Kwik-Fit

A presentation to the World Productivity Congress, Edinburgh, October 1999
by Sir Tom Farmer, Chairman & Chief Executive

What is Kwik-Fit? Kwik-Fit is a company that operates in the most difficult industry in the world - the automotive repair industry. Our customers do not want to deal with us : I know of no person who wakens up and looks out the window and sees a beautiful, sunny day and says 'What a beautiful day. I think I'll go and have my car repaired'. Our customers are what we call distressed purchasers.

Today our organisation is the largest automotive repair company in the world. We will operate in over 2,000 places by the end of this month Our team is made up of approaching 11,000 people and we operate throughout the whole of Europe. In April of this year we negotiated and finalised a deal with the second largest automotive manufacturing company in the world, the Ford Motor Organisation. They are refocusing the way in which the Ford organisation is developing and one of the things that they decided to do was to change from being only a car manufacturer to being a player in the life cycle of the car. They decided to enter into the automotive repair business.

I have been in this industry for 44 years now - I started and joined the automotive business at the age of 14 - and for 44 years I have always thought that I knew everything about the particular industry that I have been so much a part of. But I never realised that car manufacturers did not repair cars. I had no reason to ever think about it. A car manufacturer doesn't even sell cars, he manufactures them, and allocates them to dealers throughout the world. It is the dealers who repair cars. But over many years in the growth of the automotive industry, dealers did such a bad job, and actually had such a bad image, that they allowed people like myself to develop very, very profitable and very, very fast growing businesses. So when the Ford Motor Company decided that it should refocus its organisation, it decided that it should go into the automotive repair business. I was very pleased that, in the report that they issued recently, the Chief Executive and President of Ford, said that he had looked all over the world to find out where and how they could enter the automotive repair business, and they decided that the best company, the most productive company, the most profitable company, the company that had the highest reputation was a company that was based in Edinburgh, Scotland. A company called Kwik-Fit. In April of this year the Ford Motor Company paid 1.7 billion dollars for the organisation that I started in 1971, something that we are very proud of.So today I am going to tell you how it was that this organisation grew to the size that it is today and the recognition that we have received throughout the world. I was very, very intrigued to know who would actually be here today.

I was really most impressed that here I was being actually invited to speak at a conference called the X1th World Productivity Congress. I mean the whole title just made me feel so good. I just thought that you perhaps might like to know how the description was given when I asked that particular question. I received a letter from the organisers and it gave me details of this Congress that I was being asked to speak at. It went on to suggest that the audience would be made up of people similar to yourself, people who are entrepreneurs, people from local government, national government, people from public bodies, marketing, advertising professions, a number of consultants, and a few, and this is the best one of the lot, a few normal people! Ladies and gentlemen, let me just say to you I don't know which class you want to be in, but I would just like to be included in their very, very last class, I would just like to be classed as one of the 'normal people'.

Before I started, I was standing at the back of the room thinking about this word 'productivity' - what is productivity all about? It's about making sure that our efforts and everything we do are worthwhile, and I would like to give just one little hint to the people responsible for managing this unbelievable facility (the Edinburgh International Conference Centre). This is the finest facility in the finest city you can get anywhere in the world, I believe. I don't want you to think that I am biased but let me assure you that I have a tremendous love for this city. But one tip that I'd like to give the organisers - if you want to be really productive, why don't you in future stop having a front row because nobody ever sits in it. I can't believe that somebody has actually laid out that row and nobody has actually ever, ever bothered to sit in it To me that was the waste of some productivity in trying to put these rows in place.

Anyway, I'm not here this morning to entertain you! What I am here to do is to try and give you an insight into the development and the growth of a business, a business of almost 11,000 people, one in which 'the team' have a tremendous pride. If, as I talk, that pride comes over very strongly, I make no apologies for it. I have been in the automotive repair business since the age of 14. In 1963, I decided - at the age of 23 - that I would develop and start my own business. I had a strong desire to work for myself and be able to control my own destiny. And it was in April 1964 that I opened one of the very, very first discount type premises in Europe. Business developed and business grew and various things happened that set me well on the road to develop in other businesses. But I'd been in that business somewhere in the region of two years when a friend of mine gave me a book, and it's a book that I constantly refer to - and I saw it recently referred to in The Times - a book about the story of a man called Paul Getty, surely at the end of the day one of the worlds greatest entrepreneurs. There was a chapter in that book that my friend said that I should read and pay a lot of attention to - and the chapter was 'How to be Successful in Business'. The Times recently ran a little article on the same chapter.

Now Paul Getty said, quite simply, that to be successful in business all you had to do were three things. One : rise early, two : work late and three : strike oil!

At the age of 23, having been brought up in Leith, which is the dockland area of Edinburgh, I knew that I had been very fortunate in being born with a high energy, and a lot of enthusiasm. I knew that I could rise early and work late but I didn't ever think that there was any possibility that I would go out in a rowing boat and drill for oil in the North Sea. However, for me quite simply the oil, as far as I was concerned, was automotive parts and, in particular, the five round black products in all your cars and the piece of metal that sticks out from your car and hopefully costs you something in the region of 200 dollars when you come to get it replaced.

The company grew and in 1968, the company went public on the London Stock Exchange; in 1969, it was acquired by an American company; and at the age of 28 I decided, as I looked back over the five years I had put into the business, and all those hours that I had put into it, that it was about time that I retired. I went off and spent some time in America with my wife and two young children, and in 1970 I found out that what Hoagy Carmichael had said about retirement was true.

Hoagy Carmichael said very simply that the big problem with retirement is that you can never take a day off.

Let me assure you, ladies and gentlemen, that if you are 65 or 70 years of age, and still got a lot of energy that must be a real problem - I haven't reached that point yet and I have no intention of doing so. But at the age of 29 going on 30 to be in that situation turned out to be a tremendous problem. 1970, late 1970 I came back to Edinburgh, and in 1971, I and my colleagues from my very first business opened the first Kiwi Fit centre not far from here in McDonald Road in Edinburgh.

The story of Kwik-Fit has been well documented - in magazines, and in university case studies, etc. This year, we will service somewhere in the region of 10 million automotive cars. Our market share is such that we sell almost one in three of every exhaust system (or mufflers for people from other parts of the world) in the United Kingdom, and one in three of these parts also in Holland and Belgium. We control somewhere in the region of 25% of this type of business in the UK, and 20% of this type of business in Holland. We operate in France, Germany, Belgium, Martinique, Morocco, Ireland, and the UK and shortly, as Ford spread the network throughout the world, we will be operating in other parts of Asia, South America and Australia - these are very, very exciting times for us. So the story has been well documented - but how did the growth really come about? What made it so successful.

What made us productive, because that's what success is all about, to be more productive than our competitors? What really made the difference?

Well, let me start the explanation by talking about some of the current management 'buzzwords'. These words become fashionable and they get used, then overused until they lose their meanings. Take the word partnership. One day this really meant something. Years ago a partnership was something which meant that a group of people got together on the basis of total, mutual trust and. Today the word partnership is bandied about so much that it really means nothing. For me, partnership now seems to be used to represent a situation of two people getting together where one exploits the other.

Then we have such words as empowerment. Empowerment! People suggest that, to be successful, you've got to empower people within your organisation. First, I would question whether 85% of our people would even know what the word empowerment was and secondly, even if they did, whether they would actually want to be empowered. Because what I do know, is that within this world, the business world, the majority of people don't want to be empowered.

They want to be sure that they're given the proper instructions, be properly trained, that they know exactly what's expected of them, and they want to be allowed to get on with the job.

Of course, the favourite buzzword for me, when we talk about productivity and good organisations, is the one called TQM - total quality management. You know, you can't operate a business anywhere in the world today unless, we're told, you have a total quality management programme in place. And how do you achieve this total? For me, who has a very simplistic approach to life, who had a very simple education, total means everything. So what we're told is that everything in the organisation under total quality management should be right And how do we achieve it? Well, sometimes you think that all you have to do is to buy the latest book or employ one of the new specialists who took early retirement to come along and advise you. Or perhaps you even come to a conference such as this and you listen to some of the many speakers and all gets unfolded to you - and it all seems sometimes so very, very easy.

We hear about the need to go for certification for quality. We achieve the certificate that we can hang on the wall in our reception area, and we publish details of our 'success' in our staff magazines etc. Then everything will change in our particular organisations? Throughout the world, when I travel, I go and visit automotive companies everywhere, and I walk into reception and they're there : 2, 3 4, 6 20, 30 certificates all proving the organisation is a quality organisation.(By the way, let me also say if you visit our headquarters here in Edinburgh, I regret to say you will probably see the same!) And I sometimes wonder what people think actually happens when they receive this certificate. Do we think that some spirit comes out of the certificate and goes throughout the factory or office and that tomorrow morning, when we walk in and open the doors, we get - Whooooof! a whiff of quality-ism, or whatever it is, that the certificate had, has made things happen and changed our whole operation? Well of course we know, we know quite simply, that that doesn't happen.

So how do we achieve this quality in an organisation - because it is only quality organisations that will definitely be successful in the long term.

My experience tells me very simply that we need to look after our people.

We need to train, and retrain, and retrain our people at all times. But, more than that! I would remind you that what we do as far as horses are concerned, is to train them to jump over fences. We train our dogs not to piddle on the carpet. Surely, what we do to our people is more than such 'training'. For me, quite simply, the real key to success in business today is not the investment in computers, it's not the investment in property, it's not the investment in marketing and advertising, it's quite simply the investment in people. This investment, the biggest and most important investment we'll ever make in any organisation whether it be in Government, the National Health Service, whether it be the automotive factory such as Ford or the automotive repair company such as Kwik-Fit, is the only investment which will guarantee success in every way.

You know, when we invest in equipment and technology, it comes with a set of instructions. And provided we take the time and the trouble to read the instructions, and follow them through, we get years and years of unbelievable service. But for the most expensive, and it is the most expensive, and the most complicated piece of equipment in the world the human beings that we invest in, there is no set of instructions. And not only that but every piece of that equipment is different, the 11,000 people that make up our organisation today, every one of them is different. Not only are they all different as individuals, but they are also different every day of the week, every week of the year, every month of the year. So often in the organisations that we are part of, we don't spend enough time to find out how to make that investment, how to make that piece of machinery, the human being in our business operate. We don't spend enough time in trying to find out ways of making sure that they can operate better.

We set targets and we set visions and dreams for our people in our organisations, and we talk about the need to go out and have quality companies producing quality products, giving quality service, achieving 100% customer satisfaction or delight etc. We talk about the need to go out and have efficient operations. Well, I think these are fantastic targets, I think that any organisation that doesn't have these targets has no future. It's common sense - unless you have desires and targets to go out to be the best, you definitely will not be the best. But one thing is definite: there is no point in having targets and visions unless at the end of the day you have the proper tools. Men like Victor Hugo, he said that there is nothing like a dream to create the future. Well I think that being a dreamer, being a visionary, is only part of the road to success because people like Leonardo de Vinci or Jules Verne they had dreams, they were unbelievable visionaries, but sometimes their dreams and visions never turned into reality because, quite simply, they lacked the proper tools.

For me, quite simply to achieve total quality management is almost an impossibility, and we will not achieve it because at the end of the day in the business world we employ human beings to achieve this total quality, not machines and not computers.

For me, quite simply, to build and develop organisations which are 'quality' and successful is not about setting targets which are almost unachievable, but it's about setting targets that people can see, that with that little bit effort they can reach them. So for me, and our organisation, we don't operate any total quality management programmes. But what we do operate, is what we call quite simply BQM - better quality management - where we set out to encourage our people, and we set out to educate our people. We set out to have our people recognised if they make a little bit effort can make so much difference. Just a little difference from each person makes so much difference, every day of every week of every month. Better quality management to me quite simply is something that people can see and understand they can achieve. Better quality management programmes mean that we recognise that just looking at better ways of doing what we did yesterday will result in better profits, better quality for our people and better quality for our customers.

I think that we will all fail in our targets of building up better productivity and better quality unless we link this with a vision, with the proper tools and of course also the proper strategy, the proper systems and the proper procedures. But those strategies, systems and procedures will never work unless we have organisations filled with highly self-motivated people.

We hear so much of the need to go out and ensure that our people are motivated. I believe that what we have to do in business today, is to have programmes in place to effectively remunerate our people, to allow them to achieve advancement to a level that they can realistically achieve. We have to make sure that, at the end of the day, we have the properly trained and educated people, not people that are educated in writing and reading and algebra or arithmetic but educated about what the job is all about. Then they need to know what's in it for them if they do a good job? What do they get in return? And so often we fail to tell those people exactly what they can get in return for a good job, what the benefits are to the organisations, what the benefits are to the communities in which we operate, what the benefits are ultimately to the country.

For me to achieve real quality in an organisation it must be some kind of obsession.

Quality is a magnificent obsession.

I operate, as I said at the beginning, in a very, very difficult industry. I operate in an industry where our customers do not want to deal with us. We have achieved our success not through the investment we have made in our buildings, not the investment we have made in marketing or computers, but by the investment we have made in our people. People who know and understand exactly what the job is about, people who know and understand what they will and can receive in return for a good job well done.

My message is a very simple one. A successful organisation isn't created by investment in buildings, computers, marketing programmes, etc, etc. As soon as we install the new equipment, it is immediately out of date.

But one thing never, never goes out of date in an organisation, the one most important ingredient of all, and that is its people.

Our people need to be listened to and our people need to belong. As far as the future is concerned I believe continuing success depends on the way in which we listen to our customers, and the way in which we will mobilise all of our people's know-how and experience and creativity.

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