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In SOPs We Trust

Standard operating procedures could offer a body shop owner more freedom and the ability to attract new insurance business by creating ‘verifiable’ trust.

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BSB Contributing Editor Mark Claypool has more than 30 years of experience in the fields of workforce development, apprenticeships, marketing and Web presence management with SkillsUSA, the I-CAR Education Foundation, Mentors at Work, VeriFacts Automotive and the NABC. He is the CEO of Optima Automotive (www.optimaautomotive.com), which provides website design, SEO services and social media management services.

There’s a saying that goes, “Those that can, do. Those that can’t, teach.” But then there’s Michael Anderson, who actually can do both. Anderson owns Wagonwork Collision Centers in Alexandria, Va., and also travels the country as a one-on-one consultant for collision repair shops.

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As a consultant, Anderson travels coast to coast and draws as many as 300 people to each of his workshops on standard operating procedures (SOPs) and estimating.

As a shop owner, Anderson has been able to squeeze $285,000 per month out of his 8,200-square-foot shop (shop 1) and $185,000 per month out of his 5,000-square-foot shop (shop 2) – neither of which have any DRP relationships. It’s not that Anderson is anti-DRP, “I’m just pro getting paid for what we do. But we’re still under capacity because there’s just not enough work in our area at the present time.”

Anderson is able to get Wagonwork to do all this work in about 42 hours per week per technician. He structures the techs’ working hours so they finish by 1 p.m. on Fridays, giving them the opportunity to spend more time with their families over the weekend.

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The Wagonwork shops don’t do hack work, either. Bodymen finish off their work in 220 grit. Painters then finish off in 320, then 400, then 500. Therefore, they don’t prime over anything less than 500 grit. They de-trim everything, closely follow manufacturer and I-CAR procedures, and strive for their completed work to meet exact factory specs. They’re also one of the few shops certified by Audi to work on the aluminum-frame A8.

Shop 2 has scored Customer Satisfaction Index (CSI) ratings of 100 percent in seven of the last 12 months. Both Wagonwork shops average in the high 90 percent
range consistently.

So you’re probably thinking that Anderson must be at his shops all the time to get those kinds of results, directing every move and getting maximum production out of his people. He must also have managers watching over every move his staff makes, right? Wrong. Anderson is only in the shop an average of four days a month! So the work must be left up to the managers then, right? Nope, Wagonwork has no “manager” position in its organizational chart. How is that possible?

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“Because we’re ‘systems dependent,’ not ‘people dependent,’” says Anderson. “We operate by process, not by luck. The shop truly runs in spite of me, not because of me. In partnership with my employees, we’ve developed SOPs for absolutely everything we do. From cleaning toilets to answering phones, from the type of seam sealers we use to the grit of sandpaper we use, it’s all documented and delivered via computer and in printed form.”

Wagonwork employees not only know what to do, they’re also clear on exactly how to do it. They’re empowered to do their jobs and are held accountable for doing so. Better yet, they hold each other accountable even more than Anderson does. Wagonwork’s team atmosphere enables that to happen.

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Like the Giarrizzos (DCR Systems) featured in the February 2006 issue of BodyShop Business and Troy Gates (Gates Auto Body) featured in the March 2007 issue, Anderson was heavily influenced and inspired by Michael E. Gerber’s book, “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It.” The passage in the E-Myth book that brought it all home for Anderson was, “It’s the system, not only the people, that will differentiate your business from everyone else’s. …To create a world of our own. It’s nothing more than a flight from the world of chaos ‘out there’ into a world of our own. It’s a yearning for structure, for form, for control.”

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Going His Own Way
Following the traditional model of collision repair didn’t make much sense to Anderson because it was too labor intensive and adversarial. He didn’t have much of a life outside of business, and to him that was unacceptable. He came to the conclusion that the only way he was going to have a quality of life beyond work was to train his staff to do everything they did the way he would do it.

The only way he could do that was to take all of the SOPs that were in his head and put them down on paper. It wasn’t enough to just dictate how he wanted things done, so he involved his team in reviewing his procedures to get their participation and, in turn, their buy-in. He wanted consistency in his shops, and that’s what he got as a result of documenting their best practices and then requiring that those best practices be followed for each and every repair, no exceptions.

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Anyone who has served our country in the armed forces can tell you that the military also runs things by procedure. Anderson learned this firsthand after serving in the U.S. Air Force.

“We learned about how each individual plays his or her role and gets the job done by working together,” says Anderson. “That’s what I wanted to see in
my shop.”

When Anderson got out of the service, he came back to work for his father in the shop. The lack of coordinated, uniform processes was blatantly evident, and Anderson vowed that he would make changes. He knew those changes might have to wait until he bought his father out of the business, but those changes were ones he knew needed to be made if he was going to run the show.

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One of the first things Anderson did when making changes was develop an SOP for the shop’s parts department.

“I hired a parts person, gave him the SOP and, within 60 days, he was fully up and running and doing great,” says Anderson. “In our industry, I knew that the number-one reason cars didn’t get delivered on time was simply a missing clip or hardware item that wasn’t noticed during the disassembly phase. It didn’t make any sense because it was so preventable if you just had a process to deal with it.

“By following our parts SOP, our parts guy was able to virtually eliminate last-minute parts surprises,” Anderson continues. “We were getting the right parts ordered, we were checking them in effectively so we’d have time to exchange them when the vendor made an error, and we were getting timely credit for our returns. Our new parts guy kept raving about how helpful this SOP was to him. That further inspired me to develop SOPs for all of the other operations in my shops.”

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Initially, Anderson wrote the SOP himself and said, “This is what you’re going to do.” On a scale of one to 10, he rates that approach at about a seven. Not satisfied with that approach, he found that when he got his employees directly involved, everything began to click and key employees began to drive the process.

Jumpstarting the Process
To really get things rolling, Anderson announced an all-day mandatory staff meeting on a Saturday, held in a meeting room at a local hotel. He shared his vision of developing and following SOPs in every operation in his shop and getting the staff’s active participation in developing these SOPs.

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“At the end of that first meeting, I told everyone to look around the room at their fellow employees,” says Anderson. “I explained to them that, a year from now, there were some people who weren’t going to be working at Wagonwork. I said that it wouldn’t be because we didn’t get along or that I was necessarily right and they were wrong, or that they were right and I was wrong. It was just that some people weren’t going to buy into this. It didn’t make them bad people or me a bad person, it was just the truth of the matter. I asked them to really search their hearts and souls as to whether or not they could follow this. Sure enough, at the end of the year, there were three or four people out of 20-some people who weren’t there. Sometimes you have to get the right people on the bus and the wrong people off it. The best part was that we were producing more work with fewer people.”

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Anderson firmly believes that you need to develop a culture where everybody believes in the systems and, most importantly, the use of them.

“I think when you’re building your systems, you have to build in what I call the ‘why factor,’” he says. “People need to understand why you’re asking them to do what you’re asking them to do. And once they understand the ‘why,’ they’re willing to follow the ‘how’ because they understand there’s a good reason for it. I found the reason people wouldn’t do something was because they didn’t know the why. Recently, we had Generation X. Now we have Generation Y with the letter ‘Y,’ but I think it should be Generation ‘Why.’ The reason is because today’s young people really want to know why, so you have to build that into your SOPs.”
Anderson believes that his team is truly proud of their shop and their SOPs because they helped develop them and saw the results.

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“I don’t think they’re as passionate as I am, but they are motivated and share my vision of where we want to take the company. When we hire new people, they say, ‘Man, this is cool to come to work in a place that actually has some structure to it.’ When we hire a new apprentice who hasn’t been a part of the industry before, they don’t know anything else and follow our systems to a tee. They often come up with suggestions for improvement, too, and we encourage that. Everybody who works here knows that this is the way we’re going to do things and, short of process improvement, there simply is no other way.”

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Lessening the Learning Curve
Like most shops, Wagonwork struggled to find qualified technicians, and the learning curve with apprentices was steep. Anderson theorized that developing SOPs might cut down on the time it would take to bring new apprentices up to speed, given that SOPs had been invaluable to training practically everyone else including estimators, parts people and customer service reps. What he found was that SOPs helped increase the odds of a new hire’s success within the organization.

“We used to hire 10 people to get one person who would stay and do a good job,” he says. “We kept thinking that the other nine who didn’t make it were just not up to the task, but the truth was we weren’t giving them the right tools to be successful. Now, with SOPs in place, we find that our retention of new hires is much higher and there’s less turnover and wasted time recruiting, interviewing and training new people.

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“When I hire somebody, they’ve never worked in my shop before and they don’t know what I expect,” Anderson continues. “Most shops tend to leave things up to chance, and new hires often learn almost by osmosis. With our team system and processes in place, the learning curve has been lessened and the success rate has gone up incredibly. We’ve been able to take ordinary people and enable them to do extraordinary things simply by giving them the very best SOPs to follow. On top of that, it has freed me up from the need to be so busy working in my business. I can travel and do workshops and consulting and remain confident that my team will do the things I used to do and still get the same result as if I were doing it myself.”

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Easier Said Than Done?
Anderson is the first to admit it’s not easy to document your best practices and prepare your staff to implement them. He and his team have been tweaking and fine-tuning their SOPs for 12 years.

“One of the challenges our industry faces is that it isn’t so difficult to create SOPs for the front office end of our business, but on the technical side of things it’s a completely different story,” Anderson says. “Every car is different. You have to make some of your technical SOPs more like general guidelines. As far as disassembly of a vehicle, the way we want to store parts and paint a car will always be the same. We’re going to paint a car the same way whether it’s a Porsche, Cadillac or Hyundai. They’re also going to be sanded and primed the same way. But there has to be some latitude on certain technical aspects of the operation, and employees need to be able to make decisions and act upon them without having to run everything by me. Our guidelines allow them to do that.”

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Anderson also believes that without consequences, there are no rules. Here’s an example of how Anderson deals with holding his staff accountable:

“We used quality control (QC) cards that our technicians are required to use and put their signatures on. They would fill them out but often didn’t sign their names. They didn’t sign their names because the QC cards would then tell me who specifically did something wrong and I’d then yell at them. I only used these QC cards to reprimand them. Like most managers, I never pointed out the positives, only the negatives. So everyone viewed filling out the QC cards as a thing that would just get them in trouble if they signed it, so they quit signing them and it kind of blew up in my face.

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“I went to them and asked why they weren’t signing the QC cards, and I had to really pull the reason out of them. They finally came clean and said they weren’t signing the QC cards because I would get mad and yell at them when they did something wrong. I apologized to them, acknowledged that they were right and asked them to give me another chance. I still wanted the cards filled out and signed, but I told them I would give positive reinforcement and comments as well, and this they agreed to.”

After that incident, Anderson decided to randomly audit the QC cards and saw that sometimes they weren’t filled in completely or someone forgot to sign his or her name.

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“I understood that people had gotten busy and probably had run behind, so maybe they decided not to use the form or didn’t get around to it,” he says. “However, once they found out that I was going to randomly check on them once a month and they didn’t know when it was going to be, they began filling those cards out no matter how busy they got.

The same thing was happening with estimates, with employees haphazardly filling them out. At first, they were writing estimates properly and using all the sheets and systems in place. But without Anderson monitoring them, they got sloppy.

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“It wasn’t like they were intentionally doing this, but I knew that they knew if somebody was going to check on them once in awhile, they were going to have to pay more attention,” Anderson says. “You have to be consistent. If my employees know every month I’m going to be coming in there and randomly pulling a closed RO file to review it, and they don’t know what time of the month it’s going to be, then they’re going to be consistent. It keeps everybody honest and on their toes. And if the rules and systems aren’t followed, my employees themselves have determined the consequences they’ll face. They check up on each other so I won’t have to. That’s good for everyone, and it allows me to point out the positives much more.”
The benefits go beyond what happens in the shop among the employees and extends to his relations with insurers. Often, having more than one location doesn’t mean that the quality of work is going to be the same from one shop to the other. Having SOPs in place provides what Anderson refers to as “verifiable trust.”

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“Insurance carriers want to verify that they can trust you,” Anderson explains. “They say, ‘If we want to consider you as one of our DRP partners, how do we know your employees are all going to do things the same way, tech to tech, bay to bay, shop to shop?’ That’s a legitimate concern that I’m sure they’ve learned by experience out in the field. Showing them that you have SOPs and systems in place puts you way ahead of the game and gives insurers a way to verify that they can trust you. We tell them that this is how we want all of our people to put a door skin on and that we’re going to audit them occasionally and make sure everybody is doing it the same way.”

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“CSI scores tell only part of the story,” Anderson continues. “Insurers can verify that we’re giving good service because of our CSI ratings. But how can they verify that the quality of the repair is going to be good? In our shops, we have specific guidelines of how we’re going to do a specific body or paint procedure. Though we don’t have any DRP relationships, SOPs can be very helpful with regard to estimates. If the person who’s writing all the DRP assignments for a particular insurer leaves the company, how can the insurer be sure that there isn’t going to be a learning curve for his or her replacement and thus the need to closely monitor things for 90 days. When you’ve got SOPs that say, ‘This is how we will write all of our ABC Insurance estimates,’ that insurer doesn’t have to baby-sit you any time there’s an employee change.”

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SOPs have also helped Anderson reduce his shops’ comebacks by 75 to 80 percent.

An Endless Journey
Anderson contracted with Select Tech Professional Services to put his SOPs into a deliverable format on computer, complete with photos, videos and testing. He has 10 different modules in use in his shop that cover:

Administrative (front office).

Damage analysis (estimating).

Disassembly/reassembly.

Parts.

Shop/vehicle steward (janitorial, detailing, etc.).

Paint (waterborne and solvent-based).

Body (multiple units).

Mechanical (multiple units).

PPE, safety and HazMat.

Tools and equipment.

Anderson’s SOPs have caught the attention of many in the industry over the past several years. Over the past two years, he has conducted two highly rated workshops at NACE on SOPs. He recently signed an agreement with DuPont Performance Coatings (DPC) to make these SOPs available to
DPC shops.

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“It’s validation that we’ve been on the right track for over a decade,” says Anderson. “I’m excited that we’ll be able to share our successes and systems with so many others. It took us thousands of hours to get to this point, so sharing our modules with others in this way will save others a tremendous amount of time and effort.”

Anderson says that working on SOPs is like a journey. “I’m traveling down this road, and it seems like every time I round a curve, I’m learning something new and also learning that this is something I need to do to improve our processes for checks and balances purposes. And the road never ends. This is a constantly evolving process, and we have just the right culture to approach this journey one step at a time.”

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BSB Contributing Editor Mark Claypool is the president and CEO of Mentors At Work. He has nearly 25 years of experience in the fields of workforce development, business education partnerships and apprenticeships. Claypool is the former executive director of the I-CAR Education Foundation and the National Auto Body Council (NABC). He was the director of development for SkillsUSA and still serves, on a volunteer basis, as the TeamUSA Leader for the WorldSkills Championships.

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