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Business Operations

On the front lines at Mister Car Wash

October 11, 2010
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When Bob Handt came to work for Mister Car Wash in the spring of 1999, he felt he had all the credentials to run a high-volume store. After all, Handt had grown up in the business, having spent 30 years in Minneapolis “rubbing lots of cars in some very extreme cold weather.”

“I knew first hand how physical the business was, but not a lot of people recognize the intellectual challenges that come with running a high volume store,” Handt explained.

Getting a clean car, pacing, and managing labor are fundamental for most carwash managers, but at Mister Car Wash, analyzing data and identifying opportunities is where the heavy lifting comes in. According to Handt and the rest of the Mister Car Wash team, these management skills become just as important as producing clean cars.

Starting out
When Handt first started at Mister Car Wash, the third largest conveyor carwash chain in America, he was shocked to learn every store manager had access to the company’s profit and loss statements, not only for his own store but for all the stores within the region.

“I was never exposed to concepts like EBITDA (earnings before interest taxes depreciation and amortization), ROI (return on investment), and triple net leases. I couldn’t believe a company this size would be so open about the business,” Handt said.

Handt was not alone. He said that many of his fellow general managers came from environments where the “trust was never really there.” Where owners treated managers like glorified line workers and were “paranoid about showing us [managers] financial statements and letting us know how much money they were making.”

As a result, managing profitability was something that was left to the owners, not the guy running the store. “Sure I was accountable for CPMH (cars per man hour) and I monitored wages as a percent of revenue — but we never fully connected with the profit side of the equation and were therefore left in the dark about the most important part of business — profitability.”

Handt has since risen from general manager to district manager and now he’s charged with mentoring other general managers on the art and science of running a business.

He believes the virtues of openness begin with the company culture. “Senior management wants to know the bad news fast. They’re constantly picking our brains on ways to better the business. From pricing to promotions to ideas on recruiting people — nothing is off limits,” Handt explained. “In my former lives, that was not always the case.”

Indeed, the entire process at Mister Car Wash begins with a startling amount of communication throughout the entire organization.

Growth from within
Jamey Buck, now an area manager of a Houston location, earned his stripes the old fashioned way “sweating on the front end with the rest of the crew and working every station along the way.” Buck knew he could make a good living managing a high volume store, but his motivation went beyond compensation — he longed for an opportunity to take on more responsibility and grow professionally.

“Sure the money was important, but what I was really looking for was an organization where I could move up the ranks,” Buck said. He remembers a conversation with his boss, Mike Hogan, early on in his career. “I looked him right in the eyes and told him I wanted his job. I’ll never forget his response. He said, ‘Great . . . you want my job, you can have it, but first you’re going to have to earn it.’”

Buck now oversees six stores doing over $10 million in revenue with approximately 150 employees.

The highest standard wins
In the Pacific Northwest, General Manager Rudy Reyes is a classic Horatio Alger story, having come up through the ranks. He now runs one of the highest volume stores in the chain, projected to wash over 260,000 this year. “Never in my wildest dreams did I think I’d be managing a store of this magnitude this early in my career,” Reyes said.

Involvement in developing best practices is a good example. “Mister Car Wash believes that most good ideas come from the field,” Reyes explained. “We’re constantly being challenged to think of how to do things more efficiently, more profitably. We don’t just listen in meetings we actually share our views. I wasn’t used to that at first, but now they can’t shut me up.”

According to Handt, at Mister Car Wash, the highest standard wins, and that allows for anyone within the company to challenge every aspect of its process. Management fundamentally believes that “there are no sacred cows” and that change is the norm, not the exception. Handt said: “It’s that kind of culture that makes it fun to come to work. I know my voice is valued.”

Open platform
This ‘open’ approach to information and intense drive to improve has a positive impact on morale — which in turn has lead to higher productivity and increased profitability.

“The company feels that information is to be shared, not hoarded,” said Steve Bean, vice president of information technology. “We’ve created secure systems that gives them really valuable benchmark data in real time to allow them to better make decisions that drive value for our shareholders and customers”.

Ehren Loughery, general manager of Mister’s West St. Paul, MN, store sums it up best: “I used to want to just wash cars – it was in my blood. Over the last few years, I’ve become more of a business man, I understand financial statements, I participate in management brainstorming sessions, I’m part of the team and it’s neat to see some of my ideas implemented across the entire company.”

The power of people
Being in the people business is more than just a cliché for Ron Peterson, CEO of Mister Car Wash. “Howard Shultz at Starbucks has a great line that goes ‘we’re not in the coffee business serving people, we’re in the people business serving coffee. That kind of mentality is what’s allowed us to have some of the finest managers in the industry. “

Peterson began working in the family business for the toughest boss he ever had — his Aunt Jean. She taught me to be measured in what I say as a leader and that if you give more responsibility to talented, hungry people, they will rise to the occasion and figure out a way to win,” Peterrson explained.

If anyone knows about rising to the occasion, it’s Peterson. Over the years, he’s been involved in a lot of different ventures, from start ups to Fortune 500’s to restructurings. According to Peterson, the one common thread has always been you’re only as good as the people within your organization. “I’ve remained humble in that belief. We’re projected to wash seven million cars per year, I couldn’t do it without an extremely talented group of people running each store.”

Mister Car Wash, with over 1,500 people on their payroll, talks the talk when it comes to the human resource side of the equation.

“We’ve structured a pay system that rewards our guys based on the success of the business they’re in charge of,” said Peterson.

Mister Car Wash is also looking at rolling out a program that will allow its employees to be owners in the business. Peterson said he has found that if you invest heavily in professional development of your key people, throughout the continuum of their careers, it’ll pay for itself in the value they bring back to the organization.

“Take for example our monthly management review meetings. We touch on almost every aspect of the business. Form customer satisfaction scores, to silent shopper surveys, to store level financial trends, you name it. These guys know more about their business than anyone else, and we expect them to. In essence, it’s their store!”

According to Mike Hogan, vice president of Texas operations, with Mister’s recent expansion efforts, the company now has more opportunities to give.

“Take for example our maintenance crew – we couldn’t deliver clean, dry cars consistently day in and day out without them,” Hogan said. “There’s always an argument within our walls as to who’s more important – the general manager or the maintenance team. I think it’s a toss up!”

Letting the greyhounds run
Pat Secord, vice president of Western operations laments, “As we grow, the number of opportunities grows exponentially.” Secord said the beauty of Mister Car Wash is that the company understands that without a good general manager, a store will never fulfill its complete potential.

“If anything, I serve the general managers not the other way around,” Secord said. “These guys push me like you wouldn’t believe — and I love it — it keeps us all on our toes and striving to get better each day.”

In the end, Mister Car Wash is a company that believes in hiring greyhounds and letting them run. “Of course we have oversight, all good companies do, but we’re careful not to stifle creativity or build in bureaucratic systems that bog down the system,” Peterson explained.

If the company can’t justify why its doing what its doing, then it is quick to kill it or find a better way. A popular saying within the company is “the highest standard wins” and that keeps employees and stores constantly looking for ways to better themselves.

“If a vacuum crew member makes a suggestion on how to improve productivity — we listen,” Peterson said.

Posted on a white board at Mister Car Washes corporate office is the phrase “Stay Humble, Stay Hungry.” In an industry known for it’s propensity towards hyperbole and chest thumping, it’s refreshing to see a company that recognizes that it’s the people that make a company great and they’re only as good as the guy on the front line.

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