Mike Shaw Automotive lives by the rule “inspect what you expect” – With Help From Compli
Mike Shaw Automotive is a family owned and operated company with two generations working side by side. With seven locations and 465 employees Compli has helped them monitor things on a higher level to maintain a high level of compliance.
Today’s guest is Jeff Johnson. He is the Chief Financial Officer of Mike Shaw Automotive. Hi, Jeff. Thanks for making time to speak with us today.
Jeff: Thank you, Jennifer.
Let’s start with some general background. Who is Mike Shaw Automotive, exactly, and how long have you been in business?
Jeff: Well, Mike Shaw Automotive came to being in 1994. Mike Shaw was working with the dealer development group from General Motors and got his first store, the Chevy store on Colorado Boulevard here in Denver. He actually started in the business about 45 years ago as a service writer while he was in college, but worked his way up and got himself in a position to be a dealership owner.
So after General Motors did that, he was very successful, was able to pay off dealer development, make it his own store fairly quickly, then expand it into Colorado Springs, a Subaru store up on 104th, and then moved down into Texas with some open points and Louisiana. So currently, we’re at seven stores.
How many employees?
Jeff: We’ve got 465 employees. Obviously, that varies day to day; people come and go. But we’ve been fairly consistent; a little over 450 now for about the last year or so.
That’s a lot of people to keep track of, though.
Jeff: It is. Especially when you spread them across three states and seven different entities.
Mike Shaw Automotive Group Quick Stats
Regulations then are a big factor in running a successful automotive business, I’d imagine. How does the regulatory environment right now in your industry affect your day to day operations?
Jeff: Well, the regulations on our business are pretty heavy. I think some of the major businesses that get hit pretty hard are automotive and banking. So there’s all kinds of paperwork, and it doesn’t matter if it’s a car deal or the service department and the chemicals that they use, or hiring and terminating employees. In all those different situations, you have different regulations and different governmental entities that are telling you what you need to do and how you need to do things. So it’s a big handful to keep track of.
So how do you go about keeping track of that and manage to sleep at night at the same time?
Jeff: Well, some nights, you just don’t sleep. But we generally infer…the payroll and HR compliance side, we use Compli. It’s been very effective and allowing us at a corporate level to monitor for sure what’s going on at the stores. Prior to using that software, we relied on each individual store controller to make sure everything was done all right. And then we would go in on an occasional basis and look through paper files.
But going electronic and using Compli allows us to monitor it on a higher level from the corporate office and allows the compliance person a lot easier access to check on stores on a more frequent basis and make sure everything’s been done correctly.
Tell me a little bit about how you use Compli, exactly, maybe on a day-to-day basis. Is it on the HR side, mostly?
Jeff: Yes, so when an employee is hired, they’re gonna have to go do the employee packet. So it’s going to be all of our policies and procedures, and they have to sign on some safety stuff. Anybody that drives a vehicle has to go through our safe driving courses and a number of things like that, go through harassment videos. And that’s all done through Compli and recorded to make sure that happens. There’s a few tests on some of them to make sure that they pass, and they sign off that they completed it all. And it records that and it keeps track of when it was done to make sure that it’s all done. And we don’t actually allow an employee to go out on the floor to either sell cars or go back into the service department until they’ve completed everything on there. It also allows us then to track on an annual basis, it kicks back out and says, “Hey, this person just hit their one-year anniversary. It’s time to go back and retrain on a few things.” So it gives us a good way to stay on top of that kind of thing.
We don’t actually allow an employee to go out on the floor to either sell cars or go back into the service department until they’ve completed everything assigned to them in Compli.
When an employee is educated about what is and is not the right behaviors, and what our expectations are, then it makes it a lot easier for them to go out there and do their job, and do it in a way we expect them to do it.
Jeff Johnson
CFO
Mike Shaw Automotive Group
How does it help with your customer service? How has it helped your employees better able to relate to customers or also make sure they’re doing it all the right way?
Jeff: Well, what it helps us in that standpoint is just making sure that our employees have a good understanding of what our expectations are. So every…you know, whether it’s got to do with red flag rules or different governmental agencies that say what you can and can’t do or have to do with employees, or what you have to do from a safe driving standpoint and harassment standpoint. When an employee’s educated about what is and is not the right behaviors, and what our expectations are, then it makes it a lot easier for them to go out there and do their job, and do it in a way we expect them to do it.
How did you actually make the decision to go from, you know, having each store manager/store controller handle the compliance to actually going with kind of a one-stop-shop solution like Compli?
Jeff: What you said earlier: difficulty sleeping at night. Knowing that all the stuff that is out there that can get you into trouble and might be there, and you are relying on other people to make sure it’s done…I’m just gonna take an old boss of mine who said a long time ago, “You have to be able to inspect what you expect.” Compli is a tool that allows us to do that very well.
That’s something that I need to put on a t-shirt at some point. That’s a good rule of thumb. So in terms of working with the Compli team, how did they kind of get you up to speed, and how do they keep you updated? Because compliance regulations keep changing.
Jeff: Well, there’s continuous stuff about obviously e-mails and they have their little news feeds that talk about things that are going on. But like within our company, we try and put together all of our controllers twice a year and sit down and have meetings about making sure we’re doing things correctly. So we just actually had our controller meeting two weeks ago, and Scott, our Compli guy, came to the meeting. And he spent a couple hours with the stuff up there on the big screen, the computer, and doing a little training with us to make sure we’re up to date on the most recent things and the best ways to use the software so that we can be as efficient as we can be.
Looking ahead, as compliance…in the regulatory environment we’re in right now–big word, there it is. In the regulatory environment we’re in right now, there’s a lot of changes that are either happening or could stand to happen. What, looking ahead, are you gonna rely on Compli to help you do and stay ahead of?
Jeff: You know, it’s funny, we actually try and rely on a lot of different things to make sure we get that right. So Compli is one of the tools that we use, and they help us implement whatever the decisions are. They also provide guidance on what’s going on and what they think needs to be done. But we also use our labor attorney in that situation. We also use our state associations–NADA, CADA, TADA, LADA…you know…
That’s a lot of letters.
Jeff: Every state has their own association and you’ve got the national auto associations, too. So we use those. I’m a member of the AICPA and we use our CPA also to make sure we’re doing things correctly on a regulatory standpoint. On the tax side, we set up a corporate, like I said before, with our labor attorney to make sure that stuff’s going correct.
So once everybody gets their heads together and decides what’s gonna be done, Compli makes the implementation of those things real easy.
What would you say is your biggest compliance challenge right now facing you?
Jeff: I think the most difficult thing is getting mid-level managers to properly document things as they happen. So every single time you have something with an employee, we’ve got to make sure our people are trained well enough and in the habit of just going in and document that it happened. “Hey, a person was tardy today.” They were tardy three times. I look in the thing and I can see they’ve been tardy three times. It’s time to sit down and talk to them about it. And then I need to document that you’ve talked to them about it.
And so, from a protection standpoint with both unemployment claims and EEOC claims, and Texas Workforce claims, it’s amazing the number of people out there that want to raise their hand and say, “Oh, the company did something wrong. Therefore, they owe me money.” It’s a pretty frequent occurrence. And if we do our jobs correctly and document what we do, that’s never really an issue.
I never thought about it from that standpoint. It really does kind of protect you from the litigious environment that’s out there.
Jeff: Very much so.
If someone were to ask you for some advice, or kind of been looking back on your experience in working with Compli and trying to make sure you’re on the right side of compliance, what piece of advice would you offer someone looking to kind of bring in a solution like this?
Jeff: I think the biggest deal is complete buy-in all the way down on the management staff. It’s real easy for a corporate office or, you know, even an individual store, an office controller-type person to say, “Hey, we’re gonna use this,” and you put it out there and it does some really neat stuff. Initially, “Hey, that’s great. It keeps track of this, does that.”
But if you dig down into it, it can do a lot of really good things. And you just have to make sure all of your managers are bought in and trained from the very get-go. I think for us, it kind of went in stages. You put it into place and you kind of used it as…for lack of a better word, kind of like a policy manual that everyone knew and, “Hey, everybody signed off on. That’s great.” And then you start learning about the things you can do to push things out, to manage your vacations and your time off, and your FMLA, and lots of different HR things that you can use the system to help you manage and push around, and just to keep track of.
So we’re in the process right now of taking…like in Colorado where your salespeople have to be licensed. Of getting the system so a license is once we get them from the state, upload in there, and we keep track of them on an annual basis, make sure we don’t miss any renewals.
Excellent. Good advice and good words of wisdom for all who are trying to make sure they’re in compliance. Jeff, thank you so much for making time to talk with us today.
Jeff: Thank you very much.
