Make a Smooth Leadership Transition
On May 2, ABRA Auto Body & Glass announced that its CEO of five years, Duane Rouse, will step down from his position. Under Rouse’s leadership, ABRA increased the company’s system-wide revenue from less than $300 million to more than $1 billion. The company has also added 150 new locations in the past two years alone, and Rouse has been credited with helping grow the company through strategic acquisitions and internal initiatives by the chairman of ABRA’s board, Erik Ragatz.
Rouse will remain CEO until a replacement is found and will stay on as the vice chairman of its board of directors following the transition. He shared with FenderBender what shop owners can learn about growth and transition from ABRA’s history.
What went into your decision to step down as CEO?
Mainly, I want to spend more time with my family. I’ve had a successful time and I’m excited to move to a board-level role. The company is doing great, we’re just coming off of a record quarter. We have a solid executive team and it just seemed like a good time to make the transition.
During your time at ABRA, you witnessed major changes in the company and the industry in general. What did you do as a leader to try to navigate your company through those changes?
I think ultimately it’s all about having a good team to execute strategies. I think that always keeping in mind that people are the most important part of the company and recognizing that a company is only as good as its employees really helped me. ABRA has grown a lot, which meant we had to adapt. We’ve gone from 1,000 to 5,000 employees in less than two years. During that growth, it was important to maintain the culture we had created.
What are some strategies that you used as a leader that any shop owner could implement?
I tried to spend as much time as I could out of the offices and in the field meeting the employees. I was always communicating what the company was doing and how we were doing. I let the employees know where we stood at all times as a company, which is something any leader can do. Transparency is so important for a leader.
“Be open and honest with your staff about what is happening so that everyone knows what’s going on and is on the same page.”
—Duane Rouse, CEO, ABRA Auto Body & Glass
In terms of ABRA’s rapid growth in the recent years you’ve been on board, what can an independent collision repair shop learn from the ABRA business model?
I think generally speaking, make sure that there’s good leadership in place beyond the owner. Invest in training your staff. I think what happens a lot of times is that a shop owner may be very successful in running a single shop, but when more locations are added, the owner may grow beyond his or her bandwidth and become stretched too thin. The hands-on approach that a single-shop owner is used to is very difficult to maintain with more than one shop.
What are the common mistakes that you think companies make when they expand?
Not having good leadership in place; it’s one of the most common mistakes. It’s common to underestimate the work that is required to be an MSO and then the owner is left without sufficient help. There are a lot of good single-shop operators that aren’t prepared to expand. I can’t overemphasize the importance of having good leadership in place below the owner, take for example the general manager. It’s important to remember that one person can’t do it all. At ABRA, our success was not based on me. It’s based on everyone in the organization working together for the common good. It all goes back to investing in your people and your training.
What are some traits that you look for when hiring a new manager or leader?
Looking for someone who fits our values and culture. Someone who has demonstrated an ability to engage, energize and lead a team, and achieve results. And of course, high integrity and ethics need to be inherent traits in the individual.
With you stepping down, ABRA is going through a major leadership change. What do you think are the keys to making a smooth leadership transition for any company?
I would say communication, communication, communication. Be open and honest with your staff about what is happening so that everyone knows what’s going on and is on the same page. Make sure that the departing leader is available to assist the new leader, but not so involved as to stifle the new leader. The new leader needs to establish themselves as a leader without someone looking closely over their shoulder all the time.
When the new CEO is found, what advice are you going to give your replacement?
Make sure they take care of ABRA’s employees. Train them and invest in them. Maintain ABRA’s culture and mission to always do the right thing. The advice that I would give is more people- and leadership-oriented than anything else. Any good CEO that we’re looking for will certainly have those traits. The main thing I’d want to get across is how important it is to maintain the culture that has been developed over the past 30 years. If you treat your employees like shareholders, they’ll act accordingly. Our company mantra is always to do the right thing. Through that, ABRA has created a culture of honesty, transparency and integrity.