The leadership evolution needed from operating to owning a dealership

| By Kendall Rawls, Rawls Succession Planners

In auto retail, there’s no single path to the dealer principal chair. Yes, some rise through GSM → GM → Dealer, but plenty come from fixed ops, F&I, accounting, or even outside industries. In today’s dealership environment, it is now just as common to see successors come from service, accounting, marketing/BDC, or external corporate leadership roles.

NADA, OEM leadership programs, and 20 Groups all confirm that modern dealer successions depend more on leadership competency than on the traditional ladder. The route matters far less than the leadership evolution required to shift from operator to owner.

What made someone successful in a departmental or GM role rarely equips them to run the enterprise. The business and workforce have changed, and the demands on next-gen leaders are heavier than ever. These examples reflect patterns seen across hundreds of succession planning engagements and align with leadership pathways validated through NADA Academy insights, OEM successor frameworks, and dealer 20 Group trends.

Below is how leadership must mature across Behaviors, Attitude, Skills, Knowledge, and Training (BASKET), along with real-world examples that you can relate to.

Behaviors:

From Problem Solver to Organization Builder

GSMs and department heads thrive by doing. Dealer Principals thrive by designing systems that don’t depend on them.

A Colorado GSM who became GM tried to lead the same way: closing deals, running daily huddles, and jumping into every fire. When he entered the ownership track, he realized growth required a different behavior set: empowering managers, creating scorecards, and building structure rather than being the structure.

The same evolution applies whether someone comes from service, F&I, or accounting; the job shifts from execution to architecture.

Attitude:

From “Lead Like Me” to “Lead for What’s Next.”

GMs lead today. Dealer Principals must lead the future.

A Florida group transitioned from a high-energy GM to a quieter, data-driven successor from the marketing side. Her style was different, but it stabilized retention, modernized CRM workflows, and built consistency. Leadership isn’t about replicating the founder’s style; it’s about leading in a way that aligns with where the business is going.

Skills:

From Department Mastery to Enterprise Leadership

Every path, GSM, service director, controller, outside hire, requires dramatic skill development at the dealer level.

  • GSMs must learn fixed ops, financial strategy, and OEM relations.
  • Service leaders must learn the front end, customer experience, and enterprise P&L management.
  • Controllers must build people leadership, cultural influence, and operational intuition.

One Midwest group promoted a CFO to the Dealer Operator role. She had the financial chops but no sales leadership experience. She embedded herself in each department, learned the rhythm of operations, and paired data discipline with people development. The result: their best fixed-ops absorption in years.

Many dealer groups now intentionally groom CFOs, fixed ops directors, or multi-rooftop COOs for ownership because they bring financial discipline, process rigor, and enterprise thinking needed in today’s margin-compressed environment.

Knowledge:

From Running the Store to Running the Business

A GM understands operations. A dealer must understand ownership.

Next-gen leaders must become fluent in:

  • Real estate and partnership structures
  • Buy-sell drivers
  • Strategic planning
  • Estate and tax implications
  • Multi-rooftop alignment
  • OEM negotiations
  • Leadership bench strategy

A Texas GM learned this quickly as she prepared to succeed her father. She knew the store cold. But dealership success depended on understanding leases, capital structure, and long-term planning; knowledge the GM role never required.

Training:

Leadership Doesn’t Transfer Through Proximity

Successors can’t “pick it up by being around it.” Modern auto retail is too complex.

They need structured training in:

  • Strategic planning
  • Financial modeling
  • Governance and conflict management
  • Talent development
  • Manufacturer relationships
  • Scenario planning

Leadership development must now be intentional, not assumed. That’s why NADA Academy, NCM GMEP, OEM successor training, and dealer 20 Groups all emphasize structured exposure to enterprise-level decision-making.

Bottom Line:

Becoming Dealer Principal Is a Leadership Leap

Titles don’t prepare the next generation. Leadership evolution does.

Whether someone’s path begins in GSM, service, accounting, F&I, or outside the industry, the Dealer Principal role requires broader thinking, stronger systems, deeper knowledge, and ongoing development.

Dealerships that deliberately build this evolution, not reactively, are the ones that protect performance, retain top talent, and set themselves up for long-term success.

Kendall Rawls, with Rawls Succession Planners, understands the challenges that impact the success of a complex, privately held, family-owned business. Contact us today to arrange a consultation and discover how we can empower you to overcome obstacles and achieve lasting success. Whether you're navigating regulatory shifts or striving to build a top-tier team, we're here to help you thrive in today's retail-automotive landscape. For more information, visit seekingsuccession.com or email kendall@rawlsgroup.com.