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Training or Development – What do we really need? Are you ready for some in-depth analysis

Posted by Bob Greenwood

Heavy Duty shop owners from coast to coast talk about training required for their shop. Consider the terminology “training”. This terminology creates a certain mind-set in terms of results desired with the approach to the topic from the person speaking the words. Perhaps it is time to re-examine what words need to be embraced to get our mind-set focused properly to allow us to really move the shop forward considering all of today’s realities.

I would like to submit for your consideration the following definitions:

TRAINING: Limiting the behavioral responses to a given stimulus.

DEVELOPMENT: To increase behavioral alternatives to the same stimulus.

It has often been thought that “technical training” was always required for a HD shop in order to learn which “right way” is required to do it. This worked very well in the “mechanical” world years ago. I am submitting to you that it is not technical “training” that is required today but in fact today it is technical “development” that is required. The on-going development of building a technician’s diagnostic skill level and knowledge does not lead to a “right way” to do something, but in fact it leads to providing many alternatives to explore an approach, in order to discover the correct solution to the problem. The proper “development” and building of this knowledge, in the end, allows the technician to provide time effective solutions, which in turn, ends up serving the HD shop’s client in a very professional manner. Without the proper “development” of this technical knowledge, which must be recognized as continuous and on-going, and instead where management is only focusing on limited “training”, ends up producing results where the technician “fumbles around” for a number of hours without the proper solution. Consider “training” is specific, whereas “development” is all encompassing. Think about it…. no Heavy Duty shop can afford a training process today, they require a development process.

It is also well spoken in our industry that management requires business training. I submit that “Business Seminar Training” today, in fact, only relates to one facet of the business, such as a product knowledge session. Consider that other “Business Seminar Training” produces “hype” to create short-term immediate sales, or activity, for the sponsor of the “training,” as it creates the conditions for the attendees to become very motivated. Consider that “hype-type” motivation is now out-of-date in terms of addressing the real problems of our industry and is truly a waste of money in terms of a vision or culture for a HD shop. This type of “hype-training” always has a habit of disappearing within two to three weeks, if not sooner. The statement must be made that “hype-training” lacks the “test of time”.

I submit to you that we do not need a “fire under the bum” type motivational training, which is an exterior motivation format that gets an individual “pumped” that quite frankly worked 10 to 20 years ago in the much simpler commodity era of our industry. Today’s shop business realities are very in-depth knowledge based, focused, very complex, and all encompassing. This is why “fire under the bum” type training disappears too easily. It has no substance.

Consider today, we need a “fire in the belly”. This is different. It creates the results environment of learning business knowledge at a depth level effectively enough that it creates a gnawing at ones inside gut, which in turn, creates the personal determination, a personal self-motivation if you will, to get on with it and get it done. It is also time consuming and not an “over-night visit”. The atmosphere and attitude approach required to create this gnawing is called “Business Development”, not “Business Training”. Development provides the tools in the form of a proven business concept for the owner to embrace coupled with the on-going availability of business knowledge to support its depth. The most important key word here is… support…. which in turn allows for sustaining behavioral development.

Behavioral development is very personal, in that it is totally adaptable to the individual’s own personality. Development is exceptionally in-depth in its presentation and especially its content message. It creates a picture in one’s mind as to what can be. Business Development does not “limit behavioral responses” but it, in turn, “increases behavioral responses” due to its depth of perspective. It has many angles to be examined by the individual in its understanding which allows for the development to be achieved. Business development understanding is not just spending a few hours at night or attending a one-day stand, but, in fact, encompasses many days in order to understand its focus.

Don’t be surprised if you have to read the above few paragraphs two or three times as it is important to understand the differences between “training” and “development”. I spent a lot of time trying to create the sentences I have written here to try to get across my point. The explanations truly are in-depth but I must admit, difficult to explain in this article format. My hope is that you begin to recognize that this is not a simple topic.

Time to Complete a Heavy Duty Business Opportunity Audit

Posted by Bob Greenwood

Everyone is becoming very aware as to the many challenges that lay ahead for the independent HD aftermarket. Challenges can turn into incredible opportunities when approached properly. We are now moving into a new era where the “Trade” days are coming quickly to an end and our “Profession” will step out into the economy and WOW the commercial client. It will also attract the millennials when they see the exciting technology and opportunities for them to be involved in moving our sector forward. As a Profession we will finally elevate the HD aftermarket to an income level that mirrors other high end economy segments. Exciting days are ahead but detailed planning is now required to make sure we can embrace the future.

Consider this list and address how each one affects your business and list the solution required so the shop can continue to move forward.
Business Opportunity Audit:
1 We face increased competition from the HD Dealerships and/or shrinking margins so our focus must shift within the business to selling our knowledge. Billed hours must be our focus. To achieve this it must be recognised that client relationships and earning their trust is so important. Educate as to the value and importance of investing in at least two comprehensive inspections on the HD vehicle each year. The purpose of the comprehensive is to have a full picture of the condition the vehicle is in for safety, reliability and efficiency. You then counsel the client the timing of the required work, based on how they use the vehicle and their annual mileage as to what is in their best interest to insure vehicle safety, reliability and efficiency are properly maintained.

2 We need to better understand our target clients…who they are, why they buy and what they really want. Analyze your data base as to who are your top commercial clients. What type of work do they have done on their vehicle meaning are they a break down and repair client or a vehicle preventative maintenance client? You have a solid relationship with all these people so have a conversation as to why they come to your shop specifically and what are they looking from you moving forward? These are the people who most likely will recommend you so listen carefully, take notes and improve the service level where required to meet their total expectations.

3 Some of our current and target clients are not aware of all the value we offer. Have you educated your clients as to what makes your shop “uniquely” different? This should be where your advertising/marketing dollars are spent. Differentiate yourself from the HD dealership arena “in writing” and make sure clients and potential clients “experience” that differentiation when they come into your operation. Differentiation can mean strong value to a client if you work on and remember that EVERY visit for them is about their experience with your business.

4 We don’t charge as much as we should, because of a lack of confidence in our value, or for some other reason. Have we got our emotions in check? Do the real math and establish the right labor rates for the competency and value we bring to our clients. Acknowledge that your labor rate represents your shop’s competency. You are in a knowledge based business and competent staff, from the technicians to the front counter are worth more. Review your structure to make sure you have the right rates in place for maintenance, diagnostic and re-flash labor. Once again proper education of the client is critical here. Think about this example….introduce to the client the lead technician that will be working on the client’s vehicle. This is all of a 2 minute introduction. Have a small training session with the technicians as to how the technician should handle him in front of the client and why this is important. This can build incredible relationships and trust when a client actual can put a face and “personality” to the person working on their vehicle. Remember as I said before, it is about the “experience” on each visit.

5 Our industry faces trust or image issues that we must overcome to create client confidence. This is a great opportunity for the HD independent sector to embrace. To create client confidence, you must slow down and actually make time for the client so you can engage in a constructive and positive conversation with them. Review all the facts you have on that client file proving you understand their situation. You know whether they own or lease the vehicle, how they use the vehicle (city, highway or a lot of off road driving due to their physical location) confirming they drive X amount of miles per year and understanding their expectations with their vehicle. MANAGE the vehicle based on their facts and remind them that your recommendations are for safety, reliability and efficiency to achieve the client’s ultimate expectations.

6 We need a clearer Vision for the future of our business…and a written Plan to define it and how to get us there.

This is one of your greatest exercises in an opportunity audit because you now confirm the 5 building blocks required for a successful culture and building a profitable business. All these should be fully written out and properly documented in detail. The 5 blocks are 1. Vision – what will the business look like in 3 years? From facility appearance to staff appearance to work flow management to maximize bottom-line profits. How will it differ from today? 2. Do we have or understand what talent do we require to fulfill the vision? Have you got the knowledge depth on your team that is required today? If not do they have the desire to learn what they must know to be part of this business? Where is the right training available? 3. Does the team “believe” in the vision to be achieved? In other words are they motivated because they like the direction the business is going and want to be part of it? Never ask the team to “buy into” the business, you want and need them to “believe” in the business. 4. Provide all the resources to achieve the vision. This relates to on-going and specific training the team needs, equipment and software upgrades where required and an efficiently laid out facility to maximize productivity. 5. A proper measuring document. This means to have a proper measuring document to confirm the journey is going in the right direction or point out where attention must be paid to keep the business on track.

The above six examples are but a few opportunities in the audit process but as you can see when you approach the business with a positive mind-set you are in control of the future because you are thinking of where “opportunities” lay within your business. Get the team involved as well, especially millennials who love to be part of the building blocks. Listen carefully to them; you may be very surprised as to what great in-put they can give form “their” perspective, your future customer and client base.

2019 is the start of the future. Lay down a solid foundation of thought and planning now and the next 3 years will be a start to an incredible and exciting journey.

Every Choice You Make Keeps You On A Path

Posted by Bob Greenwood

Heavy Duty Shop owners and many business owners in general, don’t seem to realize that NOT moving their business forward and still doing the same old thing over and over is still a choice. The issue is what path did their choice take them over time?

Our dynamic Heavy Duty Service industry demands that change remain constant within the business year over year and when one shop doesn’t embrace change, they are literally out of sync within 3 years.  WOW, now that is pressure, or is it?

The pressure can be greatly minimized when management is progressive in their thinking and actions; when management has a vision for the business that they can clearly communicate to their Team; when the Team BELIEVES in the vision and wants to become part of it; when management and the Team become accountable to each other.

Now for the HD service shops that don’t want anything to change within their business to keep up with or ahead of the wave of change, “because I’m the boss and I will do whatever I want” well, they are the problem shops the Industry has to deal with.  This is when we say “Come on succession let’s get the younger managers/owners in here now”.

As a good friend once said to me “Remember, you either go forward or in circles; there is no standing still.”

Road to Green: Rotten Apples or a Rotten Barrel

Posted by Bob Greenwood

We’ve heard the saying many times, “A bad apple spoils the barrel.”
That’s very true in so many cases and in business that’s why Management must focus on building the right culture with the right team and partners in place. It’s not an easy thing to do but it must be an on-going process in the business today. That is why a detailed VISION plan is required which not only lays out what the business will look like in 3 years’ time, and the road map it is going to follow to achieve the vision (the quality of the barrel), but also what will the Team (the apples) look like in terms of quality and quantity.

There’s also another aspect to consider that’s not talked about in our HD industry at all—sometimes, at some point, you have to acknowledge the barrel is spoiling the apple!

This means the entire process of how business is being done in the HD shop is completely broken and no matter how talented the staff is, the culture the shop runs under is not going to work. With a bad culture in place, finding the right people is a constant and nearly a full time job; good people that are hired do not stay with the company as good people leave because management allows bad people to stay; attitudes are negative; a team atmosphere of having each other’s back does not exist. Those are just some basic examples. The entire business must be revamped or the odds of survival may not be in that business’ favour.As the CEO of your HD business, have you clearly defined your culture and how it is developed and maintained? 2019 is going to be an exceptional year for the HD shop owners that get it.

Road to Green: Professionalism – Defining the Real Meaning for Your HD Business

Posted by Bob Greenwood

The term has been talked about within the Aftermarket Industry for decades…….. “Professionalism” and “being a Professional”, who is professional and who is not? The question is confusing today.

Professionalism means several different things in the Heavy Duty shop owner’s mind-set. There is an ironic view in its traditional meaning. For decades a professional was exactly what a HD technician, shop owner or parts supplier was not. It has always been assumed that there was a higher purpose to professional activities than merely making a living. This put professional people on a higher social level than those “in trade”, who in turn were assumed to have only money in mind when doing their work. Our education systems are guilty of promoting this concept and each of us should seize the opportunity if we get a chance to interact with the local education system to get this fallacy corrected.

In the public’s eye, professionals are supposed to “know their stuff”, meaning they know exactly what they are doing at any given time, and they know their subject inside-out. Professional persons tend to present an air of capability for the very good reason that what they have to sell is trustworthiness. Professional self-confidence comes from having a sure grasp of the fundamentals of one’s subject. Where self-confidence goes wrong is when a long-term person in the field becomes too sure of what they know, and come to believe that they have completely mastered their subject. The fact is, when they conclude that they know all there is to know, they are no longer professionals, but hacks.

If there is one characteristic of an established professional which sets them apart from other employment, it is the continual renewal of knowledge and expertise through continuous reading, attending seminars, conferences and interacting regularly with industry people.

Consider a HD shop today constantly has to learn about new equipment, new technology advancements on all vehicles, business processes and methods required to move the shop forward in a forever changing marketplace and economy. Like all professionals worthy of a name, professional Technicians, Shop Owners and Parts suppliers will put their client’s welfare before any personal consideration. They will never stop renewing and improving their knowledge and skills. They will conduct themselves with due professional pride and integrity. They will not cut corners, whether in terms of ethics, performance, or quality. Never has there been more need than there is today for professional attitudes within our HD sector of the industry. A great HD Service Industry is one in which men and women within the industry think greatly of their functions. To think greatly of those functions is to regard doing them as a profession whether or not it is so called.

In essence, the professional man or woman is one who behaves professionally, not necessarily one who has been certified by a licensing body. Professionalism cannot be conferred on you by other people. It solely consists of what you expect from yourself. Take a look in the mirror; who do you want to be?

Road to Green: The Generation in Our Industry Who Are Frustrated – Why?

Posted by Bob Greenwood

Many younger HD shop “owners”, managers, coupled with many HD parts distributors, WD, and Manufacturer corporate/division managers/staff within our industry, want to change their business processes. They have taken the time to study the HD industry, their market and go to classes and learn what is necessary to start changing today to secure the business for tomorrow. They truly understand that, with technology moving so rapidly at all levels of the aftermarket and other details that are taking place, change is not an option. The problem is they do not have the power to implement the changes required, because the “real authority” from the previous generation, or hierarchy, (who did not attend those classes) is still active, and “knows how to run this business”.

Consider this analogy of five monkeys: Start with a large cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, spray all of the other monkeys with cold water.

After a while, another monkey makes an attempt with the same result — all the other monkeys are sprayed with cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

Now, put away the cold water. Remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise, and horror, all the other monkeys attack him. After another attempt, and attack, he knows that if he tries to climb the stairs, he will be assaulted.

Next, remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm!

Likewise, replace a third original monkey with a new one, then a fourth, then a fifth. Every time the newest monkey takes to the stairs, he is attacked. Most of the monkeys that are beating him have no idea why they were not permitted to climb the stairs, or why they are participating in the beating of the newest monkey.

After replacing all the original monkeys, none of the remaining monkeys have ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not? Because as far as they know, that’s the way it’s always been done around here.

Is this analogy similar in your heavy duty shop, or company? Is it holding your business/company back today? The previous generation, the current “real authorities”, won’t change, or keep up to date, with new understandings in our ever-so rapid changing industry. In their minds, they have “been there, done that, only have another 3 to 5 years, and then I’m out of here”. They continue to stay with the standard, old thinking, old routines, in their day-to-day motions, yet profits keep dropping. It is time to come to grips with this. It is time to address this. It is time to move away from this attitude. “Vision with clear understanding”, is required to begin securing our future. It is time to go for the banana!

Consider sharing this article with the “real authority” and be ready for the fireworks because no one likes gut wrenching change. Be prepared with your notes containing clear and documented facts so you can constructively talk things out. There are many within the HD aftermarket that must get out of the “dark ages”, the “rut”, and allow vitality, and enthusiasm to enter and get on with what is necessary. If we wait those 3 to 5 years that they want for their own self-serving interests, that is 3 to 5 years of progressive/development/constructive time lost forever. It is valuable time we need today, to insure we are here 7 years from now.

Are we thinking and talking today, within our business walls, about the potential HD electric vehicle, the HD autonomous vehicle, vehicle software platforms, the competitions strategy, the changing commercial business, the type of education and training we all need to do on a continuous basis so we are at the top of OUR game? Today’s “real authority” must be properly challenged with the facts in front of them, and if they refuse take action, invest in what is necessary, then you know where your own future is if you stay there. Tough talk yes, but we as an industry must start having tough discussions and back those discussions with solid solutions coupled with a proper time-line action plan because too many aftermarket lives and families are being affected with inertia, out of touch management.

Old management loves to blame the workforce or what they perceive is not available in the marketplace and how they don’t want to work or do anything anymore. Please wake up management; they want leadership with a clear vision that they want to BELIEVE in and be part of. When a workforce believes in the company and believes truly where it is going, productivity soars and results happen. People outside of the company looking for great companies hear about you, your vision, your culture and applications start to come in. Right now too many in the real workforce are struggling to find companies that have that leadership, vision and culture. To all “Real Authorities”, look in the mirror and your problem will be in front of you.

How is your 2019 going to develop? It is time to go for the bananas. The stairs must be climbed by everyone and if someone doesn’t want to climb those stairs including the “authority”, it is time to open that door and kick them out of the cage.

Road to Green: Is Your Heavy Duty Shop Addressing the Reality That is Now Here?

Posted by Bob Greenwood

There is no doubt about it that changing times are here. That is an obvious statement yet I see many HD shops carrying on their business “as usual” thinking as long as we are busy, life is good.

I wish it was that simple, but unfortunately it is not.

Consider answering these few questions about your own operation and don’t get caught in the trap of saying “that does not apply to us”. In reality they all apply to every HD shop out there. Take the time and really think about the depth of the questions and how they affect your business.

1.         The future is here. We face increased competition and shrinking margins. What will be the long-term effect on the business? What should we measure now to catch our business trend lines and what should we do about the facts we find out about in our business?

2.         We need to understand our target heavy duty commercial clients better. Who are they, and what do they really want?

3.         Finding and retaining top staff is a challenge. What must we do daily in our business to attract and retain the best of the best in our total team development? How can we afford a proper benefit package and what should we cover in benefits to have a positive impact on the team and the business?

4.         We must deliver compelling client value and experiences that attract A-List clients. What should be our game plan to differentiate ourselves from our real competition and build long-lasting relationships?

5.         We need to do more business with our existing clients. Are we measuring billed hours per client accurately? Where should we be with this number as an average per RO? Do we have a strategy to increase our average billed hours per RO?

6.         Some of our current and target clients may not be aware of all the “value” we offer. What do we need to bring to their attention?

7.         We don’t charge as much as we should. Do we lack confidence in the value we bring? Is there some other obstacle that prevents us from charging properly? How are we going to fix that?

8.         We need to develop an effective communication strategy. Are we telling our value story effectively? How can we break through the commercial confusion and apathy in a HD world that is overloaded with communication?

9.          We face regulatory pressures and environmental restrictions that make operating our business a challenge. How do we build additional costs into the business to overcome things we can’t control?

10.         We need to increase bottom-line profitability. What is our target percentage increase? What must become our key focus to achieve that result?

These are just a few questions addressing the new reality that is here.

Are you taking the time to think things through to address the future of the business and properly document a game plan to insure your HD shop is going to move forward?

When was the last time you attended a HD Business Management class that addresses these issues?

Perhaps it is now time to truly learn “how” to become a CEO of your own business. In reality, that is your position in your company and your entire team is looking at you for the solutions to ensure the business remains prosperous and dealing with all the challenges ahead.

Road to Green: HD Shops Must “RE & RE” Their Business

Posted by Bob Greenwood

Studies of the HD sector are confirming that Independent HD shops are losing the struggle to retain the clients’ on-going business versus the growth in bay service business that New HD Dealerships are experiencing.  In close examination as to why this is happening, the main reason is due to a lack of business focus by Management of the Independent HD shop.  Too many business owners and managers are “too busy” not making money instead of slowing down and preparing their business to meet the client’s real needs and wants for their commercial vehicles.

Consider that weak shop owners focus on “cost’ to save money, whereas the most successful shops focus on “value” to make money.

Consider that new business standards are required for this new heavy duty aftermarket sector that most shop Owners/Managers have not addressed within their business operation.

It is time to “re & re” the Independent Heavy Duty shop.

Review each of these items within your own operation to ensure your business is heading in the right direction to retain all your clients business.  If you ignore these items, there is a real possibility that you are already, or soon will, lose your clients to the dealership(s) within your area.

1. Re-New the Business Format:   The “same old, same old” does not work anymore.  Shops cannot “bang them in and bang them out” ONLY doing what the client asked for.  The math does not work anymore with that format.  In fact, Independent HD shops that concentrate mainly on “volume” to keep “the boys busy” do not know that, on average, 60% of the work that they do does NOT create $1 of NET profit for their business.  It only creates sales and gross profit. They do not know how to measure this.  They are working very hard to stand still and in many cases actually move backwards in their business. Today, your business must be very focused on each individual client, one client at a time and deliver value.  Management’s number one job is to build relationships; therefore Management must slow down at the front counter and take the proper time to meet, understand, and council individual clients as to what the manufacturer recommends to ensure safe, reliable and efficient driving with their vehicle.  Service maintenance and service intervals must be discussed with the client. That is YOUR professional responsibility to the client. Client vehicle technology and maintenance education is more critical today than ever before.  The average rig owner today is not “stupid”; but they are uninformed! Slow down!!! and define the value you are prepared to deliver to each client.

2. Re-Learn the Business: Continuous technical and business training and development is mandatory today.  Professionally operating an Independent heavy duty repair shop is the most complex business in this new aftermarket, requiring not only a great deal of capital, but also higher in-depth skills than ever before. Consider technical development of the vehicle now requires highly skilled technicians who embrace vehicle knowledge with a tremendous amount of personal pride.  These technicians are highly skilled professionals. The depth of knowledge they must completely understand, and stay on top of, is mind boggling, and it is the shop’s Management’s responsibility to ensure these professionals have all the right training and tools to execute their skill.

Management (shop owners) must also continuously visit “classrooms” to stay on top of all business issues, and there are many.  It is a new world order today and this new order affects the very profitability, and potential future viability, of an Independent HD shop. Management must learn and measure the business in a totally different format today.  Just measuring parts and labor sales and following the shops bank account up and down, doesn’t work.  Management must stay on top of the business numbers to ensure they are measuring NET PROFIT on each repair order before the invoice is closed off, one R/O at a time.  Businesses that are only interested in sales and price of commodities don’t get it yet.  The question that must be asked is “do these shop owners have any desire to get it?

4. Re-Certify the Business: Management must establish “standards of execution” throughout the shop.  Define your standards in print.  Each staff member from the front counter, to the back office, to the back shop must completely understand and “believe-in” to “how” to execute their function that in turn exceeds the clients expectations. Certification today is just not a piece of paper or experience.  Certification is an Attitude!  “We will not let the client down”. “We care!”. We will take the “responsibility” to make sure your vehicle maintenance and your experience within the walls of our shop, exceeds your expectations. “We will be second to none.”

5. Re-Professionalize the Business: Management must establish on-going reviews with each staff member to ensure they are continuously aware of the importance of their personal day-to-day execution of their particular function within the shop and how it affects the clients perception of the shops professionalism.  Management must also continuously review the systems within the shop.  The systems are not only the software systems but also includes the “processes” in “how” the shop delivers its services to the commercial client.  

To “Re & Re” your shop today is simply not “knowing what to do”.  You must become proactive.  Consider this statement; “It’s not what you know, it is what you do with what you know”.

Too many HD shop owners today are very apathetic and act like “deer staring into the headlights”.  Their actions seem to be advertising “I don’t care about that stuff (above) and I have no desire to get it.” It is very unfortunate that these shop owners insist on hanging around in our industry as they are definitely affecting the image of the Independent sector which in turn hurts the best Independent HD shops within the country.  Consider also that these weak shops work to the benefit of the new HD Dealers in that individual commercial clients do not enjoy the experience at the weak shops and too many are assuming all Independents must be the same.

The challenge in front of the HD Independent sector is not an easy one; however, it is possible to turn things around when all HD Independent shops start to communicate with each other about the importance of raising the shop operation bar. Consider discussing the above issues with your parts supplier who sells to these weak shops and all of your HD shop peers to see if your market area is interested in “taking the market back”.

Road to Green: The Future IS Promising

Posted by Bob Greenwood

The future for the Independent Heavy Duty sector looks very promising, and will prove to be an exceptionally profitable period over the next 5 to 7 years compared to the last 10 years BUT only for the HD shop owners who truly understand their client base, their business, and the HD industry.

The supply / demand economic equation will be clearly understood by most HD shop owners as the supply of competent technicians has dried up, but the demand is forever increasing throughout the industry, which will force wage levels to rise quite dramatically over the next two to three years. Already we have seen in various areas that competent technicians are receiving $28 to $45 per hour with a $1,000 signing bonus, proving this shortage is not confined to one area of North America. These levels of wage rates can add to the “brain-drain” situation that is affecting North America in every industry.

Finding competent technicians is certainly one issue, but what will happen to our industry and the independent heavy duty shop itself, under this financial scenario?

In the long run, this is excellent for our industry, as competent technicians finally become recognized by the industry, that they are working in a “profession” rather than a “trade” and that technicians are highly skilled individuals deserving of a professional income. In the short run, it could cause absolute financial ruin as most shop owners are not aware of all the detailed numbers of their business and how they contribute to the net income of the business, or, properly versed on how to pass on the right labor costs to their clients. They are running their business based mainly on “price”, trying to tell everyone they are the best, and at the same time, the cheapest. They have failed to educate their clients about the level of expertise that is now required to maintain today’s HD vehicles and trailers, and that competent expertise does have a price tag to go along with it. It is also about HD shop efficiencies which is an on-going learning curve the HD sector must learn as “efficiency” affects your true cost per billed hour.

Shop owners must change how they measure their labor revenue component.   Rather than measure by one labor revenue department, labor should be broken down into a minimum of three categories, namely, a maintenance/mechanical labor department, a diagnostic labor department and a re-flash labor department. Each labor department has different skill level of technicians. The maintenance mechanical labor door rate should be set at a minimum of 4.5 times the top mechanical technicians hourly wage, (i.e. $23 X 4.5 = $103.50) or 85% of your true cost per billed hour, the diagnostic labor rate should be set at a minimum of 5.35 times the diagnostic technicians wage, (i.e. $29 X 5.35 = $155.15 per hour) or 115% of your true cost per billed hour and the re-flash rate at 6.0 times the technicians hourly wage, (i.e $32 X 6.0 = $192.00) or 125% of your true cost per billed hour. These additional rates are known as tier rates. The higher multiplier rate factor is necessary not only to cover high tech equipment purchase costs, and their faster replacement costs, but also on-going software upgrades of said equipment, on-going high end HD training, subscription fees and also Management and Service Advisor time that must be spent with the client. Management’s and Service Advisor time is consumed by educating the client as to the diagnostic process to take place, as well as keeping the client informed, and ensuring client confidence in the shop is maintained during and after the process. Until the client

HD vehicle mix of the shop is measured and understood; (“If you can’t measure it, you can’t manage it”) an interim guideline of a minimum of 25% of the labor hours billed through the bays should be going out at the diagnostic rate.

When shop management understands who they are selling to, how to implement the new strategy and measure, document and sell these tier rates with client satisfaction, the contribution to gross profit of the shop can be tremendous. When gross profit is enhanced, net profit is enhanced. Management expertise now drives future growth of the heavy duty business and the future bottom line of the business.

Are you up-to-date in your Management expertise to embrace the new profit potential available in our heavy duty industry?

Road to Green: Culture Change? You Can’t Make Anything Idiot-Proof Because Idiots are so Ingenious

Posted by Bob Greenwood

HD shop owners and managers are starting to realize that the reliability and quality of their products and service processes are vital to a successful business. Everyone is also realizing that today’s world is changing faster than ever before. Technology developments, restructuring and mergers, new ideas about management concepts are all putting pressure on owners to change and be agile. The HD industry is acknowledging that HD shop and parts supplier business owners clinging to same old structures will ultimately lose out.

Everyone is seemingly looking for the perfect solution with the right business processes to secure their future. Well the answer to that task is one single, make it right, solution does not exist.

Many studies have shown that the main causes of performance problems of staff and Management are actually in the business structures, systems and culture within which these people work. Seldom is the culture of the business properly examined by Management. It is a fact that if Management put good people in bad systems you will get poor performance, however, it is also a fact that 20% of the staff works against Management to implement change within their structure and system. They are very uncomfortable with the introduction of new ideas and new processes. They only know and want to remain within their comfort zone environment of “same old, same old”.   They just don’t realize that if we want things to stay as they are, things will have to change. So to tackle the problems of the HD shop or store, Management tries to make things “idiot-proof” hoping to improve the businesses overall performance by reorganizing or introducing new training and development programs. These moves create change, but when this is done without understanding the HD shop or store’s unique culture, owners will in fact solve one problem while without knowing it, create others. The stress level of the business actually increases and then Management in turn says the reorganization and new programs don’t work.

It must be clearly understood that within the HD aftermarket, we operate a very complex business. Management must acknowledge quick fixes don’t work, don’t exist and is totally unrealistic thinking. Business processes and change concepts must be tailored around the culture of the business itself. To achieve this takes time and if Management has ignored the business “change” required for years, or never understood the culture of the business they manage, he/she is going to be disappointed with any training or development programs they participate in. Implementing culture change and fine tuning business processes in the HD aftermarket takes on average 2 to 3 years and it is for this reason many HD aftermarket owners and managers are struggling today with their business. They failed to embrace change. They also failed to involve their staff and understand the Chinese Proverb “Tell me and I’ll forget, show me and I may remember, involve me and I’ll understand.”

The solution is not simple but it must start with ownership undertaking a complete “inventory” study of its personnel and management culture to determine what is going to be required to move their specific business forward. Once this is done, then and only then, the right training and development processes can be sought out. Slow down and really think about your business. What do you have now, what do you want it to be and whom are you going to involve?

Bob offers personal business coaching and on-going business development and training for Heavy Duty mechanical shops focusing in on building NET income. He can be reached toll free at 1-800-267-5497 or email him at  greenwood@aaec.ca