Silverstein: The Metric Trap

In the late evening hours of December 29, 1972, a brand-new Eastern Airlines
Lockheed L-1011 crashed into the Florida Everglades. Out of the 176 people on board, 101 lost their lives. The cause? A critical distraction caused by a faulty light bulb. The crew shifted their focus from flying the plane to addressing a “problem.” They did not notice that the autopilot had inadvertently disconnected, causing the plane to descend while traveling at over 225 mph in a left turn. It was a catastrophic result of tunnel vision. 

As auto shop owners, the penalty for becoming distracted and maintaining “tunnel vision” is much less severe, but it is just as important to the health of our businesses. As technology intertwines more with our daily life and demands more attention, it becomes a greater distraction from the business of taking care of customers. 

Look, I get it, I really do. You’re sitting in your office staring at your Shop Management System dashboard and the numbers look amiss. Your ARO has dropped by $15 bucks, or your gross profit is shrinking. So now you need to think of “solutions” to address that “problem.” Now there are employee conferences, policy reviews, and checking marketing effectiveness—all in an attempt to be more efficient, more productive, and more profitable.

But here’s a truth that your P&L won’t reveal: You can have the most “efficient” shop in the country and still be out of business in five years. Why? Because you traded your soul for a set of Key Performance Indicators. You stopped being a shop owner in the relationship business and become an amateur data analyst and overpaid clerk. 

The Transactional Trap

I’ve spent 26 years in this game, and I’ve watched as the industry shifted from a relationship-based business model to transactional. It’s the “Olive Garden-ification” of auto repair—standardized, mediocre, and completely devoid of character. When shop owners manage solely by the numbers, cars are treated like tickets and customers become walking, talking wallets instead of friends and neighbors. 

Take ARO—the “Holy Grail” for many “industry” coaches. They tell you to push DVIs, find any fault (no matter how small), and “maximize the yield” on every car, every time. But there are consequences to this approach. Here’s what they don’t tell you: In a recent Cox Automotive Service Study, the customer senses the “upsell” and never comes back. You might win the battle for $500 today, but lose the war for $20,000 in lifetime value. 

Labor Guide Time vs. People Time

Then there’s technician productivity. In previous columns, I’ve discussed bringing flight deck-style leadership to shops. In the cockpit, if a pilot is pushed to hit a metric at the expense of safety, people die. If you push a tech to consistently beat an often-arbitrary labor time target, they’ll stop striving for being an A Tech and will be content to hang parts or worse yet, someone who fires the parts cannon. 

Here’s another “secret” for you. The technician shortage isn’t just about money; it’s about respect. If your techs just feel like a number associated with a KPI, they’ll likely bolt the first time the shop up the street promises to treat them like men. You can’t measure culture on a pie chart or bar graph. There’s no KPI for that. 

The Vanity of Volume

And don’t get me started on car count. It’s the ultimate “vanity metric.” I’ve listened to shop owners brag about doing 60 cars a day while their net profit is tanking because they are doing nothing but rapid-fire oil changes without creating meaningful value for the customer. They’re knocking themselves out for the sake of a high number on a report. That’s not a business, it’s a treadmill. 

Refocus: Fly the Airplane

How do we use data without it becoming a distraction? It begins with a mid-course correction and regaining perspective.

1. Look beyond the monitor. Get out of your office. Walk the lobby floor. If a customer is sharing stories or photos of his family with your service writer, that is a KPI that means they’ll likely be back.
2. Stay away from analysis paralysis. Instead of focusing on 25 or 30 KPIs, focus on three that are important to you. Start with effective labor rate, gross profit dollars per hour, and comeback rate. 

The numbers are barometers to measure performance. They aren’t the destination. If you spend all of your time fixated on them, you’re going to hit a wall. Focus on your people and your earned trust, and the craft and the metrics will usually take care of themselves. Remember who you serve and why you started your business in the first place.