While the past year has created enormous challenges for those who do work in the country's hardest-hit sector, it has taken equally formidable leaders to ensure that their businesses came through the crisis -- leaders like Steve Chipman.

Chipman is president and CEO of Birchwood Automotive Group, Winnipeg's largest network of auto retailers with eight dealerships, two body shops and an independent vehicle leasing company. While the Birchwood Group has not escaped the turmoil brought on by the recession, it has managed to fare better than most of its competitors.

Despite the downturn, the 525-employee strong company managed to sell 8,500 new and used vehicles last year while earning a place on the 50 Best Small and Medium-Sized Employers in Canada list in 2010.

Chipman credits his organization's focus on being "people driven" for assuring Birchwood not only survived a trying time, but saved nearly every job while seeing it through. "It was a tough year, but it was our best year, and we are much better today because of it."

Q: Can you recap the challenges the Birchwood Group has recently had to work through?

A: We went through a very difficult year, starting with a fire in our BMW shop last February. It could have been catastrophic, but we were able to quickly adjust by deploying our service people to our other dealerships. Although it caused some aggravation to have BMW technicians working from Honda or Toyota service departments, we managed to get up and running within two days. Then came the General Motors crisis. We received a phone call from GM last May telling us that Birchwood Pontiac's contract was not going to be renewed. This left us with five completely different options to explore: find a new manufacturer, start a used car business, buy an existing business, move one of our other stores in there, or just sell the building. Normally, this process would take a long time, but we empowered our people to go down each path concurrently and find the right route for us to take. By the beginning of July, we agreed to amalgamate with Orion Chevrolet, saving 99 per cent of jobs from being lost. On top of that, we learned shortly after that we were also losing Saturn. That contract was not replaceable per se, so our solution was to convert the 6,000-square foot dealership into the new Birchwood Truck Centre.

Q: Were you worried about how these events would affect your staff?

A: At the time, the greatest concern was that as soon as word hit the street, our competitors would be on the phone trying to scoop up our top people. We told everyone upfront, "Look, we know you're going to be approached, but please give us six weeks to come up with a solution." We'd been through this kind of thing before when we acquired and merged a dealership in 2008, so we knew what we were doing. As we told everyone, our primary concern was to make sure they all had jobs -- and out of 60 employees, only two chose to leave before we announced our solution.

Q: What did you learn about leading people during the crisis?

A: Listening to people is as important as the need for consistent communication. During those six weeks in May and June, I repeated the same speech again and again because while I thought many people were listening, I realized they weren't really hearing the message. They kept asking why we couldn't convince GM to change their mind. I had to really listen to understand their concerns. It was difficult because for almost all it was hard to let go. People were grieving and all were at different emotional levels. You really have to listen to find out where they were in the process. But we needed to move on from being mad at GM for things beyond our control. Our one constant message or mantra was "Let's not be bitter, let's get better." We will work to be the new Birchwood Motors.

Q: What are the challenges associated with working in the car business?

A: This is a tough business to work in. Our service and parts departments realize that although our responsibility is to help customers maintain their investments, most people think having to bring in their car for service is a necessary evil. On the sales floor, salespeople invest huge amounts of time in selling. They spend a minimum of 60 to 90 minutes taking potential buyers through the selection process, but even then, only one in five will actually buy from them. It's not easy by any means; it's fun, but it's not easy. Because the car business is not as glamorous, it can be a challenge to get young people involved. One method that has been fairly successful for us is creating a summer mentorship program with the Asper School of Business, where we invite third- and fourth-year students to work in sales support and other functions. Several have gone on to full-time positions with us and some have now entered senior management.

Q: How do you recruit and retain good people in a sector with traditionally high turnover?

A: We take turnover very seriously and measure retention on a monthly basis. According to U.S. numbers, salespeople in our industry turn over at a rate of two-thirds per year. These aren't top-level performers because those who are successful tend to stay where they are doing well. But to help all our sales staff reach that level, we have implemented an internal training program. As it stands, we have a 20 per cent turnover rate, excellent in comparison to the rest of the industry.

To make sure we recruit people who are the right fit for us, we have improved our hiring process. It used to be that if a store needed an employee it would call the HR department to run an ad, sort through the applications, conduct interviews and then send the top candidates over to meet the appropriate manager.

The problem was that our managers said they weren't getting the right candidates. So today, HR will run the ad and collect the applications, but the manager will be the one to interview the candidates and make the hiring decision. This makes our people more accountable and ensures we are hiring people with the right fit.

Q: Has Birchwood introduced any programs that you believe are particularly innovative?

A: A key to retaining people is in the skill sets of good managers. This is why we've started two innovative programs within the past year. The first one is MIT (Management in Training) for future managers; it's a class that covers the basics of what every manager should know, from how to conduct interviews to how to develop better performance from your people. The second program we just introduced is called Birchwood University, a leadership course designed for people who have completed MIT and aspire to one of our top management positions. It is focused on how to create a clear purpose and direction and how to inspire others.

Q: What is the best piece of leadership advice you have ever received?

A: In his wisdom, my father, R.M. Chipman, created The 12 Precepts for Life. Of these guiding principles, two particularly resonate with me: "You cannot be too generous in praise of others" and "It's easy to criticize, be careful." As a former lawyer, it's in my nature to analyze a situation and look for what could possibly go wrong. That sometimes leads to not praising people enough because I assume they know when they've done a good job, or in my haste to be efficient, I zero in on the problem instead of pointing out what they've been doing right. Even as a leader, I still need to remind myself that there is always going to be more to learn and room to grow.

-- With reporting by Barbara Chabai

John McFerran, PhD, F. CHRP, is founder and president of People First HR Services Ltd. For more information, visit www.peoplefirsthr.com.

Republished from the Winnipeg Free Press print edition April 17, 2010 I1