Thinking Outside the Box

Approaching every business opportunity with the same ‘toolkit’ and thought process will eventually lead to stagnation and frustration. Sometimes you have to jump in with both feet, as long as you’re prepared to think outside the box. The below story provides a great example of thinking outside the box in order to move forward.

During a chat over lunch, a business associate of mine described a situation that had given her a massive amount of stress, but eventually turned into a very profitable venture. After doing an amazing job for a large multinational office supply company, she (and her company) were asked to consider submitting a bid to handle daily deliveries in a couple different metropolitan areas across Canada. At first glance it appeared to be a very lucrative contract, however in order to submit a competitive bid, they had to commit to securing cross-docking facilities in these specific metro areas. The companies they were competing with already had these facilities, and the managers in place to handle. With a deadline fast approaching, she had to act swiftly. After visiting multiple facilities and seeing the associated rent and ancillary costs, she quickly came to the conclusion that submitting a profitable bid would be highly unlikely. However, after thinking about the situation for a couple days, she recalled chatting with a food distributor, two years prior, who had made the remark that they only used their cross-docking facilities for about three hours in total each day. The rest of the time, the facilities were largely vacant and inactive. She quickly reached out to her contact at that company to see if the situation still held true. Luckily enough it did!

Her next step was to propose to this company renting out their inactive dock space for a period of six hours each day (which luckily didn’t overlap with the food distributor). After carefully looking at the proposal, the food distributor thought it was an great idea. The proposal was mutually beneficial since the food distributor was able to increase the utilization of their facilities, while my associate and her company were able to secure necessary loading facilities for less than 1/3 the average rent. After securing a long term rental agreement (subject to being awarded the office supply delivery contract), she was able to submit a competitive bid – and won the business. Since that time, they have been awarded contracts from the same company in other large Canadian centres using similar rental arrangements.

Maybe you can use a similar strategy to enter a new market? Maybe you can use a similar strategy to serve your existing companies in a more efficient fashion? Maybe you can decide that one ‘toolkit’ will only take you so far….

Strategy: Part 2

“You’ve got to eat while you dream. You’ve got to deliver on short-range commitments, while you develop a long-range strategy and vision and implement it. The success of doing both. Walking and chewing gum if you will. Getting it done in the short-range, and delivering a long-range plan, and executing on that.” – Jack Welch

This post is the second in a series of posts focused on Strategy and Competitive Advantage. By the end of this series, it is our hope that the info we provide will at the very least provide the motivation to look a little harder at your business and the competitive landscape your organization faces.

Last week, I provided a quick overview of an analysis/decision framework called “Porter’s Five Forces Analysis” by Michael Porter. This framework is a powerful tool, that enables its users to quickly understand their market position, threats and opportunities. One of the next steps after analysis is to honestly evaluate your operations, your customers and ways to build real competitive advantages. To build real competitive advantages, by nature they must be things that utilize specialized knowledge, equipment, systems or resources which are difficult or (better yet) impossible to build, duplicate or acquire. Competitive advantages are not necessarily qualitative advantages such as having a strong customer service culture. However, in my opinion, qualitative advantages can eventually turn into massive competitive advantages, but normally only when paired with something tangible as described above.

For trucking, building a competitive advantage requires knowing your customer’s needs (sometimes better than they do), and providing solutions that are mutually beneficial (profitable). A great example of this process was illustrated by the owner of a (then) mid-sized trucking company. For ten years, his company provided truckload services to a client with multiple manufacturing facilities in Ontario. After hearing about an innovative new trailer, this entrepreneur went back to his customer and proposed utilizing this new trailer system to build more of their finished product at one facility before shipping to their other facility to be finished. After carefully reviewing his proposal, they wholeheartedly jumped at the idea. Not only did he convince them to move forward, he also got them to finance the trailers, and guarantee enough freight to cover the financing plus overhead! So, not only did he build a real competitive advantage, he got the customer to finance it! I thought it was brilliant. He was very humble in rationalizing how it all unfolded, but it was very apparent that none of it would have occurred had he not appealed to the customer’s self interest.

The above is a practical example of someone leveraging specialized knowledge, specialized equipment AND a solid customer relationship to build a real competitive advantage. How many solid customer relationships do you have? How often do you visit their facilities? Do you understand their business model? In my opinion this is the first step in translating specialized market knowledge into a functional strategy.

For some comic relief, I leave you with the best marketing campaign I have ever seen, enjoy…

What is ReferenceStak?

Reference Stak is a resource for StakUp customers to find relevant information on any related EPI (Essential Performance Indicator) they may need. On a monthly basis when data is submitted by the trucking company representative to StakUp, the customer will immediately receive a report in the form of a dashboard that will reveal the company’s ranking in any given number of EPI categories. (more…)

Knowledge Management: Share and Grow

According to Wikipedia, Knowledge Management is defined as “……the process of capturing, developing, sharing, and effectively using organizational knowledge. It refers to a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge

How Would Your Business ‘StakUp’?

I know from personal experience and talking to many business owners in trucking that they work very hard within their businesses and they find it hard to find enough time to work on their businesses. It is very easy to get caught up in the minutia of the day-to-day task required to keep a business functioning there are many moving parts that all need attention. I ran a small fleet many years ago that grew from three trucks to fifty trucks, over a six years period; I was the main operations person along with being the main salesperson. I was also the goto person for all other major decisions concerning the business. This not only puts a lot of pressure on a person it also leaves a big gap in between being functional in your business with average results and being a high performing company with outstanding results. (more…)

Focus, But Where?

If you’re like most entrepreneurs there are situations that you will find yourself in that eat up a lot of your time and lead you to ask yourself “what has this got to do with trucking

Essential Performance Indicators

We all have our favourite metrics for helping to translate which way the wind is blowing in our businesses; these metrics are crucial to understanding which adjustments need to be made to reach our respective goals. However, standardizing these metrics across our diverse industry is akin to getting people to tell you which one of their children is their favourite. (more…)

From Status Quo to Maximum Potential

The American Productivity and Quality Center defines benchmarking as “the process of identifying, understanding, and adapting outstanding practices and processes from organizations anywhere in the world to help your organization improve its performance.