For someone like myself, who has been involved in the carwash industry since 1987 as an organizational consultant, it is truly amazing to see the transformation that is occurring now in the carwash business. Everyone is, of course, aware of the few good-sized companies that have emerged in the last three years to become the largest ever conveyor carwash organizations in the U.S. There are now several chains around 100 locations, two close to 200 and one over 300. More significantly, all of them see themselves in the future as being much bigger than they are, with the goal of 1,000 locations in the U.S. in the sights of several of them.
What is even more interesting is that brand new companies are entering the industry literally every other week (yes, 25 a year) and have started out building or buying 10 at a time, with capital committed for 50, and a goal to be large and dominant in their markets with whatever size is required.
With this backdrop, this article is going to focus on what the elements are that a large carwash company needs to pay attention to in order to be successful once all the markets are built out and, predictably, some that will be overbuilt. The six major elements that we are going to focus on are strategy, culture, systems, organizational development, training and people.
Even if a carwash company is much smaller in size and is not looking to be the next Starbucks, most of the information reviewed can help improve any size carwash organization. So, read on.
Ideally, growing a company begins with the creation of a strategy. Corporate strategy is a plan that both selects and develops target markets as well as improves the existing operations of the business to the level needed to support the growth.
In the carwash industry, with most growing chains, the company’s strategy can be described as, “We are going to buy or build as many carwashes in our area as we can financially.” The idea of improving the existing business usually takes somewhat of a back seat to the growth in number of locations.
Some of the areas that a more developed strategy would touch upon are the end goals (number of locations, car counts, revenues, profits, time frame, etc.), markets selected to reach those goals, the human resource areas that need to be developed to achieve the goals (training, pool of promotable people, new positions to be created, etc.), along with capital requirements and sources. This is not a comprehensive list, nor does the plan have to be a long one. The real key is that the strategy is clear, doable and well-executed.
Corporate culture is defined as the values, beliefs and behaviors that create the psychological environment of an organization. Now, as you might imagine, very few companies invest much time in identifying, talking about or changing their cultures. However, most organizational development experts agree that culture affects the behaviors — favorably or unfavorably — of people in a company more than any other factor. Culture impacts who gets hired, how people perform and the overall performance of the company. Let me give an example.
One of our clients has, as one of the elements of its culture, a very high value on growth — professional development, expansion of locations (which creates more levels of management), revenue growth, etc. Every way you can define growth, this company embraces it in all forms. So, when someone makes a mistake, which in most organizations creates negative feedback, the response from a supervisor is different because of this element of the culture. The supervisor might say something like, “Although that mistake is to be avoided in the future, the more important point is, what did you learn from that mistake that can help you improve your performance?” Different culture, different response.
Ideally, a company can identify the key aspects of its culture, codify it in writing, teach it and improve it over time. Of course, the concept of continuous improvement would also need to be part of the culture to do that.
Almost everyone, if that person did his or her due diligence on the culture, would discover that there were also elements that he or she would want to change. New features that are wanted in the culture can be focused on as well. These aspects almost always take a lot of time to introduce and inculcate into a company.
Why spend the time on culture? Because it has more power to affect performance than is commonly understood.
As the famous management consultant Peter Drucker once said, “Culture eats strategy for breakfast.” And, how I would describe it is, no matter how good your strategy is, your culture will greatly determine your ability to deliver on that strategy.
An organizational system is the structure within which an organization is set up.
The key elements of this system are the purpose of the business defined (mission statement), the relationships and accountabilities of the functions to each other (organizational chart), the role of each employee (job description) and how communication — formally (meetings) and informally (instant messaging) — flow through the organization.
The structure can range from very hierarchical to very flat. Ideally, the system will reflect the culture. In fact, since a culture is rarely defined at the beginning of a company, organizations often find that as they get bigger, there are conflicts that begin to emerge between the system and the culture.
In the conveyor segment of the carwash industry, when the number of locations starts to grow and spread out geographically, paying attention to these systems becomes much more important in order to maintain the practices of the company that created its initial success.
For example, as a company grows, recruiting new employees becomes a more complex task. When one manager did all the hiring, that practice lent itself to consistency just due to the fact that one person was doing it.
When there is a company recruiter advertising for candidates, an HR person conducting a first interview and a district manager and/or a site manger also involved in a second interview, maintaining that consistency can occur only if the systems and basis for decision-making are well-defined.
Organizational development is a planned and systematic approach to improving the effectiveness of a company by aligning strategy, culture, processes and people. This responsibility is one of the most difficult tasks that any large organization has to perform.
Unfortunately, because there are very few executives in any industry that have had any training in this area, there is not much attention given to or effort expended in creating this alignment. Let’s take an example of how paying attention to this area can improve performance.
Just about every exterior express carwash in the industry has an unlimited wash club program. Creating the menu of plans, pricing and advertising strategy is the easy part. Some of the more difficult questions still have to be answered.
Related: Mastering membership from the start
Who is going to administratively manage this program on an ongoing basis? What training will be provided to people on-site to answer questions and sign people up? Do staffing levels have to be increased to have employees on the pay stations to sign up customers? Financially, what are the effects of the churn rate, and how does the larger number of customers at a lower dollar per car affect the bottom line?
Carwashes that address all of the issues from an organizational development perspective have the ability to not only reach high levels of membership in the range of 5,000 members or more per location but can also sustain the growth over the long term to even higher levels. Carwashes that don’t work with all the elements involved rarely reach the potential levels possible.
One of the key areas that addresses the people and processes part of the organizational development area is training. And, there is not a single organization that I have ever worked with in my entire career that has ever told me that the company’s training was terrific, complete for all levels and really needed no improvement. Instead, what every business owner has said, at whatever the level of development for training was, is that he or she knew it could be better.
There are three major areas of training that any organization needs to be concerned with.
First, and absolutely the most important, is the initial training for any person new to a position. If it is a new employee for an entry level position, in terms of the amount of training, the ideal is for it to be extensive. The carwash industry, unfortunately, does not excel in this area. The barista at Starbucks receives 10 times the training that a new customer service attendant (CSA) usually receives. When a CSA is promoted into a supervisor or manager’s position, he or she also does not receive much in the way of formal training.
Second, there is more information a person in any position can use beyond the initial training. Having an advanced level of training not only improves performance but also prepares people for a higher level of responsibility. If the organization is fast-growing and promotes from within, this advanced training is fulfilling the organizational development need of being able to grow more effectively.
Third, ongoing employee training is a key element for any organization that wants to continue to improve. Formal ongoing training can be handled in a regular weekly meeting. Informal, one-on-one training as an ongoing practice is missing at most organizations. The frequency of this activity depends upon the length of time an employee has been with the organization as well as the skill of the manager in delivering ongoing coaching for improvement.
As human beings, when we discuss successful or unsuccessful performance, we naturally tend to focus on the people who are responsible. And, it is true that it takes people to utilize all these other elements of organizational systems and make success happen. When you think organizationally, however, it somewhat changes who you want to utilize these systems. For example, do you want a manager who naturally follows all the processes and procedures that you have carefully put together over time? Or, do you want a manager who gets the job done but does it in whatever way is expedient at the time? Interestingly enough, in the corporate world, many executives will say something like, “I just want results and I don’t care how people get them.” This is not, however, the best way to build any organization.
It is possible today to develop a very clear behavior model of the type of person who fits each position and to utilize that information in the recruiting process as well as in evaluating people for promotion internally by using this behavior model as one of the criteria for advancement.
So, do people who are good at what they do make any organization better? Absolutely. The difference when you think organizationally is that the behavior models of the people you want are usually different than an organization that does not have systems developed and is just depending on people’s individual skills.
As a company grows, there is a lot to understand and act on about organizational development in order to increase the effectiveness and efficiency of a company. Hopefully, this article provides a framework to be able to look at your organization and put together a plan to address these areas of opportunity for improvement.
Steve Gaudreau is the President of Brink Results, a training and consulting firm that provides online learning and on-site training for the carwash industry. Steve is the author of several books, including Creating Exceptional Managers. His special expertise is organizational development consulting. Steve can be reached at [email protected].