By Levy Joffrion
20 Groups.
They've been around quite a while with car dealers, but only about a decade among independent repair shop owners.
However, more and more independent repair shop owners are discovering the rewards of belonging to such a group.
Car dealers discovered the concept in 1947. That's the year Central Services, Inc. (which later became Nichols, Campbell & Morrow and is now known as NCM Associates), headquartered in Kansas City, Mo., organized the first 20 Group for Rudy Fick Ford of that same city. Interestingly, that first 20 Group is still in existence, with second- and third-generation members.
The consultants' 20 Group concept called for approximately 20 businesses of similar size - in terms of unit volume, profit potential and number of employees - from around the country to exchange ideas, experiences and expertise. The idea caught on, and more and more dealers became part of such groups. Today, NCM Associates works with 125 dealer groups across the nation.
What is believed to be the first nationwide 20 Group among independent repair shops started 10 years ago when Steve Louden, AAM, the owner of Louden Motorcar Services in Dallas, presented the idea to the 10 members of The Bosch Authorized Service Center Council of which he was a member. The idea took root and Steve Beckley, a fellow Council member and an Automotive Service Association (ASA) member from Des Moines, Iowa, contacted NCM. The rest, as they say, is history.
Louden knew about 20 Groups from his 12-year association with Ford Motor Company after graduation from college and before starting his present business 24 years ago. Louden is a past chairman of the board of both ASA and the Automotive Management Institute (AMI). In fact, Louden was a founding member of the board of AMI and has been an AMI instructor since its inception.
Today, there are other firms that also organize and facilitate 20 Groups for “independents.” One of the leaders among such consulting firms is R.L. O'Connor & Associates, an international automotive operations management and consulting firm in Washington that has been affiliated with ASA since 1980. (R.L. O'Connor & Associates instructors also teach a lot of AMI courses).
Bob O'Connor, president, says his company calls its groups “Bottom-Line Impact Groups.” Currently it is working with 11 such groups.
Another AMI instructor, Gary Gunn, is also a group facilitator. Gunn, the owner of Automotive Service Leaders in Bowling Green, Ky., is working with four groups.
Automotive Service Leaders and R.L. O'Connor & Associates both deal solely with mechanical repair shops, but there are firms that organize 20 Groups for collision repair facilities too - including NCM Associates, which has body shop management groups as well as groups for mechanical repair shop owners.
The role of consulting firms in organizing and moderating such groups may vary, and each group may be a little different. But basically, they operate on the same principles.
Such groups are comprised of approximately 20 shop owners who come together to discuss, in detail, each other's business. It is coordinated and managed by a third party administrator/facilitator.
Louden says one of the basic premises of a 20 Group is that its members must not be competitors in the same market, because each member must be willing to fully disclose every detail of his or her business to the other members. “Obviously, a shop owner would be reluctant to share details of his business with a competitor.” There are also federal antitrust considerations.
Most importantly, the shop owner must possess the ability to be a team player and have the desire to network with other business owners. He or she must have the willingness to share their victories and shortcomings.
His group meets twice a year, says Louden, for three days at a time. It started with 10 members and its membership is now up to 19 shop owners.
“NCM is our facilitator, but we run our own meetings and pick our own agenda,” says Louden. “We have officers and our members set objectives for themselves. We also follow up on those objectives. We'll ask a member, 'Did you meet your goal?' And if they didn't, we want to know why they didn't.”
That peer pressure is good, says Don Stoll, owner of The Auto Clinic in Lees Summit, Mo. Stoll is also quick to assert that without the ongoing training and support of his group, he would not be where he is today. “The group members are simply trying to help you improve your business. And if someone is having trouble, they're there to provide support and to help get the shop owner past the problem.”
Its members are the key to a good, viable 20 Group, says Louden. “We're very selective. Shop owners sometimes apply for membership. If we have an opening, and they - as well as the members - feel they would benefit from being a member, we will invite them to join our group. First, they have to be a team player. And there are other prerequisites for membership. For example, they must have been in business at least 10 years and they have to be successful. And if just one of our members votes against admitting a new person, that person doesn't get in. The vote has to be 100 percent positive.”
A new member must be receptive to the organization's objectives. Simply put, the members of a 20 Group are all in it to help each other. But a member must be willing to throw open his financial books to other members and share every detail of his or her business, even down to how many shop towels they buy.
Members periodically visit a fellow member's shop and examine every detail of that business. Then they make recommendations as to how that business can improve. And they follow up on their recommendations to be sure they get implemented.
Although they meet just twice a year, they get a monthly financial recap from NCM Associates detailing each member's monthly and year-to-date numbers. They know exactly how each other is doing. And they're in constant communication. “I get up to 10 e-mail messages every day from other members wanting to know something or sharing ideas,” says Louden.
Members really are helpful to each other, he believes. “Take technician productivity,” he says. “Say you've got one member doing especially well, better than all the rest. We want to know how he is achieving that. So we'll ask that member to make a formal presentation at the next meeting. And we'll borrow what we learn from him to incorporate in our own businesses.”
Another example: Louden's group has one member who is constructing a new building. “At least four or five of our members have gone through the same thing, so they can really advise that guy. Why reinvent the wheel when it has already been done?”
Louden says that each member must bring one good idea in writing to each meeting. “We give them five minutes to give us a presentation on their idea and at the end of that session, we vote on which idea was best. And that person wins a prize for having the best idea. Think of this, though: Each person brings one good idea to a meeting, but goes away with 19 others.”
“We always go to a first-class hotel or resort for a meeting because in addition to our work sessions, we have social functions,” says Louden. “We work intensely six or seven hours on each of the three days we meet, then spend the rest of the time having fun.”
Louden says spouses have organized meetings of their own, then all the 20 Group members and their spouses get together in the afternoon and evenings. Sometimes even children join the weekend festivities. “We are truly a close-knit fraternity. There's a tremendous amount of trust,” says Louden. “We share triumphs and trials, both in our business and personal lives. And you know, many of the good ideas we come away with have not come from one of our formal meetings, but from thoughts shared at a group dinner or at some other non-official meeting encounter.”
His group's membership is purposely made up of shop owners from all across the nation. “That way, we're not competitors and we get a broader picture of what the market is everywhere.”
Louden says they're very much aware that costs of doing business across the country vary, so they base most of their comparisons on percentages.
The benefits of belonging to such a group are many, but membership “is not for the faint of heart,” says Louden. Members of his group pay dues quarterly and he estimates it costs about $10,000 a year to belong because in addition to dues, there are travel expenses and other costs. In addition, there's the time investment.
Bottom-Line Impact Groups usually meet three times a year near the member's facility that is going to be evaluated. They usually arrive late on a Thursday, spend Friday critiquing the local member's shop, undergo training Saturday morning, and go over “financials” Saturday afternoon and Sunday. The cost of belonging to a Bottom-Line Impact Group is about $5,500, when one has added up the cost of membership plus all the travel expenses and collateral costs.
In spite of the cost, Louden regards belonging to his 20 Group “the best investment I ever made. If they are run correctly, they're wonderful.”
Many other ASA members share his feelings about their groups.
In the shop profile of this month's AutoInc., Jonathan Vickery of Bavarian Auto in Chattanooga, Tenn., is quoted as saying: “The single most important action I have taken in the last 10 years regarding my business was getting involved with my 20 Group, NCM's Service Center Scholars. It has been the driving force behind our success and prosperity.”
Thomas Chandler, AAM, of Professional Automotive in Greenwood, S.C., says, “I didn't make money until I joined the group. It taught me how to make money. I was on the verge of going out of business and probably would have if I hadn't joined my Bottom-Line Impact Group.” Chandler also believes it's a great support group. He says they are all close-knit friends and that “if someone's down, the others are there to help.”
Howard Lewis, AAM, ASA's chairman of the board and owner of L & B Auto Repair in Snohomish, Wash., says 20 Groups are “great, especially for new shop owners.” Lewis says there are benefits to networking, “but belonging to a 20 group takes it one step higher; it's more intense. Most of us become shop owners because we are good technicians. But we really don't know how to run a business; that's what you get from belonging to ASA and to 20 Groups.”
Reggie Denney, AAM, an ASA affiliate director and owner of Reggie Denney Auto Repair in Eden, N.C., says if it wasn't for his 20 Group, he probably wouldn't be in business today. “When I joined my 20 Group about four years ago, my gross profits weren't where they should have been. But I didn't have a benchmark,” says Denney. “I've learned so much from my peers. They've really been helpful.”
In addition, ASA member David Burgess, AAM, owner of Burgess Car & Truck Center in Milwaukee, believes being a member of a 20 Group can be one of the most influential factors in determining your business strategies. “Anyone in the automotive industry can learn from it,” he says. “You can take what is presented and use it in your business.”
Obviously there are many benefits to be derived from being a member of a 20 Group. Best of all, some might say, belonging to a 20 Group is like having 19 other shop owners as your board of directors.
| Editor's note: The facilitators mentioned in this article may be reached at the following telephone numbers: NCM Associates, Inc., (913) 649-7830; R.L. O'Connor & Associates, Inc., (800) 755-0988; Automotive Service Leaders, (800) 233-8551.
|