Think Inside the Box

May 1, 2008
The nation’s 5th largest dealership shop owes its success to business basics.

“Thinking outside the box” has become a fairly standard phrase in the business world, as executives advise their employees to be more creative, flexible and innovative.

But sometimes, it’s possible to go too far and discard what makes “the box” so valuable in the first place, believes Larry Crouse, Body Shop Director at the Larry Miller Body Shop in Peoria, Ariz.

Sometimes, he says, people toss the classic strategies and approaches—foundational principles that have made  the box so solid over decades of business—simply to employ change for change’s sake. In the quest to be more cutting-edge and innovative, companies risk creating an environment that shifts too often for employees to be productive and for customers to feel happy. Who can keep up when policies morph every few months? No one, Crouse believes, which is why he’ll be sticking to the basics, thank you very much.

Serving the Arrowhead Honda dealership, as well as the Larry Miller Dodge dealership and two other dealerships specializing in Toyota and Hyundai vehicles, the collision center is the fifth largest dealership-related shop in the country, Crouse says. Nearly 100 employees handle up to 700 vehicles per month, and there are typically about 300 cars waiting for service.

With that kind of turnover, a rock-solid management style and clearly stated goals are crucial. Fortunately, the shop has those firmly in place, says Mike Kist, the center’s assistant manager, partly as a function of being one of the collision centers in the Larry H. Miller family of companies.

“Larry Miller, as an owner, instills confidence in everybody, so you feel that your first duty is to protect the legal and financial status of the company,” Kist says of the man whose enterprise includes sports teams, restaurants and more. “[It’s also] important to have managers who understand the body shop business from every angle.”

But those aren’t the only secrets of the center’s success. A major attribute is the insistence on staying “inside the box” of traditional management approaches, such as empowering employees, creating teams and treating customers properly.

Business Basics

Although every shop likes to maintain a customer-focused attitude, Crouse says the Larry Miller center aims to go above and beyond in making the customer the central aspect of every interaction, and to treat each customer as an individual.

It sounds like common sense advice—again, a bit of wisdom that might be in “in the box”—but putting the customer first isn’t a given. A shop might be more focused on getting repairs out the door, or streamlining paperwork with insurance companies or boosting employee training—and the customer gets lost in the shuffle of ambitious goals.

To treat customers properly, the Peoria center first takes time to understand a customer’s needs and expectations, which requires a conversation that cements the relationship. Details about the customer are recorded: Do they want to be contacted by email or phone when the repair is done? Would they like to watch the work through every step of the process?

“Some people just give us their keys and say, ‘Call me when it’s done,’ while others want to watch what happens with the car, even if it’s a multiday job,” Crouse says. A favorite tactic among customers is the shop’s email progress report. The note outlines what’s been done and gives a quick overview of what’s left to do, allowing the customer to have a sense of forward momentum with the work while getting a realistic sense of the completion date.

As part of providing faster service for customers, another strategy for the center is to emphasize fast turnaround of necessary parts to vendors. A major supplier is located on the other side of Peoria, so many times, the shop dispatches a runner to pick up a part rather than wait a few days for it to be delivered.

“Our philosophy is that when you a need a part, you need it,” Crouse says. “So, we drive over and get it. That makes the repair go faster, and the customer is happier.” The vendors, on the other hand, weren’t so fond of the “we’ll do it ourselves” approach, considering that it meant a lost sale whenever a Larry Miller employee made the pick-up. After some negotiations, most vendors agreed to guarantee faster delivery. Crouse adds, “They understood that we weren’t going to budge on getting parts in here quickly, so they stepped it up. And that’s been a benefit to everyone.”

In terms of the center’s employees, the shop takes a unique approach to creating teams that contain writers, “body men” and a paint team, Kist says. Each team is assigned a certain number of jobs, and when they get low on work, they help another group. This strategy creates an atmosphere of collaboration, rather than putting individuals together who are all trying to boost their commissions as quickly
as possible.

“It puts the company and the customer [first],” Kist says. “When you’re worrying about your money, that becomes your only focus. We create a place where you’ll make what you need to make, and you don’t have to think about it all the time. Instead, you can spend your time thinking about what’s best for your team and for the customer.”

Employees also benefit from ongoing training, such as I-CAR classes that are held on-site. This sends a positive message when it’s arranged by the company, Crouse says: “We show that we really care about them expanding their knowledge and education.”

Challenge Round

One challenge for the shop was figuring out how to keep its collaborative atmosphere during a time of immense growth. The center averages $1.2 million per month in gross revenue, Kist says, but it took 13 years to get to that point. As the business grew, employees were added, and focus had to be put on keeping the team-based environment.

“At every major level, you struggle and change,” Kist says. “After we achieved a half-million dollars a month, we created the teams. Now that they’re working, we may have to do something slightly different as we [continue to] grow, but we’ll keep paying attention to how people interact with each other.”

To keep a friendly spirit in the center, employees often socialize outside of work, and the shop organizes a number of events during the year. There are outings to the Phoenix International Raceway, a Thanksgiving turkey fry and volunteer efforts where employees come together for the community.

“We don’t all see each other every weekend, but people get involved in different events, and it’s a way to connect with other people outside of work,” Kist says. “That helps to build friendships that are maintained during working hours, too.”

An ongoing effort has to be made to maintain a positive workplace, he adds. When complaints and grousing begin, they can spread quickly, as every manager knows. The shop tends to stay focused on the work to be done, rather than getting involved in industry clashes like the controversy over direct repair programs. “We respect the fact that people want to get into that kind of thing, but we prefer to focus on making our customers happy, and that takes up most of our time,” Crouse says.

Keeping their employees happy is also a major theme: “All of our employees know they can come and talk to us anytime,” adds Kist. “And more than that, our customers and suppliers are made to feel part of this business as well. So, there’s a camaraderie here, based on continually trying to do better.”

Bigger Picture

In addition to creating an atmosphere of collaboration and enthusiasm, the shop is also aided by being part of the Larry Miller Group of Companies.

Started in 1979 as a single Toyota dealership, the company has blossomed into one of the country’s 200 largest privately-owned firms in the country, with a collection of businesses that range from racetracks to ownership of the Utah Jazz basketball team. It now operates about 40 dealership locations in six states, and has six collision centers, including the Peoria location. Other centers are located in Utah, New Mexico and Idaho.

Even with multiple dealerships, collision centers and other components, there is just one mission statement (see sidebar) for all, and it epitomizes how employees should approach their work. Dan Johnson, director of service and collision center operations for the Larry H. Miller Group of Companies, notes that the mission statement isn’t boilerplate language that gets ignored by employees working in the trenches. Rather, it’s a goal as well as a commitment, an articulation of how they should be thinking about customers and their work. And employees respond by rising to the challenge, he says.

The company works to maintain a consistent business philosophy and set of practices across all its collision centers, Johnson adds: “We focus on giving people the opportunity to grow within the company. One of the job responsibilities we’ve instilled in all our stores is to train our replacements. In every collision center, we’re thinking about how to bring people to the next level.”

The business development manager for Larry H. Miller Collision Centers, Sheri Thompson, had been working for the company and left for another firm, but it wasn’t long before she came back, for the reasons voiced by Crouse, Kist and Johnson: the company puts significant emphasis on respect for people, whether customers, vendors or employees.

“This company allows us to carry through on the mission statement in a way that makes it easy to treat customers right, and to treat each other right,” she says. “We don’t just sign off on the mission … we believe in it. We use it to continually educate employees and reflect that commitment in every action. It’s the Larry Miller way.”

The Miller company doesn’t see its collision centers as add-ons to the dealership, but instead as their own self-reliant units, Johnson notes. With that in mind, it’s encouraged for managers to operate as Kist and Crouse do, by sharing ideas within a group and giving managers latitude to make executive-level decisions.

“There’s a corporate philosophy, but every shop has different approaches and needs for maintaining customer relationships,” he says. “We make sure that the right people are in management positions, so that can get done.”

Many shops are fond of change, simply because it’s what managers feel should be done to stay competitive, but the trick is to stay smart about it: Keep a customer focus at all times, train employees and offer a goal-oriented career path to them, build stronger relationships with parts suppliers and create an atmosphere of friendship within a center. All of these might be “inside the box” in terms of business approaches, but as Larry Miller’s centers have demonstrated, that box contains long-term success.

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