2008 and 2009 were, to put it mildly, difficult years for the automotive industry. Both General Motors and Chrysler depended on unprecedented levels of government intervention to stay viable. Meanwhile, thousands of dealerships around the country were forced to close their doors for good. This challenging external environment threw some serious punches at CarMax.
In the midst of these challenging times, CarMax CEO Tom Folliard communicated optimistically and nondefensively with shareholders and employees alike. His blend of realistic optimism communicated his vision of the path through the difficult challenges in the industry. He set out an active response to help position CarMax for the economic rebound to come. Several actions helped the company endure the tough economy while making it stronger for the future. For example, by cutting $100 per vehicle in reconditioning costs, CarMax would save $30 million annually on the 300,000 or more cars they sell. And while CarMax did have to cut jobs to endure the very tough economy, much of the reduction in staffing came through attrition and labor-hour savings. Those who lost their jobs permanently were given a generous severance package of 4 to 26 weeks%u2019 pay. That sends a message to those who stay as well as those who must leave.
How CarMax treats employees in difficult times is one element of its internal business integrity, a trait that the company exhibits in its dealing in the marketplace and with customer. For example, the Better Business Bureau awarded CarMax its Torch Award for Marketplace Integrity in seven markets: Virginia; Chicago and Northern Illinois; Louisville, southern Indiana, and Western Kentucky; greater Maryland; central Ohio; greater Houston and south Texas; and metro Atlanta, Athens, and northeast Georgia. These awards are presented regionally to companies that practice fair, honest, and ethical business practices.
In addition, CarMax launched a new web-based search tool to provide better service to potential customers. The Advanced Search feature allows customers to enter any combination of makes, features, colors, and more can be entered into one search field with an update instantly available. This flexible, full-featured online vehicle search makes the process quick and easy for customers. Successfully meeting the challenge of difficult times requires optimism, empathy for employees, ethics and integrity in the marketplace. That is the CarMax way.
Respond to the following short essay questions.
How can a company like CarMax, which faces significant challenges during a recession, use the FAME method to communicate with its employees?
Create a communication policy for Carmax that incorporates all four elements of the FAME method.
What are non-verbal methods by which CarMax sales representative can communicate its commitment to customer service and integrity?
How would you design a training program to teach communication methods for the sales associates?
CarMax CEO Tom Folliart believes in a process of open, realistically optimistic communication. How would such a process work when the news is mostly bad?
Give a real example of ineffective communication that you have experienced first-hand in an organization. Explain the situation and the impact of the ineffective communication. Provide an alternate communication plan that may have provided a more positive impact?