How Do Highly Successful Shops Do It? Part 4
Systems and Processes. We know we need them, but for many of us, creating and implementing them is quite a daunting task often requiring time that we don’t feel we have. Until now.
Yeah, I know, no one ever imagined or wanted to have extra time in May. This is normally when many shops are getting into full swing with no time to spare. Now, there is a lot of positivity going around right now in our circles, which is great. There are also stories of hard times which are understandable. At some point over the past few weeks I had this thought that, “This is my time to shine.” Anyone else think that? Reminds me a little bit of Andy Dufresne’s mantra, “Get busy living or get busy dying.” All of us have worked so hard so this is nothing new, but the adjustment will be the kind of work that we do.
In the past few months of this series, I’ve laid out some concepts for taking your shop to the next level using lean methodology. Specifically, this is about getting more results using less resources. This is more than just fixing the car correctly. And for those of us who are used to staying busy, well now IS your time to shine. Your time to adapt and your time to finally work on the systems and processes that you know your shop needs. Now, I couldn’t possibly review all the shop processes here, so I’m going to offer more on the how’s and why’s of processes. And give a few examples.
The first notion that I want to get across is that this is ongoing. Creating and implementing systems and processes is not a “check it off your list” type of thing. A few months ago, Bryce Evans shared his experience reading Simon Sinek’s recent book, The Infinite Game. In the spirit of that book, our goal is not to win but to keep playing. Even if we could “win” it would be for a brief moment since the game changes constantly. Remember that you-know-what-virus?! Systems and processes are ongoing. Forever. Let me share an example: 20 year old Ryan had a personal finance process that he named Process V1.0. He called his bank to get his balance. If he had money, he spent. And if not, he saved. A few years later (perhaps after getting burned?!) he developed Process V2.0. Now, Ryan recorded all of his purchases and deposits into his checkbook ledger. This helped with that pesky overdraft issue. By age 30, Ryan was on to V3.0 which included a personal budget sheet which included money to be set aside for savings and annual expenses. V4.0, V5.0, and on to a point of financial responsibility that allows for a family, multiple shops, retirement, and rainy day (or pandemic day) funds. Moving from personal to business, many of you utilize an inspection. Our first inspection was, can you guess? Yep, Inspection V1.0. After using inspection V1.0 for some time, a customer called in and said, “Hey, I just had my car in the shop and 3 days later my battery tested bad, what gives?” Inspection V1.0 back in the day included a visual-only check of the battery. So inspection V1.1 was born which included a load test of all batteries. The lesson here is this: “Getting burned” is your signal that you’re ready for the next process version. Remember when Einstein said that “insanity is doing the same thing over and over but expecting different results?” That’s what we’re doing if we’re not stopping to take the time and assess why our results are not what we want and then making a change. Now this brings up two more good points to make on systems and processes. Measurement and the scientific method.
Ever heard the phrase “You can’t manage what you don’t measure?” If you’re trying to get a handle on your new customer acquisition budget but you don’t know how many new customers you have every month currently, then you’re flying blind. We need data. All of the KPIs out there that we hear so much about, those need to be understood. Once they are understood, they get measured on a regular basis. Some look at those KPI’s monthly but I recommend weekly. Larger shops might need to even track daily. When we see a KPI that’s off, that’s our sign to dig in. In the battery example, that would be a lower CSI score (customer satisfaction). We’d ask why, determine the reason, and then make the change. In addition to KPI’s and CSI, be sure to include your “Staff satisfaction” in the mix. Weekly or even daily meetings happen in top shops and I can say that some of the best process suggestions have come from staff in those meetings. Owners can’t have all views of the shop at once so we need to count on input from our staff to make system and process improvements. It also has the added benefit of getting them invested in the future.
I also mentioned the scientific method, anyone remember that from high school? In a nutshell, it’s “change one variable at a time and then watch the results.” Another way of looking at it would be that we need a baseline. Perhaps we think we have too many comebacks in the shop? I had that issue in the past and began tracking the number of comeback hours per technician and also the reason. After 2-3 months, the data began to be consistent and we saw that some techs magically had many more bad parts than other techs! Interesting, right? With the data in hand it was much easier to go to tech A and ask him why he had such a higher comeback rate with bad parts than the guy standing next to him when they both had the same resources, cars, and parts. That discussion there was (hopefully) the variable change and then we watch to see if those comeback numbers drop for tech A. How about low effective labor rate? Try making it more difficult for your advisor to warranty work, discount jobs, or tie their pay to GP so there’s more in it for them not to give away the farm. Maybe then there’s zero warranty work but CSI score goes down since customers are upset. Tie the advisor’s pay also to 95 percent or better CSI score. Get the idea? Measure, make a change, and then re-measure.
Now some people have an idea of processes as being long documents, perhaps even a 100 page “process manual” that defines everything the company does. Personally, I love this idea but it’s not always practical. There is a time and place for formal and informal processes. Am I allowed to take a bathroom break in your shop? If so, does that need to be written on a piece of paper? The majority of small businesses use informal processes, ones that are conveyed verbally and “understood” by staff. Some examples of formal written processes a shop should have would be an employee manual, a vehicle inspection, phone answer script, sales script/process, comeback documentation sheet, weekly KPI report, and clear processes around authorization of work and cash controls. Ultimately you’ll have to decide which processes are needed in your shop and which ones will be formalized. A good process also creates accountability when staff are trained and fail to perform.
Some of us are going to be a little off our game right now, but all of us are the hardest working people I know—we wouldn’t be business owners otherwise. If we’ve got extra time, then this is the opportunity to build up the foundation of our business so that when we’re slammed busy again, we’re better prepared to crush it. Take this time to lean out the machine that is your shop. Take another fresh look at what your customers want, review the areas of waste I outlined in last month’s article and expand your current processes. Add a few more, document a few more, and update a few to the next version based on results. The game is literally changing as I write this. Some will fall behind so be the one who rises to the challenge and prepares now for the future. Do that and you’ll be one of the shops that Ratchet+Wrench reaches out to regularly to ask, “How did you do it?”