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Would change require firing his staff?

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Frank Todaro knew during his first week as a manager at Schmidt’s Collision & Glass that his employees needed to shape up.

He was hired at Schmidt’s, in Buffalo, N.Y., in 2010 after working for about 10 years at his family repair shop, which was eventually sold to another company.

It’s tough to run a lucrative, customer-focused shop when employees don’t take their jobs seriously, Todaro thought. And many of the guys at Schmidt’s were coming in late and leaving early. They were swearing all of the time. Some of them couldn’t get along with others. They all wore something different to work, including sports shirts and hoodies.

Things had to change immediately for Todaro to do well as a new manager and grow revenue—even if it meant firing staff.

THE BACKSTORY

Todaro was raised in New York; he’s the oldest in his family of one brother and two sisters. None of them wanted anything to do with collision repair, he says. But when his dad fell into a coma in 1997, after owning a shop since 1979, Todaro took over.

He was only a teenager, but he took on the job with ease and grew fond of it.

“It’s just a passion,” says the 32-year-old father of five. “I love what I do. I wake up real early, and go home late at night. My wife tells me it’s like my second marriage.”

Eventually a competitor in town bought the business, but Todaro stayed on as manager. By the time an opportunity at Schmidt’s came up, he was ready to make a change.

Todaro started scribbling notes during his first week on the job. He saw how poorly managed the shop had been before he arrived. Some employees had downright terrible attitudes, and would insult other technicians’ work during the workday. You could feel the tension in the air. Others were unprofessional in their attire and language, or were sloppy in their workmanship. People would come in late and leave early without giving it a second thought.

The talented employees were surrounded by the negativity, and didn’t have the right tools or guidance to succeed.

THE OPTIONS

Todaro wanted to give his people a chance.

After his first week, he realized he needed to set some basic expectations for them. He began hosting production meetings each morning, and about once a month he met with technicians and painters. He showed his staff the company policy manual to instruct them on work attire, language and attendance.

To connect with a couple of the guys who didn’t get along with each other and caused chronic workplace disturbances, he tried taking them out as a team for food and cocktails. When that didn’t work, he sat them down to explain what was wrong and specifically what he expected from them.

Todaro operates using a three-strikes-and-you’re-out rule. He learned from his father how to manage and discipline people. He also learned something from firing 15–20 people in his nine years at his family shop.

So after sitting down and giving a verbal warning to the problematic employees, Todaro closely monitored their behavior. For example, one technician didn’t check parts before assembling the car, as Todaro instructed him to do. That caused parts ordering delays and dragged down cycle time. After giving his employees ample opportunities to improve, nothing changed.

“It just kept snowballing,” he says. “They weren’t listening.”

THE DECISION

Within four months of taking over as manager, Todaro fired six employees—more than 30 percent of his staff. He replaced each one of them with workers who fit the culture.

Some who were fired got defensive, but Todaro made it crystal clear what was expected of his staff. When it came down to letting someone go, he would sit down with that person, usually on a Friday in the break room while others were finishing cars.  Some people knew they were struggling and couldn’t meet Todaro’s expectations.

“Some people knew it was coming,” he says.

He made sure to keep an eye on morale, too. So he individually approached each person and talked privately about his decision to fire someone. Some confided in him that they were scared for their own jobs, which was an opportunity for Todaro to make it clear about where they stood. Others would say they agreed with him and were glad to see certain people go.

Another 30 percent of his employees were given different jobs, because he decided to restructure the organization as a whole. He got rid of the one-tech-does-all system and now has one person tear a car down, another repairs, another paints, and a fourth person details. A production manager reviews each job.

“We’re a family,” he says. “With some of the people removed, it was a load off everyone’s shoulders.”

THE OUTCOME

Since the staffing changes, revenue has grown 16 percent. Cycle time dropped from seven days to four. Work quality improved, and insurance companies are seeing the difference. One major insurer in Ne York State ranked Schmidt’s one of its Top 10 shops, while another large company is considering Schmidt’s as a partner.

Photo by Chelsea M. Sears

Todaro’s bosses also saw the growth going on at the shop. They knew he had a knack for management, so they took a big step and offered him ownership in the company. In April, he took over as owner of his shop, becoming the company’s first franchise location.

“They’ve seen what I had been doing with the company, with the hiring and firing, the production, the insurance companies, and cars getting done on time,” Todaro says. “Everything was the way they always dreamed of.”

He hears positive comments from staff and people in the community, too. People with secure jobs at solid shops are coming in and asking if Schmidt’s is hiring.

Todaro says he feels like all the hard work was worth it. Looking back, the only thing he wishes he had done differently is to get rid of the bad employees sooner. Four months felt long and drawn out. It could have been done in two, he says, and morale could have improved more quickly.

“It’s always a learning curve,” he says. “Everything is about self-improvement. Everyone’s a human. They want to be treated like that. They’ll respect you as long as you show them the respect they deserve.”

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