselves and decide where do they want to be in 100 days. On the top of that, I think they need to ask themselves that question over the long term Is this a multi-generational business? Is this something that I want to continue? Is this a business that we expect to continue and grow, whether it's for the next two years, three years or five years And notice, i can't even see beyond five years because the rate of change is so dramatic. If the answer is yes, then there really is only one impact, one way to get change focused and to get people to pay attention to that, and it's going to happen, especially as a result of the recent acquisitions and mergers and things like that. It's going to happen very quickly and very suddenly.
Speaker 2:Every dealer is going to be faced with an opportunity and I would guess in the next 12 months to re-contract with their suppliers. And this is the opportunity, and this is the only opportunity, to sit down with whoever your business system supplier is and say, okay, now let's talk about the terms of the contract. I'm happy to sign the contract which, by the way, i have it in good authority is going to be a five-year contract, which to me, is just unheard of, since we can't predict the business three years out. We can't predict the business two years out that you want me to sign a five-year contract, but before I do that, i need to know what it is that you're going to deliver on a scheduled timeline for the first year. I'm not asking you to tell me what you're going to do for the next five years. I just want you to tell me what you're going to deliver to me for the first year And, by the way, if you can't tell me what you're going to deliver to me in the next year, i can't sign that contract.
Speaker 1:Nobody can, nobody can.
Speaker 2:Correct, correct.
Speaker 1:But they're going to. They're going to be the business system. Suppliers have been lulled into some kind of complacency because of the agony that dealers have experienced in changing business systems. They don't want to do that often. When I came down and was running EBS, when they had 450 dealers at their peak and when I got there was slightly more than 100 because it was a batch business They had an online business as well. We used to install two to four systems a month and it's painful for the dealers. The other thing that dealers tended to do I think I talked with you about Coda, a financial package out of England that Caterpillar bought a bunch of licenses for all their dealers. The dealers took the package and it made the package do exactly what the dealer financial system did previously. That's an indication of the inertia that we're trying to overcome here.
Speaker 1:Employees don't like system changes either, but one of the things I do on consulting is I get people to answer three questions and give me five things on each of those three questions. What would you like to do if you had a magic wand? Give me five things that you would do to make your life easier at work. Second question give me five things that at work you find to be a pain in the butt to do. Last question give me five things that, if you were able to make changes, would be better for your company. Then we take all these people and all those suggestions, we get a flip chart or a whiteboard whatever is up there and we make the language the same. We end up with 10 different things that are on all three lists. It would make your life easier, it would be better for the company and it's a pain in the butt for you to do. I asked the question very simply. If they're on all three lists, how come we haven't done something about it yet? Well then they start looking to the boss.
Speaker 2:That's not up to me to do.
Speaker 1:That's another thing that we're confronting because there's a generational change going on with Gen Z and Alpha's and the younger ones and Baby Boomers and the Silent Generation. The younger ones under 40 are starting to complain about we older ones over 40 because we copy everybody in the world on an email.
Speaker 2:They say why the hell are you doing that?
Speaker 1:You're just wasting my time. If I need to know about it, send it to me. If I don't, don't. There's a whole bunch of things going on out there that are it's coming. I don't know what's going to provoke it, What's going to be the tipping point, but their ability will be won. That's what we're talking about. That's that 100-day thing.
Speaker 2:I think that the tipping point for me is that the people that are developing systems now aren't people that ever stood in the end customer's feet and their boots. They never stood on the other side. I argue with somebody the other day that they never stood on the other side of a parts counter When you had a construction worker on the other side who was telling you that if he didn't have this part in 24 hours and didn't have his machine up, it was the end of his livelihood. They didn't have a farmer covered in manure on the other side that needed to get his job completed so that he could get paid, so that he could send his kids to school. Part of the frustration is and I'm not going to rail on this because I'm sure I'll get edited out for it but part of the frustration now is we have equity partners involved in all of this. They're looking at this business from an entirely different perspective. Most of us got into this industry because we liked it. We liked the customers. We liked the equipment.
Speaker 2:I used to make a joke all the time. I started playing with cranes and diggers when I was four years old and I didn't stop until I retired. Now we've got a market that's being built on. What can I do to expand the market? What can I do to guarantee revenue? What can I do to grow my company and take it public? That's different than doing it for the right reason and doing it My turn to reminisce. I worked for a guy my entire career who never once said go out and make money. His answer was go out and do the right thing, The money will follow. Quite frankly, I don't think anybody's doing the right thing right now. In fact, I believe the industry itself is kind of perilous right now in terms of if these dealers don't change, somebody's going to come in and change it.
Speaker 1:It's happening as we speak Third-party suppliers, X-Craft is a good example for me down in Florida as a man who saw a hole, a gap, an opportunity, and he created an Uber for technicians. So if a customer is looking for a repair or a maintenance, he puts something up as a text and Alex has got a bunch of mechanics who see this text and they can quote and bid and away it goes and it's wildly successful to be expected. The world has changed. It's kind of fun. I don't know where we go.
Speaker 1:We used to have a thing in Quebec we called PBQ Profitable Development. In Quebec. We had two meetings a year. They were for three days Friday, Saturday and half of Sunday. Everybody would come in from the territory That's the province of Quebec. We'd have about 100 people in the room. We'd have speakers come in who were leading edge people, because that's the leader. The owner was very, very much a thinker, He was an engineer but he was a peddler at heart, which is an unusual combination. And out of that meeting twice a year we would have a series of projects that were given assigned with dates to be done before the next meeting. So the beginning of the every meeting was a review of everything that was assigned and how they did. Next was a state of the economy and the market and the business, And then next was what do we need to do to get better? I would love to have dealers go back to that kind of circumstance. Oh, now you got the brains back in the family, Just my dog.
Speaker 1:There's little dog on his lap. Yeah, way to go. No, but it's kind of interesting. Let's have a review, a formal review, with the leadership of the company twice a year. What have we done in the last six months? What's the condition now? What do we need to do now And who's going to do that for us? And we'll just keep doing that, but nobody's doing that anymore.
Speaker 2:And hence the reason I am asking about a hundred days, because you're talking about a hundred years ago. well, in your time, when you were talking about doing it six months, and now I think things have accelerated. And my question is it's the what's changed in a hundred days and what are you doing to answer it in a hundred days?
Speaker 1:And the problem with that, John, I think is the capacity of people to handle that. Rate of change is really limited. Change is difficult.
Speaker 2:I agree, but I think you're underestimating today's workforce.
Speaker 1:Oh no, i agree with you a hundred percent. You don't want to get something done. The old days It used to be. You want to get something done. Ask a busy person. Today, i want to say you want to get something done. Ask a young person, and by young I mean somebody under 30. The capacity and great opportunities have reallyOut Viewed in Tsui educational background of people under 30 that cared about what they were doing is astounding. They make what I. I mean it was almost like I went to grade school and that was it. Some of these young people are so damn smart it drives me crazy. I can't keep up anymore.
Speaker 2:So take those same young people and have them walk in and stand behind a parts counter or a service counter, be a service coordinator, and let them look at the systems and watch their faces.
Speaker 1:Oh, you know who is it in Canada that Canadian tire? They've they've had leading aid systems for you ever. It's replacement parts for cars and all bender of people Once a year. I don't know that they still do it, but they used to have a once a year. High school students would come in and have to stand behind the counter and perform the sales job And there was a contest for the high school student that could find all of the parts that customers needed fastest And there was not one employee that was able to keep up with those high school kids who didn't work in the company And that was kind of the carrot in front of the current employees face. To get better, to continue to get better, you got to keep learning, you got to grow because these young people coming up, holy mackerel. So Oregon, as an example, does not have self-serve, didn't used to have self-serve gas stations.
Speaker 1:They thought it was a better idea to keep people employed. Paris, france, has people sweeping the street every morning at four o'clock because they don't want people on unemployment. They have one of the highest tax rates in the world. They deliver mail twice a day. You know, there's, there's ways to handle all this thing societally, through sociology. We're heading for some serious, serious stuff in the next number of years.
Speaker 2:So let's, so let's discuss this. We'll put a pin in it and come back in 100 days and tell me if we're just still talking about the same thing over again.
Speaker 1:So, let's, let's change that around this. I'm going to call this July one instead of June 23rd or whatever it is, and let's say it's going to be October one. We'll do a follow up on this one.
Speaker 2:Okay, and I'll give you a mission.
Speaker 1:I'll give you a mission. Give me three dealers or three business, anybody who's made change in their particular sphere of influence.
Speaker 2:Sounds, sounds like a plan, and if it's, and if it's nobody, you know what's going to happen.
Speaker 1:Well, if it's nobody, then that creates an opportunity for you and I will. We'll host a meeting somewhere in warmth in the winter and invite dealers, for a fee, to come down and talk, rub shoulders with how we're going to go forward and make change.
Speaker 2:Sounds like a plan.
Speaker 1:Okay. So now we've been pretty critical here, pretty negative here about the world that we're in, i think justifiably So I'll take some of the blame, like you, but you wrote that damn blog. Don't forget that It wasn't me that wrote that. How do you want to end this? Can you give me an optimistic upside?
Speaker 2:Yeah, yeah, i can. The good news is there are people making change right now. The good news is, all the tools are in place to make that change. I don't want to say the bad news. I'll keep telling you the good news. The good news is, with equity investments in the market, there's more capital to spend to be able to make those changes.
Speaker 2:You know I can tell you all the bad things about mergers and acquisitions. The interesting thing is, right now we have one company that has the largest sales force, that has the largest development team, that has the largest capital assets and probably has the largest customer base. So there are people poised to be able to lead and make significant change. So all good news. The good news is we're going to come up with a very employable marketplace of people because jobs are going to change and we're going to need people to be able to sell parts and pick parts and pack parts and ship parts. There's a lot to be optimistic about. What you can't do is stick your head in the sand and just hope you don't get run over, because you're going to get run over.
Speaker 1:Your daughter is how old?
Speaker 2:now 23 years old and teaching me something new every single day.
Speaker 1:So my grandkids are in the same category 18 and 22 and it's scary You'd say the same thing about your daughter. What they know, how they think, how they operate, is totally different than what I did and what you did And it you know. The same thing is true with my daughter. She's much smarter than I ever was And I think generationally we've missed out on taking advantage of the younger people, giving them project work.
Speaker 1:I was dealing with a group of people this week about 40 of them that sell parts on the counter for a large dealer And they're driven by the sales per employee number And they've got a reasonable standard and that standard has been around forever. I'm guilty as the next person. 1980, i provided a standard for the industry. It hasn't been updated, but each of the stores was understaffed. So what I was probing on and trying to help them grasp was 50% of their customers have no contact with the dealership unless they call the dealership And by not having anybody touching the customers, that customer is vulnerable to competition And they all acknowledge this. And I said I'd like you folks to be able to make outbound phone calls to people that are not assigned to a salesman today. How many can you make. The answer, without exception, was zero. I'm too busy, i don't have enough people. Now I said, okay, wave a wand, i'll give you more time. Tell me how much time you need every day to be able to make two phone calls outbound to customers. They said 20 minutes. I said, okay, if I can get you 20 minutes, i'm going to give you 40 customers. I want you to start making calls on those 40 customers at least once a month. Question do you think you could get more business out of those customers, without exception, absolutely. Why the hell don't we do that?
Speaker 1:Another dealer different examples, same result Said to me Ron, you've been pushing me to do this for years. I finally broke down and did it in a store. Every single time I add a parts person, my part sales goes up. I said does that surprise you? He said not anymore. What it was a reflection of is I was fat, dumb and happy thinking the customer service we were providing was sufficient. It obviously was not. So he's going forward, he hires a person and it keeps on going. Every time he hires one, the sales go up. He's got stair steps that logically apply it.
Speaker 1:So I asked another guy in the neighboring state who's in the same type of circumstance. Do you want to follow his example? He said oh no, i'm worried about the economy. Interest rates are going up. Inflation is bad news. I'm going to have to start laying people off. Real. Of two people, both about the same age, both extremely intelligent, well-educated, experienced, one of them is obviously right and the other one is obviously wrong. The guy that's right doesn't want to. He'll pass it off. Guy that's wrong will debate forever to say he's right. It's an amazing world we're in.
Speaker 2:And just to add to that little piece you remember the article I wrote that went meh. Yeah, You don't have to be much above meh these days to be able to have people compliment you on your customer service. Our expectations have dropped so low that you would be surprised at how little attention has to be paid to a customer for you to win that customer over.
Speaker 1:My wife and I were out to dinner last night at a restaurant We particularly like. It's run by a man from Colombia and his wife from France. It's called the French Ritisserie. If you're ever in the Palm Springs area, it's a wonderful restaurant. Lewis has his name. He makes his own sangria.
Speaker 1:Sangria is something that I particularly like because of all the time I spent in Spain And in Spain in Barcelona anyways. Almost every restaurant that has a sangria has their own recipe. Well, lewis has a recipe and I all of a sudden like his white sangria because he mixes tequila and rum in it. It's not just wine and fruit. He puts whiskey and vodka in his red sangria. I love them both.
Speaker 1:So why'd you do that? I said you drink too much. Is that why you did this? He said, yeah, i drink it to make me. What do your customers think of this? They love it.
Speaker 1:What made you do it? Well, i didn't like the old fashioned thing. I made a change. He's got a wonderful restaurant. The menu is fantastic, the food is fantastic, the service is fantastic. So it's quiet here. Now It's summertime, it's 110 degrees. Everybody's left Very few people in the restaurant. Everybody that's in there is a repeat customer. There's a guy in Paris who works at the bar. His name is Colin Firth. He's been the best mixologist in the world three or four times in the last five, eight years. He works at oh, i've Louis George Fifth or something, and he's asked a question how do you define your good customers? Is this kind of a cheers story that I like to go to a place where everybody knows my name? He said no, my measure of my customer repeat business is not when they know my name or I know their name, but it's when they know each other's names. That's an interesting change on customer service, isn't it?
Speaker 2:Absolutely.
Speaker 1:You're going to come to a place that it's kind of like the old pub in Britain. 200 years ago everybody went to a public house to have meals And it was like society. We got to get to that place with systems, with businesses. We got to reach out all over the place and ask for help And you're right, there's a lot of positives We have greater than ever.
Speaker 1:We have more computing power than ever. We have more technology and equipment than ever. We have smarter people than ever. We just don't have a lot of leadership taking us to the promised land anymore. Any last shots.
Speaker 2:No, that leadership's right here on the phone. Call Ron. That's the problem. Everybody that knew something is starting to say, hey, it's time to move on, to move out to sunset. We did a bad job of passing the torch.
Speaker 1:Well, i guess that's, but I'm still trying. I'm not going to go until I get the torch out of my hand. The last thing you're going to see is me on the ground with the torch up in the air. Thank you, john, for the discussion. Thank you everybody for listening. I hope we've provoked some thinking on your part. There's a lot of opportunity, but there's a lot of work to be done. All of us together. we'll see you at the next candid conversation. Mahalo, thank you.