Consolidators: Fix Auto USA to Hold Conference After Two-Year Hiatus
Maximize productivity by standardizing “best practices” across your organization.
“Since we started truly implementing standard operating procedures, 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 a four-year time period,” says Troy Gates, owner of a three-shop operation called Gates Collision Centers in Madison, Wis., which currently has 26 DRP relationships (something that would be virtually impossible without standard operating procedures in place and, more importantly, in use.
Got your attention?
Good. Keep reading …
Jennie Clark is 23 years old. She’s been running a small collision repair facility, Belkirk Body Shop in Kirkland, Wash., since 2003, when her father, Kevin, passed away. When Jennie’s father died, he left few instructions behind on how to run the business he’d been running for 25 years. Although Jennie has been working hard to learn everything she can, during this time, the shop has lost nearly one-third of its
Jennie’s father had a plan in his head for how the shop should run, how they should meet and greet the customer, how they should repair and paint the car, and so on. He did much of this himself, or guided others, and earned a strong reputation in his community. But when he passed away, he took his plans and workplace methods with him, leaving everyone left in the shop fairly high and dry — and flying by the seat of their pants.
Given the fact that much of this industry is composed of small, family-run businesses like Jennie’s, this scenario could easily play out in hundreds, if not thousands, of shops across the country.
Don’t put your family in Jennie’s position. Jennie hopes you’ll learn from her situation and take the steps necessary to create and follow standard operating procedures (SOPs). In fact, she’s working on her own right now — and learning from others in the industry who have already implemented them.
Now you can do the same.
A panel of experts in our field are about to share what they have learned about SOPs. Included, in detail, are:
What motivated them to create SOPs.
How they determined and created each of their SOPs.
How they deliver them to their employees, how they train.
How they make sure their SOPs are being utilized.
What kind of results they have seen.
If you do only one thing this week, read this article. It can change your life.
SOPs for You, the Reader
To maximize the effectiveness of what you’re about to read, please follow our:
STANDARD OPERATING PROCEDURE FOR READERS
Locate a highlighter to mark text of interest within the article.
Inform your office manager that you’re going to be involved in a very important meeting in your office and you are not to be disturbed.
Put a note on your door that you are not to be disturbed.
Step into your office.
Close the door.
Turn your office phone and cell phone to “Silent.”
Sit down in your chair.
Put on reading glasses (if needed).
Begin reading article. Highlight as you feel moved to do so.
As you’re reading, carefully reflect on the content and consider how it
applies to you, your business and your employees.
After reading, repeat step 9 as motivated.
Put together a game plan for your own operations, adding to what you
already do and improving it, as well as adding new things. Be sure to involve your employees.
Implement your plan, one piece at a time. Put one foot in front of the other.
Audit your team’s implementation.
Make adjustments as needed.
Seek continuous improvement.
NOTE: If you’re unable to follow procedures 2, 3 and 6, it’s even more vital that you read this article.
SOPs are detailed descriptions of specific tasks to be carried out in a particular operation.
“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.”
SOPs, when written properly, reflect years of training, know-how, experience, learning, testing, research and discoveries. SOPs are the perfect training and development tool for mastering established jobs. With them, you can continuously improve the performance of your employees and your operations.
SOPs that are carefully put together and effectively implemented help collision repair shops achieve a high level of proficiency, production and safety.
SOPs take some time and effort, but once you invest that time, you just might wonder what you ever did without them.
What motivated you to begin using SOPs?
Robert Tavares (Caliber Collision Centers): “The initial SOPs came from a need to standardize our processes. Early on, we saw lots of different, great operations. We brought a group of our best operators together, and with the help of a consultant, we got the best practices down and determined what would make Caliber unique. Lots of these are customer-service driven, but they’re also what distinguishes Caliber from our competition. And we needed to have initial buy-in — from our regional managers to people in the centers, who would be running
with these SOPs — in order to ensure their success.”
Troy Gates (Gates Collision Centers): “The motivation to use SOPs really came from the military. The joke I always tell in my seminar is that we put an ad in the paper, and we end up with all these other company rejects who walk in the door — and then we’re shocked and dismayed when they turn out to be a lot less than what they promised in their interviews. 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 quality training platform to develop our people.
“Let me tell you about my first job. My first day at work, my drill sergeant didn’t ask me how well I could drive a tank or shoot an M-16. He told me, and made it perfectly clear to me, that the sooner I understood that I knew nothing, the better chance I had of surviving the experience. Essentially what the military did is they trained me from the ground up with everything I needed to know to be a successful employee of their corporation.
“That is 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, high-performance result. Now I’m not saying we can replicate that in the collision repair industry — considering the resources the military has for training and development — but we need to come somewhere in between the two.”
Michael Giarrizzo, Jr. (DCR Systems): “Back in our JSI days, after reading Michael Gerber’s book, The E-Myth, we realized that we had to build this business to be saleable, even if we had no intention to sell it.
“The core of this organization has been involved in standard operating procedures since 1993. Before ’93, JSI was two locations with family members split between the two of them, and we just did it and knew we all did it the same.
“Then we went to a third location and then the fourth location, and we were running out of family members to manage them. So it became time to begin documenting what we did and to put it in place as training tools. We also began looking for opportunities to improve our processes. As we went to multiple locations, we wanted to build it in a way so every customer got the same experience. With standard operating procedures, if we improved a process, we could make a systemic change across our network of stores and affect every customer the same way.”
Michael Anderson (Wagonwork Collision Centers): “I decided to start developing SOPs after I read the book, The E-Myth by Michael Gerber. It truly inspired me. The only way I was going to have a life was to train everybody to do everything that I do, and the only way I can do that is to put what I have in my head down on paper. I wanted consistency in my facilities.
“We had a hard time finding technicians, and we had such a learning curve with apprentices that I thought by developing SOPs, it might cut down on the time and the learning curve of bringing apprentices up to speed to become full-fledged technicians. Apply them to the office staff, and you can take a CSR or estimator and get them up to speed a little quicker. So what I did, to start, was develop SOPs for our parts department. I hired a parts person, gave him the SOPs, and within 60 days, he was up and running great — and he kept raving about how helpful that SOP was to him. That really inspired me to develop other SOPs.”
Author’s Note: Notice that two of our panelists referred to the book, The E-Myth, by Michael Gerber. This book is a must-read for all business owners who want to have a business that runs in spite of them, not because of them. You can find this book on Amazon.com.
How did you determine and create your SOPs?
Michael Anderson (Wagonwork Collision Centers): “Initially I wrote the SOPs and said, ‘This is what you are going to do.’ On a scale of 1-10, that probably went over at about a 7. But I found when I get my key employees directly involved and they participate in the development process, they feel like they have ownership and then they’re much more likely to follow through on using SOPs.
“We have had roundtable meetings where we get together and I’ll say, ‘This is the SOP we’re going to work on today.’ I operate as a facilitator and extract the information. I’ll ask thought-provoking questions in order to encourage that. Then we take that, type it all up, put it in a structured format, and two or three weeks later, we present it and go through it, agree or disagree with it and make changes. It’s kind of like a review process. In the end, the final SOP comes out.
“The problem with our industry is that it’s not so difficult to do this for the office end, but it is from the technical end. Every car if different. You have to make some of your SOPs generic, but you also need to give some guidelines — as far as disassembly of a vehicle, the way we want to store parts, the way we paint a car. We’re want to paint a car the same way. Whether it’s a Porsche or a Cadillac or a Hyundai, they’re going to be sanded the same way and primed the same way, so you’ve got to make sure that you build that in too.”
Troy Gates (Gates Collision Centers): “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 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 a few weeks later when I saw them not following the best practice that I had illustrated for them.
“The first step I found is that you need to have written best practices. If you don’t write them down and put them into a training format, you’re not going to change behavior, fundamentally. Implementing SOPs is really about fundamentally changing behavior.
“You have to have employee ownership of the SOPs, or the SOPs will become dusty documents in the corner. But if you involve people, they’ll help you set expectations of where everybody should be at and they’ll take ownership and help you implement.”
Michael Giarrizzo Jr. (DCR Systems): “When you first dive into SOPs, probably the most difficult thing to figure out is, ‘Where do I start?’ The place to start is really documenting what you do today. How does a customer and a vehicle move through your process, A-Z, today? You start putting documentation in writing and building the visuals around that.
“To help us do this, we work with Select Tech [www.select-techpro.com]. Select Tech allows you to pull it all together in a very simple manner and with a high degree of technology, utilizing everything we have and putting it in its simplest, most direct form. And that’s really all it is — starting to document what you do today. When you start that process and involve all your people, you have a lot of interesting discussions and debates about how things are done.”
Dave Dewalt (DCR Systems): “There are really three things that are always happening. What you want to be going on, what you think is going on and what is really going on.”
How do you deliver SOPs to your employees? How do you train?
Robert Tavares (Caliber Collision Centers): “Service advisors and CSRs all go through mandatory training on their SOPs. We’ve incorporated much of these SOPs into the regular classes we offer. We teach a class called ‘Maximizing CSI,’ and we touch on six different SOPs in that course alone. SOPs that affect the service advisor and are important for CSI include vehicle review, vehicle delivery, production and teardown, and continuous customer contact. If we’re going to talk about CSI, we’ve got to talk about SOPs.
“If we have a class on salesmanship — capturing additional sales — we’ve also got to pull in some SOPs because there are some very important things that fall into that category. If we talk about improving our KPIs [key performance indicators] and our performance for our clients, again, there are a lot of our SOPs that need to be a part of that curriculum.
“We have those SOPs initially established for our CSRs and service advisors, and then we come back and reinforce them with our continuing education programs. We have developed our SOPs in one- or two-page reference sheets, done in PowerPoint and printable. They’re a quick reference and always available on our corporate network.”
JC Baccus (Caliber Collision Centers): “I’m in charge of implementing the teardown SOP. I’m training techs to properly perform a complete teardown at the beginning of the job so that we lower our supplements and cycle time. We go out, look at a vehicle and I’ll ask a tech, ‘What do you think? What kind of time do you think you’re going to see on this job when you get your estimate?’ ”
Michael Giarrizzo, Jr. (DCR Systems): “With the help of Select Tech, we now have our SOPs on interactive DVD with hot links to our forms. These DVDs include text, pictures, video and audio narration, so when we train our people, we’re assured of hitting at least one of their learning styles. We’re utilizing SOPs for consistent training and consistent operational management.
“The interesting thing is the people we have hired look forward to getting a document that states what our process is and what their accountability to that process will be.”
n Troy Gates (Gates Collision Centers): “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 cannot just hand them an SOP manual. The key part of what you need to do is 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.
“The key is that you have to pull them out of the work environment, look them in the eye and explain, ‘This is why we do things here 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 what type of service your customers receive. ‘This is why it’s important to follow this SOP.’ By training them, you then improve your results.
“The next step beyond training is testing. If you don’t test them, you’ll be left with different levels of comprehension. Also, people don’t pay as close attention during training if they know they won’t be tested.”
Michael Anderson (Wagonwork Collision Centers): “We worked with Select Tech to take our content and put it into deliverable form on CD. We feel that a picture paints a thousand words, so including photos, video and narration helps us get our SOPs most effectively across to employees, both existing and new. Who wants to sit down and read a bunch of text? We have SOPs developed in 11 different areas of the shop, covering every aspect of the repair. Through my consulting business, we’re making a templated, customizable version of these SOPs on CD available to the industry, saving them hundreds of hours of development time.
“The first CD we did was in Disassembly/Reassembly, since everything else revolves around that. Our employees and insurance partners have all been blown away by this. I did a workshop on SOPs at NACE. Over 200 people attended. It’s a hot topic right now, and I urge everyone to begin putting their own SOPs into some kind of deliverable form.”
How do you ensure your employees are following SOPs?
Robert Tavares (Caliber Collision Centers): “We’re always trying to tie back our SOPs to certain performance metrics. For example, for our production management SOPs, the CSI component of ‘delivered on time’ is the performance metric — we have certain goals we want every center to reach. That’s how we measure performance. For every SOP, we have a certain metric that we can tie back to it. If it’s quality, CSI, customer follow-up, quality, capture rate, there are 13 different SOPs that we currently have and are looking to refine and increase those, as our business increases.”
JC Baccus (Caliber Collision Centers): “For the teardown SOP, we use a checklist to check off items on a teardown, things that typically get overlooked, things like cavity wax, clamp marks. There’s quite an extensive list that we have. We plan to audit the files for the checklists to make sure the technician and estimators are using that checklist because a lot of dollars get overlooked by not getting paid for the things we do, like R&I parts.
“We tell the managers that they’re going to have to drive the process. The bottom line is the manager has to drive it or it’s not going to happen. If a technician does it a couple times and he doesn’t see a difference, he’s going to go back to his old ways. It isn’t something that’s going to happen overnight, but the techs will eventually see the value in this process.”
Troy Gates (Gates Collision Centers): “Auditing. This is where it takes real discipline and a more proactive approach. If you audit based on customer feedback and management feedback and are easily able to capture this feedback into a database, then when you do your employee reviews, you can reference this feedback and the trends 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.”
Michael Anderson (Wagonwork Collision Centers): “I have come to the realization that building the systems isn’t enough. You have to also build in auditing devices to ensure that the systems are being followed. That’s another important part of the equation.
“We use quality-control cards that our technicians are required to use and sign. In the beginning, they would fill them out, and if somebody did something wrong, I’d yell at them. I only used it to reprimand them and never used it to provide positive comments. So everyone viewed it as a thing that would just get them into trouble if they signed it, so they quit signing off on it, and it kind of blew up in my face.
“I went to them and said, ‘Look guys, you aren’t filling these out,’ and they finally came clean and said, ‘We’re not filling these out because you yell at us when we do something wrong, so if we don’t fill them out, you won’t know who did it and you won’t yell at us.’ I said, ‘Alright, give me another chance, and I’ll give you one.’
“So then I started using them to also give positive reinforcements and comments. I went a couple years where I didn’t really audit any, and then I went and checked a few and found a couple that weren’t getting done. People get busy and they run behind so maybe they decide not to use the form or don’t get around to it. But once they know that they’re going to be audited, that I’m going to randomly check on them once a month — and they don’t know when it’s going to be — now they’re always doing it because they don’t know when I’m going to pop in.
“The same thing with estimates. My employees were writing really good estimates, and they were using all the sheets and systems that I had in place. Then, without me monitoring them, the old way starts to creep back. It’s not like they’re intentionally doing it. But they need to know that somebody is going to check on them once in a while. You have to be consistent. If they know that every month, I’m going to be coming in there and checking 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.”
What kind of results have you seen after using SOPs?
Michael Anderson (Wagonwork Collision Centers): “Since we implemented SOPs, we’ve cut down our comebacks and re-dos dramatically. We didn’t have that many to begin with, but we’ve cut them back by 75-80%. Consistently we maintain 98% CSI. Used to be we had to hire 10 people to get one person who could work within my systems. We kept thinking that the other nine who
didn’t make it were just not up to the task, but the truth was that 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. So we also have less turnover.”
9 BENEFITS OF IMPLEMENTING
STANDARD OPERATING PROCEDURES
A reference for employee training, cross-training and retraining.
Less chaos and confusion in general and when employees leave.
Consistency, where expectations for a job lead to tasks being performed correctly every time.
Reduced risk of job failures and interruptions.
A basis for effective employee performance reviews.
Employee buy-in because employees help create your SOPs.
A clear understanding of who does what, where, when, why and how.
Team unity built around attainable standards and goals with procedures to achieve them.
A tool for evaluating efficiency and procedural correctness.
Michael Giarrizzo Jr. (DCR Systems): “SOPs can have a significant impact on your insurance company relationships. Most DRP relationships depend on a single point of contact, right? They want Joe to handle all their work. Their understanding is that there are no real standards in the shop, so if we can get Joe trained, we’ll place our faith in Joe.
“Or, ‘Let’s place our faith in DCR Systems where we know that whether it’s Joe, Fred, Lauren, Michael, Dave, whoever, they handle things the same way.’ They know we share the same mentality regarding our attack to strategic disassembly and the repair plan. Even if it comes down to market competitiveness, in the way you write that repair plan, if there’s a methodology that you go by — what you pursue first, second and third on how to attack different situations — and they understand that as part of your standard operating procedures, you stand a lot better chance of having them believe in what you’re doing.”
JC Baccus (Caliber Collision Centers): “The typical example I used to show the benefits we’ve seen using the teardown SOP is a Honda Civic that was hit in the rear. There was a lot of hidden damage that you couldn’t see, so the estimate was 10-15 hours. We did the complete teardown following our SOP — took things out of the trunk, took the tail lights out, etc. — and found cracked caulking underneath the tail lights, things like that. The job came out to 32.8 hours. That kind of stuff gets the service advisors to follow through and to write a thorough estimate.
“It’s important to get that teardown and final estimate done in the first few hours that the car is dropped off to get the ball rolling and to get those parts ordered. That way, when all the parts are in and that job hits the tech’s stall, he can work completely through the job and get it to the paint shop.”
Troy Gates (Gates Collision Centers): “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 a four-year time period, from 1996 to 2001. In 2001, I stepped out of the business and pursued the Performance Alliance.
“So if you want freedom, the only way you’re going to get freedom is to put standard operating procedures in place — not so much that you write the manuals but that you create the right culture and make sure that people hold each other accountable.”
Time to Get Started
SOPs are an integral part of the daily lives of our panelists and their employees. And these SOPs translate into enhanced, consistent delivery of great customer service, high-quality repairs and, perhaps most importantly, high referral rates.
Many believe that SOPs and the development of tomorrow’s skilled workforce are the two issues that will separate the competitors from the pack over the next decade. Take a good look internally at your operations and see if you’re addressing one of these issues, both of these issues or neither. It’s not enough to have SOPs in your head — you must have them in some deliverable form in case something happens to you.
Once in a deliverable form, actually deliver them, and then test and hold your employees accountable. Best case scenario is that you might be able to step back a bit and let your business run itself like Troy Gates does. Worst case, you take steps to improve how your business runs, how you train your employees and how you serve your customers.
BSB Contributing Editor Mark Claypool is 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 Skills-USA and still serves, on a volunteer basis, as the TeamUSA Leader for the WorldSkills Championships.