Overhauling a Shop Culture
Jordan Hadwin was tired of getting the same answers.
As the 24-year-old general manager of her family’s 20-plus-year-old dealership, Hadwin was looking for new solutions to jumpstart the business’s stagnant collision segment.
“If there’s one thing that drives me crazy, especially in a business that’s been in place for many years, it’s that sometimes you’ll ask, ‘Why are we doing it this way?’ And the only response you get is: That’s just the way we’ve always done it,” she says.
Hadwin grew up in her family’s dealership business, Hadwin-White Buick GMC Subaru in Myrtle Beach, S.C. She had seen firsthand how the industry had changed. Vehicles were different, customers were different, yet the company’s body shop operated in the same way.
Over the last six years, Hadwin has worked to instill a new shop culture, one built on a new operational approach, highlighting metrics, systems and processes that provide accountability and produce results.
“I’m 30 years old, and I came in at a time when the Internet was really booming.
“That was the same thing in the body shop context,” Hadwin says. “A lot of things had been the ‘good old boys’ system, and now it became very much about numbers and metrics.”
Since the overhaul, the shop has seen improvements in nearly every metric: In the past six months alone, the shop’s monthly sales have increased 10 percent to $285,000, cycle time has decreased from eight days to six, and production in the paint shop has improved by 50 percent.
An Unexpected Start
Hadwin’s father, Gary, started the dealership in 1986, and it’s always been a family business—Hadwin’s husband and her younger brother work there now.
But Hadwin had never planned on being part of it. Then when her older brother passed away unexpectedly in 2007, she came home to take on his role as the head of the dealership.
“This isn’t what I planned to get involved with,” says Hadwin, who was a journalism major at the University of Georgia. “It was where I needed to be for my family at that time. ... I really threw myself into learning everything I could about the [dealership].”
Part of that education came from her father who preferred to be removed from the day-to-day operations of the business. She attended conventions, trade shows, and business-building workshops from automakers. She also took a year-long business succession course from the National Automotive Dealers Association.
That helped her overall approach to running the company, but it wasn’t until a few years later she took some basic accounting courses at a local college that her focus shifted toward the collision shop.
The shop had always been a moneymaker; it was profitable. Because of that, Hadwin had overlooked it during her transition, instead focusing on other, more critical aspects of the company. When she started breaking down the shop’s numbers, though, she began to notice a trend.
Supplements were an issue. From simply looking at the shop’s finances, she noticed the supplement ratio was running at 25–30 percent.
“It’s so important to the success of your business to understand the numbers or how the smallest percent can make a huge impact on your bottom line,” she says.
From that starting point, Hadwin began to uncover more issues in the shop’s overall operations and culture. And she began to make wholesale changes.
Focus on Culture
The first time Pat Black visited the collision center at Hadwin-White, he immediately saw the opportunity.
Hadwin had flown Black in from Washington State to give his expert opinion on the body shop. Black, a 27-year veteran of the industry, had spent the previous 17 years transforming underperforming shops into multi-million-dollar companies. At this point in the fall of 2013, he was running a collision center that produced more than $1 million in sales each month.
Hadwin had been introduced to Black through networking with other shop operators.
“They had a few good things going for them,” Black remembers of that first visit. “They had large insurance company direct repair relationships that were strong. They had an ample size facility.
“But they were struggling—in terms of staff, quality of work and no organization of teams.”
Between Black’s observations and Hadwin’s own digging into her shop’s numbers, she found out where the problem really was: a lack of accountability throughout the shop.
She had the framework for the culture she desired, but not the processes and systems that would allow that to take place.
That’s where she hoped Black would come in: She offered him the position of collision center manager. Black, whose son lives near Myrtle Beach, was looking for a new opportunity in a more family-centric location.
It was a fortunate match, and Black signed on with Hadwin-White in December of 2013.
A Shifting Approach
After taking a couple weeks to get acclimated, Black began helping Hadwin overhaul her operations. They focused on four key areas of the business:
1. Standard Operating Procedures (SOPs). Up to that point, technicians operated independently, each accomplishing tasks at their speed and in their way. Hadwin went about changing that. She and Black created SOPs for each operation in the facility, from the time vehicles are dropped off to vehicle delivery.
“Sometimes it can be as simple as putting in a checklist at different parts of the repair process, be it at disassembly or paint work to framework,” she says. “I think it helps the techs understand the standard that we want and that reduces the number of times where you have to say, ‘I need you to fix this.’”
2. Team System. From Black’s experience working with high-volume shops, the most efficient operational system is using a team concept—breaking shop staff into group-based roles (one each for paint, body and detail) and having them complete tasks together.
It shakes up the “private contractor” mentality, Black says, and it gets technicians focused on pulling vehicles through the shop, rather than simply completing their individual tasks.
“[A new mindset] is what you run into with teams,” Black says. “If there’s one guy who wants to sit on his barrel, the other guys will self-police that. We’ve got equal enthusiasm.”
3. Job Descriptions. In order to operate with a team-based concept, each individual employee needs to have a clear understanding of his or her role, Black says. He and Hadwin began making specific job descriptions for each employee, thoroughly documenting all expectations and benchmarks for performance.
4. Regular Meetings. To keep everyone on the same page, Black and Hadwin began holding regular meetings with the staff. Black does a daily, 15-minute production meeting, covering all vehicles in process and charting out the work flow for that day. Hadwin also meets with technicians, estimators and customer service representatives individually to get feedback and ideas for shop improvements.
“In the smaller breakout meetings, it gives me a good opportunity to hear some of the suggestions,” Hadwin says. “If we’ve got an issue with a repair, I like to know. I like to understand what’s coming.”
Seeing the Results
While shop improvements are continuous, there were clear results almost immediately.
Within one week, productivity in the paint department rose 18 percent, and has steadily climbed since.
Overall sales are around $285,000 per month, cycle time decreased to six days and the supplement ratio is at 12 percent. And Black says that, for the first time in his career, he has insurance carriers requesting his shop’s participation in their DRPs.
More importantly, the culture that Hadwin envisioned at the start of the transition is finally taking place.
“The more efficient we are, the better our attitudes are, the better our quality of work, the better prepared we’re going to be for those opportunities,” Hadwin says. “Everyone needs to feel involved in its success and everyone needs to be involved in the hurdles we have to overcome.”