There’s a repair shop located in a New England town that has grown from a handful of bays 25 years ago to three locations. But, this is not your typical rags-to-riches story with year after year of steady growth. In fact, the two new locations were acquired last year. But, what’s really amazing is that less than three years ago, this shop was in the midst of a financial meltdown. In 2015, the shop had an $80,000 loss, with no cash reserve and mounting debt. So, how did the shop owner recover and turn the business around in a little over a year? He fired all the wrong people, starting with the manager.
It all started about five years ago when the owner of the shop did what many shop owners do after many years of being in business: He put a manager in charge, ventured out into other interests and stepped away from the business. What he didn’t do was to put enough safeguards in place. But the killer was hiring a manager who had his own agenda, and that agenda crossed the line of ethics.
Before I go on, the owner of the business wants to remain anonymous. However, I am sure that it will be clear to everyone reading this article as to what went wrong and the lesson we can all learn from it.
With the shop owner devoting his time to other interests and putting trust in his manager, he took his eye off the ball. Before long, he noticed a drop in car count, sales and profit. By the second quarter of 2015, it was obvious that things were spiraling out of control. The shop owner then stepped back into his business and starting auditing everything. What he uncovered was mind boggling.
Most of the problems rested with the manager. Instead of leading the company, he chose a destructive path of complacency and indifference to his role. His rough character turned off many customers, and soon, other employees followed his behavior. In addition, the manager limited car counts on certain days, which added to the decline in business. The manager would also come in late and leave early. With no strong leadership, the rest of the staff stopped caring, too.
The last straw occurred when the shop owner made an unplanned visit to the shop and witnessed the circus firsthand. Instead of seeing customers’ cars in the service bays, the manager had his family’s cars being worked on, with no invoices generated. Enough was enough. It was time to act. This was the summer of 2015.
You might be asking, “Why didn’t the other employees revolt against the manager?” This is what I have learned about these types of situations: The shop owner put this manager in place. While the manager’s behavior was not in line with the owner’s, the employees are put in a tough position, and avoid confrontation. They will question their leader’s integrity—both the manager and the shop owner. The result is a toxic and an unsustainable workplace. When people don’t trust their leaders, the business becomes fractured and failure is imminent.
The shop owner exhausted all the contacts in his pipeline to find a new manager. A few months later, after finding a new manager, he fired the old one. It took months to begin to see a turnaround and a few more people had to be fired, also. The shop owner created a system of checks and balances, where every element of the business is now monitored. Ten months later, the shop was profitable again, and the new manager and owner began working on a strategy to open up two more locations, which they did in 2017. By the way, the shop owner gives most of the credit to his new manager, not himself.
I suppose the question now is: Can you truly step away from your business and have the confidence that everything will be OK? The answer is yes. There comes a time when all your years of hard work should allow you options in life. The lesson here is not what the shop owner achieved, but how it was achieved. Great companies have the right culture and the right safeguards in place. But most importantly, building a great company takes the right people.
In 1962, President Kennedy toured the NASA Space Center. He noticed a man carrying a broom and walked over to him and asked, “What do you do here?” The man answered, “I am working on putting a man on the moon.”
When you hire the right people, who share in the same vision and mission, your company will achieve great things.