Jim Ramsey knew something was amiss with Lamb’s Tire and Automotive’s business model after his first three months on the job as the company’s president and CEO. “When I came in, the company was a disaster – it was losing a lot of money and had been for a while,” he says. “The entire structure of the business and business model was wrong.”

Ramsey, a former fixed operations director for a large car dealership group in Oklahoma, joined the company in September 2012 after Lamb’s Tire equity owners Main Street Capital approached him about the position. Ramsey, who had worked in the Austin, Texas, market prior to taking the job in Oklahoma, was familiar with the brand, which opened the doors of its first location in Austin in 1987. 

After the company’s financial woes became apparent, Ramsey set about correcting its fiscal ship. “The business model here was formerly heavily tire-centered,” he says. “Don’t get me wrong – we want to sell as many tires as we can, but our margins are really made in parts and labor, not tires. We needed to shift our focus from being a company that just sells tires to being one that does the majority of its work in auto repair.”

Ramsey spent six months learning more about the company and its challenges and positioning it for profitability, which it finally achieved in March 2013. The year 2013 saw 59 percent pre-tax revenue growth. Last year proved even better, with the company seeing a 150 percent increase in net revenues. “We are healthy now and intent on growing,” Ramsey says, noting the company anticipates opening its 15th location later this year. 

Total Transformation

In addition to making the company profitable, Ramsey also worked to change other aspects of Lamb’s Tire’s operation. “Our founder, John Lamb, was known as a tough business man, but his employees really liked working for him,” Ramsey says. “Lamb was very involved in his business, and stressed customer  and  employee satisfaction. After  he sold the business, there was very little personal communication between the people who worked in the corporate office and the employees in our stores.”

Ramsey, whose career included working as a mechanic before moving into executive positions, started to break down those walls of communication. “Quite frankly, I feel more comfortable being out in the stores and shops than in my own office,” he says. “My predecessors rarely visited our stores, but I’m out there all the time, and know every employee by name or face. Our employees are very important to me, I take a personal interest in them, and never forget that I am responsible for their livelihood.

“When I first came into the company, and saw the concerns, I remember thinking ‘if I don’t get this thing turned around, a lot of people are going to be out of work,’” Ramsey adds. “That motivated me to make the tough decisions that needed to be made.”

Before Ramsey joined the company, Lamb’s Tire had a difficult time recruiting new employees. “Being in a high-tech city, we already have a tough labor market, but I think the  company also had a bad reputation,” he says. “I’m happy to say that’s totally changed, and we’re now an employer of choice. People are hearing great things about us and want to join, and that’s really rewarding for me.”

The company’s executive ranks have also changed within the last two-and-a-half years. “Of the 14 store managers who were here when I started, two remain,” Ramsey notes. “One of my biggest initiatives here was getting people to understand what we’re trying to do here. A lot of the people who were here when I started really didn’t understand our goals, and were just picking up a paycheck.”

Associates and salespeople are trained regularly in customer interaction and sales techniques, while managers are given training in management techniques and financial analysis. The company in 2015 will roll out an enhanced technician training initiative, Ramsey says. 

The training has had a positive effect on the company’s interactions with customers. “We often get great reviews from our customers and continue to see month-over-month increases in the car count at our stores,” he says. “We care about our customers; while we’re in business to make money, I think people really do feel a personal relationship with our company. We’ve developed a great level of trust with our customers; they know that if they have a concern, we will take care of it.

“Ours is a relationship business, vehicle repair is a very personal thing. In training, we stress the importance of building rapport with our customers,” Ramsey adds. “We know that if we do high-quality work, and treat our customer with respect, our business will experience growth.”

Lamb’s Tire also improved its customer service and employee satisfaction levels by giving its stores a significant facelift. All stores were refreshed in 2013, a process that included installing customer waiting areas. The company also hired a full-time maintenance person responsible for upkeep. 

Lamb’s Tire is building on its recent accomplishments. “I feel the Austin market offers a lot of opportunity to expand, and I feel there are still a lot of things we can improve on,” Ramsey says. “I feel the future of the company is very bright; when I first came in I was a little skeptical we could turn it around, but we have, and I feel that in the future we will continue to do very well.” 

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