People-Smart Leadership Principles
Imagine a dealership where employees are fully engaged, supervisors inspire loyalty, and turnover is minimal. Customers feel the difference, and the financial bottom line reflects it.
Now, imagine the opposite, a workplace where employees feel undervalued, disengaged,
and leaders fail to inspire. Which scenario sounds more like your dealership? The data shows that leadership training is the key to building the first and avoiding the second.
Eighty percent (80%) of the dealerships participating in 2020 and 2024 NAEDA Workforce Studies told us leadership training is needed within their dealership. This statistic alone should raise a critical question for every dealership: Are we investing enough in developing our leaders? Keep reading to discover what else the data reveals.
Employee Engagement
The Dealer Institute conducted employee engagement research across eight stores to identify the leadership practices leading to highly engaged employees. Employee engagement is not just a feel-good metric—it directly impacts the dealership’s bottom line. Studies across industries consistently show that engaged employees outperform disengaged ones, reducing turnover and driving higher customer loyalty.
Employee engagement is measured by a combination of three characteristics:
- The physical intensity of the effort put into their daily work.
- The emotional engagement as measured by the energy level put into their work. The cognitive effort or degree of being focused on their work.
We also studied the following eleven behavioral mediators to identify the leadership practices that are correlated with employee engagement levels. These behaviors provide a roadmap for dealership leaders who want to create a workplace that retains employees and drives peak performance.
1. My work challenges me to do my very best.
2. My work is meaningful, i.e., I do what I do best every day.
3. I feel as if I make a positive difference for the company.
4. I am cared for as a person first and as an employee second.
5. I am empowered with the authority to make independent decisions.
6. I have an excellent working relationship with my supervisor.
7. I feel that my opinion/input is valued.
8. I have a great deal of confidence in the senior leadership to drive the company’s success.
9. I have the necessary resources to complete my job responsibilities successfully.
10. I view my employment with the company as a career and not just a job.
11. I feel supported by the company in developing my skills that promote my career.
The intent was to pinpoint the leadership practices the dealerships could employ to yield
higher levels of employee engagement. Statistical analyses were completed to determine the degree to which each of these 11 mediating factors contributed to employee engagement. The rank order of the first five positions is listed below, and the rank is in parentheses.
- I am cared for as a person first, and as an employee second. (1)
- My work challenges me to do my very best. (2)
- I have a great deal of confidence in the senior leadership to drive the company’s success. (3)
- I feel that I make a positive difference for the company. (4.5 — tied rank)
- I have an excellent working relationship with my supervisor. (4.5 — tied rank)
Notice how the top-ranked factors focus on how employees “feel”, reinforcing the idea that a dealership’s success depends not just on selling equipment but on fostering an environment where employees feel valued, challenged, and empowered.
Senior leaders play a critical role in setting the example for downline leaders/supervisors to implement these behaviors throughout the dealership. One leader using toxic behaviors can wreak havoc within a store. If you were to survey your employees today, how many would say they feel genuinely cared for as a person.
You may be interested in seeing the rank order of the remaining order of the remaining six practices, so they are included for your general information. We’re not downplaying the significance of
these behaviors, as each is important in its own right. The DI’s leadership training incorporates these eleven leadership practices:
- I feel my opinion is valued. (6)
- My work is meaningful. (7)
- I have the necessary resources. (8)
- I am empowered (9.5 — tied rank)
- The company supports my skill development. (9.5 — tied rank)
- My employment at the company is a career. (11)
The statistical analysis tells a powerful story. Let me share a couple of examples that emerged from the Dealer Institute’s Leadership Modules that emphatically tell you that leadership training is needed.
Supervisor = Teacher
Since we’re emphasizing the critical role of a supervisor, this next example never fails to
shock me. Time and again, I hear supervisors claim that interpersonal skills can’t be taught! This belief isn’t just misguided — it’s harmful. It implies that employees either naturally possess these skills or they don’t, completely disregarding the reality that leadership and communication are learned abilities, just like any technical skill.
Supervisors who adopt this mindset are setting themselves up for failure. If they believe interpersonal effectiveness is innate rather than developed, they’ll never be able to coach employees toward improvement. We strongly recommend reading Christine Porath’s books, “Managing Civility” and “The Cost of Bad Behavior”, which expose some of the worst supervisory mistakes and the steep price companies pay for them. The consequences can be downright alarming.
We thought you would be interested in the opinions offered by employees attending DI’s leadership course about what supervisors can do to show “caring”, and these are listed below.
Note how simple each is:
1. Greet other team members in a friendly manner.
2. Talk in terms of others’ interests.
3. Be sensitive to others’ discouragement/ frustration to provide a needed word of encouragement.
4. Participate in the excitement associated with success by offering sincere recognition.
5. Encourage others to do their best.
6. Compliment individual/team success.
7. Positively recognize the assistance offered by others.
I know for a fact that people can change their behavior because, in my younger days, I was a shy, introverted college student, and I started practicing telling strangers, “Good morning.” Now, my wife wishes I would shut up! This personal example shows that interpersonal skills, like greeting others warmly, are learned behaviors, not inherent traits. If a severely introverted person can learn to be more extraverted, so can any supervisor change if they are willing to put in the effort.
Retaining Employees
Another reason driving the need for leadership development is that toxic supervisors drive employees away. Obviously, that’s the last thing you want to happen in a tight labor market. It is well known in leadership circles that the number one stressor in an employee’s life is their supervisor. Additionally, the number one reason employees leave is the relationship with their supervisor. This means that leadership training isn’t just about improving efficiency, it’s about survival in a workforce that demands better leadership.
In Closing
The real question dealerships must ask isn’t whether they can afford to invest in leadership training but whether they can afford not to. Employees are a dealership’s most valuable resource, and failing to develop strong leadership skills within the organization comes at a steep price. Poor leadership and ineffective interpersonal behaviors create disengagement, turnover, and inefficiencies that ripple across the entire business.
Research shows that organizations with weak leadership lose 20-25% of their operational efficiency due to miscommunication, low morale, and disengaged employees. That’s not just an abstract statistic—it’s lost revenue, wasted time, and missed opportunities. Take a moment to calculate your dealership’s cost per hour and consider what a 25% loss in productivity looks like on your balance sheet. The numbers will be eye-opening.
Leadership training isn’t an expense; it’s an investment in higher performance, stronger retention, and long-term profitability. The choice isn’t whether to invest in leadership — it’s whether you’re willing to continue paying the price of not doing so.
Article Written By: Larry Cole, PH.D. and Michael Piercy
LARRY COLE, PH.D., is a lead trainer for and consultant to the North American Equipment Dealers Association’s Dealer Institute. He provides onsite training and public courses to improve business leadership effectiveness and internal and external customer service. Please send questions and / or comments to Larry at teammax100@gmail.com
MICHAEL PIERCY is the Senior Vice President of Manufacturer and Dealer Relations for NAEDA. Piercy joined the association in 2015 to help build the Dealer Institute as a complete solution for industry training and consulting needs. With over 20 years of experience in leadership, training and strategic development, Piercy brings a wealth of expertise and dealer-first perspective to his new role, leading NAEDA’s efforts to strengthen the partnership between equipment dealers and manufacturers across North America.
