How book clubs are increasing service department production, profits

Service managers striving to optimize fixed ops performance might want to rip a page from the playbooks at Sherwood Ford in Alberta and Shaheen Chevrolet in Michigan. In short: Get employees together to crack open a good read.

Reading groups in both dealerships' service departments have amped up efficiency, developed better leaders, empowered decision-making, boosted accountability, enhanced customer service and boosted technician retention. And subsequently, key performance metrics — average value of repair orders, throughput and labor hours billed, for example — have risen like a hot novel on the New York Times Best Sellers list.

Take Sherwood Ford, a single-point rooftop in Sherwood Park, Alberta. The 52 employees in its service department can participate in a reading program that has helped raise labor revenue, says Service Director Damon Egan.

In 2021, the department racked up $12 million in billable hours. In 2022, the figure jumped to $13 million. And so far this year, the department is on pace to generate $14.2 million.

Egan attributed much of the increase to a book called The Goal: A Process of Ongoing Improvement, by Eliyahu M. Goldratt and Jeff Cox.

"We actually utilized information in the book to move our 47 hoists around, which cut down on dead time and improved work throughput," Egan told Automotive News. "We started tracking the time it took for technicians to do things like retrieve parts, go talk to service advisers and retrieve vehicles.

"By cutting downtime and becoming more efficient, we saw an immediate growth in hours billed," he continued. "That book probably has had one of the greatest impacts on our business. It's so good that I reread it once a year."

More specifically, Egan cited Jasdeep Chahal, a technician who worked at two service bays that were fairly far apart. For several days, Egan had Chahal write down a detailed account of his daily activities.

"We found he wasn't in his bay for about four hours a day," Egan said. "He was putting on 15,000 steps per day and losing about a half a day's worth of production every day."

By moving the two hoists next to each other, hiring a parts runner and having Chahal use a text system built into the dealership management system to communicate with service advisers, his average daily downtime was reduced to 47 minutes, Egan said.

"We then did the same analysis for the rest of our shop and reacted accordingly," Egan said.

In another instance, after some employees read The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company by Joseph A. Michelli, service advisers at Sherwood were given the authority to do whatever it takes to make customers happy — without consulting a manager, Egan said.

"This turns bad situations into good situations," he said. "It makes people angry when you have to 'go talk to my manager' to solve a problem. I know this new policy works because we're writing off about half as much work as we used to, compared to before we started doing this around 2020."

At Shaheen Chevrolet in Lansing, Mich., part of Shaheen Automotive Group, a group of service advisers at the dealership's adjacent, standalone Oil Change & Tire Center also gleaned valuable insights from reading a book.

The three service advisers and a tire specialist used lessons learned from Extreme Ownership: How U.S. Navy SEALs Lead and Win to improve their leadership skills — and boost financial metrics — said Brad Millican, assistant service manager.

The book, by Jocko Willink and Leif Babin, emphasizes how leaders are accountable for everything under their purview and that they must take ownership of problems — even if they didn't create them. Millican said the impetus to read the book was a change in management structure in 2022, from one dedicated manager to three service advisers responsible for each of their teams' production and customers' experiences. Lackluster sales performance and falling morale among the facility's roughly 35 employees ensued.

"We had a need for more leadership," he explained. "If we wanted to empower these three employees to be leaders, we had to open their box of normalcy and let them take more command over how the facility operates — own the experience.

"I already had read the book twice, and it changed how I do business," Millican added. "So it was perfect for teaching them everything they needed to learn in their new roles. I was very confident it would make a big difference."

The book's message improved operations. Millican cited one service adviser's average repair order for customer-pay work, which jumped 23 percent in one quarter to $166.38 — well above his objective of $150.

"All the team leaders saw similar improvements in their metrics after implementing concepts from the book," Millican said. "And we went from handling around two upset customers per day to about one per week."

What made the difference? Decentralized command. Before, team leaders were overwhelmed trying to handle everything and not delegating duties and decisions. That robbed them of time to — as Millican put it — inspect what they expect.

In other words, if leaders set expectations for employees, things won't improve unless leaders can ensure those expectations are met. And by giving team members more ownership and autonomy, the three service advisers gain more time for not only employee coaching, but for more thoroughly advising customers about what their vehicles need, he said.

"It was cool because as the team leaders got a good grasp on things, they passed along the lessons to their team members," Millican reported. "And all of a sudden, the whole group is making decisions and being successful and working together.

"When you own an experience, you have the authority to change that experience," he added. "You take on more responsibility, but you also feel more empowered. It's very impressive to see."

Reading groups can be structured in a variety of ways. At Shaheen Oil Change & Tire Center, team leaders read Extreme Ownership one chapter at a time. They had to write a synopsis of each chapter, focused on a salient quote and a few bullet points to support it, Millican explained.

"Then we discussed each chapter and how its lessons could be applied in a real-world business structure," he said. "We'd review the chapter, allow three days to put lessons to work, then do the next chapter. It took about a month to get through the book."

Was there any pushback from team leaders? Only a little, Millican said, and most of that was related not so much to reading the book but to the difficulty of making changes.

At Sherwood Ford, Egan said he started the reading program in 2018 after he saw a speaker at an auto industry conference tout its benefits. He said it gets people outside their comfort zones of doing the same thing all the time — it broadens their perspectives about ideas and philosophies they can use in day-to-day operations.

Reading books is not mandatory for all service employees. But he estimates that about 40 percent of the department's 90 or so employees regularly sign out books from the store's "library" in his office. They use a third-party website, BetterBookClub, to sign out the books and also utilize an Audible account so people can access podcasts and audiobooks, he said.

"My office is filled with hundreds of books," Egan said. "But we try to make things as accessible as possible and match the different ways that people learn."

To motivate employees to read, Sherwood pays them to hit the books. Reading a short book might earn an employee $5 or $10, while longer, more challenging books command bigger payouts, Egan said.

When someone finishes a book, they're required to write a summary — maybe a few hundred words long. Then they're free to join a daily service advisers' meeting, part of which is devoted to discussing a book, he explained.

"If we can pull just one takeaway or tip a day out of each book we delve into, it's a success," he said of the meetings. "That's what we're looking for — that one thing that makes us 1 percent better every day."

The reading club circumvents a this-is-the-way-we've-always-done-things mentality by continually bringing to the forefront new ideas, perspectives and viewpoints, Egan said.

"It gets people thinking," he said. "And when people see someone else's idea work, it gets them thinking about how they can change what we do for the better."

Empowering technicians to suggest ideas for improvement and offering them opportunities for personal development helps keep them on board, Egan and Millican said.

"We think we can develop better technicians and retain the ones we have when we give them the tools to be more than just wrench-turners," Egan said. "They don't want to be like old codgers, doing the same thing for 30 years.

"But they don't always know how to get there, so reading books helps get them get there."

Millican agreed technicians often are stereotyped as employees who can't think beyond their service bays. But dealerships that treat them like that do so at their own risk, he said.

"If you're not raising everyone on your team to the next level, you're not adding value," he said. "If you empower employees to make decisions and take care of guests, they'll do all that and more."