Mr Zamora was apparently worried. Not everything was going his way. It was already 6.00 p.m. and his car had broken down. He had to travel to the Mexico City airport to leave for a two-week business trip. His wife's car had also broken down and was in the repair shop, to be fixed and returned only by next week. Mrs Zamora worked 30 miles and had to take their children to three different schools-a day's drive of 85 miles. And, with all the heavy traffic, the taxies would have cost a fortune!
Repair was a major automatic transmission wear that, in normal conditions, would take at least a week. It was a result of an improper day's before repair made at the dealer's service shop. At any other repair shop this was an opportunity to charge a virgin. Hesitantly, Mr Zamora called on Gomez, an old time colleague at the Ford Motor Company, who had recently quit his job to have his own auto repair shop. Gomez drove Mr Zamora to the airport in his car and promised to deliver the car next morning at his home, to be of use to his wife. This was a testing time for Gomez. It was the first job for his shop and some tools were still missing, the spare parts were not available, and they were not committed to working at night. Back from the airport, Gomez drove straight to the shop. He made several calls for tools and spare parts but could not get them as most vendors had already wound-up the day's activities. After a little hunt, while the tools were borrowed for the night, the only option was to swap the transmission of Zamora's car with that of his own. This meant a double swap. Finally, Gomez decided to have a go and worked all night to fix the car. It was delivered to Mrs Zamora well in time, with a request to return at the earliest, to make the swap again. Mrs Zamora could return the car only in four days and it was only by the fifth day that both the cars were running. Further, the charges were solely for the equivalent of two people's labour for one day, and spare parts, about 40 percent of what Mr Zamora knew a regular shop would charge. But Mr Zamora and Gomez both also knew it was a fair deal.
Mr Zamora was clearly impressed. In fact it was Mr Zamora's comment about Gomez's performance in the company that forced the latter to retire. He decided to take up his case and insisted that Ford reinstate Gomez. However, Gomez declined this offer and decided to continue with his new business. That was in 1993.
Backdrop
Servicios Automotrices Echegaray (SAE) is a proprietary firm owned by Alfredo Gomez Luna, a mechanical engineer of 30 years' standing. Specializing in repair of automotive vehicles, SAE is located over the Avenida Gustavo Baz Na 181, in Echegaray, Naucalpan, State of Mexico, a densely populated neighbourhood, with settlers from a middle income group, averaging an annual income of approximately US$ 30,000. In his 50s, Gomez had worked for two automobile giants, General Motors (GM) and Ford, as a product design specialist. He worked for FM for about 10 years and then switched to the Ford Motor Company, to work for 17 years, before he was almost forced to take retirement. He had had a combined experience of working on designs of around 20 different vehicles for the local market. He had the opportunity to work in diverse areas like suspensions, brakes, tires, clutch, and transmissions, etc.
As an employee at Ford, Gomez was popular for his sense of camaraderie, his positive attitude and willingness to help others. This won him appreciation and friends, but got him into trouble with the company, which believed that he focused less on his work than on his relationships with others. This finally made him quit his job, to launch SAE in partnership with Norbeto Sanchez, a retired mechanic from Ford.
To begin with, the company's prime customers were relatives and friends from Ford. It was like walking on a tight rope, as most of the customers were knowledgeable automotive employees. Gomez was content with making fair deals to satisfy these customers, who were his friends. In turn, these friends often extended some words of technical advice to SAE. Today, SAE is the service shop endorsed by experts. An attitude of friendliness is now a stated policy at SAE. All their customers are like friends. Teamwork and a friendly work environment is a key value at SAE. The company seeks out loyal customers and close partnerships with suppliers. Employees are too like friends. It is always a friend's day out at SAE. This is the value cherished by SAE and has helped retain its knowledgeable employees. The company that has grown almost at the rate of 80 percent a year, now has Gomez as General Manager-Proprietor, an administrative assistant, 10 mechanics in charge of repair activities, and 3 trainee mechanics.
Gomez recalls that as an employee at GM and Ford, in spite of his expertise, he often had no time to repair his own car and was generally forces to take it to repair shop close to his house. The crafty, big inviting smiles in these repair shops could not hide from his experienced eyes the improper repairs and inefficiency that got translated into costs for customers. His views were shared by his colleagues at the two automotive giants, most of who often complained that they had to go without cars, when they were under repair, for long periods, and that was painful. This included his first customer, Mr Zamora, a chassis manager, who was his ex-boss and sat next to him for almost 15 years. Their lunch together, often saw a discussion on unfair and inefficient practices of repair shops. He even tried different repair shops, but with similar results and costs.
Putting Experience to Work
Organizing around his sweet and sour experiences, and his conviction for cordial relationship with customers, Gomez set out to drive his business with this new approach make friends, business flows in as a sequel.' In no unequivocal terms, Gomez impresses upon his employees, through personal example, that customers must be treated as friends. This policy has led to some guiding principles:
- You should not make abnormal and unfair profits out of friends. Base your repair pricing on labour costs, plus a 40 percent. Remember, most of the customers are themselves automotive experts. Do not try to hoodwink them.
- Do not make a margin on a friend's cause. That way, you are not being sincere. Pass the discounts offered by suppliers to the friends.
- Do whatever is possible to help a friend. It may mean working overnight or even on weekends. Remember, a friend in need is a friend indeed.
- Try to share your friend's concerns. Learn more and more about his vehicle - what is causing him trouble and keep him informed about what may cause him a problem in future. Take a ride with him in his vehicle to understand fully well his concerns.
- Drive with him when he comes to collect the car, and ensure that he is fully satisfied with the repair. Do not compromise on this.
- Friends need to be in touch. Maintain a database and call your friends when it is time for maintenance.
- Friends like to spend time together. Make a party of your job. Allow your friends to participate in what you are doing and how you are doing. Share with them whatever you do and plan to do. Encourage them to help you fix their cars and maintain them.
- Friends will allow you a chance. They know that no one is perfect. Even if you make mistakes,they are wiling to overlook them. Just let them know that you are doing your best. Track your performance and keep improving so as to help your friends better. If needed, get back to school (to learn new advances and update on technology).
In fact, Gomez does not see his business as a job any more. For him it is an opportunity to make friends and enjoy with them. This applies to his employees as well. They are not employees, they are company to the fun party at SAE. No more a manager, he is more of a guru, a coach, who helps generate solutions that hold up commitments. He and his administrative assistant are seen as a support to buoy up the activities of others. Friends attend upon friends on an as-arrived-as-served basis, which includes a joint review, with the assistant manager using database and a short evaluation drive. This leads to an advice note, detailing the required time and activities. Often this is also used to drop back the owner. The mechanics then evaluate their ability to resolve the problem and, if need be, seek Gomez's advice. Over a period of time, some friends develop a preference for a particular mechanic, and, in such cases, the availability of such a mechanic is facilitated, if not ensured, depending upon the time the customer can allow.
All replaced parts are given back to the customers and, if requested, destroyed in their presence and scrapped the same day. Friends are most welcome to see what is being done and, after finishing the job, vehicles are delivered to them only after a satisfactory test drive.
Though not formal, yet there is a continued communication with all collaborators in the business. Gomez leads an informal, short day-end meeting as the day's activities are wound up. In this meeting the day's experiences, customers' feedback, opportunities of improvements, and successful practices are discussed. The moods and preferences of friends are also discussed.
A new member joins the team only if there is a general consensus among all team members. Gomez initially screens the incumbent for his technical skills and, more importantly, for his attitude and loyalty. His ability to make and sustain friends is the key value sought. The candidate is then supposed to rotate one day, helping every mechanic, as a part of his screening exercise. At the day-end meeting, all must agree on the new recruitment. If so, he is declared a new friend-on training and must, as a part of the training, team skills and fine-tune the person's technical skills. Most of the incumbents. Are retirees from the automobile manufactures, who want to keep themselves active and busy and remain in touch with friends. Majority has a sufficient technical background and need only some interpersonal skill orientation. Gomez personally ensures the sharing of knowledge. He understands fully well that employees have a key role to play. His customers return to him because of the confidence they have in the friendly relationship they share with the repair personnel. Most customers come with a personal reference from the customer-friends or employees themselves. SAE is more a club for friends, automobile repair providing the necessary opportunity.
SAE has an almost delayered informal organization with everyone reporting directly to Gomez - an ideal opportunity for excellent understanding of professional and personal issues and concerns. The senior most and most experienced mechanic is a kind of team leader, and has an additional role of mentoring and coaching other employees. Compensation is based on weekly salary, plus a volume-linked incentive. Incentives are also linked to customer satisfaction. Volume is measured on the basis of time deployed on a job, as compared to a team agreed standard time; these standards and labour rates are compared twice a year with competitors and the team sets the new labour rates. The team collectively reviews customer satisfaction. All members make a weekly review of the others in terms of their contribution to the team. Weekly incentive is based on the weekly revenue minus the expenditure. The administrative assistant makes a weekly balance sheet to report results. Employees have, therefore, virtually become partners in business.
There are no promotions. All are at the same level. In case of friend customer is not satisfied, the employees must make the amendments on their own, and there are no ifs and buts to it. A friend must never go unsatisfied. That is the last word.
With a well-knit team and customer-friends, competition is not a big deal for SAE. It claims not to have lost a single customer till date. Even those who have moved out of the city, keep in touch. Employing retirees with vast manufacturing experience and inputs from automobile expert customer-friends has contributed largely to the knowledge base. Friends frequently extend new ideas and advice on new technology. Gomez says that he is committed to introducing new technology as and when available and applicable.
Milestones
Team concept has almost eliminated the need for isolated bays, and several employees may work together on the same job. Members have also learned that it is useless to work independently on a job for hours, when the same can be completed in far less time with support from others. Help is not sought, it is extended. All understand very well that it pays to seek and provide help. At SAE, there is a kind of brotherhood and extreme sensitivity for cooperation, with none other than Gomez leading by example. Quality has, thus, become an emotional response to expectations rather than a rational response to functionality.
When asked, Gomez can clearly recall some of the milestones with pride:
- SAE is now known as a repair shop preferred by the specialists
- Loyalty of his friend - customers has grown to a point that SAE has not lost a single customer till date. Even those who have moved to other cities keep in touch
- Every friend has contributed in promoting the business, to the extent that Gomez and his men are facing difficulties in managing the demand, Mr Zamora has become a very good friend and is one of the leading promoters of the business.
- All employees have an appointment in advance with the friends. Friend-customers have been pampered and enjoy the luxury of dealing with the employees of their choice
- For routine maintenance jobs, there is a waiting of three weeks in advance
- Friends do not have unexpected breakdowns on their vehicles
- Friends are willing to spend 30 per cent more on priority service, something that members have declined to accept
- Employees receive indirect benefits from friends, who are willing to oblige for the treatment they receive at SAE
- Friends-customers had become more open to sharing knowledge
- Friends enjoy sharing knowledge during energized discussions at SAE, which often last long. We are all specialist and we enjoy this process' says Gomez.
1. What approach did Mr Gomez apply to run his business?
2. "His friendly approach to his customers and employees won him Laurels in business with the result that he got 80% growth per annum, but his same approach which he practiced at the time of his job in Ford made him cost his job." Give your comments as to why Mr Gomez could not get success in his job earlier? Was organizations approach correct in forcing him to resign?
3. Can this concept of "service excellence" as practiced by Mr Gomez be applied to every kind of service or not? What limitations employees face in various organizations to apply this concept? Give your views?