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?