Pursue customer-service excellence or total quality management all you want. Before they have a chance, your company has to master the most fundamental management secret of all. Just ask the folks at Childress Buick/Kia
The thing I hate about getting my car back from the repair shop isn't the bill. It's that it's no longer my car. The seat's back -- way back, thanks to some long-legged jerk of a mechanic. And there's a smudge on the door handle. But the thing I really hate -- OK, it's a small thing, but it's really irritating -- is that my favorite radio stations have disappeared.
But if I lived in Phoenix and took my car to Childress Buick/Kia Co., I'd still be tuned to my favorite country-music station when I drove off the lot. Before the car's battery was disconnected, a nine-volt battery -- the kind you can buy anywhere -- would have been plugged into the cigarette lighter to save the stations I'd programmed. Terrific idea, right? It didn't come from management. It was a suggestion from an employee, the kind of suggestion that really makes a difference to a customer and whose implementation probably makes the employee feel great, too.
The battery is only one of many top-notch suggestions that flow up from the workforce at Childress, and that's just the way president George Russel Childress wants it. "Information must bubble up from YOU to PREVENT ongoing frustrations," he writes in Dealer Direct, a newsletter for employees.
Ronald Reagan never met George Childress, but he'd surely relinquish his "Great Communicator" title if he did. To 34-year-old Childress -- "Rusty" to everyone but the taxman -- the only way to grow the business is to harness the collective brainpower of the people who work there. ("I go to a seminar, read a book, and now I'm the smart one? That doesn't make any sense.") And the only way to do that is to have information sloshing about, all the time, across departments, down from managers to employees, up from workers to managers. And it does. The battery trick? That's nothing. You should see the daily video in the customer lounge, another employee's idea. (Some customers call to find out what's showing on a given day so they can schedule a service appointment around it.) The popcorn popper next to the VCR? Also an employee's idea.
The suggestion flow is one of the myriad ways in which information moves around the company, and it's not just from the boss, either. Dance and sculpture have yet to be used, but just about every other communication medium is at work: electronic mail and bulletin boards; hot lines; newsletters and questionnaires and meeting notes; town-hall meetings; and teams and focus groups. Each tool is simple, low cost, and low tech (no videoconferencing budget here). Each by itself is unremarkable. But taken together, welded into a culture in which you keep hearing the same stories and the same words, the tools are powerful. And channeled through an employee-run team (in a company with only 122 employees!) set up last summer specifically to improve internal communication, their effect is dynamite.
Rest assured, the dealership has its fair share of communication snafus, just like the rest of us. Meetings start late and run long. There's confusion about a memo that bans eating at desks. ("Not even a candy bar?") And there's more befuddlement about who'll be affected, and how, when the service shop starts opening on Saturday mornings. Yet Childress seems more like a start-up whose five employees are reveling in the hot news of a second big order than a company that's just celebrated its 35th birthday with a huge showroom bash for hundreds of customers. By rights the dealership should have lost the joy of scuttlebutt, the compulsive information sharing so many small companies start out with and gradually lose as they grow.
The purpose of the communication game is evident to even the rawest recruit. In textbook fashion, Rusty Childress explains, "By maintaining open communication with customers and employees, not only will you learn exactly what customers need and expect, but employees' job satisfaction will increase as well, which will help perpetuate your department's high level of service quality." Childress's CSIs -- the customer-service indexes dealerships have been gauged by in the last few years -- are regularly above 95% for overall customer satisfaction, and everyone knows it: monthly breakdowns are posted on walls and in newsletters. And employee turnover, at around 20%, is low for the industry. Employees are unanimous in their claims that this place -- an auto dealership, for crying out loud -- is a great place to work. At other places, says Judy Kane, the weekend switchboard operator, it's "mind your own business and get on with your work. Here, you know who's who, where people are, who's in, when they come in." Without the free flow of information, believes service manager Tom Anderson, the dealership itself would be much smaller. It might even be no more.
It wasn't ever thus at Childress. The company may have billed itself "The Friendliest Place in Town" -- it still does -- but that didn't mean managers felt compelled to share information with workers, or vice versa, or that one department had much to do with another. It took a crisis to bring real change.* * *
Childress Buick/Kia sits close to where I-17 curls out of central Phoenix, heading north toward the Grand Canyon. Across the road are a Discount Tire Co. and a Burger King. If you're no fan of the Whopper, you can cruise on down Camelback Road a few blocks to Ramiro's Taco Shop, though most of the dealership's customers -- many from retirement communities in nearby Sun City -- prefer the familiarity of Denny's pancakes close by. Down a few blocks, you could check out the Dollar Store ("Nothing More Than a Dollar"). Perhaps you'd see that black BMW parked in front of Teaser's Topless Dancing ("Contest Tonight!"). From the outside, you'd never give Childress a second glance: it looks like a zillion other auto dealerships, streamers aflutter and gleaming 1995 models out front.
Moving more than 65 new Buicks a month, Childress is one of the GM line's 50 largest shops, and a wallful of Best in Class awards testifies to Buick's satisfaction with the arrangement. With Childress's customer-retention rate (the percentage of new-car buyers who bring their cars to be serviced at the dealership) above 70% -- the industry average tops out at 30% -- it's little wonder many other car dealers, as well as hospitals and deluxe hotels, come here to visit, using Childress as a benchmark for customer service. In late 1993 Childress's record led Kia, a South Korean marque new to the United States, to give Childress a franchise. It's successful by any standard: after-tax profits topped $900,000 on 1994 revenues of more than $39 million, up on both counts from the year before and the year before that. (The body shop plays a starring role: its revenues are growing 12% a year.)
Of course, any dealership that stays even today is a winner. In 1993 nearly 10% of all U.S. car dealerships lost money, according to the National Automobile Dealers Association (NADA). For the most part, Childress has kept after-tax margins above 2%, compared with NADA pretax averages of 1.0% to 1.6% from 1989 to 1993. Not long ago Childress had no Lexus, no Acura, no Infiniti to contend with. Now there are 95 new-car dealerships in metropolitan Phoenix -- five are Buick outlets -- and new dealers move in each year.
Inside the dealership you begin to get a sense that there's something, well, different about this place. You realize you haven't heard a brash voice or a swear word or the imperative tense -- anything tense, for that matter -- all day. Childress folks address one another amicably: "Nice job!" they say, "Why don't we . . . " and "I'd suggest . . . " and "Sorry!" As in service boss Tom Anderson's apologizing -- not deferring, just being respectful -- to Mark, a lot attendant, when telling him he'd have to hustle that morning because a new lot attendant was going to be in a training session.
Maybe niceness is in the water here. Rusty Childress believes that helping people realize their full potential is just as important as pumping up profits. Or perhaps it's a function of the values of the courtly founder, George Ray Childress -- "Mr. C" as he's affectionately known -- Rusty's father. In earlier days, Childress found itself dubbed "The Country Club" by other dealerships for its relaxed ways and low-pressure approach to sales.
But workforce harmony didn't cut it in 1987 when calamity hit in the form of a computer system that the company belatedly found out was a development model. Soon, long lines at the service driveway and the cashier's office were sending CSIs into free fall. The senior Childress and then general manager Jerry Hughes had no answers. Hughes called in Childress's son -- at the time, head of marketing -- and asked for his help. The energetic twenty-something who'd once wanted to become a geologist so he could play on top of volcanoes now had something just as hot to handle. The challenge came with a new title -- owner-relations manager. And it came with tacit permission to change the entire organization.
You have to understand something about Rusty Childress. For being such a regular-looking guy and for all the Tom Peters slogans he uses, he's quite the hotdogger. The back of his business card tells all: hometown, Tucson; education, Northern Arizona University (B.S. Geology/B.S. Earth Science) and NADA Dealer Academy; interests, Harley-Davidson, Mardi Gras, the beach, and so on -- kayaking, Swedish massage, speaking on total quality management. One wall of his office is all photos of himself running big white water in his kayak. Overhauling his father's company was "The Next Big Adventure" -- white-water rapids for the workweek.* * *
Rusty had worked his way up and knew the dealership well. The idea of fixing the organization -- not the computer -- held powerful appeal. It was risky. But he knew that to manage risk, you use information. He began signing up for courses and seminars. ("Back then, if you spent $39 on a seminar, you really had to sell it.") A Tom Peters session led him to the Ritz-Carlton hotel chain, and soon Childress was interrogating hoteliers about customer-service excellence and total quality management. (At Childress Buick/Kia, the terms are used interchangeably much more than consultants would care for.) And he was getting himself one learning opportunity after another. There's another line on that telltale business card: under organizations are Rotary, NADA, Arizona Automobile Dealers Association, Arizona Quality Alliance, American Society for Training and Development, and American Society for Quality Control. And that's only about half the list.
Soon Childress was "getting pretty smart" about employee involvement, communication, benchmarking, and total quality. "So I had to do some training, had to write it down." The result is Creating Service Excellence, 158 ring-bound pages of an employee manual that's very different from most. There's no information about sick leave here: the subtitle is "Employee Manual for Quality Customer Care." In four sections Childress communicates about communication: Active listening skills and interpersonal communication make up two sections. The one on listening tells how little listening training is done and describes how to develop a desire to listen and how to determine a person's intent or purpose. New recruits have to read the book as they go through "Childress College" -- the company's seven-week orientation, in which employees spend one day a week in a different department -- and then sign a pledge at the end that says they know who their internal customers are, too.
In June 1991, about the time he was distributing the manual, Childress "borrowed" the Ritz-Carlton's company-credo idea. With help from employees, he crafted a mission statement that appeared in every office and on every employee's business card. He also began to mobilize employee teams all over the company to spotlight themes as sublime as quality and as earthy as housekeeping.
The same month -- a little over a year after he'd been promoted to vice-president and dealer -- Childress resurrected Squeaks and Rattles, a monthly newsletter that had appeared briefly in the 1970s. This time around, birthday gossip was joined by stories that communicate about communicating: one and a half pages of a recent six-page issue list "attaboys" and news from "Take 5" meetings, another device for letting ideas bubble up. (Childress picks five workers at random and asks how they would improve the dealership.)
Just over a year later Childress borrowed the idea of a president's letter from a local community college and launched Dealer Direct, a weekly E-mail newsletter received by every employee with a computer. Every Monday morning, he would crank out a breezy bulletin that might contain data on Buick's nationwide sales or an appeal for workers to sign up for a team, and there was always a folksy inspirational aphorism that would do Reader's Digest proud. Then managers would meet with employees for doughnuts and dialogue.
But something still wasn't right. To the workforce, Childress Buick/Kia was no Information Central. In 1991 Rusty Childress had begun polling employees; by late 1992 the results were revealing that all was not milk and honey. "What would you like to see more of?" asked one Employee Satisfaction Index questionnaire. "More things like this. At least you are trying to find out what is really going on around here" was one reply. Childress ran another survey to test the "coefficient of company culture" with questions like these: "Do employees receive the information they need to understand organizational changes?" Grade: C plus. "Are employees told about day-to-day events?" Grade: B minus. "Do employees receive information about major changes in a timely way?" Grade: B.
Childress, realizing his communication program had a ways to go, began opening up new channels. At the end of 1992 he launched the Suggestion Connection, an update on suggestion boxes that uses a database to store suggestions and a team to sift through and act on them. No point in asking for ideas if you never get back to people about them, Childress says. Eight Suggestion Connection white boards are placed prominently around the dealership, each with the same format. The date appears in the first column; the suggestion ("Everyone should have name tags") in the next; and its status in one of the next five columns ("under study," "pilot," "recommended," "adopted," "not adopted"). In the final column comes mention of the players.
The following spring Childress kicked off the first quarterly town-hall meeting in the showroom. The idea was to give all available employees a state-of-the-dealership address, slide show and all.
By mid-1993 it was hard to ignore Rusty Childress's efforts to make communication work. Overall CSI numbers, which had plummeted to lows of around 80% at the time of the computer calamity, were again in the high nineties; skeptics who hadn't believed information sharing could work were coming around; and departments were more open with one another than they'd ever been.
Witnesses? Talk to body-shop boss Bruce Grabber. Here's his football metaphor for the conventional relationship between body-shop workers and sales reps: "It's like Arizona State and University of Arizona. Always butting heads." The reps sneer down their starched shirtfronts at the metal bashers, who are just as proud. Communication, but not the right kind. Next time a customer comes to the body shop with a car that's an insurance write-off, guess who's last on the body shop's list of recommended sources for new cars? It was the same way at Childress before the big thaw. Now workers from the body shop and the front office interact, sometimes sitting on the same teams. The payoff is real. In a good month, says Grabber, the front office will get five new cars' worth of referrals from his group.
By this time, there's a communication tool for every personality type. Find the Take 5 meetings a little exposed? Use the anonymous defect hot line to talk directly to Rusty. You're not a committee person? Work the suggestion boxes and the one-on-one meetings. You'd like the world to know how a coworker went beyond the call of duty? Post a Round of Applause. Several of these sunflower-size yellow paper disks are pinned up on a bulletin board near the bathrooms. The one for Bob Rude reads, "Recently Bob had a lot of orders he was filling for the body shop. Just to keep things flowing smoothly, he came in for a few hours on his day off. Way to go, Bob! P.S. He even brought in a dozen doughnuts." It's signed by a peer: Greg de Costa, 11/15/94.
Rookie salesman Marcus Henderson describes how he felt when a highly public attaboy came his way for a cleanup job he'd done after hours: "Man, it pumps you up -- you feel great!" Not a bad way to feel when you're in sales.* * *
Piece by piece -- and managers' skepticism notwithstanding -- walls between departments began to tumble, creating an atmosphere in which problems could be discussed and ideas could be floated. Technician Sylvester Howard says his department suggested that the service advisers put more information on repair orders so the technicians wouldn't have to take time tracking down the advisers to ask for details. And general manager Brad Majercin -- an admitted cynic when Rusty Childress started talking about listening to employees -- tells a story about how one of the salespeople angered a customer last year by messing up information about the availability of a '95 Riviera. The rep knew it was safe to admit that he blew it both to the customer and to his boss. To make a long story short: Childress sold the car with a profitable service contract and lots of goodwill. "Years ago, when we were motivating by fear, the reps kept this stuff from us," says Majercin.
Karleene Petruk -- she was hired as a customer-service rep last summer -- puts her finger on the feel of the place: "There's very little intimidation here." At other places she's worked, "a lot of times, you're scared to go into another department manager's office."
By the middle of last year Childress had constructed a powerful and effective communication machine. He'd borne the brunt of the work himself. But he wanted to push further, to get employees to take full ownership of communication. He got his chance when Buick brought its Living the Vision seminars to town. The seminars, intended to promote premium customer care and designed with considerable input from Childress, are being brought to employees at all of Buick's 2,880 dealers nationwide. After every Childress worker had been through the series, Rusty -- the president since January 1994 -- ran a companywide meeting at which he asked for a list of the most pressing issues facing the dealership. The number one issue, as revealed by the seminar: internal communication.
Say it ain't so! Not with newsletters and attaboys and teams and meetings. Still, the vote was clear: you can never have too much communication. Marketing coordinator Christa Hartley describes the startling state of the dealership: "We were on a 'need to know' basis. There were a lot of rumors going about. Nobody had the whole story."
Now that everyone had seen the collective vote on communication, Rusty Childress knew he didn't have to sell the idea of an employee-run team to anyone. Soon after the seminars, every employee's pay packet contained a list of hot issues and a novel request: choose the top three cross-company teams you'd most like to be on. Everyone had to sign up for something.
Without thinking too much about it, salesman Marcus Henderson signed up for communications and found his talkative self elected chairman by the 13 others on his team. Reluctant to fill the role at first, he soon caught the group's enthusiasm. Now you can't shut him up about this stuff; he spends a good three hours a week on it. And the team is on a roll. The members make plans and proposals; they're on a mission. In fact they have a mission: "Due to the sensitivity of the direct relationship between our employees and our customers, we must be able to perform as an informed team and not operate on hearsay and rumor." The first project -- to get department heads to download the details of their many mysterious meetings in the form of written summaries, to be placed in each employee's mailbox -- is working well. It's meant that Henderson, 22, had to pitch a proposal, budget and all, to the top team -- including the 80-year-old chairman, Mr. C. It's meant that the team had to choose and buy mailboxes and select locations for them.
Let's follow Henderson down to the service techs' lounge. He knows every scuff mark on the linoleum; he was a technician not long ago and, before that, a lot jockey -- the attendant who drives customers' cars to and from the service bays. These days, when he's not clinching a big sale, he's thinking about how "his" new team can at the very least begin to put positive spins on all those rumors and at the very best get everyone knowing everything about everything. Henderson is irrepressible, talking a million miles a minute. First he's showing off a Suggestion Connection white board; then he's waving at the red suggestion box. But they're old news! Here's something very unusual for a techs' lounge -- gray mailboxes, just installed, that will be used to get management-meeting summaries out to the troops. Henderson is really proud of those mailboxes; they're his team's firstborn. Now all he's got to do is make them work.
We're sitting in on one of the weekly communication-team meetings. On the wall is a calendar. The message for July reads, "The power of communications begins with the art of listening." As usual, Henderson is the energizer; sales rep John Fabiano is the facilitator, the voice of reason, the meeting's avuncular pacemaker. Everybody gets a say. The team is talking about installing the mailboxes. Margie Williams, an executive secretary, says Mr. C doesn't want one. "He said, 'What's wrong with my desk?' I said, 'Nothing!" Lots of laughter. Rose Seals, title clerk, wants to know how employees will know they have mailboxes. "We'll do our meeting summary," says Fabiano.
Or so he thinks. Later he tells a story about a delicious irony. "I got Marcus good!" he says, beaming. "I told him we'd forgotten to do something, and I could see his mind going a thousand miles an hour. Then he says it: ' Meeting summary!' So I ask him who's going to do one, and he says, 'I guess I am."
Henderson does do his summary, and receptionist Cheryl Pierson, a teammate, distributes it. They know it'll be the first of many, that communication will be an ongoing program. One of the next big moves will be to turn the town-hall meetings -- now under team management -- into dialogues, not addresses from a podium or slide shows. There are gains already. As a member of the team, Pierson felt she could do something about the times when she couldn't find the salesperson a customer was asking for. "I had one caller who said, 'Well, I'll just take my business elsewhere," she says. So last fall Pierson felt free to tell a meeting of the sales managers that the reps had to -- absolutely had to -- let her know if they were going to slip out to the post office for a minute. The reps could use a light board (flipping a switch when they leave the dealership). "Or they could just tell me; either way works for me," she says. Nowadays no one forgets that the front desk is the nerve center of Childress Buick/Kia.* *
Employees throughout the dealership are beginning to reflect the spirit of internal communication. Last fall, after customer-service rep Karleene Petruk had solved the problem of a slow service job for an agitated customer (a doctor), she took two more steps -- two internal steps -- to ward off repercussions. First she saw to it that all the service advisers' terminals would flag the doctor's sensitivity to waiting time. Then she told her supervisor, just in case he got a call from the doctor (who might have gotten to fuming again on the way home).
By now, the collective time spent studying how to keep everyone informed is huge. Marketer Christa Hartley, another facilitator on the communication team, figures she spends as much as an eighth of her workweek on internal communication. Is it all worth it? You'd be hard-pressed to find a Childress employee who doesn't buy into the idea. Aside from the standard grumbling about too many meetings, there's nothing to suggest that anyone perceives the communication push as just another "to do." Folks like Brad Majercin will give you examples of how it's working, not how it isn't. He no longer does formal performance appraisals for employees; communication works well enough to make them unnecessary, he feels. Nor is there any doubt about the market-driven reasons for it all. Everybody has a business card that reads, "Ninety-one percent of unhappy customers will never purchase services from you again."
But it's too late for an about-face, even if it was called for. Information sharing gets deeper into the company's bloodstream by the day. Tom Anderson is badly infected. It's not in the job description of a service manager, but he ponders how to improve things over a beer in his backyard. He has this crazy plan -- he's stealing it from the restaurant trade -- to improve new-car delivery. You know those goofy happy-birthday choruses, when the entire wait staff gathers around your table to sing? Anderson plans to have all available employees -- from the body shop or wherever -- come up to the forecourt on cue to applaud new buyers. The odds of the plan's succeeding are good; so many internal channels reinforce the importance of delighting the customer. The other communication element -- the audible signal that will call employees to the front -- hey, that's the easy bit. And Anderson is promising that the next time we visit, there will be a town crier, tricorn hat and all, singing out the latest company lore.
Childress loves it. "That's the greatest thing, to care about something other than just what you're responsible for. If you can get everyone like that, it's absolutely amazing. So what do you do with a guy like that? You just encourage the hell out of him."
With more than a Round of Applause, we hope.