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(Cycle) Time Is On His Side

A wanna-be basketball star in a revolutionary’s body, consolidator Jon McNeill has plans for the collision repair industry.

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W hen he was a kid, Sterling Autobody Centers CEO Jon McNeill wanted to be a basketball player. Unfortunately, genetics were against him. Instead of signing with the Boston Celtics, McNeill helped form Sterling Autobody in 1997 with a goal of revolutionizing the repair industry. Since then, the consolidator has pushed the cycle time envelope, reporting an 8.4-day turnaround – 40 percent shorter than the industry average. If that doesn’t light a fire under your desk chair, perhaps McNeill’s plans to deliver repaired vehicles in 24 hours will.

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BSB: How did you get involved in the collision repair industry?
McNeill: My grandfather ran a small repair business in rural Iowa, and I spent my summers as a kid taking wheels off cars … and cleaning parts with gasoline. That was my first exposure to the business.

About eight years ago, a group of people and I started a call center company that outsourced 800 numbers to insurers for claims service. If you dialed 1-800 CNA or 1-800 USF&G, etc., that call was answered at one of our call centers. It got to the point where about 100,000 times a month, the phone call was from someone who’d had an accident and was reporting it to his insurer. And one of the first questions he’d ask is, “Where do I get my car fixed?” Some insurers had answers for them, but a lot didn’t.

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I began to explore why there wasn’t a great answer to that question. That was what initially peaked my interest in this business. What I found was a $25 billion market that’s highly fragmented – 50,000 shops doing things 50,000 different ways. At that time, the largest chain had 17 stores in Los Angeles. … Outside of that, there wasn’t anything close.

I knew there had to be a better way. We could have a national, consistent brand in easy-to-reach retail locations that delivered what customers wanted. And it seemed to me they wanted speed, service and convenience. I knew there was a way to deliver that, and the more I looked into it, the more compelling it became. So in 1997, we launched Sterling to address those needs.

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BSB: What’s your overall goal with consolidation?
McNeill: We want to revolutionize the industry. We’ve got a bunch of revolutionaries and cowboys who won’t accept the status quo as the answer. They want to see things done differently. Our mission statement is one sentence: We want to make a bad situation great. People who are in an accident didn’t wake up and say, “Gee, I want to go to the body shop today.” They’re in our shops because something traumatic happened, and our mission is to help them – to turn the bad situation around and surprise them with great service, great speed and a great facility.

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BSB: Do you consider yourself a revolutionary?
McNeill: Absolutely. It’s the way I’m wired.

BSB: Besides being a revolutionary, is there anything you wanted to be when you grew up?
McNeill: I wanted to be a 6-foot 8-inch shooting guard in the NBA. Unfortunately, genetics weren’t on my side. But I’m a still a big basketball fan.

BSB: Do you have a plan to achieve your business goals?
McNeill: It’s hard to achieve, but it starts with the people of Sterling. People are the absolute key ingredient. We look for people who have the attitude and aptitude, are open to a new model and will aggressively pursue that new model. Ninety-nine percent of our formula is our people.

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BSB: How has Sterling achieved its 8.4-day cycle time when the industry average is reported to be 13.5 days?
McNeill: We believe in the fundamental truth that a person can’t be in more than one place at one time. You can’t surround yourself with five or six things to do and get them all done. You need to focus on one thing, get that done and then move on. That’s the simple rule our system is based on.

BSB: What talent would you most like to have?
McNeill: One of my partners, Bill Haylon, has this ability to take the most complicated thing and boil it down to a very simple message. He’s also got great talent for taking that simple message and motivating our people. It’s a talent I admire.

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BSB: What are Sterling’s five-year goals?
McNeill: In five years, we want to be repairing cars in a single day, and we want to be the industry leader in service and quality. We also want hundreds of locations nationwide. We want customers to see Sterling on most of their drives around town – whether they’re on they’re way to work, to the grocery store or wherever. We want to be a national player.

BSB: How do you plan to achieve those goals?
McNeill: To get there in five years requires you to look at how you repair cars pretty differently. We use an example at our shop a lot: In Europe, they asked their engineers to design 150-mph trains for mass transit. In Japan, they asked their engineers to design 300-mph trains. The [Japanese] engineers came back and said if you want a train to travel 300 mph, you have to think about it completely differently. It can’t have wheels because the friction generated would melt them. So they started to think about magnetic levitation. And today, the Japanese have 300-mph bullet trains.

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We’re asking our people to have that bullet train thinking. We said we’re going to figure out how to repair a car in a single day in the next five years. Do we have the answer today? No. Will we? I’m confident our army of revolutionaries will come up with the answer.

BSB: Will repairing cars in 24 hours require multiple shifts?
McNeill: Yes, I think you’re going to see multiple shifts in the industry. We’ve done some experimentation with it, but it’s a tough thing to figure out. In a 24-hour environment, you can’t rule anything out. You’re probably going to see multiple shifts, very different paint chemistry and very radical approaches to repairs to achieve that 24-hour cycle time.

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BSB: What quality do you value most in a friend?
McNeill: Authenticity. Someone who’s transparent, open and honest.

BSB: That’s not always easy to find.
McNeill: No, it’s not. There’s a guy in our company, Bob Thompson, who personifies that. He’s as honest as the day is long, and what you see is what you get. He’s more than a just business partner – he’s a friend.

BSB: The Sterling Web site says Sterling Autobody Centers “consistently deliver on five promises,” one of which is a guaranteed delivery date. How do you accomplish that?
McNeill: It’s hard. We use it [to] discipline ourselves. At times, back-ordered parts, catastrophes and other situations get in the way. When they do, we explain them to the customer – but those are the exceptions. On a day-to-day basis, we’re not going to look for an excuse. We’re going to deliver your car to you on time.

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As a consumer of this business before I was a part of it, [missed delivery dates] drove me nuts. I was in an accident and after taking my car to a shop, I was told it would be done Friday. Friday would come and the shop would say, “Your car will be done Friday.” Then the next Friday would come and they’d say,” Your car will be done Friday.” I finally figured out they were telling me my car would be done Friday – they just didn’t tell me which Friday. After five Fridays go by, the average consumer is pretty frustrated.

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We want to stand out because we’ll tell you your car is going to be done Wednesday, and we’ll deliver it that Wednesday.

BSB: What’s the biggest challenge to achieving a short cycle time?
McNeill: Culture and the supply chain. The culture is a tough nut to crack. It’s hard for all of us to do things differently than we’ve always done. … It takes being uncomfortable to make changes, and a lot of people don’t have the discipline. Those who do will rise above the crowd.

BSB: What do you consider your greatest achievement?
McNeill: My two kids. They’re what I smile about most.

BSB: Does business travel take you away from them a lot?
McNeill: Yes. It’s very frustrating to be on a plane and not be with them. But we have a rule at Sterling that weekends are sacred. For the most part on weekends, I get to be home – and I turn off the cell phone.

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