DIGITAL TRANSFORMATION TO TAKE CAR AUCTIONS INTO THE FUTURE

BECOMING ONE MANHEIM… RIGHT NOW

Context

Located in Atlanta, Manheim (a business unit within multi-generational, family-owned Cox Enterprises) is heralded as a leader in the vehicle re-marketing services arena. With its 20,000 employees in 125 auction locations around the globe, Manheim is transforming the wholesale vehicle buying and selling experience through investments in technology and innovative products and services – shifting the auction experience from an in-person one to an online one.

Founded in 1945, the company grew through acquisitions and partnerships over the years. Many of these auction houses remained locally run and operated. With a changing marketplace and digitalization impacting the industry, the old way of working was no longer sufficient to keep pace. Like many companies, the team experienced a “cultural hangover” after several years of recessionary reorganization and increasing industry competition.

The executive team knew change was urgently needed to regain employee morale and maintain their leadership position in the market. Because of this, they named their transformation effort “Right Now.”

Research sets the right tone

The first step was to conduct a comprehensive, all‐employee opinion survey – Manheim’s first in several years. While the results illustrated highly engaged employees with an overall positive score of 78%, the survey also identified critical opportunities to help empower Manheim’s workforce. Many felt strong ties to their local market, but not to Manheim as a whole. Less than half of employees indicated agreement with the statement “At Manheim, it’s acceptable to take a chance on an idea that doesn’t work out.” In its report to Manheim executives, the survey vendor’s top recommendation was to foster a culture of speed and innovation.

The assessment was clear, and Manheim rallied around Kotter’s philosophy that to change behavior, you have to start by creating a sense of urgency. Rather than relying solely on books, Manheim brought Kotter in as their partner to help ensure a successful transformation.

"Right Now" is born with a case for change and the urgency to win

Manheim’s leadership knew it was critical for employees at all levels – from auction staff to the executive team – to:

Create collective understanding and excitement about the future of the company
Rebuild an open, honest and direct culture focused on serving the customer
Cultivate a culture where employees are collectively focused on driving the organization’s transformation as One Manheim

In order to move towards these objectives, the leadership team partnered with Kotter to articulate a Case for Change. They leveraged existing data and inputs (such as the employee opinion survey) to create a shared understanding amongst the leadership team of the business outcomes they wanted and the behaviors they needed to see adopted at scale. In addition to aligning around a specific business Case for Change, an expanded leadership team of more than 100 people helped author an Opportunity Statement to make the vision and mission more relatable to every employee in every function of the company. The statement included two important calls to action:

1.for everyone to better serve customers
2.improve operational efficiency by putting everyone’s talents to work – every day – through passion, innovation and determination.

To generate buy-in and commitment to action towards this new future together, the Manheim team mapped out a plan to generate a true sense of urgency around the opportunity. Part of that design was to launch the Right Now community, which was set up on Manheim’s employee intranet, Main Street. Accompanied by a full communications plan to socialize the Case for Change was the introduction of a grassroots movement to share wins associated with the ongoing success of this transformation. The goal was to bring visibility to everyone around how their contributions were moving the organization forward – demonstrating and celebrating signs of progress instead of waiting until the end to declare victory.

As they rolled out the “Right Now” program, Manheim invited employees to pledge their commitment to help make the Opportunity Statement a reality, setting a goal of 50% engagement. Using local and networked teams focused on recruiting volunteers to join the movement, Manheim surpassed the pledge within four months. In addition, more than 300 employees completed a combined 2,500 hours of training to lead the charge.

Learning from What Worked

WHAT MANHEIM DID RIGHT WITH "RIGHT NOW"

Took the time to collect the most meaningful data to inform the organization's direction.

Engaged many more people than tradition would suggest be involved in setting the overarching vision for the future.

Honored and preserved the best of local cultures while creating a sense that each dealership was part of a larger, collective community.

Identified simple, universal cultural attributes and behaviors that all of Manheim was proud to share.

Created beacons of success locally, and established visible, accessible mechanisms for sharing across sites to enable collaboration and the leverage the power of scale.

Accelerate results with the help of thousands of passionate people

With thousands of employees recruited, Manheim shifted gears to move commitment to action around key priorities and maintain the momentum they had created. A key component of this was embedding those leadership behaviors articulated as part of the Case for Change into the day‐to‐day culture. One philosophy that Kotter shared was to drive change by focusing on specific results, and celebrating every win that embodied the desired behaviors needed to achieve those results.

To operationalize this in the organization, Manheim formed a team called the Guiding Coalition. The team consisted of approximately 40 people from all levels and areas of the organization, and had three objectives:

1. a.Create broader awareness across the organization of the end-to-end auction process so everyone could see how they fit into the bigger picture.
2. b.Maintain engagement across the tens of thousands of employees around the need to drive customer satisfaction and operational efficiencies through innovation and determination each day.
3. c.Leverage the commitment of engaged colleagues to sell more cars by scaling customer-focused insights across their 70 North American auctions.

Top executives participated in the kickoff event, providing their perspective about the state of the business and even pitching ideas (which the team would be free to choose or not) about what they felt could be powerful strategic initiatives for moving the business forward. Guiding Coalition teams committed to a year-long focus on their objectives to ensure the movement would not become another corporate initiative that felt like a “flavor of the month.”

Ultimately, 13 cross-site sub-market teams formed as part of the emerging employee network to drive change locally and execute on enterprise-wide transformation projects.

One Example

"DEPARTMENT 101"

As part of the Guiding Coalition’s task to improve employee’s understanding of Manheim’s business, they launched an effort called “Department 101.” The Guiding Coalition chose to leverage Manheim Learning Lane, the company’s learning management system, to share informational videos about each of the key departments at the auction sites – with videos ranging from sales to auction day logistics (in which thousands of cars would be sold in just a few hours!).

The team recruited volunteers to create videos – using whatever materials they had available – that could speak to their department’s role in serving the customer. The videos went viral internally, with familiar faces talking about their job and how they contributed to driving the transaction.

This effort resulted in more than a dozen videos being created, with over 9,000 employees completing the entire voluntary module, breaking a Manheim L&D organization record!

Results

Within the first year, Manheim had made material progress in advancing their opportunity, exhibited in achievements such as:

Re-energized 18,000 employees across 70 sites in the wake of a demoralizing restructuring
Increased sales by $40M through a single customer education initiative
Registered 9,000 people for a voluntary education program, setting an all-time company record
Increased employee engagement scores by 31% on the topics of risk-taking, having an impact, and making a difference
Celebrated 2,000 wins impacting efficiency, bottom-line, and quality across all locations

But they didn’t stop there.

Eight years on, Manheim has sustained the new culture and the employee network, both of which have allowed them to continue to adapt and shift with the ever-increasing changes to their industry.

I am often asked by people I know who don’t work here how we have managed to do this. I think typically it sounds too good to be really true. So, anyway, I have thought about that question and I think there are two reasons that are particularly key.

First, we sought out good expertise in helping us set this system up and, as a result, we started actually getting things done, that were important to the business, faster and better than people expected. The GC that first year was maybe 30 people (we were a smaller organization). Nevertheless, the very first year we successfully addressed a chronic business issue that had been slowing growth for years and years. That was crucial because it began quickly to win over a lot of skeptics and caught the attention of the executive committee, especially the new COO.

Second, and related to the first reason this has worked so well, a few key executives, including the COO, once they saw the logic and power of what was happening became real champions, so when we hit natural bumps—political, bureaucratic, interpersonal—they did not hesitate to take action that would smooth the way.

And the overall business results speak for themselves. We have added additional wholesale brands. We have better integrated all the acquisitions. Our foray into digital retail is working. We have maintained or added to our strong competitive position. And we have grown a lot.

On the more personal side, there are more than a few people who have worked on the GCs along the way who will tell you that it was the best work, or the best developmental experience, they have been involved in within their entire careers.

Kevin | Sr. Director, Talent & Organizational Development