Creating a Vision Statement
Darrell Amberson walked into a well-established collision repair operation when he was hired as general manager of Lehman’s Garage in 1999. The Bloomington, Minn.-based company already had four locations with $10 million in annual revenue.
The business had been successful, but Amberson noticed inefficiency at the management level. The company had a top-heavy management structure—an owner, general manager and chief financial office—a trio that made nearly every decision for each shop location.
“The owner of the company was making a huge [number] of daily decisions,” says Jim Jensvold, shop manager at Lehman’s Bloomington location. “We were micromanaged; nobody was empowered to make decisions.”
Anytime there was a decision to be made, Jensvold had to stop what he was doing to track down the owner for guidance.
Amberson knew that this style of operation was unhealthy, both for him and the company. Making every decision for the business is a heavy weight for any shop operator to carry on their shoulders. And owners and managers can only effectively oversee a finite number of people, he says.
— Dave Dunn, owner, Masters Educational Services
So in 2001, Amberson started to phase out that hierarchical management style, and transitioned to a “corporate philosophy.” He delegated responsibilities, and leaned heavily on his employees for daily decision-making, a key factor that’s allowed for continued growth.
Dave Dunn, owner of Masters Educational Services, refers to this management style as “liquid amalgam.” This allows more decisions to be made by employees at the ground level, while keeping in mind the values and principles that would have gone into the decision if the owner were to have made it.
“You’re not telling your people what to do, you’re sharing with them how you think,” Dunn says.
The Traditional Way
Many shop owners go into business so they can be their own boss. But that’s sometimes more work and frustration than expected. Fortunately, much of what’s frustrating can be cured with the right management style.
A lot of shop owners are technically strong and administratively weak, and don’t have the management structure in place to operate efficiently and successfully handle growth, says Art Dahm, president of Automotive Disciplines Inc.
Everyone’s heard the phrase, “work on your business, not in your business.” Well, in many shops, especially small ones, owners tend to do the exact opposite. Dunn highlights two common styles that might hinder future growth, and cause owners to run around like their hair is on fire:
• Clannish management. Clannish managers run their business like a king or queen—every decision filters through the brain of that one person. Things tend to run fairly well as long as that decision-maker is constantly at the shop. Most small businesses operate in this manner.
“As the business grows, the owner’s brain becomes the narrow part of the funnel,” Dunn says. The owner ends up spending most of their day making decisions for other people, which is a restrictor to progress and improvement.
Once you get more than 10 people reporting to you, this style becomes an obstacle to getting decisions made. “There is a high level of frustration that happens at that point,” causing a natural swing to a more mechanized structure, Dunn says.
• Mechanized management. This is when the owner decides the business needs to have standard policies and procedures in place so people have another resource available to help answer daily questions—without asking the owner first.
On the surface, this might seem like the way to go. But this style can cause problems too: the SOP-type model leads to an impersonal environment with a high emphasis on systems and policies, Dunn says. “This can be dehumanizing, and the level of service perceived by customers tends to drop.”
Empower with Principles
Dunn says most shop owners naturally fall into either the clannish or mechanized management styles when they open their doors for business. But in doing so, those owners become “slaves to their company.”
Is it possible to avoid that whirlwind of stress? In short, yes. Shift decision-making power from the owner all the way through the organization. Train your managers and employees to think like you, and make their own decisions based on the core values and principles that define your business.
By sharing a list of values and principles with your employees, you’re sharing how you think, instilling the criteria integral to your decision-making process.
It’s important for all shops—from mom and pop shops to multi-shop operators—to operate this way, Dunn says.
Dunn, who also owns Dave’s Auto Body in Galesburg, Ill., implemented a litmus test to help his employees make decisions on their own. He refers to the test as HEAP: honesty, excellence, accommodation and profitability. When an employee needs to make a decision, they ask themselves:
• Is the decision honest?
• Is the decision excellent?
• Is the decision accommodating to the customer?
• Is the decision profitable to the company?
If the answer is yes to those questions, the employee is free to proceed.
Those are the values that Dunn established at his shop, but your list of values might be completely different. And that’s OK; the critical point to keep in mind is that the values established at the shop—whatever they might be—need to reflect the owner’s mindset in their decision-making process.
Shop owners need to be the ones who set the tone and culture of the business, Dahm says. Every manager and employee should understand how the owner thinks, and how they would want things to be handled, from customers to insurers to shop processes, “without [the owner] having to hold their hand.”
Phases of Change
A company filled with solid decision-makers—who aren’t bugging you with questions every five minutes—sure sounds good, huh? But this doesn’t happen automatically; it takes some time to get your employees in line with your vision. If you’re tired of working 70-hour weeks and worrying about the company crumbling when you’re not there, take a look at how you can make this change, before the stress of your business begins to weigh you down.
— Darrell Amberson, president, Lehman’s Garage
Dunn says transitioning to the liquid amalgam style is a four-phase process that takes about nine months to complete:
• Orientation phase. Introduce the idea to your employees. Describe your long-term vision, and make your employees understand how this will create a better environment for them.
Dunn recommends holding regular one-on-one meetings with each employee: Discuss the core values that you expect to become their basis for good decision-making, and why those values are so important to your business. Spend at least 20 minutes each month with every employee throughout the transition.
Slowly release_notes the reins of day-to-day decisions, and get your employees to make decisions based on the core principles you put in place. “Through time, the owner can start to trust the employees more as they prove themselves to be trustworthy,” Dunn says.
• Dissatisfaction phase. Employees will likely realize this transition is a bit harder than they may have initially thought, and that it’s going to cause them to change their behavior.
“People can get discouraged pretty fast with new ways of doing things,” Dunn says. The natural tendency is to revert to their old ways, even if that wasn’t working. This phase tends to set in within three months. But don’t let a bit of employee push-back stop you from moving forward. With those regular employee meetings, you can help them see the long-term benefits, and give them a positive outlook on the new system.
• Resolution phase. Employees finally start to seriously use the principles you put in place to resolve their own problems. It takes about three months for employees to really get used to doing this.
Amberson says Lehman’s is currently in the process of organizational goal setting. Each shop manager has created small teams of customer service representatives, estimators and technicians within their shop. Those teams are setting goals for business performance. They discuss their processes and constraints, and brainstorm ideas to improve the business—without any help or oversight from Amberson himself.
“The shop managers are doing the same thing with the employees that I did with them,” Amberson says. He adds that it’s allowing each shop to grow from within, and improving the business without sucking up any of his time.
• Production phase. Once you’ve implemented the new management structure, celebrate the improvements you’ve made. Continue to meet with each employee once every three months to maintain the values you’ve instilled in them, and ensure they don’t start to slip back into old habits.
With multiple locations, Amberson says the company frequently experiments with new processes or techniques at one shop, and then shares that information with all locations.
Jensvold says the shop managers from each of the company’s six locations meet monthly to discuss successes, problems or changes at each shop. Amberson also holds regular company-wide meetings to discuss those same issues with his 115 employees.
Committed employees, reduced stress, increased profitability and a stronger team: That’s some of what you can expect with a values-based management structure.
Jensvold says he now has a lot of latitude to run his location of Lehman’s Garage. He now makes immediate decisions on hiring, firing, financial issues and equipment purchases. More importantly, that’s a laundry list of things that Amberson doesn’t have to do. And it freed up enough hours in the day for him to spend working on business plans, marketing strategies and DRP negotiations with insurers.
Those things paved the way to open two more shop locations, which nearly doubled the company’s annual revenue, to $17 million.
“Had we not made that transition, it would have greatly held us back from achieving the progress we’ve made.” Amberson says. “It’s been a lot of fun to watch our managers grow and assume more responsibility.”
If you can get people to understand the big picture, you’ll find that you’re going to get much more committed employees, Dunn says. “Your people grow at an intellectual level if you stop spoon-feeding them answers all the time.”
Jensvold agrees: Empowering people to make more decisions based on the company’s core values has had a tremendous effect in bringing the employees together as a team, he says. “The change has been uplifting.”