In July 2011, during a trip to Las Vegas, Daren Pierse received a serious and troubling phone call from his shop, Arizona Collision Specialists, in Scottsdale, Ariz.
His business partner, John Bock, called to inform him that a storm caused major damage to the shop’s roof, and some of the interior ceiling tiles had fallen.
Pierse had a suspicion that a much larger problem was in the works. Just a few months later, those suspicions turned into a disastrous reality. In October 2011, the roof collapsed, destroying the entire building and causing $2 million in damage. Customers’ cars were crushed and the building was condemned.
At stake were relationships with nine direct repair programs, which the shop relied on to stay in business. Pierse would have to lean on the staff, a spare building, cash reserves, and lean processes to try and save customers’ vehicles and resurrect shop operations. The challenge was whether they could still meet DRP requirements while rebuilding.
THE BACKSTORY
Upon seeing the damage, Pierse and the staff started thinking through what they would need to do to keep the business open and to maintain their insurance partners.
“I just immediately focused in on what I wanted for Monday morning,” Pierse says. “I wanted it to be as chaos-free as possible.”
Pierse had started Arizona Collision Specialists six years earlier, and in 2007 when the business had grown to about 200 repairs per month, he bought a second facility about 200 feet away. He was using it for storage but had planned to expand shop operations when the time was right.
“We knew [after the roof collapse] we would be moving next door to the other facility,” he says. “We were very, very fortunate to have that facility.”
Then Pierse, Bock, and their wives began pulling tools out of the destroyed building and brought them to the new one. Miraculously, he says, most tools were fine, though some tools in the middle of the shop had been demolished. Mobile carts and big toolboxes against the walls survived the collapse.
“We drug everything we could out of the building,” he says, noting that they were also able to save repair files, paperwork, desks and other basic resources.
After getting a basic setup for repairers to do their work in the new building, many of the other options they had were assessed quickly as problems arose. None of them had ever dealt with anything like this before, so the shop leadership team was in constant communication about how to handle each situation as it arose—including motivating employees, ordering new equipment, and sorting through accounting and insurance issues.
“Everyone was fine-tuned to the fact we don’t have time for any waste,” he says.
Then the shop had the task of explaining the situation to insurance agents.
THE PROBLEM
Pierse says they didn’t want to lose anything. They didn’t want insurers to think they couldn’t keep up with the volume of work, and they definitely did not want to get the axe from any program.
“We have to be able to keep those relationships,” he recalls thinking.
There was much to be concerned about. They were able to save about 10 customer cars, but 20 of them were buried and wouldn’t be dug out for a few weeks. Pierse had to prove not only that they could satisfy the customers whose cars were wrecked again, but also that they could keep more business coming in and still maintain low cycle time and high customer satisfaction.
He also knew the shop didn’t have a lot of time to show insurance partners that it could meet this challenge. Even if it meant working around the clock, he was determined to impress insurers and deliver high-quality repairs as quickly as possible.
THE OPTIONS
Pierse began immediately thinking through how he could explain the situation to insurance companies and mitigate any concerns.
Before entering the collision industry, he had previously worked as a chef for a large hotel chain. In training for that work, he learned to anticipate customers’ needs. Those skills transferred to the collision industry, where he says his main driver for doing what he does each day is great customer service.
In this situation, he anticipated questions that would be going through any insurer’s mind: Can they handle the incredible workload? How will this affect my customer? Do I need to call them up and explain this situation? Is this situation going to create a lot of extra work for me?
Pierse thought through all those answers, which helped him create his to-do list. The roof had collapsed on a Saturday; he and the staff had to get to work quickly if they were going to call customers and get the shop in order by Monday.
THE DECISION
On Monday morning, Pierse worked on informing shop staff and getting operations going, while Bock handled the task of calling all the customers. That was the first priority. Then they could tell insurers that they had already called customers and were on the ball.
While some customers were frustrated and short-tempered, most people understood. Some even brought them cupcakes and cookies, Pierse says.
The shop also rented a mobile trailer as a temporary office for estimators and a receptionist. The temporary office sat outside the old building, which was quickly condemned and locked by the city. Pierse wanted to eliminate as much confusion as possible for insurance partners and customers, so he kept the original address. Then he bought a golf cart to drive people to the new facility.
He also bought a large Astro Turf carpet and a white picket fence, as well as potted plants, a cocktail table and chairs. He wanted insurers and others to see as pleasant a sight as possible at the mobile trailer office.
Meanwhile, in the shop, the sense of urgency in the workday was heightened tremendously, Pierse says. They weren’t thinking consciously about how many hours they were working or what their key performance indicators (KPIs) were; they just wanted to complete repairs for customers whose cars had been damaged, to keep new business rolling in, and ultimately keep insurance agents satisfied.
“We didn’t miss a beat,” he says.
THE AFTERMATH
Insurers were impressed with Pierse and his staff. Agencies were talking amongst themselves about how well Arizona Collision Specialists handled the situation, and the business quickly became an example of how shops can always work more efficiently, even under the worst of circumstances, he says.
“We’ve had many conversations with new insurance companies and existing companies that say, ‘We’re using you as an example in other markets,’” Pierse says.
He says that employees knew they needed to work as quickly and as much as possible to keep work flowing through the shop. There was so much to be done, and there was an intense fear that DRPs could cut them off if they didn’t keep moving. Employees repaired cars and dealt with customers around the clock, seven days a week.
As a result, he says, CSI scores hit an all-time high, and production increased about 20 percent.
“We promised something, they gave us a shot, and we made it happen,” Pierse says. “It wasn’t me, it wasn’t just John. It was everybody.”
THE TAKEAWAY
Pierse learned a lot from this situation.
For one, he says, “you are quite capable of doing more than you think you can do.” He and his staff exercised incredible self-discipline to finish the day’s to-do lists before more work could pile up on their already full plates.
He says “performance without excuses” was important. He knew that the insurance companies would not let them off the hook just because they were going through a hard time. They were being compared with the guys down the street, whose shop’s roof did not collapse.
“You know that you have to perform no matter what obstacles you have laid upon you,” he says. “They need results. They need to take care of their customers. You have to perform no matter what.”
Pierse also credits lean processes and procedures for saving the shop. They had started their lean journey a few years before.
“People understand in the long run that if you’re not in this mindset of constant improvement, there’s just not going to be a lot of shops out there that have the work, especially in these economic times,” he says.
