Manual Processes are (Slowly) Killing Your Business

Manual Processes are Killing Your Business (slowly)

You’ve done it a thousand times. Walking through operations, you’ve asked yourself “Why am I paying these smart people to spend half their time doing mindless tasks and data entry? What if I could free up their time to allow them to do what they do best – solve problems. That would give them more purpose – that would give our business more purpose”. Ok, maybe you didn’t think those words exactly, but I can guarantee that if you’re a high-performing carrier, it was something along those lines. Although detention and dwell times are the items with the largest targets on their backs with respect to operational efficiency, you don’t have to look to far for the next one on the list – manual data monitoring, entry and management.

We generate endless volumes of data each day in our dispatch and accounting systems.  Even more is found in unstructured formats, such as e-mails, POD’s, load tenders, and invoices.  Many paid hours are spent taking information from one format and rekeying it into one or more other disparate systems.  This duplicated effort is not only expensive, but it opens the (large) possibility of errors through typing mistakes or missed documentation.

The reality is, many of the tasks handled by our operations, accounting and customer service teams are repetitive and prime candidates for automation.  In general, any repetitive, rule-based task is a prime candidate for automation.  So why haven’t they already been automated?  Until recently such automation required a lot of expensive programming that resulted in systems that were not very flexible.  Simple upgrades of your dispatch system could cause the automation to fail simply by having a table renamed.  When this happens, your team must revert to the old manual processes until the programmer has the updates in place. The other reason is human nature. The growing list of portals and manual updates downloaded to today’s trucking companies is like compound interest. It started with a work-around to make one customer happy and has grown exponentially to the elephant in the room that no one wants to talk about.

EDI (Electronic Data Interchange) has been used to try and automate the transfer of information.  However, it has rarely been able to fully transform a manual task and create efficiencies.  EDI protocols can be very rigid as it uses standardized (and outdated) formats.  It is also expensive, meaning that most carriers or logistics companies are not able to invest what is necessary to use EDI to its full capabilities.  The other challenge is that it is not necessarily in real-time.  Things like check calls are not readily handled and a pod request is likely still going to require a phone call or e-mail.  The result is many carriers can only justify the expense of EDI setup and maintenance for their largest customers, typically representing less than 30% of loads.

Web portals have become more common for 3PLs and some larger customers to attempt to get around the limitations of EDI.  Documents such as PODs can be easily uploaded.  Documentation supporting detention can be transmitted, and many can log comments when further explanation is required. However, they can introduce other inefficiencies.  A human is still needed to transfer or transpose the information into the portal.  Errors are still possible and very likely, despite best efforts.  Depending on the internet speed where that employee is located, a lot of time could be wasted if your team member must wait for the information to get uploaded to the site and then wait again for the next screen to load.

The Institute for Robotic Process Automation defines RPA as “the application of technology that allows employees in a company to configure computer software or a ‘robot’ to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.”  In more practical terms, it’s software that you can “teach” to move information from multiple inputs to multiple systems without the help of a human.  RPA is designed to be deployed in days or weeks, not months.  It also does not care where the information comes from or where it goes to.  One of it’s strengths is that it does not rely on things like EDI or API’s to bridge into other systems or require complex programming to work.

Let’s look at a simple example that happens many times a day in your company.  A customer e-mails a shipment request to your CSR team.  The CSR is constantly monitoring their e-mail for these requests.  When they see one, they are likely saving (sometimes printing) the email to get the request on file.  The CSR then creates the order and enters the shipment details.  Once it is in your dispatch system, the CSR then logs into that shipper’s portal and enters the pickup date and time.  Finally, the CSR replies to the original e-mail to confirm that the order has been entered and received.  Depending on how busy it is, each CSR may be doing hundreds of these transactions every day.  Each of these steps could be automated by RPA.  The robot can monitor the email queues more efficiently than a human can.  It will parse each e-mail and pull out the new shipment information.  That data is then moved into your TMS where it checks availability and schedules the pickup date, time and location.  Because RPA is rules based, if there is missing information or any other exception, it will flag the appropriate CSR to handle it.  Once there are no exceptions, the system will log into the portal and update it with the pick-up information.  Finally, it will generate and send the customer email confirmation.  In this one scenario you can see that the CSR will now have time to work on higher value-added tasks, likely making their work much more interesting.   The process will be handled more efficiently, and the possibility of errors is greatly reduced. The best part is you can implement entirely on your own, no need to get in the long queue with your TMS provider to complete on your behalf.

So, what should you pay attention to when considering an RPA implementation?  A recent CIO.com article gave 8 keys to having a successful RPA implementation.

  1. Do the Research – Frank Casale, founder of the Institute for Robotic Process Automation & Artificial Intelligence, recommends that you invest the time to build a business case for RPA and learn about the products available. There are three key boxes to get success and only having two out of three will not work. The boxes include:
    1. Choosing the right technology solution to meet your organization’s needs;
    2. Creating a solid business case for RPA, including developing ROI metrics;
    3. Assessing current processes and organizational issues to avoid political problems. Keep in mind that RPA is a disrupting technology. People will fear that the technology will affect their jobs, possibly eliminating them. The human resources that will be affected are not going to be eager to train the robots that might replace them.  A vision and roadmap for the future needs to be communicated and it should include new opportunities for displaced workers. Managers also need to go in with open eyes, a cautiously optimistic mindset. Management of expectations is critical.
  2. Educate Staffers About RPA – It’s important to clarify what the technology will and will not do with regards to employees’ job roles. Many organizations use RPA strategically by helping staff do routine tasks quickly and efficiently so that they can spend time addressing higher priority needs. Determine how your company will use the technology and then honestly communicate what that vision is so that you get people onside with you before rolling the technology out.
  3. Determine Where the Technology Will Work Best – You will want to identify processes where you are most likely to see a positive business impact. Keep in mind that it will not always be easy. However, as the organization becomes more experienced with RPA, other processes will more easily be uncovered.  Many successful implementations are very selective as to what processes to automate – look for something that it repetitive and frequent.  Once you have achieved some initial success, fight the urge to try and automate everything.  If a task can not be done without a very limited amount of human interaction (preferably none), then it really is not a suitable candidate.  When picking your first process, remember that while cost reductions are important, improving customer experience is even more valuable.  The client experience is what will be your competitive advantage.
  4. Keep It Simple and Modular – RPA works best when it is not complex. As much as possible, keep your bots as generic, common and reusable objects. Mona Kahn of Fannie Mae recommends that you externalize all variables and logic to minimize failure points. This makes it much easier to update when something changes and makes it much faster and easier to test before putting the changes into production.
  5. Don’t Neglect Data Security – Make certain that processes can not be manipulated. Start with any processes that are business or mission critical. These must be secured before any implementation is attempted.  Regardless of how critical a specific task is, keep in mind that RPA will process much faster than a human can, so ensuring that a bot is secure must happen during the testing phase and this should be a show stopper if it is not secure.
  6. Test Implementations Regularly – Notwithstanding what we just discussed, testers can only try to test so many points of attack. Weaknesses are going to appear once the robot has gone live. Keep in mind that individual testers may not be as experienced with a process and may only be looking for positive results.  If possible, include the staff that actually do the task in the testing phase.  Additionally, test the automation on desktops running legacy systems to ensure that the desktop will be capable of handling the infrastructure requirements.  It is critical that you understand how different bots work together so that processes do not break.
  7. Develop a Cross-Functional Center of Excellence – By this, I mean put together a team that will share experiences and best practices to other parts of the organization. The idea is to leverage previous efforts to ensure that the wheel does not get reinvented repeatedly.  Make sure that both failures and successes are documented to make certain that the knowledge of those experiences is not lost.
  8. Prepare for Future Advances and Challenges – RPA is going to advance, and each company must keep up with the changes. Eventually, each organization will struggle with the management of the automation. End users will find ways to automate desktop processes for their own use, so understanding how the introduction, elimination or upgrading of enterprise applications will affect these deployed bots will become increasingly critical.  Like any other asset, bots need to be tracked and managed so that they can properly be maintained.  Consider what would happen if a password policy was changed for one of the applications the bot uses and how would you know if data is not being properly passed though?

 

So, what is driving the implementation of RPA?  The obvious one is cost reductions.  Forrester Research estimates that about 16% of US jobs could be replaced by RPA by 2025, while creating new jobs that are equivalent to 9%, meaning a net loss of 7% of jobs.  This is because bots are generally low cost and relatively easy to implement.  In the financial services sector, there is a major shift away from manual, clerical-type jobs and a move towards more analyst or advisory jobs.  The shift is being fueled by the vast amounts of data that RPA is creating, resulting in customers needing more human advice to help them process it.  In some cases, bots are assisting the human advisors by identifying patterns and offering options that the advisor can then present and explain to their clients.

There are several companies that have experience in working with our industry.  These include:

  • Kofax with it’s products that include Kapow, TotalAgility and Information Capture
  • Pega with it’s Pega Infinity digital transformation suite
  • Jacada with it’s Jacada Agent Desktop Automation
  • Automation Anywhere has it’s Automation Anywhere Enterprise Suite
  • UIPath – the UIPath Enterprise RPA Platform
  • Nintex Platform – utilizing Promapp, DocGen, Xtensions Framework and Hawkeye applications
  • IBM – Robotic Process Automation with Automation Anywhere

For those with an in-house development team (even a small one), building your own RPA toolkit and ‘army of bots’ is possible. There is even an open-source development framework to get you started. This Python-based framework – Selenium, is used thousands of companies all over the world. Worth examining if RPA is on your to-do list for 2019.

As a real-life example, Kofax has publicized a successful implementation with Crete Carrier (see the full case study here).  Specifically, Crete automated their appointment scheduling process because they previously only had CSRs available Monday thru Friday even though their business is 24/7.  If a shipment tender came in on the weekend, it would sit there until someone came in on Monday morning. Meaning that some of the shipments would have been missed, and the shipper might have ended up using a different carrier.  This is likely a scenario that you have all have faced at one time or another.  Crete created Kapow robots that handle a range of information about the shipment.  The bot then uses those parameters when it receives a tender and uses them to pick an appropriate pickup or delivery slot.  In most cases the bot can schedule an appointment on the first pass.  If it is unable to find one, it then passes all the information that it has received to a human operator who can establish a new set of criteria and have Kapow take a second pass at it, with additional human help if needed.

Crete also uses RPA to enhance visibility of its freight as it moves across the country.  It uses a near real time tracking of trucks, trailers and what freight is on each trailer.  Previously they would need to send an employee to inspect a trailer to see if it was available, even if it was reported on a yard check because of the difficulty in going through numerous e-mails or reports.  Kapow can go through all the reports and emails and give the operations staff the location and status of equipment as they need it.

A third use is allowing Crete’s customers to have improved freight tracking.  Dedicated web portals are used to keep certain clients informed as to where their freight is.  Staff would have to manually update the portal information, a time-consuming task that resulted in information-delivery delays.  On off-hours and weekends, the customers knew that the portals were not always up-to-date, resulting in more calls to the customer service team for load tracking.  The introduction of bots to this process have resulted in updates happening instantly, resulting in happier clients who now have faith in the portal information.  On the back end, it eliminated some very tedious tasks, freeing up the customer service team to spend time on other tasks with a more strategic focus.

The use of RPA has allowed Crete to book freight further in advance, allowing them to have greater access to delivery slots that work for them and maximizes their meeting delivery targets as well as maximizing their effective use of rolling assets.  Additionally, they have found that staff were able to be dedicated to more customer-facing services instead of only having the time to handle routine tasks.  A better customer experience and a more efficient way for Crete to run the business are two major results.

Any of the companies or open-source packages that offer RPA tools, can allow your company to achieve similar or even greater success. The key is to know what it is that you want to accomplish – without a defined project scope there is a significantly reduced likelihood of goal achievement.  In fact, without spelling out what will constitute success and how to measure it you are probably dooming the project to failure right at the start.  It also means that you are more likely to use someone or something other than the optimal solution provider.  Similarly, the management of expectations is another critical component.  In the example above, Crete has been using RPA for over four years.  Your people need to understand that it will take some time to optimize and implement these bots.  If someone is offering to come in and “have you up and running in a week”, be very skeptical and ask some very pointed questions as to how that will happen.  It is possible that they have extensive industry specific experience and have semi-customizable templates that can get you implemented quickly.  If they tell you that “customer service is customer service” then they probably are not going to work.  A quick example is from the scheduling process used by Crete.  If an RPA provider does not understand how HOS can impact appointment times, then they may program a solution that ignores the mandatory break after being on duty for 8 hours.  A lack of industry experience does not have to be a deal breaker, but it will mean that your project team will have to spend more time and be more explicit in their requirements and specifications document.

So, in summary, some quick takeaways on RPA are:

  • Robotic Process Automation is a potential game changer for our industry, possibly causing a revolution in how we handle routine customer service tasks.
  • People are going to be afraid of losing their jobs when they hear the terms “robot” or “automation”. Expect that reaction and have education and communication resources prepared to help people get over those fears.
  • The potential for head count reduction is there, but it should not necessarily be the driving force behind this initiative. It is more likely that you will be able to handle more productivity out of the same number of people.
  • The ability to cover off-hours without having to add to your head count is a very real possibility. If things like location requests, driver direction requests or load tenders are why you are considering adding or maintaining off hours staff then this may be a lower cost solution for you.
  • Do not treat automation as an ad hoc process. Have some form of control over where bots are implemented and try to use common programming as much as possible. This will allow you to know what needs to be updated when other systems are upgraded.  Additionally, it will greatly reduce the time needed to develop fixes when problems arise.
  • Start with processes that occur regularly so that you have a few highly visible wins to the start of the project.
  • Expect there will be setbacks. Many of these processes have dependencies and it only takes one to cause a failure. Involve the people who currently do the job in the testing phase.  They will have seen the process breakdown before and can offer insights as to where to challenges may come from. This in turn will allow for more robust testing pre-implementation.  It will also increase the acceptance of RPA as they will have some say in how it is implemented.
  • RPA is not a magic bullet. Managing expectations is critical. Exceptions are going to happen. Crete considers having 40 to 50% of appointments scheduled by the bot a success.  Other processes may achieve closer to 95%.  Some processes may require human interactions.  Your team needs to be prepared for these to happen.  At the same time, let them know what that 40% means in terms of freeing up time to handle their other tasks that might be getting pushed off to the side.

Crafting the Roadmap: Getting from Idea to Action

This post is the third in a series of five focused on narrowing or eliminating the gap between ‘Knowing’ vs. ‘Doing’. In our personal lives, we all know what we ‘should’ be doing, but our daily habits and tactics don’t always line up. Similarly, in business, a business without an achievable strategy, a business will ultimately deteriorate to the point where it’s simply a series of fires being put out. The Knowing Vs. Doing series is a lead-up to our TPP Seminar on December in Indianapolis  focused on preparing trucking enterprises for success in 2019. Take the Knowing Vs Doing Survey here.

In last week’s post, we reviewed the S.W.O.T. process. This mechanism, regardless of industry or size, is a crucial step in developing a short and long term strategy for success. Specifically, discussing and owning your company’s current weaknesses and failings is the type of introspection that should occur regularly, with feedback from all roles in the business – from the C-Suite to the Driver’s seat. Further, I’ve always felt that successful businesses, and their leaders, should always be a bit paranoid – in both good times, as well as bad. After you’ve gone through the S.W.O.T. process, and you’ve determined the major objectives for the business (see Part 1 of this series), it’s time to put the plan into action. In general, all well-executed plans have the following key components:

  1. The goal is well defined. Each team member understands what IS to be achieved, and the impact on the business – whether from a financial, as well as from a corporate culture point of view. Each member of the team assigned to the objective should be able to clearly communicate verbally the objective, and the key benefits to the business.
  2. A timeline is established. Execution does not happen without a deadline. Put that on the wall in every room of your business. Conversely, if you want to remain on the treadmill of mediocrity, don’t set deadlines.
  3. Make your people accountable. This part may seem like a no-brainer, however, being a fan of business, I’ve read about (and witnessed) many well-known businesses that got too comfortable. This comfort was rooted in a lack of accountability – from the Board room, all the way down to the front lines (e.g. Kodak, Sears, Toys R Us). Making specific people and teams accountable will ensure continued momentum. This step is also an important vetting process for future business leaders. The ones who step up, and want to reap the rewards (and the potential penalties) are the type of people you build your business around
  4. Incent, Incent, Incent, Succeed. Within TPP, many of the top performing companies use variable compensation to light the fire for success. Outside of asking your people to become shareholders, there are very few other tangible ways to ensure that your people have Skin in The Game, other than variable compensation. Proper variable compensation plans need to aligned with, and constantly readjusted to make sure they tie to the goals, deadlines and the overall financial impact of the individual actions and decisions made by people and teams. While contemplating these programs, ensure that the compensation program methodology is easily understood, and the objectives, variables and measurement are within the control of the individual and teams being rewarded.
  5. Review and Adjust Regularly. No explanation needed here.

In all industries, leveraging existing frameworks for the above process can vastly improve the speed of developing and executing on a strategy. In TPP, we have a significant amount of discussions on the items above. Further, many high performing companies have implemented third-party programs such as the Four Disciplines of Execution. Using 4DX or another third-party program narrows the focus, and clearly defines the steps needed to rapidly move forward. Next week, we’ll move from the Macro to the Micro, and discuss the importance of time and task management to executing on your plan.

For your Sunday viewing pleasure, here’s a short video about the 4DX program to get you thinking about your action.

It All Starts with a SWOT

No General leads his or her army into war without knowing both the terrain he or she will face and what the strengths and weaknesses of the enemy they will face. In the current market environment, achieving profitability should not be difficult, even with pressing weaknesses. However, just like seasons change, the market will swing the other way. The smart companies know this, and are reinvesting their profits into building networks and advantages, to put themselves ahead of the their competitors when tide goes out. Knowing what your business needs to do next comes naturally to some business leaders, but for most, setting a course for the future requires equal parts Collaboration, Introspection and Honesty. An excellent way to get you started on this path is with a SWOT analysis.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are internal business factors while Opportunities and Threats are external factors and variables. There are several different templates out there that can be found with a quick Google search and each organization will have their preferences. However, the physical form is not as important as actually doing the exercise.

This analysis is not just for use at the enterprise level. It is equally powerful when done at the division, department or even product line/customer account level. You are probably already doing a similar analysis on all your top accounts but possibly not in as formal a framework. By using this method in conjunction with being closely integrated with your large account you should be able to foresee any threats to that client and be prepared to fend off any attempts by other carriers to take over some or all of the business.

Strengths
Look at factors such as:
• What are the organization’s advantages?
• What do you do better than others?
• What unique resources can you offer (ideally ones that a customer will pay for)?
• What does the marketplace see as your strengths?
• What is your unique selling proposition?
When looking at your strengths, also look at where you are in relation to your competition. If all your competitors are achieving 98% on-time deliveries then you achieving that is not a strength, it’s a market necessity (a table stake). Also take the viewpoint of the customer as they are the ones making the buying decision!

Weaknesses
• What could you improve on?
• What should you avoid or eliminate?
• What does the marketplace see as your weaknesses?
• What does your competition do better than you do?
• What causes you to lose sales?
• Are their perceived weaknesses that you could easily overcome?
Be honest in this step as downplaying weaknesses will not allow you to move forward and address them.

Opportunities
• What are emerging trends?
• What changes in technology are coming in the near, medium and long terms that you are posed to exploit?
• What competitors are family owned and are showing signs of cash flow issues?
• What new developments are your current customers working on?
• What new businesses are coming to your marketplace?
One approach to take is to look at your strengths and ask if they open any opportunities. At the same time ask yourself if the elimination of any weaknesses could also create an opportunity.

Threats
• What obstacles do you face?
• What are your competitors doing?
• What technological game changers are coming that you are not ready to exploit?
• What is your financial position – any cash flow or debt problems?
• Are quality standards or specifications for your product or service changing?
• Are there any weaknesses that could seriously threaten your business?
• Are there any Political, Economic, Socio-Cultural or Technological (PEST) factors to consider?

Once you have made an exhaustive list for each category, it is now time to pare down the list and prioritize each item. Where possible ensure that all statements are precise and verifiable – for example you want “a cost advantage of $0.05 per mile on the Chicago to Des Moines lane” instead of “competitive pricing”. Finally make sure that any options generated are carried through to later stages in the strategy formation process. Make certain that you follow through and create a strategy once the analysis has been done.

An important task is to measure the gap between where you are and where you want to be. This helps you create goals that can be measured and verified. It’s much better to say “achieve a 5% increase in miles per gallon” than it is to say “improve fuel efficiency”. Understanding what these gaps are will guide both you and your staff towards implementing an effective strategy to get to where you want to be.

Finally, be prepared to revisit this analysis on a periodic basis – possibly yearly for the entire enterprise, more often at the product or customer level. Look at what has changed. Did you improve or eliminate any of your weaknesses? Did your competitor find a way to close the gap on your price advantage? Did something new that has the potential to be a game changer come on the market recently? This should not be a static document and it should be one of the first things you turn to when a new threat or opportunity comes on the horizon. By understanding what is happening on the playing field means that you can make the proactive moves of a market leader instead of reacting like a follower.

Knowing Vs. Doing Part I: Setting Priorities

This post is the first in a series of five focused on narrowing or eliminating the gap between ‘Knowing’ vs. ‘Doing’. In our personal lives, we all know what we ‘should’ be doing, but our daily habits and tactics don’t always line up. Similarly, in business, a business without an achievable strategy, a business will ultimately deteriorate to the point where it’s simply a series of fires being put out. The Knowing Vs. Doing series is a lead-up to our TPP Seminar on December in Indianapolis  focused on preparing trucking enterprises for success in 2019. Take the Knowing Vs Doing Survey here.

Setting Priorities

Most senior managers are very aware of the things they need to do to reach greater levels of profitability and growth. However, many don’t have the time to come up for air to determine which actions they should take, and in what order to build momentum. Everyone wants to reengineer their freight network, implement a shipper scorecard, fix their billing process, eliminate redundant tasks, implement new maintenance practices and measured etc. This list can be endless. I would suspect that they vast majority of those reading this post are shaking their heads, saying ‘yep, yep…”.

Now, let’s stop for a moment and remind ourselves of the following quote:

“Well done” is always better than “Well said”.”

There will be a small percentage of readers who can state, with confidence, that they have a well-defined strategic plan, and have assembled a series of tactics to achieve this plan. For everyone else, it’s time to set step back, catch your breath and prioritize.

My two favorite methods/systems of prioritization are extremely simple, and are/were used by two very successful individuals – Warren Buffett and President Dwight D Eisenhower.

The Buffett Method of Prioritizing Strategies and Goals

You can read about the Buffett method here. In a quick summary here’s how it works:

  1. Write down up to 25 goals – big and small, that you have for your business. This needs to be done by both principals and senior managers.
  2. Combine all the goals you listed with those of the rest of your team
  3. Circle the top 5 goals that are achievable in the next 12-24 months. This is your ‘List A’. The remaining goals are your ‘List B’.
  4. Although it’s not technically part of the Buffett method, when it comes to execution, size and scale matters. For Large carriers (e.g. over 500 trucks), 5 important goals is a ‘doable’ thing in 12-24 months. However, for smaller carriers, I would pare the five down to 2 – max. For mid-sized carriers (100 – 500), 3-4 should work.
  5. Now that you have List A and List B. What’s next? Simple develop a strategy and a project plan to achieve each item on List A and adjust where necessary. Make sure every person on your team knows what is on List A, meet weekly to discuss. List A needs to become engrained in the fabric of your team.
  6. What happens to List B? Easy, store each of those goals away and don’t consider them until you’ve completed / achieved List A. They are not given any more time!

The key difference between the Buffett Method for personal vs business is collaboration. In order to build long-term business value, the decisions on which goals make List A must be done in conjunction with those in c-suite right through to the driver’s seat. You want buy-in, and a thorough understanding of what is achievable, and what’s not. For larger companies, this typically would involve departmental goals, and strategies, for smaller companies, company wide goals and strategies.

The Eisenhower Method: Prioritizing Daily Tactics, Tasks and Habits

Everyone has the person on the team that fills their day up with ‘busy work’ that provides little or no value to the business. People always ask me what is the number one cost-saving opportunity for trucking companies. Regardless of the industry, it will always be removing those people from your businesses. The longer you wait, and the more you grow, you are tacitly telling your team this behavior is acceptable, and suddenly you have a business full of ineffective people. Cut them from the team. It will improve culture, set a new course for that role in the business, and add to your bottom line.

Each if us also has daily habits and tasks we all do that are either redundant (not needed or done by someone else), or those that are not moving the business forward. Doing an audit of your daily and weekly habits and tasks is an important one that should be done by everyone in your business. Once you have that cumulative list, it’s time to prioritize. The Eisenhower Matrix is a phenomenal way for people in all roles, and at all levels of responsibility, to do a gut-check on their daily activities. How does it work?

President Eisenhower would regularly create a matrix to properly categorize and prioritize his daily activities. This eventually turned into a mental model that his team used to decide which things they should bring to him, and which things should be immediately delegated, or perhaps eliminated. Here are sections within each matrix, and how to consider those daily tasks and habits:

1.Urgent and important (tasks you will do immediately).

2.Important, but not urgent (tasks you will schedule to do later).

3.Urgent, but not important (tasks you will delegate to someone else).

4.Neither urgent nor important (tasks that you will eliminate).

Although setting priorities can sound boring, it can be the main difference between success and failure. Hopefully the above two methods provide you with some food for thought. Are you expecting too much from your team, from yourself? Do you need to be part of that email chain? Are you going to keep allowing people to use their time ineffectively and inefficiently? Does your team know their collective priorities other than the daily ‘busy work’? Take some time, give this some thought. Take action.

Mentorship: The Best Education

Within the last two weeks I said goodbye to a great friend, and mentor. Gabe was in the prime of his life; a world traveler, a respected entrepreneur and a compassionate human being. Am still processing his passing, and it’s surreal scrolling through the many text messages we sent to each other.  Gabe had very strong opinions, and many ingrained habits and principles. Some I wholeheartedly agreed with, and others I simply respected. He had an impact on my life, without a doubt. I was lucky enough to spend a day with him prior to his passing, and I told him how much he meant to me.

This sad moment also provided a time for contemplation about all the people who’ve been my mentors over the years (whether they knew it or not). When I visualize a timeline of my life, there are certain ‘eras’, and during those times there was always at least one person who I looked up to, and in turn provided both direct and indirect feedback, this feedback changed everything. In fact, I kind of feel like Forrest Gump sometimes, for being so lucky to connect and learn from such a dynamic group of individuals. The great thing about mentors is that they are normally connected to a role or activity your involved with during certain segments of your life. In order words, they not only can provide parts of the ‘operating system’ for navigating your way through life (the strategic), they will most likely impart practical and tactical knowledge that can catapult you in your career or another pursuit. The added advantage of mentors is it normally does require any direct cost. Mentors are the form of education with the highest return on investment.

In the whirlwind of business, it’s easy to forget the importance of quality mentoring with respect to employee development. The mentors are, naturally, being pulled in a million directions. The ‘mentees’ who can most benefit from mentorship are being thrown into the deep end, sometimes without a life jacket. I don’t want to generalize, as I know there are many companies doing a fantastic job with formal mentoring programs. However, they are the exception, not the rule. More companies need to stop giving lip service to the word ‘mentorship’. Stop paying a third party to do something you can better internally, with an emotional connection like no other.

If you’re successful in life or business, some part (small or large) of your success can be linked directly to a little bit of luck, and a connection to some person (or persons) that changed the direction of the arrow on your compass. Conversely, the probability is high that there is someone in your work or life bubble that admires you, and could benefit significantly from just a little bit more of your time. Give them that time, the return on investment doesn’t just accrue to them – it comes back to you.

For a great summer read, and to put the importance of mentors in proper context, I highly recommend the book HillBilly Elegy, by JD Vance. In summary, this book not only provides insight into the strength and enduring nature of ingrained cultural norms and habits (the good and the bad), it also reinforces the significance of mentors in changing the course of peoples lives, and future generations. The author’s ‘Mamaw’ was that person. Mamaw didn’t just change the course of author’s life, she changed the lives of his children, grandchildren etc. That’s my kind of compound interest.

In closing out this post, I want to take the time to say thank-you to all my mentors, past, present and future. These men and women are the true professors of my life. The degrees and designations are meaningless in comparison to the education which they have (and will have) given me.

Time to Tear Down Those Invisible Walls

Picture your typical terminal.  Dispatch and Operations staff are glued to their computers.  Safety people are trying to determine the best way to implement the latest regulation that is coming down the turnpike.  The driver manager is grumbling out loud about the driver doing the Sheboygan lane being late “yet again”.  And there is your driver, standing behind the half door (that prevents them from entering the office), hoping to get directions to that new customer that she has never delivered to.  She’s witnessing the office whirlwind firsthand, and wondering what is being said about her when she’s out on the road.  She is disconnected. Just after leaving, she speaks with a friend who tells her about how well he is being treated at his new carrier.  Deb likes the runs and the pay where she is, but something is telling her to look at this new place.

We all know that driver retention is an issue – it’s always been one.  Putting drivers in seats is what’s holding a lot of carriers back from growing their business, and taking advantage of one of the best freight markets in decades.  So why do we keep treating drivers differently from the office staff?  Richard Branson has a perspective on human capital that many should adopt, perfectly framed by this quote: “Your employees are your company’s real competitive advantage.  They are the ones making the magic happen – so long as their needs are being met”. Notice he didn’t state some of your employees. A Fast Company article put it this way:

It’s tough to argue with Branson’s logic.  Satisfied employees are simply more productive and more efficient.  They tend to work harder, contribute more and call in sick less.  They feel empowered, appreciated, and are more loyal.  They stick around so companies don’t have to spend as much time and money recruiting and training new workers.  Happy employees also tend to rave about their workplace, which can often attract new talent.  When job seekers are clamoring to work for a company, that company gets to choose the cream of the crop to join the team.  – Fast Company – 06-18-2015

Let’s address something right off the bat – drivers know that they get different treatment.  Follow a few of them on Facebook, if you don’t know what I mean.  Let’s take Driver Appreciation Week as an example.  You will see posts like “driver appreciation week – when the office gets a BBQ and the drivers are out on the road!”.  Some may also have other special events throughout the year that get great attendance from the office but there are only a few drivers who happened to be there.   Others have gotten away from holding golf tournaments or Christmas parties simply because so many of their drivers are on the road and can’t make it.  While this does level the playing field it might be causing the office staff to “blame” the drivers for causing “them to lose something”.

So, what can we do better?  First, individual attention matters.  Stop treating your drivers like they are being a pain.  These are the public faces of your company. So why are you sending out demotivated people to be in front of your customers.  Finding business is not the issue these days. If you have customers that are not ‘driver friendly’, time to put them on notice and take the step in the right direction. Further, drivers get this is a competitive and fast-paced business, but they do want to hear when they do things right, not just get blasted when they mess it up.  Sometimes it might just be that they have spent the last 7 days on the road, and need to have someone listen to them.  While they are part of a team, they still need some personal recognition to make them feel appreciated and that their efforts do make a difference.

Two, leaders set the example.  Make sure that senior managers are spending time on the loading docks, or in the orientation room getting to know your employees.  If you want your operations staff to break down the barriers, you need to be doing similar things.  Just telling people that there is now an open-door policy isn’t enough (everyone says they have an ‘Open Door’ policy, but very few mean it).

One dedicated carrier that I know once landed what was the company’s second largest account doing store delivery milk runs.  The customer was transitioning from using LTL carriers and shipping whenever it was needed to setting up a schedule and lanes that would balance the customer’s need with what a driver could reasonably do in a day.  One thing that the general manager did was send the salesperson in charge of the account out with one of the drivers for the first week’s worth of runs so that they understood exactly what was being asked of these drivers.  This had two major results – one, the manager got to see some of the tight places that they were asking the drivers to squeeze a 53-foot trailer into.  The second was that the carrier now had first hand driver input into the runs and adjusted what equipment we were using for the final deliveries.  Yes, it meant they had to go back to the customer and make some changes, but they now had happy drivers and the result was they only had one driver ask to get off these runs over the three years that the contract ran.

Finally, having physical barriers between drivers and dispatch should be minimized.  To paraphrase Ronald Reagan: “Mister dispatcher, tear down these walls”.  Communication needs to be two ways.  PC Miler might tell you that a certain route is the best, but a veteran driver may look at it and say that a particular state route is great in the summer time, but it becomes treacherous in the winter.  By taking that input and modifying the routes in the winter may add a few miles but reduce accidents and minimize hours of service issues.

Your drivers just want to be treated equitably.  They are on the road a lot so they may not get equal treatment, but it needs to be seen as fair.  Little things like giving a restaurant gift certificate to drivers who were on their runs during the company BBQ or Christmas party, will go a long way towards correcting things.  Consider having company-branded items that are unique to the drivers, or at least get distributed to them first.  Finally, consider having your orientations to include having drivers sit in dispatch and dispatchers going on day runs so that both sides understand what the other must deal with.  A little understanding can go a long, long way.  By getting rid of these differences you should have a more motivated team of drivers, a reduction in turnover and your company spending more time improving your driver force instead of always looking for another new employee.  Drivers are the face of your company to the customers – wouldn’t you rather it be a happy one (or at the very least – content)?

Using Video As a Recruiting Magnet

Over the past couple weeks, we’ve been reviewing best practices with the use of Social Media.  If you were on the fence, hopefully you’ve now bought into the idea of using social media strategically. We’ve mentioned video a lot – mainly because it gives the audience a first-hand look at your operations and your culture. To reiterate, the whole purpose of using social media is to achieve scale, and produce a network effect – reaching an audience you would never be able to reach without. Once you’ve reached those people, nurturing them over time to the point where, if conditions are right, they come to you for a job instead of the other way around (inbound marketing).  Today, let’s dive deeper into video. When most people think about video, they equate it to massive budgets, production, editing, scripting etc.   How can you use video, in an affordable manner, while also capturing a genuine and professional glimpse into your company’s culture, work environment and ambitions?

First, a Demand Gen survey found that 70% of respondents prefer an inexpensive format that pretty much any of us can produce with something that’s likely in your pocket or on your desk.  We’re talking about that smartphone that all of us carry.  Most phones manufactured in the last 3 years are capable of recording 1080p, high definition video.  If you have a little bit larger budget then invest in a digital SLR camera, such as the Nikon D3400 or Canon Rebel T5 – both priced under $500 – and a tripod to keep things steady (see this great article on some equipment suggestions).  You will get a better product and have more options with a decent digital SLR camera but

The next thing to consider is having the proper lighting.  When in doubt, face your light source.  If the light is behind you it will cast you in a silhouette and make it hard to see the images that you are trying to present.  In addition, if you are outdoors and have the sun behind what you are recording, they will get washed out.  So, a few other tips.  One – the sun is free so use it as much as possible.  Two – make sure to do a few test shots if you are using artificial lighting as many bulbs can give a yellow tinge that may not be visible to the naked eye but will show up on the camera. The better the lighting, the more professional the video will look.

Third is invest in a good microphone.  Poor sound quality will quickly chase your audience away.  The one on your smartphone will be ok if your subject is close to the phone and the filming is done in a quiet room with no background noise.  If you are shooting outdoors in a windy or noisy location, then the background noise will likely drown everything else out.  If you don’t use an external microphone, expect to spend more time with your video editing software and doing voice-overs that may or may not match up to your video.

Next, set up a professional looking background.  This could be as simple as a nice bookcase, the awards case in your office or even a nice park that is nearby (check out this article on backgrounds).  It is usually much better to not complicate things (see this vidyard.com post for some more tips).  If you decide on a backdrop, be sure to have it professionally printed.  And avoid having your branding if it will not always be visible – more on that later.

Spend the time to investigate what video editing software is best for your needs.  There are a number of free or open source options, such as Handbrake (for Windows, Mac or Linux), iMovie (for Apple products) or the free version of HitFilm among others so don’t assume that you need to get something expensive, especially to start.  Make sure that you can add in graphics so that you can show your branding throughout the video.  Software like Canva, or SnagIt ($49.95 one-time cost)  as well as free photo sources such as Unsplash, LibreStock, Gratisography, Pixabay or Pexels will help you create professional looking graphics that will increase the credibility of your finished product. We use Camtasia from TechSmith at inGauge. It allows you to edit, screen record, and comes stocked with lots of additional media resources to add to your content.

Ok, so now you have gathered the equipment to use.  But how do you create a great video?  Like most things, it takes a bit of planning.  First, what is the goal of the video?  Remember that with social media you are looking to gain trust and open conversations, so going for the sale (or at all)  is just going to put them (your audience) off. If you go to the pitch right away, it is now different than playing a video ad – all credibility is lost. The best videos don’t pitch anything. Always think storytelling as opposed to marketing. Speaking of them, what is your intended audience?  The more targeted you get here, the more effective your video is going to be.  Finally determine what resources you will need to bring this all together. This will form the basis of your production document which will act as your road map to pull this all together.

Once you have a goal and a target audience, craft your story to capture their attention (see this short video by Alan Alda discussing telling better stories).  Make it interesting and ensure that the target has something to take away (and even better, give them a reason to share your video).  If you are using this to recruit drivers, find one of your enthusiastic drivers and let them tell their story of interesting situations during their life on the road.

Pay attention to the pacing of the video and of the speaking.  Keep it at a conversational pace.  Look towards the camera – you want the viewer to feel that you are talking to them.  Most importantly just be yourself.  If you are a family run business that is in a rural setting, you don’t want to come across like you are a Wall Street firm in your video as people will see through that and you will lose credibility very quickly.  Tell them how you came about – put in any hardships the business has had to overcome – that makes a good story that people want to hear.  And have some fun.  That sort of infectious energy is what will convince people to not only watch your post put to share it with their social media friends.  The more people who see it, the more mindshare you are going to get.  Just remember that you are not going to hit a home run n the first try.  Expect to have to put up a few videos before you gain enough attention that people will start coming to you and sharing what you have to offer.  And that is how you are going to leverage a small investment into a great ROI.

Next week, we’ll discuss the ideal skill sets, and traits of the next generation marketing professional for your organization. Here’s some hints, they understand content creation, scale, and social media. They are light on degrees, and buzz words (and may have a couple tattoos).

Emotional Intelligence

During the TCA Annual Convention I was lucky enough to be in the audience for a General session entitled “Creating a Dedicated Skilled Workforce”. This panel session featured Karen Smerchek (President of Veriha Trucking), Brent Nussbaum of Nussbaum Transportation, and Steve Hitchcock, COO of Duncan and Son Lines. This panel was actively moderated by Jim Ward, President & CEO of DM Bowman. Although the premise of the session was building a skilled workforce with driver value proposition as a main feature. The panelist went off in many, very interested directions.

One key path that I focused on was when Jim Ward brought up the fact that Veriha trucking had an abnormally high percentage of female and millennials in their office and on the road. As Jim reinforced, the percentage of women in leadership roles has continued to be low in trucking. Further the workforce in general has shown a continued disdain for the growing population of millennials in the workforce. Considering these two facts, Karen was quick to point out that these two groups are not a result of a novel strategy.  It was a gradual tide that has led to a renewed and thriving business. Of course, trucking isn’t conducted in vacuum, so you have to give some props to the strong market. With that being said, I think Veriha’s workforce diversity could be a great indicator of the future of trucking.

During the session, Ms. Smercheck mentioned one term that struck a cord with me – Emotional Intelligence. Her hypothesis was that women have a higher Emotional Intelligence than males, which (paraphrased) leads to continued introspection and empathy for fellow team members. Without going into the rabbit hole of gender stereotypes, I think she is spot on in this regard.

Building on this thought, here is the Cambridge Dictionary’s definition of Emotional Intelligence:

“the ability to understand the way people feel and react and to use this skill to make good judgments and to avoid or solve problems”

 Now, let’s put that definition in context. Without fail, every person I speak to these days say the same thing (essentially) – “I have tons of demand, at great rates, but am short on driversLess pedigree more people skills

So, as a trucking industry leader, if you have finished this post with some lingering skepticism, or perhaps a realization that your Emotional Intelligence quotient is low, maybe you should start thinking of hiring more with a higher quotient. Maybe your next company President is female, maybe she is a millennial, maybe she is currently serving you coffee at the local Starbucks. Trucking needs new blood, and different opinions.

An Empowered Team: Compound Interest for Your Business

“Empowerment is not giving your people the ability to make decisions. Empowerment is the giving your people the ability to mistakes” – Steve Hitchcock, COO Duncan and Son Lines

The above quote (one of hundreds of golden nuggets I heard at this year’s TCA Convention) got me thinking deeply about empowerment – true empowerment, which also requires a necessary absence of micro-management from senior leaders and managers.

I use the concept of compound interest as a frequent analogy for many business processes and functions, which I think is totally appropriate, since it is (as Albert Einstein once declared) the 8th Wonder of the World. The concept of compound interest doesn’t just apply to money, it can be easily applied to human capital, and technological capital. For human capital, if you have the right ingredients – people with a decent set of technical skills, and better-than-average amount of character and purpose, the gains your staff can make (if you give them the right tools) can catapult your business to the next level of profitability and efficiency.

The above can happen if you have two necessary table stakes. First, you need the right people (I know easier said than done in this low-unemployment environment). Second, you need to employ the correct approach to managing those people. Specifically, you need to have a strong culture and set of shared values that leads a current or future associate to respect the business and want to add value to it – day after day.

If you ask a leader with a micro-management problem, in my experience, they will undoubtedly admit to this ‘addiction’. Normally, this business-limiting issue affects the entrepreneurs who built the business from the ground up. He or she has invested their blood, sweat, and many tears over the years to get to where they are today. It’s natural that they are emotionally torn when it comes to trusting someone else with an important business function. However, for those that are true micro-managers (many say they are, but they aren’t), they don’t realize the opportunity cost of looking over their team’s shoulders day after day – they are not receiving any interest payments on their human capital. To visualize this, think of a hamster on a wheel. Lots of busy work, but no progress.

I started this post off with a quote about empowerment. I had not heard it defined like that before. Empowerment is not, at it’s basic level, about giving an associate the ability to say no to a customer, authorize additional compensation for a great driver, or perhaps decide to stop doing a process you’ve been doing for eons. No, true empowerment is allowing them to make those decisions, without fear of reprisal if the decision(s) didn’t work out to the company’s advantage. Further, true empowerment requires a lack of unnecessary oversight (see micromanagement).

My challenge for you this week. The next time one of your trusted associates brings a business-critical decision to your desk, simply reply “I’m good with whatever you decide”. Conversely, when a team member (who has been trained properly) discloses that a previously made decision didn’t turn out the way it should have, simply reply “Good, we can learn, and get better”. On the last one, watch this great video from Jocko Willink for inspiration.

It’s time to start earning higher rates of interest on your human capital.

I’m Different

Starting a benchmarking service is hard. It would be almost impossible without the strong history, and foundation of the Best Practice Groups (BPG). Recently, I was asked what the most common objection to getting involved in benchmarking was. I didn’t have to think twice. The most common objection/phrase I hear (almost daily) is “I’m Different”. Since I’m polite by nature, my typical response is “Interesting, tell me more…”. However, in the back of my head I‘m saying “I’m sure you are” – with heavy sarcasm.

Although this perception is a psychological barrier for some, the contrarian approach (and proper one in my opinion) is to embrace the attributes that make a company different. The Best Practice Groups are Operating Mode specific, but beyond that, if you look at the members within (as an outsider looking in), you’ll immediately see big differences in size, location, and more importantly those unique operating attributes that make them ‘different’.

As a group facilitator, I’m primary concerned with three things: 1) Personality compatibility with other group members, 2) Level of engagement, and 3) Unique perspectives/Contrarian opinions/Problem solving ability. If the combination is right, it not only provides an energetic atmosphere for group meetings, it also provides an endless inventory of new ideas for each member to take back to their respective businesses (and profit from). An outsider would expect that the biggest carriers would have the best ideas, the freshest perspectives and ultimately best long-term performance. Nothing could be further from the truth. In fact, some of the best performing trucking companies in the Best Practice Groups are under 100 trucks.

It should be noted, differences in operating models do affect the comparative results, but those differences are typically isolated in secondary KPI categories (Average Length of Haul, Loaded %, etc). When it comes down to the primary KPIs (Gross Margin, Gross Margin per load, per driver, per non-driver, Admin % of Gross Margin etc), that is where excuses about differences float away. It also highlights those companies that have out-performed their peers. Those situations start the conversations, and those rabbit holes are what I live for.

I could sit and listen to a member talk about their strategies and tactics all day long, and coincidentally, that is a common trait of BPG members. They are fans of business, and the Best Practice Groups are like a continuous March Madness.

Yes, you’re different, and that’s why benchmarking is for you and your company.

Embrace it.

Get Involved.

Get Better.

Repeat.