Conversation with Galpin Ford’s Bert Boeckmann
Boeckmann Takes the High Road Among Car Dealerships
Bert Boeckmann began his career selling automobiles at Galpin Ford in the San Fernando Valley of Los Angeles in 1953. Four years later, at age 26, he was the general manager of the company. In 1960, he began a buy-out of the corporation, using his earnings to purchase company stock. By 1968, the buy-out was complete, and today, Boeckmann is widely recognized as the most honored and successful automobile dealer in America. Galpin Ford is the #1 in sales volume Ford dealership in the world. Galpin also has the franchise for Jaguar, (#2 in the nation), Lincoln-Mercury, Mazda, Volvo, Saturn and Aston Martin. Although his sons are now involved in the business, Boeckmann remains a very hands-on manager. His innovation and management skills, along with a very strong sense of integrity and customer concern, have brought him to the top where he continues to achieve new benchmarks. He has been acknowledged by hundreds of organizations and causes with more than 3000 awards. He is also a member of the Los Angeles Police Commission, having been appointed three times to that body by three consecutive Los Angeles Mayors.
Recently, Professor Linnea McCord appeared with Mr. Boeckmann on a panel about ethics in business at the Valley Industry and Commerce Association Annual Conference last fall. Later she sat down and talked with him about this important topic.
GBR: Most people seem to believe, or are taught in school, that much of business is bad – that you have to lie, cheat and steal to be successful. How do you respond?
BB: In truth, it is the opposite. The people I have known who are really successful in the true meaning of the word have always tended to fit into the mold of honesty and integrity that we would call ethics today. Their basic integrity is not just measured in dollars, but is measured by their families, their friends, and their whole lives.
That is one of the reasons in our company that we talk about the power of trust. Trust has to be there. And it has to be built on being ethical in whatever you do. It has to be part of your life. It is important that people can trust what you say. I feel very, very strongly about that.
GBR: Can you give an example of how this applies to the dealership?
BB: We currently have between 1,850 and 2,000 retail car sales or leases a month at our location. Yet, if you were to say, “Where can you locate a dealership that would be the most successful Ford dealer in the world or the United States?” it probably would not be here. So something else attracts that business. When I look at why we are doing so well, I think that number one is that we have tried very hard to build the organization on what we are talking about — the power of trust. And I think it is a combination of what we try to teach our people to do in dealing with others and the fact that the Lord has chosen to bless us. We do have a strong customer focus in our business. The one reason we are here is to serve the customer. If we are not going to serve the customer, we have no reason to be here.
Well over 80% of our customers say that their primary reason for coming here was that they bought a car from us before, they were referred to us by someone they trust, or they heard about our reputation. That is an amazing percentage of people who would come here to buy, particularly when you look at the volume of what we do.
GBR: How do you hire and train your people? How do you find people that you believe will represent your company the way you want it to be represented?
BB: Realistically, you get them in a lot of different ways. Some answer a newspaper ad. Some are referred by other employees, which is a lifeline for recruiting new employees. Sometimes I meet people in the community that I feel would do well in our business, so I ask them to come by and talk with me.
Salespeople these days tend to be a younger group than used to be in sales because they are willing to work the long hours and the weekends. Among younger people today, though, I think you do sometimes run into those who are willing to compromise their values. You see it in little things. For example, someone might have been arrested for something, yet did not put that on the job application. We are pretty critical about such things. Remember, we do background checks, so if we find something with which we don’t have a comfort level, we question the person about it. If we find that he tried to hide it, then we just don’t hire that person. To hire even one person, we screen a lot more potential employees than we used to. We only want to hire those whom we would like to represent us.
After we have screened applicants and made tentative offers, there is a 13-day training program. About one in four will drop out during that time. At the end of the training, there is a dinner for these newhires and their wives or husbands. I like to have spouses there because I talk about the hours our employees are going to work. If the wife or husband of our potential staff member is someone who cannot stand being home alone, this is not a good business for their spouse to be in. And I tell them that right up front.
At the dinner there is conversation back and forth, and each person tells about his or her background and experience, even if it is not in the car business. Generally I am able to tell which ones will last as permanent employees. We are very dedicated to screening and training our employees in order to get them to represent our company in the manner that we want to be represented, a very truthful manner.
GBR: If one of your goals is to work with people and to be concerned about them, what are some of the other ways that concern plays out?
BB: One example would be that the salespeople have a committee of their own that sets the rules about things such as who gets the commission if there is more than one sales person involved in a sale. It used to be that the manager would make up the rules as he went along, and the next thing I knew, somebody was mad at someone else. Now this group makes the decision, and that is final. The manager only tells people what the rules are that have been agreed to.
Another example is the way the offices on the showroom floor are arranged. There are no doors on them, and they are extra large so the customer can sit next to the salesperson and see what is being written. There is enough privacy that if they need to give credit information, for instance, no one else hears. But the door is open and the customer can easily leave if he or she wants to. In the new showroom across the street where they have individual computer terminals, the salesperson will turn the computer screen around and show everything to the customer. There is nothing secret. We try to look at things from the customer’s standpoint.
GBR: Do you have a formal code of ethics –- something that you put down on a piece of paper that you hand out?
BB: We don’t have a formal code of ethics as such. However, we do have a set of imperatives about how we treat customers. Each sales consultant must agree to and sign those imperatives. We also have a mission statement. It says, “Our mission is to maintain a standard of excellence unequaled in the automotive industry.” In addition, we have three governing principles that all of our people receive and understand. The first is integrity, the second is continuous improvement, and the third is continuous commitment. By integrity we mean that honor, decency, and truthfulness will never be compromised in relationships with customers or with each other.
Finally, we also have a motto. It is really just three statements that I made up at some point in a talk. The staff picked them up and kept them as a motto. The three statements don’t really go together that well, but the employees wanted it, so the motto is: Do it right! Give your best! Help one another!
GBR: Most people understand when they are making a truly unethical choice. The more difficult choices often are conflicts between two good things, such as family and work. How do you suggest handling such conflicts?
BB: When I was starting out as a salesman, I worked 12 hours a day seven days a week and this continued as I went into management. Looking back, I realize I shortchanged my family. If you had asked me then, “What makes your dealership competitive?” I would have said, “I can outwork them.” I really did work hard. Today, I will talk to our people about quality time and commitment. For example, I may tell them, “You may not be able to spend this weekend with a child, but if you commit to give that child a period of time another weekend — or whatever else it may be — if you make that commitment, you must be positive you can keep it. Otherwise, you don’t say it. Never raise an expectation that cannot be met. Then if something comes up, we will always try to back you up and make sure you can do what you promised.” Our people have learned to help each other and work together as a group.
GBR: Is there a way you can structure the reward system so that you nip unethical behavior in the bud, or can you use the system to make sure that you encourage ethical behavior?
BB: There is always temptation. It is easy to structure things to benefit unethical behavior – such as putting on a contest without any checks or balances so that a person who wants to can take advantage of such lack of organization.
While you do try to build the business around trust, that does not mean you do not monitor the business to be sure that one person does not take advantage of another. We would hope that everyone would tell the truth, but if we have someone who is not truthful, we want to discover that. It is not a matter of spying; it is using common sense and monitoring. And if a question comes up, we look into it and find out what the truth is.
GBR: When you have a large number of employees, it must be harder to be sure that everyone represents you well. How do you measure customer satisfaction? Do you do customer surveys?
BB: Oh sure. The manufacturers do the surveys for new cars, and we use their forms for that. We have our own call-back system for customers who come here for other things. We have to watch because sometimes people will try to beat the system. They won’t turn in the card if something did not go well. Or they could just change one or two numbers on the card they fill out so you won’t be able to reach that customer. When that happens, we check it out. If the salesperson does that, then he is not right for me, so I get rid of him. If he is willing to do that to me, then I don’t know what he will do when it comes to truth with the customer. It is a good way of weeding out some of those people.
I remember when I first went into management, I would sit down with someone who had a complaint and would be very logical, and I would say, “These are the facts, and this is what I will do, and that is the end of it.” Over time, I learned to take more of a sales attitude. I said to myself, “I am going to focus. I am going to listen. And then I will decide what I am going to do and tell the person what that is.” Now, if I give you something when I don’t think you deserve it, I am going to tell you up front that I am going to give it to you and that I am not going to take it back. I may tell you afterwards why I don’t think you deserve it — just because I feel better telling you — but you will know I am not going to take it back. It is often very easy to turn the situation around because what people often really want is someone to listen to them.
GBR: Is there one area in which unethical behavior is more of an issue than any other? Accounting? Marketing? Sales? Workmanship?
BB: I would say wherever a person can receive a direct benefit is where you are going to see unethical behavior. People lose control. I find today that honesty is compromised in all kinds of stupid ways.
For example, almost every time we hire a mechanic from another store, we will find him padding warranty work. He doesn’t do it when the customer is paying directly, but with the warranty from the factory, he will try it. We give him one warning that we will not tolerate that. The second time, he is out. I don’t believe in the idea that everybody always deserves a second chance, but in this case, we will do one warning because that practice is so prevalent.
GBR: If you had to sum up what we have been talking about, what would you say?
BB: The best you can do, wherever you are, is to set the best example you can, whether it is in your family, with your friends, or business associates, or customers. That is all I know how to do.
About the Author(s)
Linnea B. McCord, JD, MBA,, Associate Professor of Business Law at the Graziadio School of Business and Management, Pepperdine University. Dr. McCord started teaching business law and ethics more than 30 years ago, first as an in-house corporate counsel and later as the General Counsel of a division that was part of a high-tech Fortune 500 multinational corporation, headquartered in New York and Paris. Her area of expertise is the critical role Rule of Law plays in the long-term success of economies and countries and why American Rule of Law is unique in the world.