Consolidation has certainly been the defining buzzword for the collision industry over the past five years, and shows no signs of slowing down. As the number of collision repair shops dwindle from 80,000 to 40,000 to a projected 20,000 over the next decade, consolidated networks will experience pressure to deliver results for their investors and franchisees.
At the speed of our industry’s consolidation, there are challenges. The collision industry model hasn’t changed tremendously in the last 20 years. Because repair companies operate on a very traditional business model, there remains a lot of opportunity to technologically advance our industry. This can present higher hurdles for efficient integration.
At Driven Brands, we’ve acquired 14 companies in just four years. That fast pace of acquisition has taught us valuable lessons – and helped us develop a smart approach to successfully overcome integration challenges. Here are five key things we’ve learned:
Plan for integration as you are doing your due diligence on an acquisition target: You have to focus beyond the finish line for the deal to the start line for the new company. Establish a 100-day plan for when the deal is announced and stick to your deadlines. Make your integration plan part of your final evaluation. Determine where and when you can integrate key functions, who will lead the charge and how to avoid potholes. It’s also important to have your integration timeline in place when you make the announcement.
Communicate, communicate, communicate: Apprehension and resistance can build when information isn’t available; share what you can as frequently as possible! Provide a direct connection between leadership, team members, store network employees and vendors. Give them the vision and the steps everyone will take to collectively achieve it. One pitfall to avoid – bombarding them with different messages from too many people. Create a streamlined communication channel everyone can rely on.
Move quickly to show results to your corporate team, store network and financial partners: You’ve set your integration plan, now it’s time to implement. Harvest the low-hanging fruit first where you can share positive outcomes. Discuss the benefits of more challenging tasks to generate buy-in and commitment. Provide talented team members new opportunities to lead, grow and bring fresh thinking to the organization. Motivate team members with your own commitment to driving the integration success.
Prepare for surprises and speedbumps – but don’t let them derail you: There are always going to be unforeseen situations in a merger or acquisition. Sometimes the financial reporting isn’t as optimistic as expected. Occasionally there are unknown business situations not discovered during due diligence. This is where the motivation of your team is critical. You need everyone to rally around finding a solution to the speedbump, maintaining the pace of integration and continuing the positive thinking.
Celebrate every milestone and success: The pressure of integration is tremendous, but it’s critical to mark every milestone when marching toward a goal, no matter how big or small. Look for ways to recognize team members – regardless of their level in the organization – for their contributions. The person in accounting who talks with franchisees every day is just as important as an executive who delivers positive messages about the merger. Identify opportunities for celebrations with your constituents to ensure they continue to see benefits and rewards.
While an acquisition is never easy, with strong leadership; a committed, motivated, informed team; and a strategic, detailed plan for implementation, you can achieve integration success!
