Process Improvement Fails

A process manual built with AI 0:00

Steve Shaw: Dave Rogers, what's going on? How you doing today?

Dave Rogers: Fantastic, Steve Shaw. How are you?

Steve Shaw: I am doing amazing. Better than 90% of the world today.

Dave Rogers: Awesome. Better than 90%. I love it.

Steve Shaw: Well, I think everybody's probably tired of us talking about the weather. What's on your mind today?

Dave Rogers: We're not talking about the weather today, that's for damn sure. What makes you better than 90%? What brought you there today? That's a pretty good level.

Steve Shaw: Oh, what brought me to that conclusion? Well, it was 72 here. That's why.

Dave Rogers: There you go. Now you're talking about the weather. You're rubbing it in, is what you're doing. You don't want to talk about the weather, but you bait me into it.

Steve Shaw: I don't know, it seems like a good way to open everything. We do that a lot in class too. Everybody types in their weather sometimes when we get ready to start class.

Dave Rogers: Yeah. Well, this time of the year, with what's going on right now, nobody's having good weather from the Northeast all the way out to the West.

Steve Shaw: I did get into a conversation today. I was talking to some different people about the convention, and depending on when this airs, it'll probably be right after the convention. I talked to a bunch of people about AI, and I recently helped a dealership group put their processes together using AI. It was pretty awesome. That was a cool use of the tool, especially since I'm not the greatest typer in the world. Being able to use AI to write this stuff out and put it into a Word document was pretty cool.

"Did you document it?" 1:40

Steve Shaw: I've been working with this group on process improvement, which is why they hired me. Most of the time I get hired to do training, sales training, and help move RO performance. But this group hired me to guide them in writing their process improvement manual. We set out two years ago to document every process in their store, which led me to this cool sign I have in my office. I gave it to every single service manager in this group. You can talk about a lot of things, but as the sign says: did you document it? Does everybody know what they're supposed to do?

So we spent two years, a couple of days each month, not day by day, developing it step by step, starting with that phone call. We have a BDC operations manual. And then when the customer drives in, what is supposed to be done, from, as we would say, "welcome" all the way to the final walk-around and delivery process. A pretty amazing chain of events.

Dave Rogers: That's really cool. I would say we don't have that, or we don't have it as good as we should. You're making me think back to when I was with Chrysler all those years, and they evolved Five Star into being process-oriented, and we had to do our flow charts and stuff. Even Toyota had their thing, Signature, I believe it was called. And Honda had theirs too, Excel.

Steve Shaw: Ford Blue Oval, yeah.

Dave Rogers: It sounds like a next-level-up type of dealership if they're interested in doing that. What got them to do it? You said four stores?

Steve Shaw: They've got four stores. It's a small, local, family-owned group, and their fixed ops director is a pretty strong character. He really just wanted standardization, and I know a lot of people struggle with that. It's small enough, it's not a 30-, 40-store group like yours, and they're similar brands. And they have a lot of change; people can work at this store or over there. So the fixed ops director wanted all of these things documented in case of movement. And they have actually moved people around, from one Nissan store to another Nissan store, even across brands, and the manual has done a good job.

The funny thing is, even within that small group, they each do the walk-around a little differently, which is totally fine. I don't care how people do their walk-around, especially if there's a compelling reason for it. The only difference is one store will walk around the car backwards and another store will walk around forwards. They didn't get too strict. Within a store, everybody has to do it the same way, but they didn't say it had to be the same at all four locations.

I think it was cool that it was flexible and everybody had input. It was really cool to watch the managers go out to their people, and that's why it took a long time. It's an evolving document. The walk-around, the write-up process, the delivery process, these things continue to change over and over. A guy got promoted, so what he was doing within the process got removed. So although we've been working on it for two years, it's an evolution, and that document continues to evolve every day. It's been a cool project.

Write it, agree to it, then follow it 5:39

Steve Shaw: The one thing I would question is, do you follow it? We have it. Did you write it? Did you agree to it? And then, did you follow it? Obviously, there comes the biggest challenge. Are you doing all the things you say you're going to do?

Dave Rogers: Yeah, that was always my thing. We did it because we were forced to do it. I loved the idea, I thought it was a great plan. But you kind of just practiced for the inspections. When you had the inspection from the factory and they were going to come grill your people, you really just practiced for that. You didn't even practice the process, which kind of ruined it after a while. And there's a large group in my area that claims they have written processes and all this stuff, and 90% of that is BS. It's not the same. They don't follow it. They don't do the consistent thing. I love the idea. I love the concept.

What I developed out of that was to give a basic outline. I think that's what worked best. When I got to Honda Excel or Toyota Signature, even though they wanted us to have these big, long flow charts, I always found the best thing was to keep it simple, bullet points, give them a few things to do. Because it's like herding squirrels, man. You've got so many different personalities. My group now is 30 stores with three different owners operating their stores, and the GMs have autonomy to do their thing. I'd probably lose my mind if I tried to come up with one book. But we're going to have to try and do something in some of these stores, because I think it's a good idea for the foundation.

The advisor who treated grandma differently 7:57

Steve Shaw: Well, I think it's important to have that, certainly an outline. But I keep hearing these things: we are a very litigious society these days. And one of the things that came out of this was very interesting. A small store in a little town just outside the big city here. One advisor, a very aggressive service advisor. While we were all going down this path and doing it one way, this one particular advisor liked to do a little bit more. Sometimes, not all the time.

I noticed it while we were training. I'm going to say grandma: grandma would come in, or somebody older, and this advisor would be very aggressive. Good-looking guy, very articulate, and when different people came in, he'd take a different approach. Grandma comes in, the hood gets popped and the brake fluid gets checked. But when mom or dad or an attorney or a regular person came in, none of that happened. That bothers me very much. It hurts my heart.

Then I think about the dealer's pocketbook, because we are a litigious society. Grandma's son or grandson happens to be an attorney, and she bought a brake fluid exchange and someone else didn't get offered one. That leaves us pretty wide open. "I got profiled." Discrimination. So it hurts my heart, and it's going to hurt the dealer's wallet. I believe having those things written out, as tough as it is sometimes, is the most important thing we can do.

One price for every customer 9:57

Dave Rogers: No, it's true. I use a very similar example with pricing. You have an advisor go back to parts and say, "Can you knock $25 or $50 off that part?" My thing is, you don't do that. It's always built out at whatever that markup is. Let's call it our list price. It's always the same. And then if you're going to discount something, you put a discount underneath it. Because you're right. Whether it's somebody's grandmother, or a person who works for a lawyer, or a minority, they're going to say, "How come you charged Mr. So-and-so $300 for that part, but you charged the woman of color or the Spanish person $350 for the same part?"

Steve Shaw: Exactly.

Dave Rogers: They could cut different deals, and you can give discounts on the repair orders. But you're right, it's such a crazy environment out there. That's a great one. I've let everybody know, but that's probably something we should remind them of every month. Don't do it.

Steve Shaw: Yeah. And actually, to the driveway manager's credit, because we were talking about it, this particular individual is very good. If you want to make the argument, his performance was very good. His numbers were great, probably one of the top guys in the store. But then you've got to ask, why is he the top guy? Is he taking advantage of somebody that other people are not? And the driveway manager actually did a great job and said, "No, this is our process. This is how we do business, and you have to do it this way."

Nobody wants to say "my way or the highway," and I never say that, certainly as a consultant. But as a manager, I think we've got to hold the line and say, "This is how we're going to do business. We documented this process, you've agreed to it," and we've got to hold them accountable and responsible for doing it that way.

Dave Rogers: Yeah. For managers out there, and anybody in the business, if you can document some of these key things and put out an outline, it should make your job easier. It really should. It gives the guidelines, and then you've got the rule book to smack them in the nose with when they don't follow it.

You can only control the process 12:21

Steve Shaw: Remember when we were down in the Keys together for my summit, and we had a speaker who said the only thing you can control is the process? I can't control anybody's behavior, but I can control the process. I believe that with all my heart as well. We wrote a process, and we've all agreed to it. Here are the rails. You can do this and you can do this. If you get outside of these, now we've got an issue. I still like you, I still think you're a good person, but the process says this, and I need you to stay within those guidelines.

Dave Rogers: And listen, that's where being a good manager comes in. You have to have the red flags on the process. You've got to know when someone deviates. It's that shock-collar mentality: when they go outside the perimeter, there has to be some way you're notified. In today's world, with so much going on, you have to make sure they stay within the rails, like you said, within the parameters you gave them. It would definitely help somebody, especially a newer manager, to put down some processes everyone can agree on. And I think you should start small, too. It doesn't have to be a 14-page book.

Steve Shaw: Right. But I've worked with groups and done this plenty of times over the years of consulting, and the best example is a guy up in Vermont or New Hampshire. His name was Al, and I love Al to death. Al is the shit. Al built Al's Bible. Day one, there were a couple of pages, but over the course of many years, everything we did, Al put in his Bible. You'd love him. He's a big, burly guy with a huge beard and mustache, loves the snow, loves the outdoors. Super cool dude. Al had his Bible, and kudos to Al, he held people accountable. "We put it in the Bible. That's how we're going to do business." Good deal.

Dave Rogers: That's funny. When you said 14 pages, I was thinking 1,400 pages or 14 chapters. Try to keep it to 14 pages is probably what you should do.

Steve Shaw: Well, there are nine or ten key processes, whatever you want to call them, starting with write-up, so there's a page for each. I think we talked about this once before. I want my people to say "welcome." That's my favorite word. We do the welcome dance. I want everybody to say welcome. That's not to say everybody has to, but I think it's important that they do it the Piazza way at Piazza, and the way your guys want it. I think that's a key component of longevity and retention: what's the customer's expectation? And if we don't tell our people, somebody might be greeting the customer however they want to.

Compliance is 70% at best 15:24

Dave Rogers: Right. So when you follow up with these stores, is there compliance with the process?

Steve Shaw: Execution? That's the tough part.

Dave Rogers: I always felt it would give a new employee a head start. You have something to give somebody instead of just throwing them on the line. When you follow back up with them, is it hit or miss? Are they pretty good? What do you find?

Steve Shaw: I'm going to tell you it's 70% at best. It's certainly not that they don't do it at all, but it's not 100%. Could you expect it to be 100? I could make the argument, yes. Is it going to be in the real world? Probably not. But if you're above 50 and you're working it, I think you're doing a good job. And that's me saying what everybody wants to hear. For real, if you're going to do it, then stand up and do it.

I don't like people saying they're going to do something and not doing it, even if it's a manager or a store I'm working at. Look, don't tell me your walk-around is like the Chrysler process. The last I heard, it was "put the blinker on and get the customer involved," and do this, no BS. Nobody's going to do that. So don't write down that you're going to do it. To your point, put a bullet point: these are the five things you have to do in the walk-around. Great. Take some pictures. If you want a picture of the front, the rear, the top and the grille, then that has to be in the process, and the accountability piece needs to be there.

The only way that happens is the manager reviews those videos, or the driveway manager, if we have one, and this group has one in each store. What's your job in life as a lane manager? I would say it's to be the rails of the write-up process and make sure it happens 100% of the time. So if they're at 70%, I'm probably being generous. Some stores I'm going into don't have anything. I like the idea of holding people accountable for the process however that happens. We were talking with Brad recently, and Brad said, "I go out there every single day and review the numbers, and there's an expectation of X. And if it doesn't happen, I still love you. I might even still have a drink with you. But the process wasn't followed appropriately."

Management, leadership and being liked 18:16

Dave Rogers: Right. And that's a whole other subject about today's generation and some folks, because it seems like they want to be liked more than they want to make money, or more than they want to do a good job. That's a higher priority. So when you tell somebody they didn't do a good job, all of a sudden they feel like you don't like them anymore, and they're crumbling.

Steve Shaw: "I can't work here anymore."

Dave Rogers: Well, listen, we keep talking about having a conversation at some point about management and leadership and the confusion out there between one and the other. We're talking about management right now. It's a skill set to put a process in, make sure everyone follows the process, decide what you do if they don't follow it, and re-inspect the process at certain intervals to make sure it's working. Leadership is the people running through a brick wall with you. It's not always them following a process. They're going to run through a brick wall for you, or they've got your back if something goes bad.

Steve Shaw: I've been doing a lot of research on that, by the way. So when we decide to have that conversation, you know what we should do? I should take the management side and you should take the leadership side. I know right now you want to talk about management and I want to talk about leadership, but we should flip the script and debate the other side.

Dave Rogers: Right, we should. My point on that has always been that it's the buzzword stuff out there. You see all these people on LinkedIn or any social media puking out these garbage articles about leadership and this and the other thing. And I feel a lot of times what's missing is good management. Start from the basics. That's just the way I look at it. You mentioned 70%. I'll take 70% on any process to start with, and then you do continuous improvement. We want to get a little better. The goal is always 100, but let's be realistic. You're not always going to be 100 at everything you do.

Steve Shaw: Yeah, I think we have to be realistic. But it drives me crazy.

Dave Rogers: I know it does me too. But when you get old like me, Steve, you learn you've got to pace yourself and be happy with some of it. You just do.

Steve Shaw: Well, I'm an outside service. Quite frankly, most people don't care about my thoughts, because I'm an outside service and they're like, "You don't understand." And I never even promote my history or what I've done in the past. So I accept that responsibility: I'm an outside service. You're running the deal, and so are most of my clients, so I try to be lenient and accept those things, to a point.

There was a time in my career as a trainer when I thought it was important to be liked. If they like Steve Shaw, they'll tell their boss they like him, and I get hired back. And then one day I decided I don't really care if they like me. What I'm going to get invited back for is whether that advisor makes a big fat paycheck and whether the manager makes a big fat paycheck. They can like me or not like me. So I've become very direct when it comes to those things.

Forget about the walk-around, that's a whole different deal. But if we're going to present a multi-point inspection, and you've hired me for any length of time and I'm in your store, then I have an expectation you're going to go one, two, three. And if it's in your process book, I have a higher expectation. There was a manager at this store, and they've been in our system for many years. I was coaching someone brand new to do it the way the book says, the way we teach, and the manager was talking about making recommendations and doing this and that. I'm like, "Bro, do we make recommendations, or do we talk about failed items? Do we talk about the minimum requirement?" He looked at me funny. Then when I looked at the report, he'd never taken a class. And he's not the manager anymore. That wasn't because of me. I didn't fire him. I just made the report and showed it to the boss. How can you preach what the company wants if you're not doing it?

Dave Rogers: No, that's been my point too with the training and taking the online classes. It's one thing to make your advisors or techs or parts guys take the training, and then you look in there and you haven't taken one. Well, how the hell do you know what they're training for? That's "do as I say, not as I do." There's your leadership part. You have to understand what the training's about. Otherwise you're just checking a box. That's all you're doing.

Steve Shaw: Right. And if you did write it down, I'm going to give you all the props, all the credit. You took that step. Everybody knows it, you handed it out. Okay, great, good job. You're an A student. Now if you want to get the plus, let's go execute. Let's go stand out there and watch them. I'm not going to say it's easy. I would never say it's an easy thing to do. And like you said, herding cats, you're herding 30-plus different rooftops, plus all the people within them. But as it gets down to the lowest level, somebody has to be the accountability person and make sure people follow through on what we said. And everybody agreed to it, because there are signatures on it. "Yeah, I wrote it. I said I was going to do it. I was involved."

Fourteen advisors, fourteen processes 24:22

Steve Shaw: As we developed this, I didn't walk in and say, "This is Steve's way of doing business." I said, "How do you guys want to do it? Here's what happens. How do we do it? What are we going to do?" And the funniest part was, in one store with 14 advisors, I said, "I want every one of you to go home and write out your process." How many processes did we have when they came back the next day?

Dave Rogers: Fourteen.

Steve Shaw: Fourteen. Kudos to the manager at the time. He took all 14 processes into his office and looked, and they were pretty similar. So we came back with one. "Everybody gets it? Do you all believe this is the right way?" "Yeah, that's it. I missed that, or this, or that." Okay, cool. Now we have a process that 14 people collaborated on, and the manager put his final touch on it. I would think everybody should follow that process, and you can't give me a reason why you would not follow it.

Dave Rogers: You wrote it.

Steve Shaw: You wrote it. You agreed to it. You said, "This is how I'm going to do business." I love it. We even had contests. We paid them, we did all of this. So it's not a lack of knowing. You made a decision as an associate not to do it. And so I get to, I don't like the word confront, I get to coach you. "Here are the rails. We agreed to this, and you're over here somewhere. So get back in line and let's go." Still love you.

Dave Rogers: That's all it is: correction. I like that. Fourteen people, all with their own opinions or their own process. I like that.

Steve Shaw: The funny thing is I was telling another dealer about that, and he goes, "We are not effing doing that. We're going to come in and write a freaking process and they're going to follow it." Whatever's your pleasure.

Dave Rogers: Yeah, but I do think buy-in is the way to do it. If you're going to make something that's a drastic change in some places, you've got to get some buy-in, because it's a lot easier to hold people accountable to a process they own. So I agree.

Steve Shaw: Exactly. It's much easier to hold people accountable if they had input. And you could make the argument that that's management or that's leadership, and we could certainly debate it. We ought to put that on our schedule and just do a knockdown, drag-out debate about it.

Dave Rogers: I'm going to have to do some more research, then. It sounds like you're all geared up for this thing.

Steve Shaw: I was asked to give a talk on leadership. And sort of because of you: I'm the guy who will always talk about a vision. I have a vision for myself, for my company, my relationship, everything, and I think people should have one. But because of what you said, there are too many people telling their bullshit pie-in-the-sky theories on LinkedIn or something. So I'm like, okay, I'm never going to use that word again. I'm not going to talk about a vision. So I did some research, and it's actually been pretty good. I did have Grok help me out a little bit. When I do my presentation, which will be really super cool, I think I'm going to blow some people's minds, because I refuse to say "vision." I don't want people looking at me like I have two heads, because whenever I say, "What's your vision?" people are like, "What's that?"

Dave Rogers: That's one of the reasons why we have these chats. It's amazing how you can get off on a tangent and start learning different things and go down these rabbit holes. I love it. I'm always trying to learn something new, or you say something and it gets me going. I think it's great to keep learning. It keeps you young, it keeps you fresh, it keeps you sharp. Too many people are just caught in these ruts. They're not broadening their horizons, they're not learning something new. It makes for a pretty boring life, and definitely a boring time at work.

Steve Shaw: That's right. So wrap us up, Dave. What are your thoughts on everything we said? I think a GM could help his service manager with accountability. What could a GM do in your world? GM tip of the day.

Dave Rogers: Well, I think the GM would have to make it their philosophy, their culture. It's a pretty big undertaking to put a whole dealership together and put a book on it. So I think you start with your managers, and I like your idea of getting them to collaborate and getting their opinions on things. If you can get some processes down pat, whether it's the way you handle leads or whatever, then "did you document it?" becomes the way.

Steve Shaw: Those signs are for sale below. Click the link and buy the sign. Actually, you can buy them yourself on Amazon.

Dave Rogers: I'm sure they'll cut your price. They'll cut you out. But I do think you get everybody together and start small. Start with simple things, start with your internet process, start with the things you know most about. Get together with your service manager and talk about your write-up process, your appointment process, your delivery process, whatever. You'll probably find a lot of synergies between all the departments when you really get down to it. It's not that different. But you have to make the decision that's what you want to do, because if you're not going to be the guy leading the band and making sure it happens, then there's no use even putting a pencil to it, because it's not going to happen.

Steve Shaw: Absolutely. Well, let's leave it on that point, and I'll catch up with you next week.

Dave Rogers: Next week. All right, bud. Talk to you.