The MSO Project - September 2020 by EndeavorBusinessMedia-VehicleRepairGroup

NAVIGATE TOUGH

CONVERSATIONS PAGE 22

YOUR NEXT

CRITICAL HIRE PAGE 8

S T R AT E G I E S A N D I N S P I R AT I O N F O R M S O S U C C E S S

FIVE

KPI-TRACKING TIPS PAGE 16

SEPTEMBER 2020

BALANCE YOUR TIME The efficiency tips to get more out of your day PAGE 18

KEYS TO GROWTH Implementing time management and strict quality control has helped Heath Harris grow his Missouri CARSTAR shop.

Brought to you by:

Sponsored by

At Heath Harris' CARSTAR shop, time management is a daily pursuit.

The keys to having difficult conversations

SEPTEMBER 2020 | THE MSO PROJECT

WHO’S BUYING

ACQUISITIONS H&M Auto Body in Miami. This marks Classic Collision’s ninth south Florida location, and it now operates locations in Georgia, Florida, Alabama, and South Carolina. With the acquisition, H&M Auto Body will be known as Classic Collision Coral Gables and expands Classic Collision’s coverage from Palm Beach and Broward county into the Miami area. H&M Auto Body has served the Miami Dade and Coral Gables communities for over 25 years.

M AY

CARSTAR ADDS LOS ANGELES LOCATION In May, a CARSTAR facility, CARSTAR First Choice Auto Body, opened in Los Angeles, Calif. This is the first CARSTAR location for owner Edwin Khoshabeh. Joining CARSTAR gives Khoshabeh access to the company’s learning portal, CARSTAR University, and connects the shop with other industry resources. CARSTAR First Choice Auto Body is a 6,500-squarefoot facility. The body shop is an I-CAR Gold certified facility. 4

JUNE

CARSTAR GROWS IN ILL., CALIF. In June, CARSTAR added a pair of new locations to the fold, with the addition of locations in San Francisco and suburban Chicago. The multi-store network of independently owned shops recently announced the opening of CARSTAR Sunset Auto Reconstruction in San Francisco, as well as CARSTAR Geneva Body Shop in Illinois. The San Francisco location is owned by Victor Sirhan, who has been in the collision repair industry for 14 years, after originally starting in the insurance realm.

THE MSO PROJECT | SEPTEMBER 2020

Meanwhile, CARSTAR Geneva Body Shop has opened in Batavia, Ill. The owner of that shop is Pasquale Roppo, a veteran of 35 years in the collision repair industry. The native of Italy said in a press release that he felt he had pushed his shop as far as he could take it himself, prompting his recent decision to join the CARSTAR family. J U LY

GA. MSO CLASSIC COLLISION ACQUIRES MIAMI SHOP Classic Collision LLC, an Atlanta-based MSO, announced in mid-July that it had acquired

The 1Collision Network and Canada-based CSN Collision Centres formally announced the merger of their business operations. The 1Collision and CSN footprint now spans 240 locations throughout North America, with a combined network revenue of over $550 million (U.S.). Day-today operations in the U.S. and Canada will continue to be led by Jim Keller and Flavio Battilana (the COO of CSN Collision Centres), respectively, with Ryan Bruno overseeing both networks. Both organizations were formed in the early 2000s. “We believe we’ll be able to combine our strengths in terms of corporate level support through Insurance relationships, operations, marketing, vendor relations and business planning and extend that service and deliver more value on both sides of the border,” said 1Collision President Jim Keller, via a joint press release.

COURTESY JENNIFER WAGNER PHOTOGRAPHY

1COLLISION NETWORK, CSN COLLISION CENTRES ANNOUNCE MERGER

PART# 66321D3000 CAN YOU NAME THAT PART?

OUR PARTS EXPERTS CAN. Not only does he know it’s a ’16 Hyundai Tucson OE right front fender, but he knows you’ll probably need fender bolts, brackets, a splash shield, insulator, liner screws, grommets... you get the idea. Whether OE or Aftermarket, we know our parts, we have the inventory and we’ll deliver everything together. You’d be nuts (part# 52950-14140) not to give us a try.

CALL US. 855-462-9042 Turn us on as a preferred vendor.

EDITOR’S LETTER

Back to Basics

RECONNECTING WITH YOUR ROOTS Recently here at FenderBender, we’ve experienced one of those random bouts

ANNA ZECK Editorial Director The MSO Project

THE MSO PROJECT | SEPTEMBER 2020

of employee turnover, and, as a result, it forced me to do something that, frankly, I haven’t done in years now: write stories for the magazine. When I first started working for FenderBender as a staff writer, my entire job consisted of writing magazine stories. But as I continued growing in my role, that part of my role decreased more and more, until I finally just wrote my editor’s letter. I’m sure many of you can relate to this: You may have started out as a technician, working on vehicles every day—something that, in all likelihood, you now haven’t done in years. It was an interesting exercise for me to go back to the basics and write many of the stories that make up this quarter’s issue of The MSO Project. It reminded me of those early years in my career, trying to master the job and learn the industry. It made me feel more connected to our staff and the work they do every day. And it also reinforced the reasons for many of our processes and our dedication to making sure our team follows them. Because, man, looking at 45 minutes’ worth of unorganized interview notes really isn’t fun. It’s almost ironic, then, that the main story I wrote for this month’s issue is about finding a COO or operations manager for your shop. Although it felt good to get back on the ground f loor, it’s absolutely not something I—or you—should be doing with any regularity. Sometimes that’s a bitter pill to swallow; I love reporting and writing. Doing that over the past month felt so familiar. But it’s simply not my role anymore, just as working on the day-to-day of your business isn’t yours either anymore. If you haven’t already invested in a key C-level position like a COO, I highly encourage you to read the story (not that I’m tooting my own horn) because the sources in that story so plainly lay out not only when it’s time to hire that position, but also exactly what that role should entail. And, perhaps more importantly, what your role should entail. I hope that as we enter fall and finish out 2020, you’re feeling better about the state of your business, and ready to continue on that growth plan.

TRENDS+ANALYSIS

Navigating Turbulent Times

LESSONS LEARNED FROM RECENT GERBER FALLOUT BY ANNA ZECK

In early June, Gerber Collision & Glass was forced to apologize and terminate members of its management team in the Seattle market after racist photos depicting a marketing manager wearing blackface and an afro wig during a virtual conference call were obtained by FenderBender and distributed on Twitter. The photos depicted the marketing manager and a number of employees, including numerous market managers, during a business meeting with Gerber’s Washington state manager. In response, Gerber issued the following statement on its Twitter and Facebook:

GETTY IMAGES

“Gerber Collision & Glass has taken immediate and decisive action against employees who were involved in a racial incident. An investigation concluded that behaviors of these employees during a virtual meeting in early May were unacceptable and not in keeping with the company’s culture or values. Individuals directly responsible for this incident are no longer employed with us. “We apologize for the offensive image from a virtual meeting that was posted on social media. We have the obligation to build and support a culture that empowers our people and fosters a sense of belonging, where everyone is respected and supports inclusive thinking, and where we celebrate the diverse voices in our workplace and our communities. While this incident involved a very small number of employees, Gerber Collision & Glass has committed to taking meaningful measures that include training and supporting our entire workforce to become more active in diversity, inclusion and sensitivity in the near future.”

The Boyd Group had diversity and inclusion, along with harassment and antiracism, policies in place. “It is with extreme sadness and disappointment that we are dealing with this incident. There is no question as a company, that we have zero tolerance for harassment, violence, and discrimination of any kind, including racism. Zero tolerance means that it is completely unacceptable. I can confirm to you that we have taken this seriously and our actions reflect this,”

said Tim O’Day, president and CEO of the Boyd Group. The Boyd Group further outlined the steps the company took to deal with the incident in a statement: “Our senior leadership team immediately launched a thorough investigation of the incident Wednesday morning (June 10) and concluded that there was a violation of the company’s zero-tolerance policy on race discrimination. In less than 18 hours, the individuals directly responsible

for this incident were no longer employed at Gerber,” the statement read. Gerber declined to provide information or details regarding the individuals involved in the incident. In order to quickly communicate the issue to the company’s leaders in every market, O’Day conducted a mandatory teleconference call later that afternoon. He informed the team about the incident and, according to the statement, reiterated the organization's zero-tolerance policy. O’Day concluded the meeting with the following statement: “I am committed to ensuring we, as a company, take the appropriate steps, including investing in additional training for our team, as well as enabling and supporting our team members to become more engaged in changing our local communities.” The Boyd Group, said O’Day, further addressed this issue and reinforced the company’s commitment to a more inclusive workplace. “While this incident involved a very small handful of employees in our organization, the Boyd Group is committed to doing more work in this area,” the statement read. “Meaningful measures will include training and supporting our entire workforce to become more active in diversity, inclusion and sensitivity in the immediate future.” The incident led to other MSOs, including Service King Collision Centers, to issue similar internal memos, and a wider conversation about policies at shops regarding social media use by employees. Many HR experts have recommended instating (and emphasizing) a social media policy, particularly one that notes that, if employees make it known they are employed by your shop, they are not allowed to make inflammatory posts that could reflect negatively on the business.

SEPTEMBER 2020 | THE MSO PROJECT

FEATURE

EXECUTIVE DECISION ARE YOU READY TO ADD C-LEVEL MANAGEMENT?

ou likely still remember what it was like just running one single store. You were there every day, day in and day out. You knew every inch of the building, every employee, every operation. You set the culture, the processes, the SOPs, the behaviors. You might have been known as the friendly, familyowned collision repair center. But what happens when your time is suddenly split between two stores? That’s the question Leroy Rush, business development manager at Sherwin-Williams, asks nearly all of his MSO clients. And what happens if it’s split between three stores, or 10, or 20? Suddenly, after spending six months opening a new store, you visit one of your other locations and realize, things aren’t the same. Processes aren’t being followed, there’s high variation between locations, and there’s not a chain of command influencing each employee’s actions—even with great managers.

THE MSO PROJECT | SEPTEMBER 2020

“There’s a reality that can’t be ignored: it diminishes your influence and impact,” Rush says. “Imagine if you have 20 locations. There could be stores that haven't seen you for 30 or 45 days. You could have employees that have not yet met you. There’s zero influence over behavior and culture.” Luckily, there’s a position so simple, yet critical, that, if effectively utilized, can solve those problems: an operations manager or COO. There really is no reason to needlessly stress yourself out and spend every day spinning your wheels, Rush says. And, no, adding a C-level title won’t make you lose the personal feel of your business; it will actually free up your time to allow you to spend more time working on that culture and brand. “As you become a multi-store operator, it changes. The friendly local family collision repair center becomes two, becomes three. It becomes a corporation,” he says. “The need to modify the way you approach multiple store operations changes. You don’t have to lose that family feel; that’s a culture thing. This is about operations, to sustain multiple locations.”

GETTY IMAGES

By Anna Zeck

ARE YOU READY TO HIRE AN OPS MANAGER? ARE ALL MY LOCATIONS MAXED OUT?

There’s no hard-and-fast rule about when the time is right to hire an ops manager, but, Rush says, there’s an easy way to tell if you’re beyond ready: Are you at your wit’s end? Beyond just stress, though, are you finding yourself more frequently reacting to your business? The matter that you used to manage well and were out ahead on, are you now getting a call from your store manager that something’s gone wrong and you have to fix it? That’s an indicator that you’re spread too thin and don’t have a firm grasp on your day-to-day operations. However, hiring an ops manager shouldn’t be a strictly emotional decision. It also comes down to the following factors, outlined in the graph on the right.

NO YES

Work on increasing volume first (RO counts, revenue)

Am I able to stay on top of issues at all of my locations? NO YES

Work on streamlining processes across the entire operation

Is my P&L statement financially sound? NO

Hiring an Ops Manager So you’ve made the decision you’re ready to hire an ops manager. Next logical question: Where do you find one? Easy, Rush says: internally. There’s credibility and cultural influence with an internal hire, and they’re already trained in the way your business operates. But, from there, it’s not entirely easy at all, really. “There’s also risk. Just because an individual runs a single location well, a multi-store manager requires different attributes,” Rush says. “Do not promote someone straight out of a general manager chair without knowing how they’ll truly perform. You will lose that person if you have to demote them.”

YES

Work on financial stability first

Set gross, net profit goals for ops manager hire

BEGIN OPS MANAGER HIRING PROCESS

SEPTEMBER 2020 | THE MSO PROJECT

FEATURE

Defining the Role On a basic level, the owner provides the leadership, management, and vision necessary to ensure that the company has the proper people and systems to effectively grow the company. The operating officer is responsible for all hands-on operational aspects of the company, and the store managers are responsible for the managing of tasks. That’s just an overview, though. Rush outlines the duties of those positions as follows:

That’s why he suggests a very systematic approach to promoting an internal candidate to ops manager: 1. Identify your next level of talent.

Look at your org chart and identify those with leadership qualities. 2. Get a feel for their goals during monthly one-on-one check-ins. 3. If they’re interested in management, begin to groom and train them.

Give the store manager responsibility for a second store, while still running the first store. Allow them to mentor, coach and, operationally, begin to manage the second location by working with the manager on a regular cadence. 4. Observe the positives and negatives.

In particular, note how he or she interacts with the second store manager. “The manager at the second store is usually not going to be excited that someone else is coming in to help them,” Rush says. “So, how does the potential operating manager manage that? You’re always going to have that. An operating manager coming in and managing managers is always going to have its challenges.” If you don’t have someone at your stores who can step in, Rush says that you certainly can pull ops managers from other industries, but the key will be to rapidly educate that manager on the nuances of the collision repair industry. He says that a good, functional multi-store manager should be able to do that within six months.

THE MSO PROJECT | SEPTEMBER 2020

OWNER

• Visionary leader • Owner develops the next location. He or she works with real estate, banks, contractors, equipment vendors, etc. • Enjoying life! All jokes aside, Rush says that, at some point in an owner’s life, he or she likely is re ady to enjoy more downtime.

OPERATIONS MANAGER

• Operations • Provide annual strategic operations plan to drive companies’ goals • Provide leadership to location managers through store ops plans • Responsible for driving the company to achieve goals • Human resources • Responsible for all personnel functions • Responsible for recruiting, hiring and termination • Training • Develop employee development programs • Oversee the execution of training strategy • Finance/Budget • Provide financial analysis each month • Prepare an annual budget forecast and quarterly updates • Accounting • Supervise payroll, billing, accounts payable, accounts receivable • Technology • Develop, monitor and update a technology plan • Quality • Develop and supervise quality assurance program • Marketing • Develop or delegate strategic marketing plans and work with in-house or outsourced support

STORE MANAGER • • • • • • •

Ensure staff attends training Provide weekly reports to ops managers Manage numbers and KPIs for his or her specific store Manage staff at store by exhibiting leadership Provide personnel updates to ops managers Work with ops manager to hire and terminate employees Meet market goals and objectives

UNDERSTANDING THE ROLES

OWNER

Growing & expanding locations

STORE MANAGER

Achieve desired outcomes & goals

Work on day-to-day operations & goals

Making it Work If you read the previous job descriptions and realized you’ve handled nearly all of the ops manager’s responsibilities, you’re not alone, Rush says. “It takes a strong personality just to have your own collision center. It’s rare,” he says. “Imagine that driven person. They’re not easily persuaded to relinquish control.” Although you might not naturally be inclined to have a second in command, before bringing on an ops manager, it’s vital to fully understand the positions and what each will handle. “I’ve seen where there were ops managers brought in and when interviewing the ops manager, they’re very dissatisfied because they're not given authority, overridden, second guessed,” Rush says.

Set the company vision

OPS MANAGER

The best way to combat that is with a written, strategic operations plan, which allows owners and ops managers to peacefully coexist and work together. There are a few levels to an effective operations plan: The strategic operations plan outlines a market-level MSO strategy stating market goals, objectives and general action items. Its purpose is to drive leadership focus, collaboration and actions to manage toward the desired outcomes of the business, not just “hope,” Rush says. The store ops plan performs a similar function at the store level for the shop manager and staff. This ops plan is more specific and mirrors the market’s goals and objectives. The shop ops plan is a highly detailed, customized plan specific

to each shop with action items, due dates, and persons responsible. In the strategic operations plan, the owner and operations manager should go through and assign out responsibilities, so it’s clear who is responsible for each action item, how that person will report on the action item, and how frequently it will be discussed. In the shop ops plan, Rush recommends creating a spreadsheet where each action item is listed out, assigned out, and has a due date attached. “Store managers are working off an ops plan that helps us meet the goals of the market strategy,” Rush says. “Theirs is more granular and that includes actionable items: Sit down and meet with Lee Rush about I-CAR training. Schedule Lee for I-CAR training.” You’ll also want to determine a cadence for the operations manager to check in with the store managers on the operations plans, so that both individuals are on the same page with decisions being made on the shop level. “If I’m a COO and next thing you know, I get a call from a manager that, ‘I have to fire so-and-so,’ my response is, ‘That’s not possible because I have never seen it in your ops plan that you send every Monday by 10 a.m. How can that performance begin to slip and there’s no communication?’ That happens all the time,” Rush says. “The ops manager can get in front of that and help the manager save that employee and improve retention. “I would know about it if I’m an ops manager because I’ve been looking at it in the ops plan for three months. We’ve been working to develop a plan. When we get to the point where we need to terminate an employee, it’s been part of our plan. There’s no conversation needed.” For examples of how to create an operations plan on all three levels, head to fenderbender.com/operationsplan.

SEPTEMBER 2020 | THE MSO PROJECT

BUSINESS BUILDING

BRANDING NEEDS TO BE DELIVERED CONSISTENTLY TO INCREASE CUSTOMER SATISFACTION BY MELISSA STEINKEN

Continuity creates trust for customers. It’s the same principle for body shop operators with 2–5 locations and body shop operators with 10 or more locations. How do you expect a customer to become familiar with your brand if it’s not cohesive? Take McDonald’s, for an example. You know that if you pull into the drive-thru of any McDonald’s in the U.S., you could get a Happy Meal or a large Diet Coke and medium fries. These are staples to the fast food chain. But, there’s still some nuance. For example, customers going to McDonald’s franchises in southern states might always expect to order a large sweet tea (a southern staple). Customers can expect the same consistency in service and quality of product but each location has its own little bit of local flavor. Body shops are no different. A customer should be able to expect a certain level of service and quality repair regardless of the location. But, each shop’s “staples” might look a bit different. Melanie Spring, chief storyteller at Melanie Spring Productions and creator of Bite-Sized Branding, shares how to build a cohesive brand strategy for your business. 12

THE MSO PROJECT | SEPTEMBER 2020

1. CREATE A BRAND BOOK.

When body shops follow the same guidelines across locations, then customers can anticipate the same level of service, Spring says. She advises creating a guidebook for employees to reference. This “brand book” should contain the company’s logo, style, voice, content and all the other ancillary materials as well. Make sure it is as specific as possible describing how the company writes sentences and what punctuation is preferred. The guide can be as long as 25 pages or just shorter style guides. “There are two different styles of brand books,” Spring says. “One you can use to train and the other can be used for more of a stylistic perspective and that can be just a couple of pages.”

GETTY IMAGES

Boosting a Brand

4. ASSIGN ONE PERSON TO MANAGE THE BRAND’S MESSAGES.

The book should be created as a “living document” that can be uploaded to the cloud but also made to be printable.

marketing expert, and front desk, for example. Make sure everyone is on the same page with the one brand voice.

2. NARROW DOWN A VISION STATEMENT.

3. SET UP SOME SORT OF INTERNAL QUALITY CONTROL.

The phrases “mission statement” and “vision statement” are often used interchangeably—but that’s inaccurate. The vision statement represents who you are as a company, and should be shared privately, between employees. Reflect on how the company works as a team, how it works with clients and how the company prepares itself, Spring says. Understanding the company’s core values is critical to forming not just a brand but a unique brand. Form a voice for your body shop, she says. Customers shouldn’t hear different messages from the company’s CEO,

Once the vision statement and brand book are created, the body shop should have a way to test if all locations are following the same brand identity. Maybe this means the shop operator places “secret shoppers” to visit each location. Or, an owner can take time to do intermittent check-ins at each facility. Spring recommends taking time to visit each shop personally and assess how it is operating. After all, an owner could be tracking CSI for a long time but not once take measures to implement customer feedback.

One area of branding that might get overlooked is maintaining the shop’s Facebook page or other social media sites. For multiple locations, the body shop could have separate Facebook pages for each one. If so, one person in a higher position should oversee the content being posted on there. That way, one person can make sure the brand’s message is told consistently across multiple pages. But, be aware of bandwidth. Spring urges not to take on too much and, if it’s easier to have one company Facebook page, stick to one. “It’s really hard for even big companies to maintain multiple social media feeds,” Spring says. “It’s really easy for them to target ads to different locations, so if you have one Facebook account but four different locations, you’re going to have everyone doing all their reviews in one place and then you do ads to get it out to different locations.” Shops can filter social media photos and video ideas from staff to one person. Encourage people to share the work they're doing but send it to one person to manage posting.

5. BRING LOCAL PERSONALITY TO EACH SHOP.

Find a cause or program to support that makes the acquisition stand out from others under the same brand. For instance, use marketing dollars to support a local charity. Or, support a local sports team. Even if there are limited resources, every business should have some giving back element to it. “If you’re going to build a brand, you’ll need to build a club to go along with your brand,” Spring says. Figure out the customer you’re trying to attract into the shop and build the brand’s personality from there. SEPTEMBER 2020 | THE MSO PROJECT

BUSINESS BUILDING

Communication Upheaval

6 TIPS FOR SENDING OUT A STREAMLINED, UNIFORM MESSAGE TO STAFF BY ANNA ZECK

Patrick Donadio has a simple phrase that sums up what he feels is the importance of good communication: “What people aren’t up on, they’re down on.” And that’s just the beginning. That small seed of doubt breeds assumptions and fear begins to take over, which can wreak havoc on your staff and shop culture. That’s only more exacerbated by the rampant anxiety and uncertainty that 2020 has ushered in for many people. “We’re in a less connected environment in that we can’t see each other,” says Donadio, a communications coach and author. “When you can’t manage by walking around, remember the value of keeping people informed. The more people are informed, the more they’ll be connected.” Naturally, that only becomes more complicated when you own multiple locations and can’t be at those locations every day. Donadio outlines six tips for getting the right information and messages across to staff throughout multiple locations.

1. CONSIDER NEW COMMUNICATION VEHICLES.

More than ever, you will need good lines of communication, Donadio says. Provide opportunities to communicate out to employees and for them to communicate back to you by making sure those vehicles are available. “How do you want people to communicate with you—email, text?” Donadio says. “There’s a lot more information you need to communicate. Do a communication channel assessment and determine what you’re using, what’s working, what you can add.” Those technologies to add could be an Intranet site, virtual meetings, an instant messaging system like Slack or Google Chat, or a private Facebook group for all the shops. 14

THE MSO PROJECT | SEPTEMBER 2020

2. GET COMFORTABLE WITH VIRTUAL MEETINGS.

If you already conducted weekly staff or leadership team meetings, keep doing those—virtually, Donadio says. However, note that there’s a few differences when it comes to conducting virtual meetings: A. Send an agenda ahead of time. People need time to think and get ready. Before, you likely had the option to walk around the shop and hear what’s going on, thereby getting ideas. Without that option now, Donadio says, there’s a good chance you’re not as up to date with the concerns of your staff. Ask people to submit agenda items. B. Build in a little bit of time for a checkin at the beginning of meetings, and encourage your managers to do the same.

This is an easy way to take the temperature of staff. C. Communicate guidelines about how employees can best contribute to virtual meetings. This might be a new tool, so staff need ground rules. Communicate how and when they can ask questions, if there’s a moderator, and ask everyone to turn their cameras on. The latter helps build connection and you can better read body language. D. Be mindful of your background and ensure the lighting is OK and there aren’t any notable distractions. E. Pay attention to the camera and talk to the camera. F. Do a quick technical check before the meeting to check audio, lighting and Internet connection. G. Get comfortable with the tools available through virtual meetings, such as sharing your screen or sending polls.

3. MAKE A POINT TO SHARE GOOD NEWS.

Donadio says it’s safe to assume that there’s some anxiety and fear among your team. That’s why it’s critical for leaders to maintain a positive outlook. “Who knows what their fear is— that’s why it’s important to keep them informed,” Donadio says. “We have to remember to keep the morale high.” There are easy ways to do that, including sharing encouraging stories, small wins, or asking everyone to share “30 seconds of good news” at the beginning of weekly meetings.

“Have a few moments that you can share something good or exciting or that you’re proud of. During normal times, they can see you walking around and smiling. When they don’t see you, they need that more than ever,” Donadio says. “People need to know you care about them.”

GETTY IMAGES

4. WORK WITH YOUR MANAGERS TO TAKE THE TEMPERATURE OF STAFF.

If you have a weekly managers’ meeting, Donadio says to encourage them to be your eyes and ears on your facility’s shop f loor. What are the challenges? What are they hearing from employees? Another option, Donadio says, is conducting a 30-minute town hall meeting where

employees can hear directly from you and ask any questions they may have.” “Managers can keep you informed, but think about how you could be available,” he says.

5. CREATE A LOCATION TO STORE ALL IMPORTANT INFORMATION AND ANNOUNCEMENTS.

If you don’t already have a company-wide Intranet site, Donadio says now could be the right time to create one. That allows you to create an easily accessible COVID-19 page and list out employee benefits, guidelines, recorded meetings, resources, etc. If you don’t have the resources to do that, consider sending a weekly newsletter so that everyone receives all the same information.

6. ASK THE TEAM FOR HELP.

If communication isn’t your strong suit, or it’s always been a challenge in your business, get feedback, Donadio says. Ask your team: What can we do to achieve better communication? “Don’t dictate it—co-create it,” he says. “Let it bubble up from the bottom: I would love to make sure I’m communicating well. What are some things that I could do to keep you informed?” But if you’re going to ask your team for feedback, genuinely listen to that feedback and try your best to apply it. If your team says they don’t want an inf lux of emails, then don’t email them every day with announcements, Donadio says. Instead, send a weekly recap email. SEPTEMBER 2020 | THE MSO PROJECT

IDEA SHOP

Five Steps to Better KPI Tracking With one location, it’s easy to be intimately involved with the nuts and bolts of your business. After years in the business, you may even be able to predict, or simply feel, how the business is doing. That’s not the case with four or five locations. Take it from Darrell Amberson, president of operations at the 10-location LaMettry’s Collision in the Twin Cities area. “You realize that you can’t do that in every shop—it’s not physically possible,” he says. “You have to turn over operations to others.” 16

THE MSO PROJECT | SEPTEMBER 2020

That’s where data and tracking key performance indicators (KPIs) becomes critically important. Amberson and his team rely on data to keep an accurate pulse of how the business is doing as a whole, and on a by-store basis. And while Amberson acknowledges that the KPIs to track might not be dramatically different than a single-store location, the way they should be tracked differs significantly. AS TOLD TO ANNA ZECK

GETTY IMAGES

THE NUMBERS EVERY MSO MUST MONITOR—AND HOW

1. NOTE THE DIFFERENCES BETWEEN FACILITIES.

Although most of our shops are, on average, 15,000 square feet, they vary to some extent, both in terms of the facilities and the clientele. For example, in our more suburban locations, we see more domestics than imports. In other suburbs, particularly one location by a motorplex, we see a lot of exotics, Porsche and Teslas. So, when you’re looking at KPIs and, particularly, comparing locations, you need to take some things with a grain of salt because the different characteristics might affect the numbers one way or another.

2. FIRST, SET BENCHMARKS AND GOALS ACROSS THE OPERATION.

In general, we set goals across the board, but a mixture of both. In the early fall, we have a strategic meeting offsite with upper management. During that meeting, we set two or three specific goals for the organization for the upcoming year. When it comes to tracking KPIs, there are a handful of key numbers to look at broadly, which can then be further sliced and diced to look at in a number of different ways. From a broad perspective, you want to look at: • Sales, although those will be based on the shop. If we’d like an overall sales increase of 10 percent for the organization, it might not be fair to ask that of a small shop bursting at the seams. But, there could be a younger shop 10 miles away with a lot of potential that gets a 15 percent sales goal instead. • Parts gross profit • Labor gross profit • Paint and materials gross profits • Cycle time in 30-day and 6-month periods • CSI numbers

3. NOW, DRILL DOWN INTO THOSE NUMBERS ON A PER-STORE BASIS.

Our managers don’t necessarily get

complete P&L statements for all the locations, but we share a lot of data with them through CCC ONE so we can reference differences in the shops and also ensure consistency. We are a company that makes a lot of decisions based on data and the reports we generate. By looking at the numbers from a big picture, you can easily see if anything is off, and then work with the general manager to dig deeper into that number and figure out the core issue. On the flip side, if someone is doing really well on a specific number, you can dig into that and see what they’re doing and share it with the other shops. Here are some ways that numbers can differ that we need to take into account: • Parts gross profit will vary based on the brands we work on. Typically, the European brands don’t offer as much of a discount on parts as a domestic. • If you have key insurance relationships, it’s important to segregate the cycle time numbers for each of those. • When we break down allocation of expenses, you’ll sometimes find that a typical high-end European job will have a different mix of parts versus labor because their parts are more expensive than a run-of-the-mill Toyota. Parts sales as a percentage of the total sale is going to be higher. • If paint and materials gross profit gets out of whack, you want to start breaking down gross profit by liquid product versus sandpaper, or looking at how much the painters are mixing to see if they’re overmixing.

4. MINE CSI NUMBERS FOR MORE DATA.

CSI should be looked at as a tool for improvement, and not a feel-good number. If you’re interested in constant improvement and if you’re going to look at it really honestly, you want to know what the customer is displeased about and with what they’re pleased. If there’s an

immediate issue, you also want to know about it and correct it as quickly as possible. There’s a lot of data in your CSI reports that ultimately leads to the customer’s emotional impression of you, the goal being that they’re so happy with you they’ll endorse you. Pay attention to quality numbers and the courtesy numbers. How is your staff treating your customers? What kind of quality product are you producing?

5. DECIDE ON A SCHEDULE FOR LOOKING AT THE NUMBERS.

Although most businesses operate on a monthly cycle, I look at the numbers on a weekly basis. There are pros and cons with this and you need to decide what’s best for you. One positive with the monthly is that it’s a good measurement and a reasonable amount of time for most numbers. But, one, the size of the month varies. And, two, because it’s a longer period there’s an inclination the last few days of the month to push and have a good month. Then there’s a hangover for the first few days of the next month because you closed out some ROs, you haven’t received payment from insurance companies, etc. As a general rule, your sales suffer and you’re playing catch-up. You don’t get that when you’re tracking it weekly. The con of tracking it weekly is that it won’t be as consistent, mainly because the size of jobs varies. As an example, if you're producing 10 jobs per day, but you’ve got two or three trainwrecks where you find one more issue and you can’t close it that week, that can make that week look pretty poor and the next week looks awesome. On a monthly view, you don’t have those fluctuations. Every Friday, by mid-morning, we’re looking at computers and our accounting people are sending out the sales numbers by store. During COVID, we have two or three upper management calls per week to see what’s going on. SEPTEMBER 2020 | THE MSO PROJECT

SHOP TALK

THE MSO PROJECT | SEPTEMBER 2020

E V E R Y D A Y I S A F R E S H S T A R T. Photography by Jennifer Wagner Photography

Growth-Focused Leader Since purchasing the shop in 2010, Heath Harris has diligently worked to more than triple revenue at his St. Louis, Mo., CARSTAR shop.

It was almost like one big April Fool’s joke, Heath Harris thought. Harris had worked at CARSTAR Arnold since 1997 but the first month after he purchased the shop in April 2010, was the slowest month for sales yet. Looking at the sales numbers in 2010, he wondered if he made the right decision. Shrugging it off, he looked at the shop as a whole and he knew he had a vision. “I knew the business could do so much more and I’m not saying it wasn’t run correctly, but I just saw so much more growth potential in this shop,” he says. Now, looking back, he’s proud he stuck with the shop and his vision. He’s grown the shop to three times its initial size in volume without adding additional square footage. Today, Harris operates a $3.5 million shop in a 10,000-square-foot building. Despite the growth, Harris doesn’t have just “one” key to success. He’s put to test his associate’s degree in collision repair and technology from the Ranken Technical College in St. Louis, Mo. He’s grown the business by taking classes, implementing routine processes and strengthening the shop’s quality control process.

As told to Melissa Steinken SEPTEMBER 2020 | THE MSO PROJECT

SHOP TALK

Every day the shop opens at 7:30 a.m. and I am here at that time to open the doors. This is the time I get everything

turned on in the shop and up and running for the day. I help get customers in rental cars if they’re here for those. The team has a release meeting every day to go over production.

I let our production manager run the morning release meetings. I try to at-

tend three to four of these per week but we’ve really tried to make them as concise and to the point as possible. These meetings are critical to good communication throughout the shop. We touch every vehicle during this and try to eliminate every question we have on the car. We’ve also slowly adapted to making these meetings more of an individual meeting with a technician at his or her toolbox. Then the office staff will meet at the production board outside the shop floor. After opening up the shop, I tend to linger on the shop floor or in the front office. I try to help where I can.

Sometimes I’ll step in to help write walkin-estimates. This doesn’t happen often. We encourage customers to make appointments for estimates but if the customer really believes a walk-in estimate is best for him or her, then I help write that. Other days, I spend the morning helping the parts department. I stay on top of my tasks because I practice “480 time management.”

This is a time management strategy from CARSTAR and I’ve practiced it for years. Basically, it represents the minutes you have in an 8-hour workday: 480 minutes. Then, the strategy is pretty straightforward. Plan to work and work the plan. It’s important to write down or outline a plan for your work for the day and then work to meet that goal. You have to be mindful of the minutes of the day you’re using up. If a technician decides to take two minutes to walk across the shop to get a tool and does this 10 times per day, then that’s 20 minutes wasted in the day’s work. 20

THE MSO PROJECT | SEPTEMBER 2020

Make sure to schedule your parts orders, car deliveries and estimates and stick to the time. I’m really proud of our in-process quality control program. This process is very

strict and we pride ourselves on implementing this tough program. We’ve adapted to the newer, modern vehicles. We’re practicing what they call “hard stops.” We have one staff member from the office who is the inspector. We call him our “checkpointer.” So, when we get to a certain spot before a vehicle moves from the body department, it stops on the production line and gets a full inspection for quality and accuracy. Then, it gets moved into the next phase, which is into the paint department. Prior to it returning from the paint department, before going back into reassemble, it does a hard stop again and gets a full real steel inspection to make sure everything was done as per the work order. They’re reading every line of the estimate. They’re using boroscopes to look inside a panel to make sure the repair was done properly. They’re verifying that all the OEM repair guidelines were followed strictly and documenting who and how we did it. We’re verifying that everything on the repair was done correctly. The

in-process quality control system is not new to our industry, per say, but years ago we adopted it 100 percent and it was a game-changer. This is one of the tasks you have to show to your employees can be beneficial and show them that doing one task just once is time-efficient and more profitable. It minimizes any delays or comebacks. It helps your performance reviews for when insurance companies are looking at you. I’d rather have the DRPs that do not want a discount. I pride ourselves on the fact that the ones we've partnered with grade us on our performance. About 60 to 65 percent of our business comes from DRPs. I don’t take a break during the day for lunch. I like to eat my lunch at my

Eye on Time Regardless of the staff member’s position, time management is a skill that owner Heath Harris is constantly working on with his team.

desk most days. It’s rare if I do take a lunch break. Once a month or so, I go to a St. Louis business group meeting with other CARSTAR store operators and then I’m able to sneak away for a lunch break. To stay on top of every single item I have to complete, I set reminders for myself. I’ll constantly be putting in

a new reminder on my phone to alert me to deadlines. I’m also a list-maker. I like to write out a physical list and then cross off each item as the day goes on. I like to work towards that end goal and see it completed. When I leave the shop at night, I like to remind myself that every day is a fresh start. This means that if I’m at my

desk at the end of the day and there are items on my to-do-list that I didn’t get to finish, tomorrow now starts at the end of today. I’ll take those extra minutes before

I leave the shop to figure out what steps I need to do to complete the task tomorrow. Sometimes I am able to delegate the task to an office employee. I end my day around 4 p.m. Prior to

the COVID-19 virus, I was able to leave right as the work day ended but now that’s changed a bit. Now, we have more cleaning procedures and steps we’ve implemented and my day typically goes past 4 p.m. I’m glad to be a part of a larger franchise group during this time.

Even with COVID-19 going on and the uncertainty of it, I’ve been able to take advantage of some of CARSTAR’s programs as an owner. Photo estimating has been very helpful in this case because now customers are actually realizing what it is, how to use it and why it’s helpful in offering them a touchless repair. SEPTEMBER 2020 | THE MSO PROJECT

DJ MITCHELL GROW TH PL AN

Tips for Having Tough Conversations

WHEN AN ISSUE ARISES AT ONE OF YOUR SHOPS, THE ONLY WAY TO HANDLE THE PROBLEM IS TO TALK ABOUT IT PROMPTLY B Y DJ M I T C H E L L

struggle with conversation. They beat around the bush. They stretch the truth. They downplay the importance of a situation or an event. Those leaders also tell everyone else how they feel except for the persons involved. They wait for what they feel is the right time to address things. And, all too often, they don’t address things at all. All of these can be detrimental to shop performance, shop morale, credibility, and respect. When an issue arises the only way to handle the problem is to talk about it now. I believe most people want to do a good job, and so many times people don’t realize they aren’t doing something right unless they are told. For example, we had a great body man working with us but he was not seeing eye-to-eye with the manager, or so it seemed from the outside. The manager continuously told me how the technician would take two-hour lunches, and how it was hurting the f low of the shop. After this went on for a few weeks, the manager eventually had enough and let the technician go. I was in the area when it happened and the technician blurted out, “Well, if it bothered you so much, why didn’t you say anything?! I may take two-hour lunches, but I work until 7! If you didn’t like it, all 22

THE MSO PROJECT | SEPTEMBER 2020

you had to do was tell me and I would have stopped!” Something as silly as not addressing a technician’s lunch hours cost us a great teammate. When it comes to quality, it should be one of the most important things (if not the most important) in your shop. Yet, so many times I see poor quality go unaddressed. I often see people tell other employees how so-and-so’s seam sealer is no good, yet we don’t tell the technician we don’t like it. So often we are worried about making someone upset by telling them something doesn’t look quite right. But, in reality, only three things will happen if you address quality with a technician: 1. They say, “OK,” and they f ix it.

2. They disagree with you and say it’s acceptable; you say it isn’t, and they still f ix it. 3. They disagree, don’t f ix it and disciplinary action is taken.

I can say with 100 percent confidence that option No. 3 is fairly unlikely at most shops. Issues going unaddressed can often lead to drama on a shop f loor. And, drama spreads like wildfire and is unproductive for working toward the goal of the shop. The worst part about having a tough conversation is the dialogue we make up in our heads. If conversations are had with respect, they are easy to have. I think you’ll find that employees usually appreciate prompt decisionmaking and accountability.

DJ MITCHELL is the vice president and co-owner of MITCHCO Collision Repair, a regional MSO in Florida. He also hosts a podcast for FenderBender’s The MSO Project. E M A I L : D J M I T C H E L L @J H C C . C O M COURTESY DJ MITCHELL

All too often, even the best leaders

Use the Henrob rivet gun with Pro Spot’s Blind Rivet Adapter!

Our Henrob Conversion Kit comes with everything you need to safely convert your Henrob Rivet Gun to the Pro Spot Riveting Platform. Why Convert Your Henrob? • Install Blind Rivets • Increased Access On F-150 Repairs • Ability To Use Larger Pro Spot C-Arms

Pro Spot Gives Your Henrob Gun A Future.

Part # PRR-HCK on a Henrob Gun

SEPTEMBER 2020 | THE MSO PROJECT

SATA®air visionTM 5000 System Supplied air respirator is independent from booth atmosphere – for ultimate safety, comfort and perfection. Whatever environment you are working in: Whether you want cooled, heated or re-humidified breathing air or simply looking for absolute safety from particle contamination – with the new add-on modules complementing the SATA air vision 5000 breathing protection system, you can be sure that your health and comfort are both efficiently catered to.

www.sata.com/SATAairvision5000

The NIOSH approval number is TC-19C-0533

Stay healthy The exclusive independent distributor of SATA products in the US and Puerto Rico

Phone: 800-533-8016 www.satausa.com E-mail: satajet@satausa.com

SATA, SATAjet and/or other SATA products referenced herein are either registered trademarks or trademarks of SATA GmbH & Co. KG in the U.S. and/or other countries.

THE MSO PROJECT | SEPTEMBER 2020

The MSO Project - September 2020

Articles inside

Face Your Fear

5 KPIs to Track

Monitor Staff Behavior

Brand Builder

Performance Management

Back to Your Roots

Your Next Big Hire

One Message

Acquisitions