Most SERVICE MANAGERS can tell when something feels off in their department.
Customer complaints increase.
Employees become frustrated.
Productivity drops.
Profits shrink.
Yet many dealerships spend months—or even years—trying to solve the wrong problems.
In Service Drive Revolution #362, the discussion centered around what it actually takes to turn around struggling service departments. One of the biggest takeaways was that most dealership problems aren’t caused by a lack of effort. They’re usually caused by broken leadership, broken processes, or a culture that has stopped improving.
The good news?
Most service departments are fixable.
Not Every Struggling Department Has the Same Problem
One mistake leaders make is assuming every dealership needs the same solution.
In reality, service departments tend to fall into a few different categories:
- Losing money
- Breaking even
- Performing well but looking for incremental growth
Each requires a different approach.
A department that’s losing money usually has deeper issues involving leadership, accountability, culture, and process execution.
A department that’s breaking even often has good people but inefficient systems.
A high-performing department may simply need refinements to continue growing.
Understanding where your department truly stands is the first step toward improvement.
Broken Processes Create Daily Frustration
Many service departments operate on processes that have been passed down for years without anyone questioning whether they still work.
Policies get created because of one isolated incident.
Procedures remain in place because “that’s how we’ve always done it.”
Over time, these habits create unnecessary friction for employees and customers alike.
Signs of broken processes often include:
- Poor communication
- Inconsistent inspections
- Appointment bottlenecks
- Unproductive labor
- Customer complaints
- Low technician efficiency
The challenge isn’t identifying that something is wrong.
The challenge is being willing to change it.
Great Leaders Diagnose Before They Prescribe
One of the most overlooked leadership skills is observation.
Strong SERVICE MANAGERS don’t immediately jump to solutions.
First, they gather information.
Next, they review repair orders and analyze financial performance.
They also observe customer interactions and listen carefully to employees.
Before making changes, effective leaders identify the root causes behind the problem.
Too often, dealerships rush into new software, new tools, or new initiatives without addressing the underlying problem.
Technology can improve efficiency, but it can’t fix a broken process by itself.
Customer Experience Is the Ultimate Report Card
A service department’s financial performance and customer experience are often connected.
When systems are broken, customers usually feel it first.
Long wait times.
Poor communication.
Missed expectations.
Confusing processes.
Inconsistent experiences.
These problems eventually show up in customer retention, CSI scores, and profitability.
That’s why successful leaders pay close attention to both operational metrics and customer feedback.
One often reveals the other.
Culture Matters More Than Most People Realize
Processes are important.
People are even more important.
The strongest departments create a culture of continuous improvement.
Employees are encouraged to ask questions.
Managers seek feedback.
Teams remain open to new ideas.
Everyone understands that today’s process can always be improved tomorrow.
In struggling departments, the opposite often happens.
People become comfortable.
Change is resisted.
Poor habits become normalized.
Eventually, stagnation becomes part of the culture.
That’s when performance starts to suffer.
For many leaders in Fixed Ops, improving culture becomes the foundation for improving everything else.
Leadership Drives Results
One of the biggest lessons from SDR #362 is that service departments rarely improve by accident.
Improvement requires leadership.
It requires someone willing to challenge assumptions, identify inefficiencies, and create momentum for change.
The best leaders understand that success isn’t just about finding great employees.
It’s about creating systems and environments where great employees can succeed.
Many successful SERVICE MANAGER leaders spend just as much time improving processes and culture as they do reviewing performance reports.
Because strong systems make good people even better.
The Bottom Line
If a service department is struggling, the solution is rarely a single fix.
It usually requires a combination of:
- Better leadership
- Clearer processes
- Stronger accountability
- Improved customer experience
- A commitment to continuous improvement
The most successful service departments aren’t perfect.
They’re simply willing to identify problems, address them honestly, and keep getting better.
Because when leadership, culture, and process all work together, even a struggling service department can become a high-performing one.
đź”— Related Resources
- Why Systems Matter More Than People in Fixed Ops Leadership
- 9 Reasons Service Managers Fail in Fixed Ops (And How to Avoid Them)
- Why Fixed Ops Systems Matter More Than People in Dealership Service
Feel free to explore the linked articles above for deeper insights into each strategy. If you have any further questions or need additional resources, don’t hesitate to ask!
FULL VIDEO TRANSCRIPT
Welcome to the Big Show
Welcome to the big show. I’m Chris Collins. Hogi’s here. Adam is here. Say hello. They can’t hear you when you wave at them. Hello. Give them that good Illinois. What’s going on? Today we’re going to talk about my experience learning how to fix service departments and parts departments. It’s a fun story. It’s got lots of twists and turns, but there are some lessons in there for sure.
I want to remind everybody that we’re starting the second week in June here coming up. We’re going to start doing Service Drive Revolution Live and we’re starting the live academy which you can purchase on our website. Anybody who wants to learn how to be a more effective leader, manager, you want to learn the financials, marketing, whatever it is, and want really to be in a community of other like-minded individuals, that is starting. So, go to chriscollinsinc.com and sign up for that. And then that and much, much more coming up right now on Service Drive Revolution.
The Bears and Crook County
So, it’s so funny. Adam sent Hogi and I a text today, and I thought it was like a business thing because we’ve been sending emails and texts back and forth about how new car sales are down, how manufacturers are struggling, and the shortage of technicians in the industry. And he sends this basically, it’s a TikTok or a Facebook link, which by the way, Adam, I don’t look at Facebook. I don’t have Facebook on my phone, so I can’t ever see it. I don’t either. Well, you sent it. I just found it. The guy who sent it doesn’t have it. It doesn’t make sense, but anyways, it’s something about the government being a mess, that sort of thing. And I’m thinking it’s about tariffs or something. No, it’s about the Bears moving to Indiana.
His wife is a principal. It’s not about the education system. It’s not about trucks or cars. No, it’s about the Bears moving to Indiana and what a mess the government is in Chicago. Basically, Chicago is the heart and soul of it because they have the most votes, right? It’s like in Washington state, the farmers have no representation because most of the population is in Seattle and it can outvote everybody else combined.
That’s why we call it Crook County, not Cook County. Well, the corruption is a whole other story. I do empathize with you a little bit because if they move them to Indiana, probably the worst part of it, I can’t believe they’re going to do it, but they’re going to call them the Indiana Cubs. That’s a step down from the Chicago Bears for sure. The Cubs are close to Indiana when you go along the lake, aren’t they? They’re all close.
Cubs are kind of north side and White Sox are southside, right? Sox are a lot closer to Soldier Field than the Cubs are. It’s way easier to get to, but Sox are doing really good, though nobody talks about that either. But you framed that text as if it was business related too, which was kind of funny. Like yeah, I had to go somewhere I can see Facebook to look at that. Not that anybody cares or anything, but I’m just throwing it out there, you know.
Accessing Financial Statements
No, but truly business related, we had some really good questions from the last episode on financial statements that I think we should kind of circle back to. And I think one of them, Adam, you were talking about was how do I get the financial statement if I’m a service manager right now? If I’m currently not getting the financial statements, and I just get reports that I can run but don’t see the statement, how do I approach getting that information if I’m currently not?
Yeah. I mean, that was a big part of the story, right? Is what a mystery financial statements are. Nobody understands them. Nobody sees them. They’re this thing that has a lot of meaning, but is a mystery to everybody.
So yeah, I mean I don’t know what you think, Hogi, in your experience or Adam, but in my experience with that, probably the best path to it is going to your dealer or general manager and asking them to mentor you. Say, “I want to do better. I want to understand. I want to create more profit for the business, but I don’t know what I don’t know. Is there any way I could get you to explain it to me to help me and mentor me?” And then that usually opens up the door. You could also do that with the office manager depending on your relationship with the office manager. A lot of times the only time you see the office manager is when you’re in trouble.
Building Relationships with the Office Manager
Yeah, that was definitely my experience as a 26-year-old service manager. It was like going to the principal’s office. If I was in there, it was because a receivable schedule didn’t look right or something was out of control. She was kind of mad at the world, but looking back on it, she probably should have been because she had a bunch of service managers over her 40-year career that were like your first service manager you worked for, Chris. I’m sure that controller was pretty frustrated with that guy, too. So, she just had to put up with a bunch of them. But looking back on it, I guarantee you if I would have just gone to her and asked her to be a mentor and explain things to me, I know she would have.
And not only did I not do that, she probably didn’t have that experience very often. But I think that’s some really great advice: go to the controller. A lot of times we look at accounting as kind of a thorn in the side, but they’re a huge asset to you and they serve an important purpose. Looking back, man, it would have been so much better, and I could have learned so much more and more quickly, which would have set me up for success better.
I would kind of say to that too, Hogi, is we often get these questions about how to handle the problem technician in the shop or the advisor that’s been around a long time that doesn’t want to change. It’s the same thing with the office manager. I’ve had it happen to me many times where I’ve gone into a dealership to fix it and somebody will off-handedly say, “Oh, that office manager, she’s a battle-axe. She’s this and that.” And I’ll be like, “Judy, really? Like the mom that just had a grandkid? What do you mean?”
And what ends up happening is like our advice to getting to understand that technician that is the problem in the shop is to take them to lunch, maybe take them to dinner with their spouse and really get to know them as a human. One of the first things I would do with an office manager when I would go into a dealership is ask them about themselves. Nobody ever asks them about who they are as a human. How many kids do you have? What are your hobbies? Just talking to them like a normal human being with aspirations and fears and hobbies and a lifetime of experience. I would always end that very first meeting with the office manager with, “Hey, I’m going to be fixing a lot of stuff. Make me a list of the things you want me to fix for you.”
And you guys want to guess what was on that list 100% of the time? Warranty receivables. Yeah, warranty receivables. And then, oddly enough, the GOG. Nobody measures the oil. They’re always trying to get somebody to measure the oil. Those two things, you know. And probably the third one would be open ROs. Yeah, that’s what I was going to say. That was always the big thing that they hated was the open repair order report.
Accountability and Human Connection
And then guess what would happen when I would address those things? There’s a lot of parallels, right? How do you get technicians to do inspections for you all the time when you don’t sell the work all the time? You go back to them and you say, “Hey, thanks for doing the inspection. The customer’s going to wait. They can’t afford it right now.” But just the fact that I would go back to a technician and update them on what happened versus them just seeing the car leave gives you a ton of equity because you tried, right?
It’s the same thing with the office managers. A lot of times I would have to put the warranty schedule to the side because I was fixing so much other stuff in the beginning. That was like month four or five for me. But I would tell them, “Hey, I’m looking into that. It’s coming. I’m going to really address this here once I get this thing launched.” Just updating them and telling them what’s going on gives you a ton of equity. Not ignoring them because that’s what everybody else does; they ignore it, they put the ROs in the drawer, that sort of thing. Just talking to people like they’re human and really updating them and telling them the truth like, “Hey, I’m not there yet, but I’m getting there.” And then you have to do what you say you’re going to do also.
But I would say I have experience doing this with people who say the office manager is a battle-axe and they’re impossible. The thing that I make them do is just go in there and talk only about them personally and not talk about business whatsoever for at least 30 minutes. The rule is you’re not allowed to talk about yourself. So, just imagine if you went into your business manager and asked them, “Oh, hey, what did you do this weekend?” Just like you would do with a customer in the drive. It’s just petting the dog. What did you do this weekend? Oh, you have kids? yeah, my daughter’s getting ready to have a kid. you’re going to be a grandma? I’m already a grandma. I already have two. Can I see pictures? That’s it. It’s just human connection. Be genuinely interested in people.
Maybe I’m different because when I’m having those conversations, I’m not faking it. That isn’t a tactic. I really am genuinely curious about who the person is and what they know. Everybody knows something that I don’t know. There’s this saying, I think it’s in How to Win Friends and Influence People by Dale Carnegie, or one of his books, where this guy had a plaque on his desk. I actually for a long time had this on my desk: “Every man I meet is my superior in some way, and in that, I learn of him.”
We do this thing where it’s like, “Oh, he’s a cancerous tech” or “That’s the battle-axe,” and we label things. But when we judge and label them, they’re kind of final. We don’t come back to it, and it’s not the most productive way to learn or to figure things out or fix things. You just can’t live in a singularity where people are just this one thing and that’s it. People are complicated, business is complicated, and you have to be open to that.
So, the first answer would be mentorship, and then the second one would be making friends with the office manager and genuinely asking them, “What could I do better?” Then show them that you are serious about it. Even if you fail, if somebody fails and they can tell me why they failed, I’m good. If you’re self-aware enough to say, “Hey, the reason why I failed is I didn’t prepare enough, I didn’t ask for help.” But if you just externalize control and you’re like, “Oh, well, it’s the market or these people are stupid or the office is a joke,” we’re not learning when we do that.
I will say the other thing in that dealership that I worked at is they ended up hiring a younger male office manager. They kind of did the thing that they do in service where all of a sudden somebody’s a director and somebody’s a manager when they’re adding layers to things. So, one became the business manager and then the other was the office manager. The new guy coming in was really helpful just for things like—they would get my paycheck wrong all the time and he was really helpful with fixing it, getting you answers, telling you why, that sort of thing.
I mean, that’s all. I was an advisor, right? So, I was really only dealing with him on that level. But it’s funny that in dealerships, it’s easier to hire somebody else than to fix the person that’s there a lot of times. They just add another layer of people. Yeah. Any other questions before we get started on fixing dealerships?
Chasing Gross vs. Understanding Profit
I think one that I know we’ve talked about it over the years a lot, but still, anytime you’re talking financial statements, you can have a small group of service managers and this one always seems to come up: “Hey, I got really intentional and was working hard, pulling out all the stops to increase my gross and to increase my sales, even though I thought it might cost me my job if I wasn’t hitting forecast over these next couple months. And I actually did it—like I increased gross quite a bit, and we still lost the same amount of money or in some cases even more money.”
Oh, that’s very common. Very, very common. Okay, so it’s super disheartening to them.
First thing you have to understand is what gross profit is. Gross profit is what’s left over after your direct cost of sales. So, if you sell an hour of labor for $100 and your technician costs you $25 to produce that—assuming the technician runs at 100% in this equation, meaning the tech gets paid an hour and you collect an hour from the customer—you collect 100, you pay the tech 25, your gross profit is $75. That’s what you have left over to pay the bills.
Now, you have two basic variables. It’s simple and it’s not simple. You have two basic variables: what you charge for the hour. So now, if I charge 125 for the hour, but my cost is still 25, I’m making more gross, right? So I went from charging $100 an hour to 125, but I’m not paying the technician more for producing that hour. The two things are separate. The technician is getting paid whatever their hourly rate is.
Just like if I have a technician making $35 an hour and one making $20 an hour. Let’s say an alignment pays an hour. The store holds on to more gross if you have the guy making 20 do the alignment versus the guy making 35. Just like if you have quick lube techs—I hear this a lot—a lot of times the thinking is, “Well, have the quick lube techs do an oil change. Never have a master tech that’s making $35 an hour do an oil change.” Well, there are kind of two problems with that in a sense.
The first one is if a quick lube tech is running at 50% efficiency and they’re making $20 an hour, it’s actually costing you $40 an hour to do that oil change versus having a master tech at 35. And the master tech then can probably even make time because they’ll do it quicker. The other part is the master tech’s going to do a better inspection than the quick lube tech, so we have a chance of selling something. There are variables there in your cost of labor.
What most people don’t consider in their cost of labor is how efficient the technicians are. If you have a technician that makes $20 an hour but is 50% efficiency and you’re paying them unapplied time—they have a guarantee of eight hours a day—you’re costing yourself $40 an hour to produce that hour. It’s way better to give the $35 an hour technician that job because they’re flat rate or their commission on that. So, it’s what you charge for the hour and then what your efficiency is.
A lot of times when we go into a store and they’re selling more, but their gross is going down and their expenses are going up, it’s because their technicians aren’t efficient. The way that they’re dispatching, they usually have a quick lube where the technicians are running like 50% efficient. You’re not selling much off of the quick lube because it just rushes them through. Those quick lube techs really have no vested interest in inspecting the vehicles like somebody would if they were going to get the work, right? So, changing the system to lateral support versus a quick lube picks up a lot of profitability just because it’s a force multiplier in efficiency and inspections and that sort of thing.
There are some variables there in that equation. Most of the time what you see is we chase traffic by discounts. So what we’re charging per hour goes down because we’re discounting it, and then our cost of labor is too high or we don’t understand it. Consequently, we end up losing more money the more work we do, which happens all the time in service departments.
I have seen service departments, especially Toyota stores, where when we opened up, there were customers lined up a half a mile down to the stoplight. You just open the doors and that thing is busy. You’ve got 20 service advisors and a shop full of techs, and every hour of labor you sell, you lose money. The more you do—our RO count would increase and the hours that we would produce in the shop would increase—it just meant we lost more money, which was insane. But because our cost of labor wasn’t right and our efficiency wasn’t right, we had way too many unproductive hourly technicians. And the way we dispatch the work—having a quick lube and then discounting to drive traffic through—we were discounting to customers that didn’t need a discount, they just wanted it done.
I know it’s kind of complicated. I’m trying to make it sound simple, but it’s not simple.
Traffic is a Trap
Well, I think that was a great explanation, though. I think that hit a couple of the hot buttons. It’s a weird thing. If you haven’t had any formal training or haven’t been taught the financials somewhere along the way, you will walk into a month where you had better gross. Usually, if it wasn’t intentional, the month where you had better gross will come from traffic, and then we start to buy into this thing. The tribal knowledge comes from the sales side. On the sales side, it is a numbers game; they need more ups, they need more traffic. So, a lot of times that knowledge makes its way over to the service drive, and everybody thinks you just need traffic, you just need traffic.
And it’s never traffic.
Yeah, it’s a trick bag where I go advertise, I raise expenses, and on those coupons are discounts. I lower my ELRs and then I do it even more times. To your point with the Toyota stores, in that scenario, you’re losing in a lot of situations more. So, it’s not intuitive, but it truly is the case: you’ve got to slow down to speed up. You’ve got to do better with each RO first, hit your benchmarks in ELR, hours per RO, and total dollars per ticket, and then go increase those things. It’s very rare that when you fix those things, anybody talks about traffic.
Very rare. There have been times. Most of the time it’s when it’s a new point and you just don’t have the cars in your market. So sales hasn’t sold into that market for three or four years, or it’s a new brand. You know, like you go into a market in California with Subaru and Subarus just don’t exist. Since there are very few Subarus in your area, then it is a traffic thing. But most of the time traffic never is a conversation once you figure out how to have a system for selling more to each customer, getting your pricing right, and executing the labor mix and how it’s dispatched.
Reading a Culture Through Financials
I talked about in the last episode how learning the financials was crucial. I knew that, right? And I was taught the financials. I spent a long time in a room with somebody explaining it. And it wasn’t just the fixed ops part of the financials; it was the dealership as a whole. From there, when I finally was fixing stores, there are a few things that surprised me. I would do a presentation on the numbers that they had. This is something we talk about all the time: you can tell what’s going on in a dealership by looking at the financials. Now, I’m 24 at this time, so I don’t know that yet, but I figured it out pretty quick.
By looking at the financials, you have a general sense of what the culture is like, what their systems and processes are, the talent that is there, and a general sense of what the pay plans are. Most of the time I could tell you that the advisors are paid on gross and that the manager isn’t paid on net just by looking at the statements. What are some other things, Hogi, you can tell by just looking at the financials?
Receivables, just looking at the balance sheet. Looking at receivables and looking at the parts inventory. A lot of times when parts inventory value is inflated in relation to an average sales month for the parts department, generally you find a lot of obsolescence in that scenario. You mentioned receivables; if receivables are really high in relation to the average sales for the month for the service department, all those things kind of go hand in hand.
And then the other thing I’ve noticed too is when it’s really loose, you can kind of bet when you get there what the shop is going to look like and what the service drive is going to look like. Last year’s tire sales banner is still hanging in the corner. Barbara from Shark Tank says if you want to know what somebody’s like, go look at their car—open the trunk of their car and it’s a mess, right? You can just tell. It’s like that with the financials; you can tell how messy the shop’s going to be. You would only understand this if you were doing what we do because most people will inherently disagree with what we’re saying, but it’s just a funny pattern you start to realize over time.
It is a crazy perspective to look at a financial statement first and then go see the people and the location. Usually, it’s the opposite of that, right? If I start at a store as a fixed ops director, service manager, or GM, I see all the people and the facilities first and then I get familiar with the outcomes. When you do that in reverse order, it doesn’t take long to connect those dots.
Yeah, I think going that way is a little bit faster, which I appreciate. I liked also seeing if they even had unapplied time in their financials. It’s sad that it’s there, but I like that at least they’re tracking it.
The Situation vs. The Person
IThere’s another thing that happens with human biases. We’re vested in the idea that humans are the most important part because we’re humans. We’re biased toward humans because we’re humans. This comes up in a lot of areas in the way we fix service departments. Because you’re a human, your bias makes you think the people are the most important thing. When I say stuff like this, people go, “Oh, how could you say people aren’t the most important thing?”
There’s another side to connecting dots that happens to me often. For example, I will interview somebody, and a client will tell me, “Oh, I really like them.” And I’m like, “Okay, well, I liked them too, but they can’t keep a job for more than six months. They bounce around, and they’ve never fixed anything in their life.” I like them, but they don’t have a track record of performance. So, do I want to hire somebody because I like them, or do I want to hire them because they’re the right person for the open seat on the bus right now?
There’s a great book I recommend everybody read; we’ve done it as a book report with our coaches. It’s written by two Stanford professors and it’s called The Person and the Situation. It goes through how we inherently think everything is about individual people. We think Tom Brady is the greatest quarterback of all time because Tom Brady is special. Tom Brady is special, but Tom Brady wouldn’t be who he is today if he hadn’t fallen into a system, had those coaches, and been surrounded by the players he was in a system best suited for him. If Tom Brady had been drafted by the Browns, we probably wouldn’t even be talking about Tom Brady. He probably would have never made it off the bench because nobody ever makes it there.
I’m sorry to do this, Adam, but I joke about this all the time with the Bears. How many first-rounders do the Bears need to draft before they realize they should start drafting an offensive line? You can’t just say it’s on the quarterback. How many quarterbacks have you guys taken in the first five picks of the draft?
Too many.
But let me throw this out: how many linemen have you taken in the first round?
Yeah, none probably.
Please look that up and post it in the comments for Adam.
The Three Buckets of Dealerships
There’s this weird inherent thing we do where by looking at the financial statement, I can tell the culture in a dealership. I can tell what the dealer or general manager is like as a manager. They think they’re a leader, but they’re really a manager. I can tell a lot about a business by looking at the numbers. Because we’re biased as humans, we think a business is strictly about the people. It is about the people, but the people have to be led, and they have to have structure, and there are different types of people. To me, the thing I figured out fixing businesses is that dealerships fall into three buckets. Somebody actually taught me this later on; I didn’t know this when I first started fixing service departments.
The first bucket is businesses that are losing money. If they’re losing a pretty good grip of money, Warren Buffett and a lot of really famous business guys who buy, sell, and turn businesses around will tell you that if a business is losing money, the management needs to go. Now, why do you guys think they say that?
Because they’re not managing the business. They’re not even paying attention.
They’re just not capable of it. I had a dealer who owns 12 dealerships and is very successful. When he would buy a dealership, if it was losing money, he always said, “The broom has to sweep clean.” You just have to get rid of that existing mindset because it’s the mindset of the people in the business that’s keeping it from making money, right? Most of the time it’s their perspective, their opinions, and their biases. But that’s the hardest thing to fix in somebody: their biases and their perspective.
So, the first bucket is losing money. If it’s losing a lot of money, you can assume the management is terrible and there are no processes in place. It’s not by chance that it’s losing money; you actually have to do a lot of things wrong to have a service department lose money.
It’s a pretty simple business at the end of the day. When we talk about turning other businesses around, a service and parts department in a car dealership is a closed-loop system. It’s very easy. You don’t even have to do any marketing.
All you really have to do is open the doors, answer the phone, and take care of the people that the sales department has teed up for you. If you go open a business today that isn’t a service department, you have to go find customers and spend most of your time on marketing. You don’t just have customers waiting the second you open the door. So, it’s a business where you don’t have to be super talented or uniquely good in order to break even.
The second bucket is breaking even. If a service and parts department is breaking even, you probably have some good people but broken processes. You can get them to making money pretty quickly. But when they’re losing money, getting them to break even is like giving childbirth. It is significantly harder to get a store from losing money to breaking even than it is to take a service department from breaking even to making really, really good money.
Then you have the third bucket: they’re making good money and they just want the law of the slight edge. They already have processes in place, they already have good leadership, and they’re just looking for new ideas, new input, and new ways to add to their business. Like, “Hey, we want to add a fleet department, or we want to figure out mobile service.” They just want to constantly get better and interact with people who are in a lot of different businesses and know what we know. Those are the easiest clients because you tell them something and they just go execute it.
Where the people in the businesses that are losing money—you tell them something, and they spend most of their time trying to figure out how you’re wrong. They’re committed to proving you wrong, not to fixing the issue. It gets to the point where most of the questions managers in a losing store ask are never actually questions; they’re statements. Like, “What do we do when this doesn’t work?” That’s not a question, that’s a statement. You can tell a lot by the questions somebody asks, just like you can tell by the financial statement what you’re dealing with.
Most of my early stores were losing a lot of money, so that’s what I was dealing with. Back then, I didn’t fully understand it yet because I would think, “How quickly can I get them to 30% net-to-gross?” I didn’t realize there’s almost a mandatory reset where you have to get to break even, reset the culture, and then start making money. Getting to break even is the hardest part. Spending the first five years of my career fixing stores that were losing money meant it was a constant uphill battle.
The Barbecue Trailer Analogy
I tell you all this to try to explain a concept that’s tough to articulate, and maybe you guys can help me because I was trying to think of analogies this morning. Imagine if you were having a Fourth of July party, and you hired me to come over with my mobile barbecue trailer where I can make brisket and barbecue for you. What’s the face for, Adam? You don’t think I can make brisket?
I think you’d try.
Here we go. Okay, this is perfect. Adam is exactly the kind of person you run into in a service department that’s losing money. He’s already putting me in a category. Hold on a second. What are you hiring me to do for your Fourth of July party? What is my job at your party?
Make me some brisket.
No. What? You want to feed the people at the party, right?
Yes, feed the people.
Feed the people—that’s a pretty simple thing. But already, we’re not talking about feeding the people. Adam isn’t asking, “Hey, what kind of baked beans? What are we going to serve for sides? Are we serving lemonade? What kind of barbecue sauce?” No, he’s talking about, “Oh, you couldn’t make brisket.” He’s already asking questions that aren’t questions; they’re statements, right? Perfect. This is great. I don’t think we have to explain it any more than this, because this was the exact thing that always surprised me when I would step into a store.
They wouldn’t focus on the primary thing, they would focus on defending why things were broken or questioning if the new system would work., they would create scenarios that had nothing to do with the big picture of taking care of customers and building a profitable department.
Overcoming the Consistency Crash
When we talk about fixing a store, we have a system that works. But around month four or month five, something very predictable happens. I call it the consistency crash. A store starts doing well. Month one is okay, month two is better, month three is pretty good, month four was really good.
And then I could just put it on a calendar that either month five or month six, they were going to forget everything and revert back to the way things were. Just in every single department, every time, they would lose consistency and they would revert back.
They would stop doing the daily meetings, they would stop going through ROs, they would stop talking to the techs in the shop, they would stop everything that was working and they would just revert back to the old way of doing things. The manager is in his office with a seatbelt on staring at a computer, the advisor—everything for some reason would revert back.
So then I just learned how to get ahead of that and I would just tell them, “Hey, you’re going to revert back,” and I would just make it a conversation. I would trick them. I would switch things up. And then if you can get them to do it for six months, it becomes pretty consistent. And then on that program, the other thing that always kind of surprised me is they would do better year two than year one because year two they were looking for that law of slight edge.
Once they were making money, they were looking for the law of the slight edge, and little hinges would swing big doors. Now you could start doing events. Now you could start doing mobile service. They believed now, They believed that you could do better by thinking in a different way, right?, they were looking at it more like a feedback loop of how can we constantly improve versus how can we just hold still and sit right here and put as much weight on this spot as we can and not move. It’s a wheel that’s spinning. How can we constantly make it more efficient, make it better? Does that make sense? Absolutely.
The Art of Slid-of-Hand Leadership
At 24 is when I started that. Just imagine the thing. There are a couple of things in my life that I feel so lucky for that I feel like give me an advantage over most people that I interact with every day. The first one is growing up in Mexico as a missionary’s kid. I saw a thing this morning. Some celebrity was talking about how America isn’t great or whatever, and I’m like, typical middle-class entitled kid that’s never been anywhere else. Go somewhere else and see what it’s like. Growing up in Mexico and also just seeing how people there were happier and they had less than people here who are unhappy and entitled and have more was such a gift. It was such a gift as a young kid to understand that and to have that experience.
And then the other one was fixing—I could fix two or three service departments a year and I was doing that for 15 years. Then I got to the point where I had people under me and they were doing it and I was managing them. I would basically go in for the research, for the kickoff, and then my team could kind of maintain it from there. But then we were launching maybe seven to 10 a month in a sense.
Doing that over and over and over again, and just figuring out how to trick people into success and how to do this magic trick where it’s a sleight of hand and everybody’s better for it, taught me about leadership. It taught me about psychology., it taught me about tempo and speed and momentum, and it’s an art., it really is an art more than anything else. It’s rare that I’ve ever sat with somebody and had a conversation where they have done the same sort—like they’ve had that same experience where it’s all or nothing when everybody is against what you’re trying to do. It’s a weird thing that everybody is against it and you still can get it done. Does that make sense? Yeah, makes it that much more rewarding.
I guess there are three things in my life that I’m happy for: growing up in Mexico, fixing service departments, and the Seahawks winning the Super Bowl this year. That was for you, Adam. Something to be happy about for sure. The Bears, the Bears got it next year, right? It’s always next year as a true Chicago sports fan. Well, next year, let’s talk about that halfway through the season.
Final Thoughts and Insights
Okay, cool. Well, thanks everybody for hanging out with us and hope we gave you some fun insights and some lessons, some stuff to think about, and we will see you next time on Service Drive Revolution.
Thanks so much for watching this episode of Service Drive Revolution. We’re uploading new stuff every day, so make sure you subscribe and click the bell icon so you don’t miss out. If you have a question you’d like us to answer on the show, call 833-3-ASK-SDR and we’ll answer your question on the show. That’s 833-3-ASK-SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com. That’s offers.chriscollinsinc.com. I’m Chris Collins and I’ll see you in the next video.
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