A Straightforward Management Style for Success
For the past 25 years, Marc Sizemore has been improving collision repair facilities and running shops for some of the country’s largest dealer groups. At United Auto Group in Atlanta, he helped grow sales from $250,000 per month to an eyebrow-raising $900,000 per month before moving on to other shops—and to similar success stories.
Sizemore began writing estimates and acting as a manager when he was 26. For the next two decades, he worked in dealer collision centers, including the United Auto Group and the Lithia Automotive Group in Oregon, which both have Toyota dealers as part of their groups. The move to the Pacific Northwest proved to be too hard on Sizemore’s family ties, and he soon returned to Atlanta, where he joined the Jim Ellis Auto Group as the collision center’s director. Jim Ellis appealed to Sizemore because it’s family-owned, has been in business 37 years and has deep roots in the community. The shop, which has unique features like an in-house wholesale parts department and a drop-off site 14 miles away, also had room for business to grow.
Sizemore’s management techniques are refreshingly straightforward, to the point of seeming, well, simple. There’s nothing magical about his success, no top-secret approach to taking great care of customers, cars and employees—which means the direct changes he’s put into place in Atlanta might well work at any dealer shop.
Here’s a glimpse of Sizemore’s surprisingly basic, surprisingly effective blueprint for success.
Establish a strong philosophy: Sizemore worked for Toyota dealers for about 15 years, and he was heavily influenced by the automaker’s just-in-time inventory systems, lean management style and quality production strategies. Toyota has a production philosophy that Sizemore notes is a guiding principle for him: quality first, production second, cost third.
“If you put production or cost in any other [order], you’re not set up for success,” he says. “You need to put quality first, and have everything come from there.” With that setup, he believes that people can be taught to do production right the first time.
Know your role: The size of the shop makes a significant difference in the general manager’s role, Sizemore notes. From working in shops of varying sizes, he learned that it’s a fundamentally different job running a shop that brings in $400,000 per month to one that grosses over a million dollars per month.
“At that point, you’re not a body shop manager as much as you’re an organizational development manager,” he says. “You create an environment where you can foster daily improvement. If you set it up right, you just have to be the point guard.”
Sizemore’s job includes some small-shop-type daily tasks, but most of his time is focused on setting goals and improving processes so that efficiency can be realized three to nine months down the road.
Help employees be creative: “You have an organization of adults who want to work smart, so you have to tap into that,” he says. “Management has to listen to the people doing the work.”
When an issue comes up, he pulls the relevant employees together and helps them to figure out the trouble and, more important, the solution. He says, “If you create an environment where people can use their creativity, they’ll fix any problem for you.”
Sizemore emphasizes training, both for his employees and himself. He has attended Toyota Collision Center College to learn new techniques in finance, human resources, production, and sales and marketing. In finance, for instance, he’s learned to see how to evaluate the history of an account in terms of customer loyalty and past jobs, rather than just seeing costs in terms of parts and labor. With production, Toyota helped him see that technicians work most efficiently when there’s a very good initial inspection and good estimate. Instead of micromanaging the whole process, the “good paper” at the beginning creates strong workflow.
Keep asking why: Sizemore recently noticed that the customer callback process wasn’t very consistent, and it was hurting customer satisfaction. So, he brought together the advisors who were expected to make the calls and asked why it wasn’t being done.
Again calling on Toyota’s influence—the company “asks ‘why?’ five times in order to get the root cause”—Sizemore kept digging and finally learned that the advisors were trying to be in four or five places at once. There was no time for customer calls.
“That’s pretty typical in a body shop, for the advisors to be trying to handle so much at once,” he says. After much discussion, he hired separate customer service representatives and let the advisors succeed at writing estimates and working on the shop floor.
Tweak the employee mix: Hiring customer service reps resulted in a reduced number of estimators, and only a month into the new arrangement, Sizemore saw a big difference.
“It’s just a calmer, more controlled environment, and the calls are getting made more consistently,” he says. “We’re writing better estimates. All of that resulted from me getting people in a room and asking, ‘Why?’ They came up with the solution.”
Evaluating employee roles is part of a larger expense-reduction strategy as well. A manager needs to look at personnel with a view toward how they fit into a long-term strategy, and where they add to the organization.
“You have to keep on top of who needs training, who needs discipline, to make sure that the people you’re paying are working as efficiently as your business,” he says. “This is something you need to look at every day, and it’s a basic part of your ongoing improvement process.” Sizemore recently reduced the number of staff slightly and shifted some areas of responsibility to the remaining employees, since he felt that the organization was top heavy. The auto group now does the same amount of sales, with fewer people.
Use technology: A major change at Jim Ellis: Sizemore installed a computerized information system that could track cars more easily. Before, the collision center had used a manual tracking system that required estimators to find files and jot down notes.
The collision center and dealership now depend on Production Plus, an application from software maker Automotive Disciplines Inc. (ADI). Its greatest power is in its simplicity, Sizemore notes.
“There are a bunch of management systems out there where you can see all kinds of information on the business, but you can get lost in all that stuff,” he says. “We just wanted a simple system that works.”
The software was designed specifically for body shop owners and managers, and isn’t intended to replace a dealer management system or an invoicing and account system. That means it doesn’t lump all functions of the business together, but rather, focuses only on production management, such as pending appointments, sales performance, in-process hours and other job-tracking features. Sizemore says, “Everyone can see all the information, nothing is locked or requires a different access level, and we can just get the info we need without seeing all the nuts and bolts of the whole business.”
Don’t get fancy with customer service: Some shops set out food, include cute giveaway items and try to make their waiting areas cozy, but Sizemore thinks a job very well done is the key to customer satisfaction. “Honestly, I don’t think you have to jump through hoops and do all these special little things, because that’s not why people are coming in,” he says. “You put the right people in place for each vehicle. When you talk to the customer, you have to be personal and honest. You provide good, solid repair services. That’s what they care about.”
Boost customer convenience: The collision center is only a mile from its main group of dealers, but there are four dealerships that are about 12 to 14 miles from the shop.
Rather than expecting customers to drive the distance, the collision center has a drop-off center closer to the four dealerships, where a full-time advisor does estimates and organizes vehicle transport. Jim Ellis puts them on a flatbed and transports them at the collision center’s expense. The result is a solid stream of business from customers who might otherwise have tried to find a shop closer to that area.
Sizemore treats the transport as a selling expense on the income statement. It’s about $120 per car for the towing, and monthly expenses can range from $3,500 to $5,000. Although it could be added to the ticket as a cost of doing business, Sizemore believes that customers appreciate the “free” towing, and keeping it as a selling expense adds to customer satisfaction.
Take advantage of wholesale: The shop’s wholesale parts department is a major advantage. Fortunately, the collision center has enough space for a sizeable parts operation. Three full-time employees run the parts shop. Having the parts on hand speeds repair and turnaround time, but Sizemore is aware that it takes more than quick access to parts to do repairs quickly and well: “If you speed up one part of the process and not others, it’s not going to work. You have to do it all the way down the line.”
Think locally: “It’s a local business, and you have to have repeat customers, so just treat people well and smile when you see them,” Sizemore says. “You have to put things in a bigger perspective that way, to see the people who run the shop and who come in, so you don’t get so caught up in sales and decimal points.”
Every interaction is a chance to solidify a shop’s reputation. Even if a particular job doesn’t bring in a chunk of money, it still gets the highest quality work, because people seek out—and tell their friends about—a higher standard of service.
Stay on solid ground: Sizemore still sees some areas for growth at Jim Ellis, but in general, he feels that establishing foundational management practices—like listening to employees and reducing the workforce where necessary—make the real difference.
The market in Atlanta has been flat lately, but Sizemore doesn’t think it will shrink much more. The state has been in a drought, so there aren’t as many weather-related claims, and people weren’t driving as much in 2008 because of gas prices, which puts less wear-and-tear on vehicles. But even with those factors, Sizemore believes that this year will see some growth, especially with the management strategies he has in place.
“In this economy, good, strong operators will have the opportunity to get more of the market,” he says. “If you can repair cars at high quality level, have a low-to-average cycle time and great customer service, then you’ll find success. And that’s just what we’re doing.”