Continuing our in-depth look at standard operating procedures (SOPs), this month we feature Gates Auto Body, a group of three shops in the Madison, Wisc., area.
Inside Gates Auto Body
Owner Troy Gates didn’t actually intend to get into the collision repair business. He attended the University of Wisconsin with his sights set on international finance. But today he finds himself owning and running three successful collision repair shops.
Before we continue, let’s revisit the definition of SOPs. SOPs are detailed descriptions of specific tasks to be carried out in a particular operation. They’re clearly identified “best practices” within an organization. SOPs, when written properly, have a power within that reflects years of training, know-how, experience, learning, testing, research and discoveries. SOPs are the perfect training and development tool for mastering established jobs, and with them you can continuously improve the performance of your employees and your
Gates believes that the competitive advantage a service company earns is based on its employees’ performance, and that’s what every service company sells. He believes that three key things impact an employee’s ability:
Gates believes SOPs can help you in each of these areas. He and many others also believe that one reason SOPs are important is because they determine what makes you fundamentally different from your competition. Top performing companies differentiate themselves by identifying who the best people are in their area and developing them into top performers.
“SOPs are best practices, what you have found to be the most effective way to execute a particular procedure with the maximum result,” says Gates. “The whole concept behind SOPs is that you’re going to standardize that best practice across your organization so that you’re able to maximize the results, time and again.
“Consumers are also looking for consistency. Employees are looking for consistency as well in that they want to know what’s expected of them. Everyone wants to get up in the morning and do a good job at work. No one wants to get up in the morning and go to a job where they’re going to fail. The problem that we have in our industry is that we don’t provide our employees with the right environment, nor do we provide them with the right training or reference tools so that they can exceed our expectations for the customers.”
We sat down with Gates to explore the subject even more.
Q: What do shops need to do to provide their employees with the right environment?
Gates: “You need SOP champions within your company; it cannot be the manager’s job. The manager’s job is to manage the process, not to do the actual work. Managers need to be SOP experts. You need to pick out a lead person in each department to be the SOP expert, to be the orientation person, to be the trainer when new employees are hired. They’ll also take a lot of ownership and pride in their SOPs if you identify them as the lead SOP person. That process will help you engage them in the continuous improvement side of the equation.
“The first mistake I made in my own business was what I would call ‘my next best idea.’ My employees would call it ‘Troy’s latest crazy idea.’ I would then try to verbally train my people, which essentially came down to my stopping by and saying, ‘Hey, why don’t you do it this way?’ and then being shocked and dismayed a few weeks later when I saw them not following the best practice I had illustrated
Q: What are the steps to getting SOPs functioning in a shop?
Gates: “The first step that I found is that you need to have written best practices. If you don’t write them down and don’t put them into a training format, you’re not going to fundamentally change behavior, which is what implementing SOPs is really about.
“Secondly, you need to train your people. The key thing here is that you cannot randomly point out SOPs to people. When you hire a new employee, you can’t just hand them an SOP manual. You need to set time aside, one on one, and go through the SOPs with your employees, even if you have to break it up into 15-minute, half-hour or hour segments. You have to pull them out of the work environment, look them in the eye and explain, ‘This is why we do things this way.’ Go over the issues you’ve seen and show how the SOPs are designed to proactively prevent those problems. Show the employee how he or she plays a role in the type of service your customers receive. Clearly show them, ‘This is why it’s important to follow this SOP.’ By training them, you improve your results.
“The third step is testing. If you don’t test your people, you’re left with different levels of comprehension. Also, people don’t pay as close attention during training if they know they won’t be tested.
“The fourth and final step is auditing. This is where it takes real discipline and a more proactive approach. If you audit based on customer and management feedback and capture this feedback into a database, you can reference it and what the trends are from both your customers and managers toward your employees. You’ll then be able to move your organization forward. That’s when employees really take SOPs seriously.”
Q: What are some realistic ways shops can make that happen?
Gates: “Body shops don’t have separate HR departments to follow people around and evaluate whether they’re following the SOPs or not. We aren’t insurance companies with our own auditing departments. Through the DuPont Performance Alliance, we have a Customer Service Index service called ‘Performance Feedback.’
The reason we call it that is because we want to focus not so much on the statistics but rather on customer comments. We share this with employees each week to explain what’s behind the customers’ experience and to show them, ‘Here’s what role you played in either a positive or negative experience.’
“All those comments we focus on in our surveys are uploaded into our hub. We can sort and filter those comments so that when we do our quarterly review, what we call a quarterly performance feedback session, we can share both customer feedback and management feedback with employees. We also capture what their challenges are with implementing SOPs and really show them what the trends are.
“On the customer feedback side, we filter first for compliments because, in order to motivate people, it’s best to always focus on what they’re doing right. When we build them up by pointing out what they’re doing right, we’re raising their own internal standards without having to tell them what not to do.
“Our customers are really the ultimate auditor of our SOPs. They’re going to give us the answers to the test of what we’re doing right and what we’re doing wrong. What can we do to improve our business? We filter for compliments and then we filter for complaints. Now we have the data to do our quarterly review.
“The other key is that there are two sides to every story. What we’ve built in is the response section. Employees have the opportunity to respond online to customer complaints to clarify the situation. We hold a five-minute meeting with each department. We go over what the compliments were for the week and point out a couple learning opportunities that surfaced. We build up our employees in front of their co-workers – ‘Let’s celebrate this raving fan comment we got from this customer’ – while at the same time identify where someone dropped the ball.”
Q: What kind of culture would you call this?
Gates: “We call this a culture of accountability, where everyone knows what’s expected and that we’re going to share those success stories and failures with everyone else. That’s also what helps us push out the bottom 20 percent of the workforce who are consistently trying to do whatever they can get away with. It’s hard to have the discipline to do that, but with this kind of culture it happens on its own.
“By sharing this feedback with our employees each week, they start to visualize – they can see who those people were from just last week. To get people to understand SOPs’ value, they’ve got to see how those best practices actually impact the customer. That’s what technicians (and even estimators) don’t frequently see, because we as human beings don’t naturally go out of our way to tell people positive things.
“On the response section, when we get complaints, it’s rare that any one failure point is 100 percent one person’s fault. There are usually other people involved in the process or there are extenuating circumstances. We need to treat those cases as learning opportunities by capturing what went wrong and doing research to figure out where the process broke down or who wasn’t following the process. We’re turning
that failure point into an investment
in the future performance of our
Q: Can you give an example of a mistake becoming a learning experience?
Gates: “A real-world example might be overspray on the inner wheel well. There’s a prepper and a painter. The prepper is the one who traditionally masks the vehicle. You should, however, bring that customer complaint to the painter. You say, ‘Look, our SOP is to back mask the inner wheel well.’ The painter will say the prepper put a wheel cover on the wheel and that’s what caused the issue. ‘I was in a hurry that day and I just needed to get the car done. It’s the prepper’s fault, period.’
“In order to effectively audit SOPs, you have to eliminate the blame game. It’s critical to identify what role the prepper played and what role the painter played. So you say, ‘Now, you know that you, Mr. Paint Technician, are responsible for quality control here, and it’s your job to inspect the masking before you take it into the spraybooth. You have the responsibility to fail that preparation job before it moves on. Look, this is how it impacts us.’ (Show the painter the customer survey).
“This is where you illustrate the failure point for the painter. ‘Now I need to talk with the prepper as well about this same failure point and the role that he played in it, but you played a role in this whole situation, too.’ This follow-up is recorded in our online customer comment section for later review.
“There are also complaints we get from customers that are not the employees’ fault at all. It’s necessary to do the research in order to identify that, for example, this had to do with the customer’s incorrect perception of what was supposed to happen, or it was somebody else’s area of responsibility, or there’s a process that’s broken. It’s necessary for us to look at those trends now and identify, through trend analysis, where we need to fix our SOPs, where we need to improve them and how we can use them to motivate our people to change their behavior.”
Q: We’ve heard you say that shops must eliminate the “gloss-over effect.” What do you mean?
Gates: “It’s when you’re explaining to someone what they did wrong and how they need to improve it and you see their eyes gloss over as the information goes in one ear and out the other. What I’ve found is that you have to give them specific examples, otherwise it doesn’t work. Nobody’s going to respond to, ‘Hey, your billable hours really need to improve.’ However, they might respond if you say, ‘Here is the list of SOPs that you’re not following and here’s the result,’ or ‘This is the fourth time this has happened and the other times it happened are documented in this report. Where are we headed here?’ or ‘What is your commitment to the job?’ That’s when you really get people to pay attention. The customer feedback is permanently in the database, so the message is that this is going to be part of the employee’s permanent HR file – what they did right and what they did wrong. Employees have to know that you do pay attention to the trends.”
Q: So how do managers oversee this kind of program?
Gates: “On the management side, as another part of the auditing process, we carry around an “Employee Feedback Form” on our clipboards.
It has six different sections where you can jot down items as you see them occur. For example, you see that a technician isn’t wearing a fresh air respirator, or they didn’t fill out the quality control form, or, conversely, they filled out the quality control form and signed it but they obviously didn’t check what they signed off on because we now have an issue with that item. These examples go on the negative side, but we do the same thing on the positive side as well.
“Throughout the day, managers see things occur and jot them down along with the employee’s name. They check off whether it’s a positive or a negative suggestion and write a quick note to themselves. They aren’t writing a paragraph, just jotting down a note in the normal course of the day. Then, once a week they enter this into the HR section of our Web site under ‘Management Feedback.’ Later, they review it with employees: ‘Here’s what I’ve observed,’ or ‘Great job, appreciate it,’ or ‘Here’s the issue at hand and here’s what I need to see you improve on.’ They get the employee’s response and put that in there as well. When they have their quarterly meeting, they’re ready to discuss those trends.
“The biggest part is just changing the behavior of your managers so that they’re proactive. Everyone is going to say, ‘I don’t have time for that.’ Well, take the example above from the ‘Employee Feedback’ form. All you have to do is jot down one comment a day and you’ll have plenty of feedback to go over with your employees. It doesn’t have to be a huge project. They’ve just got to hit the high points by jotting down a quick note. We all have the habit of trying to ‘manage by conversation.’ Being proactive means you manage by trends. That’s when you change behavior, and that’s when people will really start to appreciate it.”
Q: But don’t you need something more than having management monitoring this?
Gates: “You must also have employee ownership of the SOPs or they’re still just dusty documents in the corner. So if you involve these people, they’ll help you set the expectation of where everybody should be at and they’ll take ownership and help you implement those SOPs. That’s when you get true implementation – when employees are holding each other accountable to the higher standard. That takes time, and that takes building a culture. It’s putting all four of these pieces of the puzzle in place, starting out with the motivation, providing the big picture and moving on to involving your employees in the written SOPs, and then getting them to take ownership for the training, testing and auditing process of it.”
Military as Motivation
Like most owners and managers we interviewed during our research phase of this series on SOPs, Gates found major motivation from Michael Gerber’s book entitled, “The E-Myth Revisited – Why Most Small Businesses Don’t Work and What To Do About It.” Gates makes this book mandatory reading for his employees. “Gung Ho” and “Raving Fans” are other must-reads. But Gates credits his time in the Army as his primary motivation.
Gates: “My motivation to use SOPs really came from the military. The joke I always tell in my seminars is that when we put an ad in the paper, we end up with all these other company rejects walking in the door, and then we’re shocked and dismayed when they all turn out to be a lot less than what they promised in their interviews. And we always complain to everyone that there’s a lack of quality people in our industry, when what we really have is the lack of a good quality training platform to develop our people.
“So let’s compare ourselves to the military. Do we pay our people more or less than the military pays for people? Do we have a higher or lower risk job? Do they bring in people with extensive training and knowledge and background? Of course not!
“On my first day at work at my first job in the Army, my drill sergeant didn’t ask me how well I could drive a tank or shoot an M-16. The sooner I understood that I knew nothing, the better chance I had of surviving the experience. They trained me from the ground up with everything I needed to know to be a successful employee of their ‘corporation.’ That’s how they’re able to take a wide variety of people from different backgrounds and mold them into effective employees of their corporation to deliver a consistent, predictable and high performance result. I’m not saying that we can replicate that in the collision repair industry to the level that they have, especially considering the resources they have for training and development, but we need to arrive somewhere in between the two.
“That’s why I’m emphasizing that SOPs are so critical. I explain the importance of really laying out the big picture for people, that you need to look these people in the eye when you’re first hiring them and talk about what your vision is for the company, what the commitment is with the team, the work that’s expected of them and what role each employee individually plays. How everyone’s job here isn’t to fix cars or write estimates, that everyone has the same job: to earn future referral sources for our company. And we have to recognize how interdependent each one of our responsibilities is to produce that result of earning future referral sources.”
Q: So what does this mean to your employees or recruits?
Gates: “It means that, at the end of the day, I want you to be part of a company that you’re proud of. Do you really want a typical job? Wouldn’t you love to be a part of a company where you can tell your friends and family how excited you are to be there, and have a sense of pride about really being part of the top performing company in your area? That’s how I envision this company, that’s what I want to share with people, that’s the type of people I’m looking for. I’m asking you to join the team, to be a part of the solution. Are you with me on this?
“So at that point you set the stage with your employees, appealing to their higher sensibilities. It also gives you the framework around this entire performance feedback model that says, ‘Our goal is to be a top one percent performer, so forget everything you know about how other technicians are managing at other body shops. I’m giving you this feedback because I want to turn you into a top performer. This is employee coaching, not a criticism session. We all have room for improvement, we all need constant feedback and that’s what we’re doing here.’
“So by setting the stage this way, you’re able to really create the right environment for people to absorb the message of why SOPs are so important. We also had all of our employees listen to the book ‘Raving Fans’ on tape and then had them take a test at the end. That’s a good way to retrain existing employees on this culture model and what you’re trying to accomplish.”
Q: How have SOPs helped your relationship with insurers?
Gates: “First of all, you have to have your estimators on board before you can pursue additional DRPs. I believe it’s critical to the success of body shop organizations today to pursue as many DRPs as possible. For most estimators, the last thing they want to hear you talk about when you’re already in five DRPs is that you want to get into a sixth. Why? Because their attitude is, ‘Are you crazy? I can’t even keep up with the five we’re already in.’
“We’re in 22 different DRPs today. I was able to put the infrastructure in place through building these training programs, which serve as reference guides for my estimators to be able to use as a tool to meet the expectations of each of the insurance companies. Everyone is cross-trained to handle all of the DRPs. The issue you as an owner have to deal with there is, ‘I don’t want to lay awake at night worrying about when my lead estimator for American Family or State Farm is going to leave and take that DRP with them to the next company they go to work for.’
“It’s the whole ‘E-Myth’ concept: you’ve got to have the business run itself and not be people-dependent but systems dependent. You cannot deliver customer service on a consistent basis if you have dedicated estimators because you don’t have an equal volume of insurance company work flowing in each day. Sometimes you could have four people from the same DRP in the waiting room at the same time, so your estimators have to be crossed-trained. The reason why insurance companies are asking for that dedicated person is because most body shops don’t have SOPs or internal training programs or reference guides.
“You can use SOPs to market to DRP programs, too, because DRP coordinators, in their performance reviews, are responsible for how well they can get their group of body shops to follow the insurance company’s procedures. Those SOPs will help you look like a star. Those DRP coordinators will also like to hear and see evidence that you can handle a sixth or seventh DRP.”
Q: What have SOPs enabled Troy Gates to do as a manager?
Gates: “It’s a statistical fact that I only spend two hours a week in three locations and that we grew from five employees to 50 in four years, from 1996 to 2001. In 2001, I stepped out of the business and pursued duties with the DuPont Performance Alliance. So if you want freedom, the only way you’re going to get it is to put SOPs in place. You don’t have to write manuals but you do have to create the right culture where people hold each other accountable. It’s all aroud us. We just have to wake up and pay attention to it.”
So there you have it: culture, the development of SOPs with staff involvement and buy-in, testing and auditing, plus a ready-made template for effective employee reviews and a process for continuous improvement. SOPs give freedom to owners and managers and allow the shop to run by itself. Too many shops operate through a group of independent contractors, each running their own business within the business. SOPs can be the answer, even if you didn’t know the question.
Seem a little bit out of reach? Not really, when you consider that this doesn’t happen overnight. It takes time.
Where does our business come from?
And time is something nobody seems to have enough of. But isn’t that precisely why we should be paying more attention to SOPs? Gates spends two hours a week managing his business. How many hours do you spend? Gates’ shops grew from five employees to 50 in four years. Do you own your business or does it own you?
Handled properly, SOPs can give managers and owners a freedom they never before thought possible. But it requires more than lip service. There are resources available out there through your paint company partners and others to help you see this through. Why not make the development, delivery and implementation of SOPs a goal for the months to come? I have yet to find a disillusioned shop owner that has effectively created and used SOPs.
In fact, he’s wishing he’d done so years ago.
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.