Behind the Wheel - Rick Hendrick Interview

Greg Uland, Marketing Director at Reynolds and Reynolds, sits down with Rick Hendrick, Chairman of Hendrick Automotive. In this exclusive interview, Mr. Hendrick shares his story, challenges he’s faced, and what he anticipates changing in the market.

“Well, thank you very much for taking the time to sit down with me and talk about you and Hendrick Automotive and kind of how you approach business.”

“Well, great to have you here.”

“Thank you. You have a pretty well-documented story, right? You bet everything you had at age 26 to buy your first store. You turned that one around and you went on to buy City Chevrolet in Charlotte, made that the best-selling Chevy store in the Carolinas. And from there you expanded pretty rapidly. Looking back, it seems like you had it all figured out. But did you? Can you talk about that a little bit?”

“I thought I had it all figured out. No, you know, I have a passion for cars. It's always been a love of my life – racing or in the automobile business. City was such a golden opportunity for me to create a great base of talent, and then we were successful, so when you're successful, you get a lot of opportunities. Looking back, I think probably I grew a little too fast at times, and I would tackle any kind of deal. Then when you do that, you find that when the market turns down, it might take you down. So looking back, I think I would have been a little bit more paced (chuckle) in the beginning, but when you're young and you're aggressive, you just think you can fix anything.”

“Thinking about that, right, and being able to fix anything. You're considered by many to be really a dealership management expert. You know how to run a store, right? You've taken a lot of stores from poor performers to absolute winners. So, what do you tell other dealers if they come to you and they say 'how do I turn a store around? What do I do?'” 

“You know, it's really all about the people. I don't care what kind of business you're in. We're in the people business, and if you get the right leaders, it makes it a lot easier. People that are trained, people that work as a team, creating the right culture. You get that part right, the rest of it falls into place.”

“Well, it takes a little hard work too probably.”

“Yeah. If you've done it a long time and you've done it multiple times, you learn from mistakes. My philosophy is you make a mistake one time and you try not to make it again. But, I've been surrounded by a lot of great talent, but it all comes down to people. I've seen a situation where you make one change, that's all, and the market, the store just turns around and it becomes successful.”

“So thinking about a little bit broader scope then... What parts of the dealership business have you and your team been focused on and really had to improve over the last three to five years?”

“You have to change with the times. I think just being able to communicate with your people, communicate with your customers, get them in and out of the dealership quickly. I think the docuPad^® System has made the biggest difference that we've seen in the last three to five years. Just being able to disarm the customer, for them to feel at home, that they're participating in the closing of the deal and the paperwork. You don't make any mistakes so it speeds up the time it takes you to cut off. I think that's an example. Just being able to control your inventories through systems and having information at real time that’s accessible. I think all those things, staying in step with what's happening around you in the marketplace. If you fall behind, customers are gonna go somewhere else. So, they got a lot of options. So, I think you have to be on the leading edge of technology, and that's what we've tried to do. And Reynolds has been a great partner to help us with that.”

“So thinking about that and thinking about the leading edge... What are the biggest challenges that you see, and maybe your team sees, in retail automotive today and looking into the future?”

“You see the way things move in the general population. You know, cell phones are real time. They want to hit their phone, order something, have it delivered, or have it paid for on the phone. So, I think we have to continue to try to meet the needs of the customer. Whatever they need, that's what we've got to accomplish. Speed of getting them in and out the transaction. Is the transaction going to be done on the Internet? How much of it can you do there? And just meeting the expectations of the customer. It’s just keeping everybody like a seal team six. You've got the people that are the smartest, the more aggressive, the more competitive that meet the needs of the customer. Those are the guys that are going to get the business. We have to also monitor our business, know what our inventories are, what our receivables are. We went to a consolidated office, which I was against in the beginning.”

“Really?”

“Because I liked having someone in the dealership to help me, a financial person. And so I resisted it. But looking back, we've now gone through all the consolidation. If you're doing 20,000 cars a month, then you can cut off clean, and you can have a financial statement in two and a half days. That's really, really good because back in my early days, I would keep the books open for two or three days trying to get all the business in. It was the eighth of the month before I had a financial statement. I'm excited about the future of our business to see paperless transactions, banks can take the payoffs faster, and we can get deals funded, and customers don't have to spend as much time in our offices. But it's changing, it's changing in a hurry.”

“One of the things that I'd like to dig into just a little bit more, you mentioned delivering what the consumer wants, and you mentioned buying a car online and doing that whole transaction or how much of that transaction can be online. How do you view the balance between convenience of buying something online and the reality of needing to bring them in the store for profitability? How do you manage those two things?”

“My experience so far is that people will look at the car online, and they maybe want to get a price online, but in reality, they want to see and feel the car. There's an experience when they come in the store, and they see what they want to buy and they drive it. I think that's the fun part of the experience. And so I think speeding that up and creating an environment that's welcoming to the customer. We don't see that much, just trying to do the entire deal online, because it's not like a hat, shirt, or a piece of furniture that you know what it looks like and it's just something you want. But a car is still an experience that people enjoy. But I think it all kind of wraps into one big thing and that is their customer experience. People talk about it, but you got to live it. You’ve got to create an environment that they want to come back to because we want them. We want a customer for life. We sell 200,000 cars a year and that's no different than when we were selling 2,000 cars a year. You got to treat people the way they want to be treated, and you've got to do it in a very professional manner.”

“Well, are there certain things that you either do or look at each day to make sure that your business is running as well as it can?”

“The one thing that I do religiously is I do a conference call with all the dealerships at the end of the month. It takes me two days. I go through every store with every general manager and look at every department. It's on a screen and we are looking at their inventories, their gross, how many cars they have in stock, what their forecast was, how they finished compared to their forecast. And so at the end of those two days, I have a feel for what's going on in the 95, 96, or 100 store's inventories, F&I income. It really is something I've done since I had three stores in 1978. And so again, it's communication, it's learning from each other, it's taking best practices, and I've done that all of my career.”

“In your 44 years in this business, plus or minus.”

“Yeah, who’s counting?”

“You've seen a lot of ups and a lot of downs.”

“I have.”

“You've had some pretty good successes, but I assume you've had some failures as well.”

“Sure.”

“Typically, we learn more from our failures than our successes.”

“We do.”

“What failure would you say you've learned the most from?”

“I got so many do-over’s I’d like to have, I don’t know if I can pick one. I think it's been market failure. I think rolling along, expanding, or not anticipating that it's ever going to get really bad. And see, I've lived through the Arab oil embargo. I lived through twenty-one percent interest rates. And when you've got a thousand Chevrolets on the ground as twenty-one percent interest, you start wondering if you're going to be able to make it. So what are the things you need to do to be prepared? You need to keep the inventories clean. You need to keep enough cash in the bank. You need to get rid of the weeds. I mean, as you get older you slow down a little bit and you say, 'Okay I want to make it the best.' I don't want to necessarily, I'll never be the, I was the biggest in 1996, I was the largest dealer group in the country. But I don't care about that. I want to be looked at as one of the best. I want people look at our organizations, say 'they got the right culture, take care of the people, they dominate the market, and they're agreeing with every manufacturer’. I think that's a competitive spirit that our company has.”

“Sure. So, you're obviously looked up to in the industry as the leader of a successful company. When people ask what are the principles or values you use to run your business on, what you tell them?”

“I believe you take care of your people first. If the people are happy, and they are energized and they feel like they're part of the team, then they'll go attack the market. So I think that's the most important thing. You just need a good group of people, smart, have the same culture that you want in your stores, and when they believe together that they can accomplish anything and they're so competitive they want to win everything, then it gets fun. It's not all about the money. It's all about the game. It's all about taking care of your people.”

“The car business is I believe one of the best industries in the world. It really embodies the American dream and what's possible through entrepreneurship. What would you tell other dealers out there about the future of our business and really how to be successful for generations to come?”

“I think if you love what you do and you love the business, but your goal is to take care of your people and take care of the customers and you don't put profits first. I mean my philosophy is: you take care of your teammates, you do what you need to do for the customer, treat him like you would want to be treated, and the profits will come. And you create a culture that will go on and on and on. It’s exciting. You celebrate together. I believe in celebrating. I believe in rewarding people. And it's not all about money; it's about recognition. It just creates a positive, exciting environment that people come in every day and it's just not a job. They’re trying to accomplish things, hit their goals, and be the best. And I'm constantly measuring everybody against each other. It’s just things that we've learned over time; there's no playbook. I tell our people our playbook is your playbook. We'll change it every day.”

“So, you alluded to it earlier. You've been doing this for a while. Right. And to wrap up, I got to know, what gets you up in the morning at this point? Why do you keep doing this every day?”

“Well, since I was 12 years old, I built my first car when I was 14 with my dad. And I love automobiles. I get just as excited about seeing a new car as I did when I was 18 years old. I went and drove the new Corvette a month or so ago, and I was like a kid in a candy store. I was just giddy going and seeing the car first. I just love the business, and I love people. I enjoy the customers. I enjoy the whole deal. In life, if you can make a living doing the things you love, it's easy to get up in the morning.”

“That's fantastic. Well Mr. Hendrick, I can't say thank you enough for taking the time and sharing so much with us. I really appreciate it.”

“I enjoyed it.”

“Alright, thank you.”