VISION Power Summit management keynote: Getting a grip on your shop using EOS
By Chris Jones, editor of Ratchet + Wrench
One of the most inefficient ways to run an auto repair shop is to focus too much on fighting fires within the shop—a sure-fire sign that the business is running the owner, rather than the owner leading the business.
In order for auto repair shop owners to become more efficient and grow revenue, systems like Gino Wickman's EOS management (Entrepreneurial Operating System) helps business owners to take control of processes necessary to run a highly efficient shop.
To start the third day of the VISION Hi-Tech Training and Expo, author and speaker Mike Paton, who succeeded Wickman at EOS Worldwide, spoke to an engaged room of automotive aftermarket professionals.
Paton asked the participants to close their eyes and envision their business from a 30,000-foot view. In doing so, he asked them to remove ego from the equation and learn how to better run their shops by walking through the six key components of EOS:
- Vision
- People
- Data
- Issues
- Process
- Traction
The aim is to get total buy-in and/or productivity, which Paton calls 100-percent strong.
Vision
Vision boils down to getting crystal clear about the goals, direction, and marketing of your shop and getting everyone on the same page. Vision begins by assessing the organization’s core values and getting those written down and into the hearts of your team.
"Define the best attributes of the best people in your organization. Use this to build your culture around the best people in your organization. If you put your core values on a business card or t-shirt, they're useless, but if you use them to drive culture, they're valuable," Paton said.
Have a big, long-range goal for your shop that's set between five and 30 years. Then strategically plan a three-year picture, a one-year plan, and three to seven priorities to focus on this year and quarter—rocks, as he calls them—to assign to members of your team.
"Create a big goal now. Ask yourself what you want from your business. Studies show that if you share your goals with the people around you and you revisit them, subconsciously the universe will help you realize those goals," Paton said "Then make sure your vision is shared, 100 percent strong."
People
If you have a great vision, you need great people to help you execute that vision. You need to put the right people in the right seats. How do you know if they're the right people? The right people are hardwired in a manner consistent with your core values.
"Once you define your core values, at least once a quarter, you ask yourself: How often do our people exhibit these core values?" Paton said.
Using a plus (+), minus (-) and plus/minus (+/-) system, you should evaluate your team and they should receive nothing lower than a plus/minus. If they do, "you need to coach them up or coach them out," he said.
Paton said most businesses have three core silos of organizational structure: marketing/sales, operations and finance. While each of these may have one standout employee in charge of them, all three leaders are led by an integrator, a person who manages the heads of these areas.
"They keep the trains running. They're the glue that keeps the business together," Paton said.
Atop the chart is the visionary, who is usually the business owner. Owners are typically great leaders but not great managers and by no means the best candidate to be an integrator. When this is the case, for the sake of harmony, the visionary must clearly define for his team who their direct report is be it they or the integrator to prevent command line confusion.
In discovering who fills the right seats for your shop, Paton uses the GWC formula: Gets it (knows the work), Wants it (has the passion), Capacity to do it (has the stamina):
- Right person, wrong seat (talented person in the wrong job)
- Wrong person, right seat (kills culture, good at the job)
- Right person, right seat (the one)
Data
One of the reasons evaluating data makes you a better shop owner is it eliminates opinion-based decisions. By running your business on a handful of objective numbers you'll move faster and make more objective decisions. Paton said the best method for gathering performance-based data is to list out the top five to 15 measurables you want to track each week. Once completed, assign a goal to each measure and task one member of your leadership team to track the data and report on it in team meetings. By simply soliciting an "on track" or "off track" response, shop owners can know what's succeeding and what needs to move down to an issues list for the whole team to solve collectively." (Using this method) means the numbers are motivating people and you don't have to manage every day. It makes your people accountable to the numbers and you're using numbers to run a better business," Paton said.
Issues
Working to figure out the issues within the company boils down to ironing out these areas: problems, challenges, obstacles, roadblocks, new ideas and opportunities you can't pursue.
To tackle these, shop owners should create an issues list. This list allows anyone on the team to identify difficult areas on the job or share ideas for possible implementation. Team members should feel comfortable enough to use this, seeing it as a way to help with the shop's mission. Once done, show owners should asset the list against EOS's IDS model: Identify the problem, discuss the problem and solve the problem.
"Most teams are already good at discussing problems ad nauseum but rarely are they good at solving them. Once you have everyone comfortable putting issues on the list and solving them for the long-term good of the company every week, that's what 100% strong in the issues category looks like," Paton said.
Process
Paton said the hallmark of the process is getting the most important things done the right way every time. While everything in your organization doesn’t need to be systemized, it can flow but there are some things that should be done in order to make the business better—core processes. These help you to stand out and grow.
"Take a 20/80 approach. Focus on 20 percent of the processes to get 80 percent of the results needed. Once you document and simplify the processes, get people to follow it.
Traction
"It's not that meetings suck, but my meetings suck," Paton joked when introducing the concept of traction. He defines it as meeting with your people on the same day and same time while starting and ending on time and is governed by an agenda.
Paton said running a more efficient meeting should look like this: meetings should kick off with five minutes of good news sharing, five minutes of reviewing data, checking on the rocks, ensuring customers and employees are happy and then reviewing the to-do list from last week looking for a 90 percent completion rate.
In doing these things, your shop can run smoothly and focus on getting results. For starters, Paton said to pick the lowest scores from the exercises and attack those until you get them all to 80% efficient. In the end, whether you use the EOS system or not, Paton recommends that shop owners use a system that works for them—and stick with it.
Five frustrations of auto repair shop owners
According to Paton, these are the top frustrations business owners encounter:
- Control- The shop runs the owner and not the owner running the shop
- Profit- Not getting enough return on investment from the time spent in the business
- People- Owners feel like no one cares as much or works as hard on the job as they do
- Hitting the ceiling- Doing good for a while and then you plateau
- Nothing's working- You've tried everything and made changes to only see them fall flat
