Dealership driven by standard operating procedures

WASHINGTON — At Fitzgerald Auto Malls, there is only one way to do business: the FitzWay.

It's a philosophy for how to treat customers that permeates every aspect of the business Jack Fitzgerald founded and built into a 15-store empire across three states.

In the minds of customers and employees, the FitzWay is shorthand for the company's detailed quality policy, painstakingly developed more than 14 years ago. But underpinning that policy is the dealership's adherence to the ISO 9001 quality management standard.

The ISO is an independent body based in Geneva that develops voluntary, consensus-based specifications for products, services and systems covering virtually every industry to ensure quality, safety and efficiency.

"It's about consistent delivery of quality to the customer," said Rob Smith, vice president of Fitzgerald Auto Malls. "We want a consistent customer experience and consistent profitability."

For example, "our tools are calibrated to the National Institute of Standards and Technology," Smith said. "So, when we say it's 32 psi in your tires, it really is 32 because we make sure the gages the technicians use to touch a customer's car are calibrated to a standard."

It's common for manufacturers in the auto industry to achieve certification under the ISO standards, but not so for dealerships.

Fitzgerald, who is 83 and still typically works seven days a week, viewed ISO as a tool to better organize his far-flung enterprise, reduce variation and make sure each location — and manager — performed to the same expectations. Following the ISO prescription, company officials developed flow charts and manuals documenting 39 processes centered on the customer. Internal and third-party audits are used to verify that processes are followed and ensure the company strives for continuous improvement.

Performance standards extend from the showroom floor to administration to the service department.

"Everyone knows what a good job looks like," Smith said. "It doesn't mean they're going to execute it perfectly every time, but everyone knows what's expected of them. There's no surprises."

The management review team meets monthly to look at measurements for key processes. New employees undergo extensive training but also have quick reference resources and work instructions available on the company intranet on how to handle each type of customer interaction or task.

"We're not trying to catch people doing something wrong," Smith said. "We're trying to catch people doing something right and improve the process every chance we can get. It's given us the chance to be consistent in all of our dealings with consumers. When you have a chaotic system that's hit or miss, how do you improve?"

It also allowed Fitzgerald Auto Malls to streamline how it qualifies for meeting performance standards for each automaker and earning factory incentives. Documenting every process for each auto manufacturer was a burden, so Fitzgerald executives developed core requirements that exceeded those of every brand and replicated them across the organization, Smith said.

Fitzgerald similarly goes "above and beyond" standards to be a Subaru Green Dealer, then applies its standards across all its brand locations.

The group just completed construction of a four-deck parking garage for its Toyota-Hyundai-Subaru location in Gaithersburg, Md., with a solar roof capable of providing three-quarters of the facility's electricity needs.

"Subaru customers really care about the environment. We want to demonstrate that we care as well," Smith said, adding, "It's easy being green once you teach everybody and make it easy in their job."

FitzMall, as it's known, is No. 78 on Automotive News' ranking of the largest U.S. dealership groups, with 12,880 new vehicles sold last year (25,328 total) and $724.2 million in revenue. It has 1,500 employees. Most of its stores are in Maryland.

Smith said officials learned from the ISO journey not to implement a new process across all locations at once. The first process FitzMall tried to standardize was trade-in appraisals, "and we failed miserably," he said.

"Now when we implement a process, we literally go store by store by store," he said. "It always takes longer than you think it will, but it lasts. You need to invest the time it takes to get people up to speed. Change takes time to get it right. That's the biggest lesson."