Schiro’s Fires on All Cylinders

May 1, 2008
with 6 Stellar Strategies for Success

It’s no easy task to transform a shop from an antique car restoration business to a full collision repair operation while confronting the industry’s many challenges. But Schiro’s Collision Repairs in North Hollywood, Calif., developed a half-dozen strategies for success that helped them accomplish that feat.

“As the auto body industry has evolved, remaining profitable has become much more of a challenge with all the adversities our shops face,” says Frank Schiro, who has co-owned the business with his brother, Joe, since the 1970s. “If we don’t fire on all cylinders, we’re not going to be profitable.” To that end, the shop developed a strong, strategic foundation—with input from all levels of shop staff—to keep the company running smoothly and in the black.

Exceed customer expectations throughout the repair process.

“We strive to exceed customer expectations throughout the entire repair experience in order to build customers for life,” Schiro says. “We’ve always spent a lot of effort on that.” In fact, Schiro’s has found that delivering a high level of customer care not only provides for success through repeat business, but also for the referrals that generate most of the company’s business. “We have experienced no better marketing,” he says.

This strategy, however, can only be effective only if company culture is created around it and employees truly care and make every effort to provide a high level of service. “It cannot be fabricated,” Schiro says. “If a member of our team [who is] interacting with customers is not genuinely caring and compassionate, customer care breaks down.” That’s why it’s important to Schiro that all staff, including new hires, buy into the company’s customer care philosophy.

The company also incentivizes its staff to effectively execute this strategy. “When our team performs exceptionally well in [customer service], we bonus heavily for the stellar performance,” Schiro says. On the other hand, if a person in a customer service role does not meet shop expectations in this area, “we remove that person from that critical role.”

Adopt industry concepts to maximize efficiencies and throughput.

“Over the years, we have adopted industry concepts such as lean production, theory of constraints and blueprinting,” Schiro says. The company’s strategy has been to take the best and most applicable aspects of each concept and meld them together into a process best-suited to the business.

Through the years, the Schiro brothers have attended training and learned the fundamental concepts of the various operating models. Realizing that no single system fit their company, they built their own operating model, which, Schiro says, “is a little bit of everything, blended together. Our processes strive to minimize inefficiencies by controlling unnecessary activities that create waste and increase cost, as well as to minimize the bottlenecks that affect vehicle flow.” Schiro cites the shop’s blueprinting process as an example. “Blueprinting means different things to different people,” he says. “The industry largely [defines] the blueprinting process as specialized teams of technicians who disassemble, estimate, repair specific areas and assemble the vehicle.” Schiro’s version of blueprinting relies less on specialization of tasks and more on the preproduction activities that ensure an accurate repair plan and minimize production delays.
Incorporating aspects of different business models also enables the company to remain flexible and make changes as needed. “We are a constant work in progress,” he says. Schiro believes their willingness to change direction as needed has ensured their years of success.

Rely on written systems to obtain predictable results.

Schiro’s business model relies heavily on written systems to support the results they want to achieve. “We have written systems for almost everything,” he says. “With all the variables we encounter each hour, minimizing these variables through the extensive use of systems has helped us obtain more predictable and desirable results.”

Having written systems for all aspects of the business also enables training—and retraining—of everyone involved in the process to ensure consistent, predictable results. Take, for example, the shop’s process document. It tracks each stage of a vehicle’s movement through the shop. Although the document has been used for years, the shop’s team reviews each case with care. During a quality control meeting, for instance, the team reviewed every step of every stage to ensure that the expectations were clear and that the systems were being followed completely on the shop floor.

Consistently communicate performance expectations.

Communicating expectations through meetings such as the quality control gathering are regular occurrences at Schiro’s. They ensure that systems are not only created, but also understood and followed. And Schiro’s takes great effort to make that communication clear, consistent and repetitive.

“If we don’t stay on top of things, everything gets watered down,” Schiro says. “We need to know that if we are going to [implement] a system, we are prepared to protect and enforce it and hold people accountable for the results.”

Another thing that doesn’t get watered down: conversations about profitability. Schiro’s is completely open with its workers about financial goals, consistently communicating and reinforcing the performance expectations that are required for the health of the company.

Measure, communicate and reward on results.

Along with setting, communicating and reinforcing expectations, Schiro’s also measures and shares results with the staff. Through various reports and meetings with the appropriate team members, results are shared daily, weekly and monthly, Schiro says. When benchmarks are met, rewards follow.

“When our team achieves our gross profit benchmarks, we have aggressive bonus plans that reward exceptional performance,” he says. In fact, most of the shop’s office staff has a pay plan that is tied to a bonus for customer service indexing (CSI) or financial results.

Employees also appreciate the nonmonetary rewards from the company. “There is a lot of satisfaction in being ahead of the curve,” Schiro says. “Most importantly, we highly encourage every person in the company to reach their potential. We try to create an environment that enables our staff to [attain] higher positions along a career path. We pay particular attention to those with good character who exceed expectations in their current position.”

Participate in business development groups.

While Schiro’s has customized its strategies to best fit its business, the owners do not take full credit for the systems. “Most of these ideas have come largely from Coyote Vision Group (CVG),” Schiro says. “We haven’t reinvented the wheel; we’ve just tapped into these ideas.”
The CVG is a peer management group of collision repair owners across North America who meet on a quarterly basis. The members help each other with business improvement and personal development. “We have been involved with Coyote Vision for over 10 years and have met extraordinary owners and managers from across the country who have helped us stay on the leading edge,” Schiro says, emphasizing that participating in the group is one of the most valuable things he and his brother have done for their shop.

Although the members of CVG are all in collision repair, the foundation of the group is its noncompetitive nature. “We go over all kinds of things that go into having a thriving business,” Schiro says. “We share everything. There are no secrets.” That kind of give and take by all enables group members to find success despite the tough business climate. “It’s such a complicated business, you just can’t do it in a bubble,” Schiro says.

Long-Term Success

While each strategy has contributed to Schiro’s growth and success, none of them happened overnight, and a shop should expect that any successful strategy will take time to develop—and will require trial and error. “You can’t snap your fingers and make it happen,” Schiro says. “A lot of these things were embraced many years ago, and are now helping us in these tough times. I don’t know where we’d be if we hadn’t embraced them.”

Not only do successful strategies require time, but they also require a great deal of work and commitment. Too often, businesses give up too easily. Patience is essential. The processes can only succeed if the time and work is put in to make them a viable and intricate part of company culture. This also means the processes must be open to scrutiny, feedback and revision. “You want feedback from your staff; they’re the ones in the trenches,” Schiro says. “Our job as management is to do whatever we can to tap into that resource.” It is a kind of a bottom-up approach, he says, explaining that it’s up to management to get the creativity flowing, and then to be open to input and involvement from the shop. “The end result,” Schiro says, “is often better than what you thought of to begin with.”

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