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Are You and Your Team on the Same Page?

Posted by Mike Gilliland on Wed, Feb 18, 2015 @ 08:59 PM

leadership, strategy, collision repair

It’s probably been a couple months since you updated the annual business plan, reviewed the annual budgets, and set goals for the year. You created a nice plan, probably felt a sense of accomplishment, but now what? How often do you reference it? Maybe more importantly, has the team you’re relying on to help even seen it? Most repairers have at least one production meeting per day to get everyone on the same page; doesn’t it make sense to put a similar discipline in place when it comes to the operation of the overall business?

 A few years ago I joined a CEO mentoring group for young technology companies; it was expensive, but most good things are. A mandate to participants was implementation of Verne Harnish’s  One-Page Plan. It addresses the common problem where companies struggle to communicate the broader business objectives to their people in a relatable way. It’s extremely difficult to convert long term goals into actionable tasks that can be achieved quarterly, monthly, weekly, and even daily. The One-Page Plan is a template to do just that; its part strategic plan and part communication tool.  In short, it’s a one page document that captures longer term goals, reverse engineers them into short terms activities, and assigns accountability to the people that need to perform them.

 I won’t go into the inner workings of the One Page Plan as there are abundant reference materials that will do that. If you can relate to the problem it addresses, I highly recommend evaluating its use. If you decide to implement it, be forewarned, it will require discipline and may not stick on the first attempt. My guess is that your daily production meetings took a while to catch on too … but can you imagine running your shop without them now?

 

In our own use we’ve modified the template to fit our specific needs, but the overriding goal is preserved. Get the entire organization going in the same direction and install a rhythm of daily, weekly, and monthly checkpoints to keep it on track.  The One-Page Plan has become a touchstone for all of us at AutoHouse. We can always do better, but with everyone moving in the same direction, I’m confident we will.

Tags: Key Performance Indicators, Productivity, Performance, Collision Repair Industry

Is the "One-size Fits All" Model Good Enough for Crash Test Ratings?

Posted by Natasha Bale on Wed, Apr 25, 2012 @ 04:30 PM

We’ve all seen them advertised and possibly even looked for them when purchasing a vehicle, but what do the crash star safety ratings really test? Or rather, who do they test for? Just because a vehicle has scored a 5-star on the US National Highway Traffic Safety Administration’s (NHTSA) 5-Star Safety Ratings System, doesn’t always mean that it’s safe for you.

An article in The Washington Post points out recent changes on how the NHTSA conducts its test. One of the major alterations is that female test-dummies are now included in the crash tests that determine a car’s safety rating; only an “average-sized male” was used previously. However, even with this major change, female test-dummies are only tested as a driver in the side pole crash test. The two remaining tests, the head-on collision test and the side barrier crash test, use male test-dummies in the driver’s seat and female test-dummies as passengers. The “average-sized male” crash test dummies weigh in at 172 pounds and stand 5 ft. 9 inches tall. The NHTSA has included female test-dummies in federal compliance crash tests since 2003, but that test is only to ensure that vehicles fulfil the minimum safety regulations (such as air bag safety) and does not contribute to star-ratings.

crash test  male dummy

"Average-sized male" crash test dummy- http://www.nhtsa.gov/Research/Hybrid+III+50th+Percentile+Male


Including female-sized crash test dummies in the star safety rating tests are definitely a step in the right direction. The new testing system makes it more difficult for vehicles to earn a high star rating and therefore encourages car makers to continue making incremental changes to improve safety. Models from 2011 and newer are being tested using the new procedures, while previous models will maintain the original rating. As a result, vehicles tested in 2011 might have received a lower rating than they did in 2010, and many did; Safecar.gov publishes the results but does not provide a comparison since the testing criteria are different.

According to the article mentioned above, a 2011 study conducted by the University of Virginia’s Center for Applied Biomechanics found that “…seat-belted female drivers in actual crashes had a 47 percent higher chance of serious injuries than belted male drivers in comparable collisions”. In addition, studies show that fewer crash forces are tolerated by people with smaller body size. As an industry, should we then be demanding that star-ratings also include female-sized crash dummies as drivers in more tests and include children-sized dummies as passengers? What should we be doing to minimize the injuries that our customers might suffer in collisions?

Many consumers (including me) may have always assumed that these star ratings resulted from crash tests representing a wide-range of the population. Considering that the star safety rating is a large contributing factor in purchasing decisions, especially for women, consumers should be aware of exactly what the rating means. Is it our job as trusted industry experts to direct our customers to where they can find information about the actual safety level for their vehicle and all of those that may use it?

What do you do at your shop to educate customers? Do you agree with the current safety rating criteria?

Tags: Collision Repair Industry, Crash Test Ratings

Competition - act like you have a 10% chance of survival

Posted by Mike Gilliland on Thu, Apr 12, 2012 @ 10:55 AM

I was recently at the PPG MVP Spring conference and one of the key note speakers commented “in order to compete we must be better today than we were yesterday”. You can interpret that comment in several ways: today vs. yesterday as a conceptual time line, or literally….we must improve every single day. In business, we all need to compete; do we do it on a conceptual basis, or are we competing daily?

My professional experience is split 50/50 between the collision industry and the technology industry, so I tend to view ideas from both viewpoints. I draw on experience from both, and what surprises me most often are the parallels between them and what can be learned about competition from the other. My interpretation:

Speed of Change

Technology – The technology industry changes rapidly, both from a technical and business perspective. Companies can go from valuations of zero to millions, even billions, in the span of a couple years. Technology companies don’t reject change, they embrace it. Change is woven into the foundation of their businesses.

Collision – The collision industry is undergoing dramatic changes. Some repairers choose to embrace change and look to the opportunities it creates, while others choose to ignore it and hope it goes away. As they say…”hope” is not a business strategy, so the non-changers may face a difficult future.

Efficiency            

Technology – Technology companies are hit and miss when it comes to efficiency initiatives, at least from an internal workflow perspective. Some see it as a competitive advantage, others don’t. I believe the same reluctance to adapt exists in the technology industry. It’s easier to identify inefficiencies in a visual process (e.g. a repair on the production floor) than in a conceptual one (e.g. a software development project), but the end result is the same – waste.

Collision – You could substitute “lean” for efficiency if you like; leading collision repairers and suppliers have embraced lean and, in turn, made it an industry wide buzz word. Repairers that are willing to admit that the old way is not necessarily the only way and are able to tweak processes to gain efficiencies are beginning to reap the rewards through lower costs and more predictable businesses.

Competitive Landscape

Technology – As you would expect, the technology industry is extremely competitive. Few companies get funded, fewer survive, and fewer still succeed. To illustrate, Angel investors (early stage investors) look for a potential return of 30:1 at exit before they will invest money. Angels typically hold 10 investments (that due diligence says meet the 30:1 opportunity), hoping 1 of them produces the 30:1 return. A couple more meagrely survive, but most will die.  If 1 out of 10 (that got funded!) succeeds, that is extreme competition.       

Collision – The collision repair landscape is not as competitive as the technology landscape… yet. With crash avoidance technology and driverless vehicles on the horizon, is a survival rate of 1 in 10 completely out of the question? Probably a little premature but if you plan on passing the business onto the next generation you may want to get the competitive juices flowing now.

Takeaways from the collision to technology industry comparisons: 1) Collision repairers need to accept change as a constant; resistance is either futile, or fatal. 2)  Technology companies should learn lean principles. Just because waste is not easily identified does not mean it isn’t there. 3) Collision repairers need to compete harder. The success rate may not be as miserable as the tech industry’s but the number of collision repairers continues on a downward trend with no end in sight.

In a prior blog post I suggested that the performance differentiator was a collision repairers’ state of mind vs. a more tangible asset or influence. Pursuing daily improvement is a mindset that improves focus and instills a sense of discipline and urgency in the business. Let’s view it from a pure investment perspective: if you were investing your money in a collision repair business and the ROI was pick the winner or lose it all, who would you invest in?

Tags: Performance, Competitive Advantage, Crash Avoidance Technology, Collision Repair Industry, Trends

What Every Car Should Have

Posted by Natasha Bale on Wed, Mar 21, 2012 @ 08:21 AM

A recent article about a man that was found alive after snow buried him in his car for two months made me wonder how prepared the average driver is for accidents that leave them stranded. Perhaps as trusted industry experts, collision repair shops should inform customers what they should store in their car in case of an emergency and why.

While most of us do not live in such extreme conditions as the Artic or the desert, there are many situations that could leave us isolated and/or immoveable. When left with your vehicle in a remote area, in poor weather or health conditions, most survival reports will tell you that you should not wander off from your vehicle. A vehicle is larger and therefore easier to find, it provides shelter, and most of all it (should) have supplies.

The Government of Canada has a great checklist on its website of what every person should have in their car:

 emergency car kit

If your car had the majority of the items listed, you would be prepared not only to survive the conditions, but also have the tools to help get found. Who really wants to spend two months buried in their car anyway?

What do you keep in your car? Do you think you or your customers are prepared? Let us know.

Tags: Competitive Advantage, Emergency Car Kit, Collision Repair Industry

Why Collision Repair is a Good Post-Secondary Choice

Posted by Raili McIvor on Thu, Mar 15, 2012 @ 07:00 AM

Is it almost spring again? You know, the time of year when snow starts to melt, trees are budding and parents of college-bound teenagers are hiding in their basements. It’s a stressful time of year for kids and parents alike. Admission offers are trickling in and that means the big decision is at hand; which post-secondary program should you choose? Well, if you’re considering a career in the collision repair industry, whether as a body or paint tradesperson or another part of the industry, below are 5 good reasons to have confidence in that choice.

After doing the circuit of education fairs, guidance counselor meetings, web searches and campus visits, you’ve probably heard all the advice you can take. I can’t tell you to listen to it all but it seems reasonable to consider what the people that have “been there” say. In BC, the provincial government surveys graduates of apprenticeship programs 6 months after completing their training to find out what they have to say about their in-school training, workplace experiences and employment.  The surveys, called Apprenticeship Student Outcomes (APPSO) Surveys, are published at http://outcomes.bcstats.gov.bc.ca/APPSO/APPSOPublications.aspx and include surveys as far back as 2005. Encompassing our first 3 good reasons, here’s what the 2010 survey participants said:

1. They enjoyed their education: most (95%) were very satisfied or satisfied with their in-school training and (93%) were very satisfied or satisfied with their workplace training.

2. Job prospects are good:  most (86%) were employed at the time of the survey and found work in less than a month. Of those employed, 96% were working full-time and 95% in jobs related to their in-school training.

3. Wages are good: the median wage of respondents who were employed at the time of the survey (that’s 6 months after completing their apprenticeships) was $29/hour.

        Two more good reasons to consider a collision repair career are that you can get grant money to help with the education costs and you have many more education options and career paths than you may realize. Here are more details on good reasons 4 and 5:

        4. The Canadian government offers up to $4000.00 per person in apprenticeship grants; that’s a grant not a loan so it doesn’t have to be repaid! See the Human Resources and Skills Development Canada (HRSDC) website at http://www.hrsdc.gc.ca/eng/workplaceskills/trades_apprenticeship/index.shtml

        5. Apprenticing in body or paint work and practicing as a journeyman is just one option. Some technicians go on to apply their skills in different parts of the industry like teaching in high schools and colleges or working in the government departments that develop education standards and govern trades practice. The Human Resources and Skills Development Canada (HRSDC) or, in BC, the Industry Training Authority (ITA) are examples. You also don’t have to start as a tradesperson; other types of post-secondary education can also lead to a collision industry career. Using the AutoHouse Technologies staff as an example illustrates that point. Our president started out as a journeyman and now runs his own collision repair-focused software company. The rest of us graduated from business and marketing, science and liberal arts programs and worked in other sectors before arriving in the collision repair industry.

        So, whether you take the short path or the long one, you don’t have to fear that you’re making the wrong choice. All education and work experience will serve you in some way at some time so the best post-secondary choice you can make is the one you want. If you can take it, there’s one more piece of advice.  

        Tags: Education, Apprenticeships, Collision Repair Industry

        The Performance Differentiator ….want the secret?

        Posted by Mike Gilliland on Wed, Feb 29, 2012 @ 06:00 AM

        What drives performance? Over the past year we’ve been trying to answer this question for completely self-serving reasons.  

        The first thing that came to mind is money; my thinking is those who want to be more profitable will focus on ensuring their business performs up to its full potential. In the past year I’ve had discussions with repairers where, with a little effort and leadership by management, profitability could improve. Some of the reasons offered on why they are not pursuing the opportunity are that “there is money in the bank and the customers are happy” and “it’s difficult to get my team to change”. Though profitability is always a topic of conversation wherever collision repairers meet, I have to assume it’s not that bad and it’s not causing that much pain since a lot of repairers won’t make the effort to improve it. So, I don’t believe money drives performance, at least not yet. Maybe it will when the pain gets unbearable.  

        How about performance based insurance relationships? These seem to be having an influence on some repairers and definitely focus attention due to the financial penalties that may be incurred if the KPIs are not met. To others, the feeling is that the targets are arbitrarily set by the insurers above what is achievable, so they are dismissed as “that is just the way they do business…we can’t do anything about it”. The repairers that have embraced these relationships may be on the right track to increasing performance but need to ensure they take a holistic approach to performance vs. a “fast track” approach for a specific insurer. Though these types of performance relationships may increase awareness of performance numbers, I don’t believe they drive sustainable performance across the repairers’ entire book of business.  

        It has to be competitive pressure then, right? Competition is real but it doesn’t seem to drive performance; it drives price cuts. For those repairers who are not willing to make the effort to focus on performance to improve profitability or to meet insurance partners’ targets, it is a lot easier to discount price. I don’t believe competition influences performance today, but I can envision the day when performance may be the competitive advantage… if I consistently fix cars 33% faster that my competitors, do we really need to negotiate on price?

        So what drives performance? After a year of trying to answer the question, my opinion, from comparing good performers, to average, to poor….. is it’s a mindset.  The good performers get up every day and want to get a little bit better and are willing to make the effort to ensure they do. In the end, I believe that that mindset will succeed. To borrow a golf analogy “it’s 90% mental and the other 10% is in your head”.  

        We have a client that has the mantra “either you’re making progress or you’re making excuses. You can’t do both”. Occasionally, I think all of us need to look in the mirror and ask….what are we making?

        Tags: Key Performance Indicators, Performance, Profitability, Competitive Advantage, Insurance Partners, Collision Repair Industry

        What Would you Wager to go Green?

        Posted by Natasha Bale on Wed, Feb 22, 2012 @ 09:44 AM

        Consumers are beginning to demand more than just the bare minimum environmental requirements and their purchasing behaviour reflects it. According to The Green Revolution, a report released by Grail Research, 93% of consumers feel that green initiatives within a company play a key role in their purchasing decisions.  What if consumers came together to put power in their purchases and rewarded the company that is willing to reinvest the most into making it green?

        That’s the idea behind CarrotMob. Consumers get together to spend more at one company. Since they would be purchasing the products or services anyway, they use power in numbers to drive change.

        So what if a CarrotMob approached your shop? How much of the additional revenue would you be willing to invest into making your shop better for the environment and for your employees’ health? As the collision repair industry is a significant contributor to environmental pollution, there are many areas that can always be improved on beyond the minimum government regulations.

        It doesn’t really matter if a CarrotMob comes or not. With new technology threatening the future of the industry (as discussed in my last blog), gaining a competitive advantage now is the only way to secure business. You can’t ignore the demands of consumers when it affects nearly everyone’s purchasing behaviour.

        Here are a few suggestions to help get you started:

        -Make the Switch to Water-borne Paint:

        o If it’s not already mandatory in your area as it is in Canada, Europe, and parts of California and New York, it will be soon

        o Water-borne paint reduces annual VOC emissions by around 40%

        -Energy and Water Conservation

        o Install energy efficient lighting

        o Investigate renewable energy oppotunities such as wind or solar

        -RECYCLE, RECYCLE, RECYCLE!

        o The usual suspects (such as parts, solvents, used oil, scrap metal, batteries, etc..)

        o Don't forget the non-business related items such as staff's empty food and beverage containers

        -LEED Certified Building (For a body shop example, click here)

        -The BIGGER picture

        o Choose suppliers based on their green level and initiatives

        o Educate your customers on what they can do

        o Educate your staff

        o Remember public areas too

        Some of these are easy to implement, such as a recycling program, while others require a larger investment. The payoff is worth it though- not only is it safer for the environment and your employees, many of the green initiatives will save you money in the long-run. It’s important to start taking steps beyond what is required of you while never compromising quality.

        Remember that honesty is key: consumers just want to know that you’re heading in the right direction. Don’t exaggerate your efforts or lie. The Green Revolution reports that 75% of consumers would stop buying from a company if they felt that its environmental claims were misleading.

        What are some of your suggestions and what have you done as a shop so far? We’d love to hear them.

        Tags: Competitive Advantage, Sustainability, Collision Repair Industry, Trends, Going Green

        Preparing for Crash Avoidance Technology

        Posted by Natasha Bale on Wed, Feb 15, 2012 @ 07:04 AM

        There have been a lot of articles floating around lately about technological developments within the auto industry- crash avoidance technology to be specific. The ultimate goal for this of course is to improve the safety of vehicles and reduce collisions. While these are amazing developments, what do these advances in technology mean for the collision repair industry?

        According to Institute of Electrical and Electronics Engineers (IEEE), 90% of all crashes are due to human error behind the wheel. It seems logical then that new technology is focusing on taking the control away from human drivers and making more features computerized.

        As long as cars are on the road, accidents are inevitable. But since there’s already more collision shops than business to sustain them, future technology that further reduces accidents will greatly impact the collision repair industry.

        Some reports are stating that these developments are going to be in vehicles by next year but others are stating that for this technology (especially the car-to-car communication) will only reach its full potential once the majority of cars have it, and that could take another 30 years. Whether it takes one year or 30 years, the overall effect for collision repairers will be the same: reduced business. Shops will have to compete even more for decreasing ROs by gaining competitive advantages and increasing its efficiencies even further.

        Now is the time to begin looking for ways to clean up shop operations and investing in tools that help you do it. AutoHouse Technologies’ products give you visibility into your shop and show you where your inefficiencies are. It shows you what’s wrong, not what’s right in your shop, so you can focus on fixing the problems.

        Let us help you gain that much needed competitive advantage so that your shop is still thriving in the rapidly changing industry.

        Is Crash Avoidance Technology a threat to the industry? What are other ways to gain a competitve advantage? Let us know your thoughts!

        Tags: Competitive Advantage, Crash Avoidance Technology, Collision Repair Industry, Trends

        The Collision Repair Industry from an Outside Perspective

        Posted by Natasha Bale on Tue, Aug 10, 2010 @ 09:00 AM

        My only previous experience with people from the collision repair industry was in high school. The shop class teacher could be heard from down the hall, screaming at students for any reason. He just seemed to be a miserable guy who took his frustrations out on his unsuspecting students. Seeing my peers run out from the room and hearing the stories from my older brothers, led me to avoid any sort of personal contact in the industry.

        Years later, I am now in my fourth year of university at the University of Victoria studying Commerce, and thoughts of that terrifying man made me doubt my survival in this intern position. I have since discovered that the industry is filled with people who are quite the opposite of that teacher. Anyone I have come in contact with has a huge sense of humour, is interested in helping those around, and loves what they do.

        When I first came to work for AutoHouse Technologies, I was unsure of how I was going to communicate with people in the collision repair industry through e-Marketing. I figured that people in this industry would be busy getting their hands dirty by fixing cars rather than being inside on their computer. I was pleasantly surprised to find so many people and companies connected to each other online. Through social media sites such as Twitter and Facebook, we have been able to connect with shops from all over North America. In what other way can so many people with one common interest join together without leaving their own shop?

        There seems to be this strong sense of camaraderie between ‘shop guys’. Even with all the strong competition within the industry, it seems that everyone is genuinely interested in helping each other be successful. It’s a tight knit community; in just a few short weeks, I have witnessed on several occasions, people within the industry lend a favour or two for as little as a promise to meet for a drink after work one of these days. I don’t think there are many other industries out there quite like that.

        I have however, found one challenge. A lot of shops and people from the industry have joined these sites, and built their profiles for the sole purpose of getting their names out there. That’s why we all do it, but it needs to go further; we need to bring the sense of community that the industry has and build from it, online. A lot of companies have joined these sites, but have not even so much as “tweeted” since joining. Contributing ideas and opinions through Twitter feeds, discussion and comment forums, direct messages, etc., are so important. Not only does it increase brand awareness for your business even more, it adds personality to your business and shows that you are interested and involved in what is happening to the industry that affects you directly. You may be involved in the area surrounding you, but you now have the opportunity to reach far beyond that.

        In the next few weeks, we will be releasing our 2007-2009 Rear-View Mirror Report, which will take a look at the recent trends of the Canadian Collision Repair Industry. Now is your chance to tell us what you would like to see in this report. We’re writing this for the benefit of those in the industry, so we’d love your direct feedback. Feel free to contact us through our website or on Facebook, Twitter, or YouTube.

        Tags: Collision Repair Industry, Trends

        A Productivity Snapshot

        Posted by Mike Gilliland on Wed, Jul 28, 2010 @ 07:18 AM

        Lately I’ve been having more conversations with repairers about productivity because some believe they have made gigantic leaps forward in making their businesses more productive. The increased focus on the production floor, triggered by the industry’s adoption of lean methodologies, no doubt has had an influence, or has it? I decided to take a quick look into our data to see if I could spot any trends.

        How do you best measure productivity? I’ve used our units per day metric, or touch time as it is also known. In this scenario, productivity measures how many hours on average are spent working on each repair, everyday it is on site (Total Hrs / number of days = Units / Day). I choose this measurement for two reasons:

        1. in order to increase your units per day performance, you must also improve a lot of other shop processes that impact this productivity KPI such as estimating, parts management and scheduling, and,
        2. there is an increased focus by insurers to monitor units per day performance.

        As discussed in a prior article, I believe this is one of the KPI’s a shop should track for its own business. If insurance partners are also tracking the KPI, it just means that you should be able to be proactive rather than reactive with those conversations.

        The data we collected includes both customer and insurance pay repairs, and is provided only to see if the trend line has moved. In future reports, we may dig deeper and get the statistical validation required to make a definitive statement. During a three year period, this is what we found:

         productivity trends

        From what we see, there is support for the assumption that productivity has improved, but what are the factors that contributed to those gains? I’ll take a stab and make some assumptions (if they are proven wrong at a future date, I guess I’ll only have myself to blame):

        • Lean initiatives and renewed interest in production processes have contributed to the overall increase
        • Some insurers (unfortunately, only some), are adopting a lean mentality to cut out administrative waste that slows repairs
        • The top performing repairers are bootstrapping the overall average higher. I know we have some clients with averages much higher than shown, even with customer pay repairs in the average

        I am interested to see what further analysis would provide. What are the average units per day of the top 10% of performers? If you segment insurer and customer pay, what are the respective averages? Does the average vary from one geographic region to another? Please let us know what you think, or what you would potentially like to see, and we may be able to include it in future articles.

        My final assumption is that the repairers who figure out how to continually increase productivity will be the winners … not just for their insurance partners, but also for their business. I don’t think I will need to eat any crow on that one!

        Tags: Key Performance Indicators, Productivity, Trends