Caliber Collision Centers is now 11 years old. The business model has been the template for many collision repair consolidation efforts throughout the country. During this time, Caliber has grown to a high of 68 and currently has 64 collision repair centers in California and Texas. They survived a legendary battle with the California Bureau of Automotive Repair (BAR), which accused them of fraud and threatened to close them down, and this past year chairman and CEO Matthew Ohrnstein left the company. Upon Ohrnstein's departure, the company was run for about a year by Dan Pettigrew, a Princeton-educated engineer who had previously served as VP of operations.
It appeared to many that Caliber was crippled and might not be able to survive the challenges thrown at the monster consolidator. In addition to the economic downturn of the collision industry and key employee turnover, Caliber's resolution with the California BAR cost $5.8 million.
In late 2005, Caliber's financial investors were paying close attention to the state of affairs. One such investor, The Bank of New York, had recently been involved with another multi-location project with great success. They had worked with someone who had a proven track record of operating performance. They wanted to bring this man to Caliber, thinking it would be a good match.
New president rides in
John Hovis is from the railroad business and joined Caliber as president of the company in November 2005. Hovis spent 26 years at Burlington Northern Railroad, retiring as vice-president of operations. Since Burlington Northern, he has served as COO for Rail America, a multi-regional transportation and logistics provider and president of Production Resource Group, a worldwide, multi-unit entertainment services and production organization.
In 1997 he left the corporate world for two years to focus on volunteer work. He spent this time in the inner city ministries of south Dallas, Texas, working with Pastor Leonard Hatcher helping to build store-front churches. "There was a lot of work to do there, we saw a turnover of people every week," he said.
Hovis walked into the Caliber organization focused and with clear strategies for success. "There is one common thread for a chance at success," he explained, " to continue to produce and perform at the highest levels." His goals are crystal clear. "We will routinely and consistently stay at or above standard benchmarks."
Hovis talked with Autobody News about the old company and the new company. He has improved the 'new' company's level of communication. Now all locations communicate with each other, focusing on the exchange of best practices. That was something Hovis took to heart. "Why did we have to make the same mistake 64 times," he laughed. "The stores have embraced the concept and going forward is encouraging."
Hovis' lighthearted demeanor does not bury his steel resolve. He believes in holding people accountable. "You get it done, or you don't," he clearly stated. There has been a 30% turnover of upper level employees at the Caliber organization since he came on board. There should be no misunderstanding at Caliber regarding expectations. Hovis reminded, "No one will assume your accountability. At the end of the day, we all have the responsibility to produce and perform." Even Hovis expects to be held accountable.
The three pillars of Hovis' management doctrine are: Safety, Quality and Profitability. He has seen the most significant change in behavior by making safety the number one priority. Every injury in the company, no matter how small, is reported directly to President Hovis. The discipline around a safe repair produces a quality repair. Safety and quality will create profitability. The operating discipline dominates the culture. It's the culture at Caliber that is changing, not the company.
After nine months, Hovis' original thoughts of continuing to produce and perform at the highest levels still applies. Caliber is focused 99% on change. Measures of success have been developed. Priorities are set on a day-to-day level. He has seen significant improvement. "The problems are figured out," Hovis reflected. "It is the solutions I am working on." Time is spent on the articulation of the real problems and how to implement real solutions. He embraces the idea of common sense and surrounds himself with talented people.
In the trenches
The increased interaction is encouraging to Caliber store managers. Ken Barker, manager of the Redlands, California, Caliber Collision Center is sold on the 'new' company. "It is like your neighbor is really there for you. We are like business partners," Barker said. He would know. He has been with Caliber since the beginning. Barker started working for one of the original founders, Jack Falluca, when he was 18 - over 30 years ago. He managed the Rialto Caliber Collision Center (Falucca's original shop) until two years ago. Barker is happy with his move to the Redlands location where he is steadily increasing his volume.
"John Hovis is the first Caliber executive to come visit me at the shop," claimed Barker. "He takes the time and wants it to be known he is in the trenches with you. He has been here twice!" He is inspired and encouraged with Hovis' leadership. Barker speaks the same language as his boss when he talks about getting the job done. "It is about performance and getting it done - you can make all the excuses you want but when it comes right down to it, be accountable to your job."
Hovis uses Barker's Redlands location as an example. The Redland's store continues to stay at or above standard level benchmarks. Barker notices differences in the 'new' company. "We are running lean and mean. We are taking care of business and making the company profitable."
Profitability was in peril last year at Caliber Collision Centers. To put it simply, Hovis explained, "Caliber didn't make enough to cover the house payment." However, Caliber debt holders made the decision to keep Caliber open.
"We have over 1,500 employees," Hovis candidly spoke. "That would have a potentially profound negative impact. The debt holders are doing the right things for the right reasons. We are not confused about our mission here. We have a culture based on: Safety, Quality and Profitability. The foundation and responsibility of this organization is to: (1) employees and their constituents, (2) client (customer/insurers) and (3) shareholders. On balance, I make calculated and weighted decisions to see this responsibility is met."
John Hovis has been with Caliber Collision Centers for over six months. "Caliber is at its own goal line, maybe the 20 yard line. We can see how to get a touchdown from here," he proudly stated. "We deliver on our promises."
Janet Chaney has been in many facets of the collision industry. She is serving the best interest of her clients through Cave Creek Business Development. She can be reached at email@example.com.