Two years ago, I first read a book called The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg. I have since re-read this powerful book three times. The Power of Habit introduces the reader to the concept of Keystone Habits. Keystone Habits can be defined as foundational habits which have the power to transform nearly every facet of your business (and perhaps your life). As an example of a corporate Keystone Habit, Duhigg details the tenure of Paul O’Neill at the helm of Alcoa (the world’s third largest producer of Aluminum). When Mr O’Neil joined Alcoa in 1987, the company had suffered through a long period of stagnation. Obviously this put O’Neill under immense pressure to deliver results. (more…)
inGauge: Data + Action
Become a A/R Ninja
Aside from delivering freight, Accounts Receivable management is one of the most important business activities for any Motor Carrier. As with all businesses, cash flow is always a primary concern. (more…)
Worst Case Thinking
“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Almost everything, all external expectations, all pride, all fear of embarrassment or failure–these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart. No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet, death is the destination we all share. No one has ever escaped it, and that is how it should be, because death is very likely the single best invention of life. It’s life’s change agent. It clears out the old to make way for the new.” – Steve Jobs, 2005
Fear of failure can be either motivating, or perhaps paralzying depending on the situation and the person. However, there are definite benefits of contemplating the “worst case” scenario while considering personal and business decisions. Primarily, it is a great risk management tool. By contemplating the potential of a decision falling of the rails, it forces you to consider other options to lower the risk of that scenario actually occurring. Further, and perhaps more importantly, it puts your ‘important’ decisions in perspective. What’s stopping you from entering a new market segment? Calling that prospect? Starting your own business? In almost every situation, the worst case scenario won’t happen. Sure, some things are beyond your control, the economy, weather etc, however there are a lot of variables that you can control.
This process is called Negative Visualization, which you can read more about here. In a nutshell, negative visualization puts everything back in the proper perspective.
Steve’s Job’s 2005 Stanford Commencement speech should be (in my opinion) mandatory viewing for any business owner/entrepreneur. Contemplating the WORST case scenario should remove almost all barriers to personal and business success. Enjoy!
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…)