About six years ago, Doug Dunn and some his peers at other bus dealerships around the country began to sense that their industry was undergoing a significant shift. So a group of them sat down to take stock and talk things over. They concluded that while their market was quickly maturing, their branch of it — the dealership sector — wasn’t keeping pace.
“I had gotten into this business back in the 1980s when it was just getting started,” says Dunn, CEO of Atlanta-based Alliance Bus Group, a company that today operates seven dealerships in the southern and eastern United States and generates annual revenue of $120 million. “Transportation needs were starting to explode in a lot of cities, and most people bought buses that were converted school buses or they just ran 15-passenger vans. Transit budgets were starting to really catch some wind, and the commercial needs around airports were exploding. It was a good business to be in.”
By 2007, however, the bus industry was starting to grow up. Most of it was, anyway.
“We started seeing some consolidation on the manufacturers’ part,” Dunn says. “And the customers started getting a lot more mature too. They started knowing a lot more about buses than they did before. As a dealership, you needed a lot of infrastructure to keep up with these changes.
“One of my favorite sayings has always been ‘Volume speaks volumes.’ You need a lot of volume and a lot of product to catch the attention of manufacturers, from the areas of support and pricing. It wasn’t easy operating as independent, single dealerships.”
It was time to get bigger or get out.
Unite the colonies
Dunn’s company at that time was simply called Bus Group. It operated dealerships in Atlanta, New Orleans and Jackson, Miss. Those dealers operated almost as if they were separate companies, with outdated software systems, too much overhead, inadequate service facilities and no centralization of business functions to achieve efficiencies.
Getting bigger wasn’t going to be easy. While several other dealers had shown an interest in joining forces with Bus Group, the company saw that it would need to integrate these outposts into a more smoothly functioning unit first.
“We began to see that we wanted to make the transformation from a locally owned and managed dealership into one more national in scope, with all of the benefits that come from that,” Dunn says. “The synergies would make a lot of sense: being able to consolidate inventories, to have better training programs for our salespeople, to achieve the economies of scale of insurance consolidation and things such as that. All of this made a lot of sense, so we decided we wanted to pursue it. But, first, we would have to lay the groundwork and get organized.”
The key elements to achieving this expansion plan were centralizing the company’s operations by creating a corporate office in Atlanta, investing in a dealer management software system, expanding and upgrading the dealerships’ service facilities, and then, after all of that groundwork was laid, leveraging buying power by expanding and acquiring new dealerships.
“We designated Atlanta to be the corporate office for functions such as accounting, finance analysis, HR and legal,” Dunn says. “We reached out and used some different sources to add an assistant controller, some other accounting people, an HR manager and some financial people to help us run the business as an ongoing, larger organization.
“Getting the right people on the bus — pardon the pun — was a major focus for us.”
The task of centralizing the company’s operations and making the outposts operate more uniformly forced Dunn to change his management style.
“This is one of the things that has been a challenge for me,” he says. “I had to almost completely change the way I operate. I had always been very hands-on with my dealerships: everything from parts inventory all the way up to dealing with the largest fleet customers. As you start getting larger, though, you need to start assembling a different kind of team.”
One of the toughest challenges Dunn faced was taking the dealer principals he had been working with — “the lone rangers,” as he calls them — and showing them how to work within the framework of a large corporate entity.
“It was a difficult transition, and it took time to get it working smoothly,” Dunn says. “To go from basically running your own shop for many years to becoming part of a team running an integrated auto distribution business in a more corporate environment, with all of the associated checks and balances in place, has been a challenge for all of us. But these guys have been wonderful to work with. All along, they’ve had the right attitude to make this happen. And I’m very proud of where we are right now.”
The dealer management software system proved to be a challenge to install and get running smoothly. The system, which centralizes all of Alliance Bus Group’s data and operations and is accessible 24/7 from any computer with Internet access, enables Alliance’s personnel to address customer service questions immediately with reference to any of the company’s departments.
“We launched the software system in 2010,” Dunn says. “It’s a complete dealership management system, similar to what automobile dealers use. It drives our entire process.”
The software system has a wealth of features. It has a contract manager for Alliance’s sales force. It interfaces with the company’s website so that as employees add and delete inventory items, the information is immediately uploaded to the site.
On the parts and service side, the system handles all of the company’s shop tickets and parts orders. It also manages Alliance’s service work orders and its accounting functions.
“One the best things about it is that it’s all in the cloud,” Dunn says. “The information is on the software company’s server, and we can connect to it through the Internet from anywhere. It has completely changed the way we do business.”
In the two years since Alliance centralized its corporate operations and installed the dealer management software, the company has acquired dealerships in Lewisville, Texas, Carlstadt, N.J., and Orlando, Fla. These acquisitions bring Alliance’s total number of business locations to seven.
Blending the new dealerships into Alliance’s corporate system, especially with regard to the dealer management software system, has been problematic, but it is growing less so as the company gets accustomed to the process.
“The integration of the new dealerships is getting less difficult as we do each one,” Dunn says. “With the first one, you know, you almost want to kill yourself, the second one, you just get real sick, and the third one, you sort of catch it in stride. That’s the way the process has gone for us.”
Dunn says conviction, clear communication and decisiveness have been keys to Alliance’s ability to successfully integrate the new dealerships into the company’s corporate structure.
“You can’t lose the faith,” he says. “It can be lonely at the top, and it’s easy to get discouraged, but I’ve learned that when you start feeling a little uncertain, you need to start communicating more. Get out and really research the situation, and then go at it with everything you’ve got.
“Gather as much data as possible, analyze it quickly, decide what’s important, follow up expeditiously, and then make the best decision you can. And once you make a decision, go for it. Don’t back off.”
That last point — not pulling back from decisions once they’re made — was especially important to Alliance as it moved through the process of acquiring the dealerships and assimilating those organizations into the company.
“If you make a decision and then you back off from it, everybody will start to question all your decisions,” Dunn says. “It can make it difficult to pursue an effective course going forward when people … you know, they may not necessarily lose confidence in you, but they may start to think you’re not as committed to something as you should be.”
With seven locations in six states spanning from Texas to New Jersey, Alliance Bus Group has expanded its reach from what was once a group of small, loosely connected “lone ranger” dealerships to a large regional bus distribution network. The greatest advantage Alliance has gained as a result of this expansion is its ability to offer more interesting and potentially lucrative opportunities to its employees.
“This is a different game now,” Dunn says. “I have the ability to take a good sales manager in Texas and promote him to be the general manager in New Orleans or Orlando. I’ve never had that opportunity before, and when you start talking about a company and the opportunities for people inside it, you know, that’s pretty special.
“As I’ve gotten older and seen things, what gives me the greatest pleasure is to see people that have come on board in the organization, worked hard and developed, and then benefited from it, for themselves and their families. That’s what gets me fired up most nowadays.” ?
How to reach: Alliance Bus Group Inc., (866) 287-4768 or www.alliancebusgroup.com
THE DUNN FILE
Chairman and CEO
Alliance Bus Group Inc.
Education: Mercer University, bachelor’s degree in political science; Vanderbilt University, MBA
What was your first job, and what business leadership lessons did you learn from it?
I was an intern for a natural gas company my second year at Vanderbilt, and the senior vice president made me an offer to stay and fill a hole, which was director of personnel for a 600-employee utility. One of the first things I had to do was negotiate a contract with a pipefitters’ union. So I went from the academic world down to the front line about as fast as you possibly could go. I got instant management experience, immediate personnel experience, and more legal stuff than I cared to know about. That worked out well for me. It was a great springboard into what I’ve done since.
Do you have a central business philosophy that you use to guide you?
I try to rally the troops constantly by staying in communication with them, and I strive for clarity to make sure people understand what I want. Also, I’ve always been a data hound. I try to stay on top of as much relevant data as I can get.
What trait do you think is most important for an executive to have in order to be a successful leader?
I think it’s perseverance. Staying with it; staying on top of the important things. Deciding what’s important and what’s not. You don’t want a dollar chasing a dime.
What’s the best advice anyone ever gave you?
That would be from my father, who has passed away. He was an executive for 48 years with Delta Airlines. His advice to me was, ‘Decide what you want to do, do what you like and never worry about the money, because it will always come.’ That has always worked for me.