Winning in a World of MSO Consolidation

Winning in a World of MSO Consolidation

T.I.P.

MSO consolidation will affect your collision repair business, it is only a question of when. The good news is, is that it’s possible to compete with these guys if you are willing to do what it takes to win! This article is not intended to support or oppose consolidation but instead to share with you some valuable techniques MSOs use to sustain rapid growth and profitability. Whether or not you run a DRP dependent business, you should still read this article carefully because this T.I.P. is less about what “they” are doing and more about what “you” should be doing do grow and prosper in today’s challenging marketplace.

Big MSO consolidators, like, ABRA, and Service King know that fast, profitable growth comes from consistent, predictable positive results, one repair job after another. This is the only way to create secure relationships with both insurers and customers. What winning principles do these industry giants follow? TRAINING, INSPECT WHAT YOU EXPECT, and PROCESS. (TIP) Their winning ways are based on a written process that produces consistent, predictable results. They train their people to follow the process, then they constantly check to make sure this discipline is followed day after day. TIP allows good people to do great things, but as with everything, its foundation begins with good people.

Training

Leaders in the collision repair industry know that training is paramount. Big MSOs invest huge sums of money in training. Some even have their own Intranet Learning Management Systems. Taking a few classes now and then doesn’t cut it these days! What is needed to survive is what is called a “Learning Culture.” I heard a shop owner once say that I can’t afford to keep training people, they always leave and go to work for the competition. My response would be “so you would rather keep uneducated employees?”

Training benefits include:

  • Increased ROI
  • Reduced employee turnover
  • Improved efficiency & productivity

Consider these forms of training:

  • I-CAR www.i-car.com
  • Automotive Management Institute (amionline.org)
  • Train in-house using your own SOPs
  • On-line videos, and Webinars
  • Workshops
  • Online “Learning Management Systems”
  • Hire a coach

Make sure your people have a deep understanding of how the processes work, and give them all the tools they need to execute successfully.

Inspect What You Expect

Testing and auditing are the “secret sauce” that brings it all together. Big MSOs do this religiously and for good reason. What gets inspected is what seems to get done, right? I’ve seen many improvement initiatives fail, even in some organizations that had great people. Most often they fail because they neglect proper testing and inspection procedures.

Testing method:

  • Create your own test based on information in your written processes
  • Create about 20 questions
  • Use a combination of True or False, and Multiple Choice
  • Test employees when training has been thoroughly completed

Auditing method:

  • Identify your process’s most critical elements.
  • Write an auditing form asking: “Is this critical task or process being followed consistently? Yes or No?”

Your form may have as few as ten items, or it might have over a hundred, but all should be noted and answered in the course of an audit. I recommend frequent auditing, especially whenever new processes are being implemented. In a more stable system this should still be done monthly or quarterly. Those who are engaged in the auditing process should see it as an ongoing coaching opportunity.

Process

Almost everything in life is a process. Most of us have a morning routine: getting up, eating breakfast, going out the door. It gets us to work on time. Fixing cars is no different. Every shop has a process, whether they know it or not—but some have very poor processes. Many shops have good processes, but don’t consistently follow them.

Most shops I’ve worked with had fragmented processes, each for a different area of the shop. These betray a lack of unity and direction. They often conflict with one another. This often creates a disconnect between the administrative processes of the business, and the work processes used on the shop floor. This leads to poor communication, unnecessary delays, poor quality and upset customers. Quality control must be built into the process, so, at each stage, the recipients get a product that meets all quality standards.

A good process should:

  • Produce consistent, predictable quality results every time.
  • Have simple, clear instructions, written out and accessible to everyone.
  • Flow well from resource to resource, without unnecessary delays.
  • Identify who does what.
  • Be visual – both in the operating manual and on the shop floor.
  • Be comprehensive, well-planned, and free of waste and inefficiency—and no sacred cows!
  • Be based on proven methods or best practices.
  • Be created with the customer’s, and the employee’s happiness in mind.
  • Be created and implemented with the input and buy-in of the entire organization.

TIP – Testing, Inspect, and Process are the three elements that will allow your collision repair business to compete on the same playing field as the big MSO’s. If you are unsure how to implement TIP, resources and coaching is available. Whether you are a DRP driven business or not, TIP will give you the consistent, and predictable results that are required to attract and keep both your insurance relationships and your faithful customers. Your employees will thank you too!

About the Author:

Dave Luehr
Dave shares his experience from over 30 years as a collision repair industry leader in leadership, lean and Theory of Constraints. Once the owner of a body shop himself, Dave draws on the realities of a real world collision repair shop in his consulting, writing and keynote speeches.

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