Detroit’s troubles offer lessons for service providers

Some of the most dynamic shops I have encountered have been those where there is real communication between the owner or manager and everyone who works for him or her.

Chris Piper, associate professor of operations management at the Richard Ivey School of Business wrote an interesting piece for the Globe and Mail’s Report on Business on the problems with Detroit’s Big Three automakers. Piper makes many good points on difficulties the North American car makers are having, many of which are important to independent service providers in Canada.

Piper’s central argument is the Big Three have lost the respect of their customers and suppliers, and must now focus on rebuilding those shattered relationships. Suppliers don’t trust the Detroit Three and are often not interested in doing good work for them; conversely, the car makers are often contemptuous of their suppliers who return the feeling in kind. It is no better with their employees who believe their hard work is ignored and their ideas for improving the car makers business are effectively ignored. Worse, the Big Three have also lost the confidence of their customers, soured long-term relationships and effectively turned people towards their competitors. These relationships need to be repaired before the car makers will see any kind of recovery.

This is something that all service providers know, that damaging the customer relationship is something that can be too easy to do and very hard to rebuild. But I want to focus for a minute on the relationship between owners and their employees. I think there is a lot that can be learned by the relationships that the best service shops have between management and their service writers, technicians and support staff.

Some of the most dynamic shops I have encountered have been those where there is real communication between the owner or manager and everyone who works for him or her. That owner or manager takes the time to listen to everyone and even encourages everyone to come up with ideas for how to improve the business and customer relations. I’ve even come across a shop which goes so far as to have an employee appreciation lunch each month. The shop is closed for an hour or more, the owner orders in food for everyone and all the employees enjoy a stress-free lunch together. The owner told me he does this because he wants to show his appreciation for everyone’s hard work.

It is a simple gesture that goes a long way to improving employer and employee relations. By doing things that show one’s appreciation of one’s employees, of supporting them in their efforts to improve their skills and to listen to their advice on what can be done to improve the business will not only help the bottom line, but keep those employees working for the business. The toughest thing in this industry right now is keeping qualified persons. By building a good relationship with one’s employees, a shop owner will likely find that those employees will likely stay on and contribute with many positive suggestions and means to run the business more profitably. Detroit has come to the realization that it has soured its relationships and is painfully finding that once those relationships are broken it is very costly to repair.