Reading time: 19 minutes
People’s issues are delicate, private, and multifaceted. However, it is essential to the car business. And even more in retail.
It’s also important to be honest and transparent about how we manage people.
If you are responsible for a business, you need to see things as they really are. But people won’t tell you the truth if you are their boss. Because in large corporations, sharing the truth can hurt your career.
The next interview will be quite different. The next person I’m going to talk to is called Marco Conti, but that is not his real name. I changed his name to protect his privacy: he is motivated by achievement, not appearance.
Marco Conti is an industry insider. He speaks about things that never get published.
He is the Managing Director for a Car brand in one of Europe’s bigger countries. He has had this job for over 5 years.
I asked Marco for an interview after seeing his quarterly management presentation. I had the impression that the figures for market share, sales, the order bank, dealers, profits, and customer satisfaction were exceptionally good. Therefore, I asked him to share his insights. I was interested in what he believes and how that helps him run a successful NSC.
Steffen Szameitat: I always start with the same question: What is your dream car?
Marco Conti: It is always the company car. I am driving my dream car. But the answer is a little bit longer. Steffen, I am not a car person. That is the whole thing. So, I do not have a dream car. I do not mind what I drive. Imagine that in my whole life I just owned one car, which was my previous company’s company car, which I bought. And funnily enough, this is exactly the brand that I work at now.
Steffen Szameitat: And even for the future, this remains the car you need to have.
Marco Conti: Yes. The car is just a means to an end. And I like business and I like solving things. That’s the whole thing. So, no dreams about cars. Sorry.
Steffen Szameitat: When we met last time, I was impressed by what you taught the team about your market. And your philosophy on how to run the market. You started as a CFO and then later you took over as a managing director.
Marco Conti: And the funny thing, Steffen, is, that I have not looked for this position. I never thought that I would work at a car company. And I just got a call from a friend of mine. He needed a CFO. And I joined the team for a few months. I thought I would be here for six months.
And here I am after ten years. That’s life.
Steffen Szameitat: And it is an interesting life. With this experience, what are your guiding principles to set up and run a market?
Marco Conti: It always starts with the people.
I am not a car person, as you know, but in the NSC (National Sales Company), in any car business, you need to have those car enthusiasts.
In the previous company it was the same thing. We had the best people in the market. That was a phone company. You have those fanatics, car and phone fanatics. These are the guys that you need. These are the people that you build on.
And obviously, you have other people as well.
Everything starts with the good people and the team that you have.
Steffen Szameitat: These are the people who are motivated by more than just money.
Marco Conti: Exactly. And that is the whole thing.
Whatever you do, whatever team you have, money is a big motivator. If it is not enough, then people get demotivated.
Is it the only motivator? No.
You must believe in what you do. Something bigger. We know, not a lot of us believe in God nowadays. But that was previously a particularly important thing. What remained is: People love stories, we dream stories.
We go for it. And this is something you can use to motivate people.
You must be close to the people. And you create something bigger than you.
That is the thing that drives them, something that they are immensely proud of.
Steffen Szameitat: What is your role as a leader of the team?
Marco Conti: Most of all, my role is taking off the stress.
This is very counterintuitive to what all the other managers are doing. But some see the business as McDonald’s: The process is king. You change the people like gearwheels. It does not matter who they are. Leading is quite simple.
But in all industries that are built from human ingenuity, you must think first about the people. The employees, but also the customers.
So, I see things very differently. You get so many conflicting messages and stress from the world around. Setting targets is not fixing this.
My role is motivating people and getting the stress as low as possible.
They do not have to know everything. But they need to know a lot. Because the other side is building trust and helping them understand. My people know more than usual, I share quite a lot. So that they know the context.
But I do not expect them to know everything. It would be too much to know everything. I try to protect them from a lot of things.
Steffen Szameitat: Let me understand stress better. Because stress can be a lot of things. Stress can be you are overwhelmed with information, but stress also can be giving people a challenge which they barely achieve. But then they grow, and they suddenly achieve it. So, what is it, Marco?
Marco Conti: It is a lot of things. Life is incredibly stressful today.
Especially during the pandemic, a lot of people were at the breaking point. Some have been beyond.
In our case, we supported people that chose therapy, psychoanalysis.
I highly recommend it to everyone.
Myself, I had psychoanalysis for five years. I finished my psychoanalysis during the COVID. This changed my life completely.
Three months after COVID started, I concluded that meditation and other mental well-being measures are enough. So, I tried to apply that perspective.
In management team I had one guy. He caused many problems, and it was getting worse. In this situation, we organized a retreat, with a famous psychologist, for two days. The only person who knew was my HR manager, who helped organize the whole thing. Soon after the two days retreat, he started therapy. He quit the therapy after a few months, but now he is there again. He is so much better… and now he knows the whole story.
People have difficulties. Life is not always easy. But there is this perspective: It is not about you. Very often we think that we are alone. That we are special. The funny thing that I learned early in my journey: I was not so special as I thought I was. A lot of people have problems. Everyone has different problems.
Even if you look at Elon Musk that is one of the narcissists of our world. He is a tremendous businessperson. He is super great at everything, but he is a psychopath. He is a narcissist.
A year and a half ago, I saw an interview with him and the TedTalk founder. There was this thing when they showed how good a father he is. His five-year-old son was sitting on his knee like at the end of the jump off. He was not hugging him. They were not hugging. There was like 30cm between them. And he was looking at the little guy and smiling.
I have kids, and that is not how you love your kid. You never sit with your kid on a lap, and they are not hugging you.
Everyone has problems. And this is leadership: Creating the team and getting much deeper than targets. Understanding personal challenges.
I go deep.
Steffen Szameitat: That is something I did not expect. I have never heard stuff like this in a business context. I am a trained psychologist. Wow.
Marco Conti: So, you know the stuff.
Steffen Szameitat: I understand exactly what you are talking about. And Elon Musk, he had this famous interview, and they stumbled over a kind of medical subscription. And then he mentioned that he is suffering from depression. You know, Musk.
Marco Conti: He is suffering.
I have a friend like this who is 192, I am 182cm. I always thought he was my height. And once he told me he was 192. Come on. And bloody hell, he was like this.
Steffen Szameitat: But I have to ask you, for what purpose we have processes and systems?
Marco Conti: We need them. People are especially important. But at the same time, you have a bell curve of capabilities to consider.
Let’s talk about salespeople.
You have those excellent people who have their own way of doing things. And they are selling hundreds of cars, right? They are so good.
And then you have “normal” guys, the “average” and the “a little bit worse.” And they need processes.
When you run a big business, the customers must be certain of the level of service. And to get that, you must train the salespeople. You just must.
You need to get to this average, which is high enough. And that is why you need those processes and everything. You can go as far as McDonald’s. They are excellent at what they do, but there is not much human interaction there.
But in our business, you still need the interaction.
Because even a non-premium car is the second biggest ticket item that you are going to buy in your lifetime. After your house, your apartment or whatever the mortgage is.
Everyone is equal in this case: customer relations and how the customer is treated. Even if you do not buy a premium car, and you buy a normal mass market car.
It has to be an experience.
If it is not an experience, will they come back to you? That is the
question. If you sell something that is such an important thing, the dream car for someone.
For people, there is so much emotion in the whole car business.
Steffen Szameitat: Which is fantastic. But I do not have this fascination of owning a certain car.
Marco Conti: I do not have it, too.
But to nurture this emotion, to provide good service to customers while keeping the cost low, you must have a motivated sales force. You must motivate the whole environment.
Because the whole thing is interconnected.
I do not believe that processes are the most important. Everything needs to work.
Steffen Szameitat: We are now more in a digital world. And going increasingly into direct sales. And a programmer needs to have a process. Otherwise, you cannot write code. But obviously, there is always a human component to it. What is your take on that?
Marco Conti: The human component is especially important. Even if you have programmers, they have enough stress. It is not easy to be a programmer. Be at work alone. The entire day they usually work alone. I have never run a company like this, but I also imagine that if they are engaged, if they believe in what they do, if they are proud of what they do, it makes a whole lot of difference.
Steffen Szameitat: My question was more to use this analogy of the bell curve. On the right-hand-side we have the geniuses. They can walk alone. They do not need to have a scaffold. They do not need to have policies or directions. They know better than anyone who can write down a process or a policy. On the more left-hand side there we need to support. Now we have the activities of a perfect salesperson going into a process. I can understand that if you motivate the left-hand guys, you motivate them, you give them sufficient money, you take the stress away, you focus them. This is what I understand. You train them. You bring them up. So, you do not need to have a lot of processes.
But now you have this digital world…
Marco Conti: But do we really have the digital world?
There was this hype going into the direct sales. But even if you look at Walmart: everyone is going into omnichannel. Tesla is going into omnichannel. Everyone is going into an omnichannel because that is the only thing that works.
You must combine both worlds: digital and people.
Amazon is amazing and extremely focused on direct sales.
But you have other companies, manufacturers, or incumbents. For them, the dealer network is a big asset now. The question is how you use the asset. How do you treat them? How do you deal with them after mistreating them?
And that is always a balance.
You have, for instance Apple. Apple is an excellent business. But they treat the suppliers not well, twist them to the bone, right? Hardware manufacturers, app developers, for instance. And now they have a big backlash.
When do you become this bad boy? Apple was always the underdog, compared to Microsoft, for example. Now they are not the underdog but the gorilla in the glasshouse. They are big.
They are big. They should be incredibly careful and treat this position responsibly. Because there is always an inflection point. As manufacturers we have the responsibility for the whole environment. And if you squeeze too much, it can go on for a year or two. But then you will see that the business itself does not work so well.
This is the balance.
At the same time, the dealers also expect that everything goes according to their rules. It is always the balance. And the question is where the balance is. This is how you build trust in the system.
You do not earn 100% in the perfect world. You go for 80%, 90%. And in this way, over the long run, both parties earn more money. If you squeeze too much, you fight too much. Obviously, there is an inflection point.
Of course there are some conflicts, and this is normal. But, you know, we are the leaders. We are the leaders for the dealers and how to create value. Obviously, they are company owners and know what they want. But leadership and trust are the key everywhere.
Steffen Szameitat: Okay. Imagine we have a stack of cards. There is one card, which is “product.” You have another card “people,” then “dealers,” “processes” and “systems.” Five cards. Can you put them in order of their importance, please?
Marco Conti: An incredibly good question.
The product is something that you do not have a lot of influence over. It is like whatever is on the road now. Or a new product that started five years ago. Product is important.
But if you have good people and you have good processes, even if the product is not top notch, you can still sell, if you build the other stuff. You do not have to have the best product. All the products have some compromises. There is no perfect thing. There is no ideal product.
It all balances.
People are particularly important. I mean everything is important, the dealers for example. It is all interconnected. Dealers also have people, processes and systems that are crucial too. If you do not have them, then you are going to suffer anyway.
Obviously, depending on the level of your sales: If the sales are not big enough, then you can cope without a system. But at the end of the day, you can have the best people. But if the product sucks, if the systems are not there, if the processes are not there, you still will not be successful.
It is all interconnected.
The ranking might be unique for each NSC.
They have some quirks that are different from country to country. The cultural differences are significant. There are a lot of things that are just a little bit different. The control over the dealer systems, for example. You need to have the same dealer management system so you can control them. You must have the same web pages and the same marketing campaigns. Things like this are not easy to fix.
But obviously you look at certain situations and you see where you have the biggest gaps and then you try to fill them in.
In most cases, the system usually comes from the manufacturer headquarters team. You can tweak them only a little bit. Some of the systems must support local processes. Product is almost 100% with the manufacturer headquarters. And people, you always try to get the best people and that is what you aim for.
Steffen Szameitat: You started our interview with people. And I understand this, “taking the stress away” is keeping the focus. Let people work and let people concentrate on the task at hand.
Marco Conti: That is correct.
At the same time, you need targets.
You need the time and people need the target. For instance, salespeople need to know the price for cars they need to sell. Otherwise, they get the minimum price, and they get bonuses for them.
The same is with the dealers.
You need to steer it, and there is still a lot of stress involved. And that is why you must take the stress away. Because inherent in the system is stress.
There is no other way.
Steffen Szameitat: The wholesale industry works in a way that the headquarters, the OEMs, assign managers to run a country. And they rotate typically.
Marco Conti: There is a big misunderstanding, particularly at the OEM levels.
Wholesale business means that you sell to the dealers, and you do not care about the end customer. Which is not the case.
If you do not care about the end customer and you only sell to the dealers, you will never be successful. The wholesale business, as it is called, is a misnomer. It is not really the case. I do not care about selling to the dealers. This is not sales for me.
You know, retail orders. The end customer, this is the most important thing. Because even if I say to the dealers how many cars I can put into their stock for a month, maybe two if the wholesale financing, if the credit limit is big enough. But then I am screwed anyway, then you know it does not work.
Wholesale business is not wholesale business. It is a direct retail business. And if you do not think about it this way, you will not be successful.
There is no other way.
Steffen Szameitat: This calls for a program to train everyone in headquarters and in wholesale selling cars.
Marco Conti: Yes, exactly. They need to know.
We are lucky enough because we have at the NSC a dealer. We sit above the dealership. We even supervise them. They run independently. But I know the dealer business inside out. I know how it works.
Which is important because this is a crucial part of our business.
Steffen Szameitat: Now I come back to my question. Typically, headquarters is moving people around, from NSC to NSC. This has a positive aspect that you share best practices from one market to another. But people are moving quite quickly. As soon as the market works somehow, those people get promoted and they leave the market. My question is: What do you think is a good tenure as a leadership team. As a MD in a market to establish the right focus for the people, the right balance between product, dealers, systems, processes, etc.?
Marco Conti: Good question.
Steffen Szameitat: This is a €100 million question.
Marco Conti: I know. And the thing is, there is no easy answer.
The biggest problem is that the MD position is a steppingstone. It is not the end position. Usually, you get a three-year contract. So, you get there, you are from the outside. You do not know the market very often. You are an outsider, you are a foreigner. You do not know the specifics.
Then you need to rely on extraordinarily strong local talent.
The CFO must be a partner. It must be a long-term CFO, for instance. You must have a strong sales director, who has also been there for a long time. But then they know that they will never get to this MD position. In this case you will not have the best people most of the time. Because the best person will have other ambitions.
Because they would like to be the MD sometimes in the future.
If you have all the time the expats coming into the market, then basically you do not get the best people at the management level. And that is one of the issues that you have.
Another issue is that when you come in, it takes you a year to get to know the business.
Usually, you have no idea about how commercial things work. But you need to know the whole business, and you need to know the intricacies and everything. I am not saying it is rocket science. It is not exceedingly difficult. But sometimes, these ridiculously trivial things that you cannot see are vastly important.
You are there one year. And you try to run it the right way.
Can you earn the trust of the dealers? I doubt it, but it is possible. But then another year. Then the third year, and you look for another job because your contract is up.
This is just not sustainable.
If we want to have excellence, I think that five years would be a minimum in such a scenario. When I look at the MD levels. The best are usually local and long-term guys. So sometimes they run the business for ten or 15 years. They are usually the best ones because they know it so well.
Another thing that is extremely dangerous is when you are a new guy, you want to prove that you are better, that you are doing something better. We can do a lot of stupid things, short term things that look good on your CV but are detrimental to the business because you are gone in three years anyway, so you do not care about the long term. You had this success, you came in, you increased the sales by 20%.
But what did you do to get this 20%? It is not so difficult to increase sales by 20% if the market does not use… I call them drugs, like selling car batches to the financing guys. You can use brokers. All the things that you should not do.
You do it. And now because you did them, you cannot get off this. That is why I call them drugs. Because you cannot get off them, because your sales would fall. For a brief time. I call them drugs because they damage your long-term business. They damage the dealers because you undermine them. You create competition, which is not necessary competition.
When you sell the batches of cars to the financing providers, you do not sell insurance, you do not sell financing. You do not earn money on those cars. They very often are not serviced in your dealer network after warranty.
You lose a lot of business over time. It is a short fix.
Steffen Szameitat: Marco, most CEOs in the automotive industry are engineers. They do not know a lot about sales. Let us say, you could educate them. What are the three sentences you would let them know?
Marco Conti: Engineers are not concerned primarily about people. But the whole sales business is about people. And that is one of the sentences.
The other sentence is about understanding the customer.
We need to think differently about direct sales. Why direct sales? A key assumption is that every customer likes direct sales, and that they will like one price. But the thing is, with one price, if selling cars…
We talked about this. It is all about emotions. If you do not get people’s emotion, you will not sell the cars. But emotions are stimulated by the perceived value of a purchase.
For example, you sell a €40,000 car.
Your ticket price is €40,000. And you have competitors who are selling this car online. And their MSRP is €40,000 and they sell it for €40,000. And then you have one competitor who has the MSRP at €50,000, but they sell it also for €40,000. This one says to the dealers: You get this 20% discount.
Let us take the perspective of a customer. The car’s perceived value is not this €40,000. For the one who buys this €40,000 direct: maybe.
But if they know about the other brand for €40,000 for this car, perceived value is €50,000 and they are convinced: “I got the better deal.”
So, which one would you choose?
And 90% of the people would obviously choose the €50,000 car because it is worth €50,000 and I bought it for €40,000.
And this is a thing that direct sales are not so great at.
Nike Store went fully direct. They cut a lot of wholesalers. They cut the retailers all over the world. And the suffering now. They are going back. They must.
There is no silver bullet that you get, you know everything. There is nothing like this.
Steffen Szameitat: Thank you, Marco, very much. I did not expect this detailed and frank interview. This will stimulate hopefully a lot of discussions in many markets across Europe. Thank you, Marco, for sharing your insights and experiences.
