Q&A: The Effects of CARSTAR's New Operations Structure
CARSTAR has made a strategic switch to a zone structure for its operations and sales throughout the U.S. and Canada. The change stemmed from a need to streamline processes and keep up with an increased onboarding of stores.
After devolving from an old structure with regional directors, FenderBender sat down with Dean Fisher, COO of CARSTAR North America, to discuss the impacts of the change on marketing and shop autonomy.
The zone structure splits the U.S. into three zones—including west, central and eastern zones. The zones are designed to provide more focused service on the local stores and the quickly expanding network. The previous structure included multiple area directors across the country. The whole process took about seven months to create, Fisher says.
In 2016, CARSTAR operated in 30 states. Now, CARSTAR has expanded to 34 states, soon to be 38, Fisher says. The new zone structure will not only aid growth but also give shop owners more access to the management staff, thus delivering information and support more quickly to stores and providing customized resources.
What was the growth like before this new structure? Did it elevate to a point where it just wasn’t working and they needed a new structure?
The growth of the CARSTAR network dictated the zones to some degree. The Edge Performance Platform is expanding and there are complex parts to it. The complexity of the industry is also dictating that. There are multiple insurers with multiple programs and more and more OEMs are providing repair standards for their vehicles. As they enter the market and dictate the repair status, we predict to some degree they’re going to start dictating the first notice of loss to the customers.
In light of this, we’re all about educating the customer and training the stores to be more efficient, and competitive. Right now, we’re growing at a clip of about 8-10 stores per month, and that is actually accelerating.
You can only manage a certain number of people until you need to add that next layer of management. We believe the structure will allow us to be quicker and more nimble to address growth in the system.
How did you choose three zones?
We looked at where our stores are primarily located and where we are planning to grow. We were founded in the Midwest and have seen strong growth in California and across the eastern seaboard. We believe we could have up to six zones. We didn’t need to make a central split anywhere. In Canada, it was easier because we just created the zones by provinces.
What was the old structure like compared to the new structure?
In the old structure, there was a vice president of operations with a national director underneath them that works directly with a group of area directors. The area directors had a much higher store count than they do now.
Under the new structure we have a lead operations person, a national director and a head of training. Then it moves down to the three zone directors and area managers. We have reduced the number of stores an area manager oversees by 6-10 stores, which makes it more effective for our operations systems to be deployed and allow for greater opportunity. This way we can implement our three Cs: coach, consult and counsel.
So, the area manager is the one visiting the stores?
Yes, the area manager visits the stores. The zone directors are actually creating a cohesiveness and making sure we don’t create silos in our system.
Our idea now is to have major connection between four major pillars in our company including operations, marketing, insurance and development.
What autonomy will the shops have within this structure?
If you think about it, that’s our model: a franchisee conversion model. We want the owners to take pride in ownership and the company interface. These shop owners enjoy the entrepreneurship that comes with it so we just put them under an umbrella and extrapolate the best opportunity out of that. We take the best of what they do and put it under a model that makes them unstoppable.
How will the marketing differentiate between the zones?
We have a general marketing practice in which we develop radio for the shop and television programs with the same message and look. We also form a business group within the area to create synergy in the demographic market area.
Any time we have four stores in a demographic market area, we link them together in a business group. Our largest groups meet on a monthly basis. Seattle, Denver, St. Louis and Chicago all have over 14 stores in a group and some have around 25. They are independent owners but they’re able to take in aggregated marketing dollars together to get more opportunities.
Overall, the revamped zone structure allows CARSTAR to better serve is franchise partners with more focused resources and support to drive their local businesses.