Over the past few years, I have had the privilege and honor of being an active observer of over 100 trucking companies throughout North America. This observation has not been done in a vacuum. Via watching, questioning and learning from the members of inGauge, as well as the Best Practice Groups (the foundation of the TCA Profitability Program), this process has been the equivalent of an education that should have cost hundreds of thousands of dollars – however, this is my job. To state that I’m grateful for this opportunity, and the friendships I’ve made along the way is the understatement of the century. From countless conversations (both one-on-one, and group discussions) with CEOs, CFOs, VPs, Operations Managers and Frontline people, I have recognized and distilled some of the common denominators of those companies (and their leaders) who continually out-perform the rest. My gauge of performance is primarily Gross Margin (Revenue minus Variable Expenses). Those that continually outperform on this measure, not surprisingly, have strong bottom-lines. In addition, I look at those companies who may have some temporary issues with their gross margin and overall performance – but all as a result of a change in strategic direction (e.g. changing operating mode, re-engineering their freight network , re-investing for the long term). Here are the nine common traits of High Performing Trucking Companies (and their Leaders). Please note, ‘Leader’ does not equal executive. A leader can be anyone from the driver seat, right up to the c-suite.
- Top Performers Add by Subtraction – Everyone wants to use the latest tools, execute on the latest plans, and automate processes to improve long-term performance. However, the top performers understand that the capacity of their human assets has a terminal velocity. To act on new ideas, opportunities and business plans, a company must first eliminate redundant or non-vital tasks and processes to clear the path for reinvention and sustainability. Further, the very act of identifying the things that “we are not going to do anymore” can be as beneficial as taking on a new project or seizing a new opportunity. Add the phrase “Add by Subtraction” to your daily mantra.
- Top Performers Invest in both Tangible and Intangible Assets – when I speak to those in the industry, one of the common phrases I hear is “this is a simple industry, we get paid to deliver X from A to B – end of story”. As soon as I hear this statement (or a derivation of it), I immediately turn off my active listening ears. There are very few industries with as many variables as trucking – it is extremely complicated. Where there are many variables, there are many opportunities. The top performing companies know that simply investing in more trucks isn’t going to cause a net gain in gross margin and ROI. More and more, the top performers are looking at intangible assets (e.g. proprietary software, specialized complimentary services, highly skilled labor, and vertical integration) as the logical step to gain an advantage. Further, they also understand that building intellectual property can be very expensive endeavor – but via incremental development and iteration (starting with building a M.V.P. – Minimum Viable Product), they can reduce the potential capital cost and expedite ROI. Want to build a smart capacity network using the latest Blockchain technologies? Why not build your own? Maybe commercialize it? Companies with strong Balance Sheets and both Tangible and Intangible Assets don’t go looking for a buyer – the buyers are lined up in the parking lot (with a big check).
- Top Performers Build a Skilled Workforce – a common trait of all the top performing companies in the TCA Profitability Program is that their leaders, and as a by-product, their team members are hungry for knowledge. Learning from a strategic point of view does not have to be formal – reading books, listening to podcasts and participation in Best Practice Groups, and Industry events are all great ways to refine focus and get ahead of the competition. From a tactical point of view, more focus and discipline is required. Some of these companies have very formal systems and processes in place for ensuring that both their drivers and non-drivers continue to develop themselves. This results in a workforce with a purpose. For industry-specific training, there are companies offering customized and semi-customized platforms for knowledge delivery (e.g. Carriers Edge, JJ Keller, Pro-tread). For other skills (in some cases very specialized), there are other avenues available, at a very low cost and high ROI. Instead of looking via traditional routes, checkout one of the MOOC (Massive Open Online Course) providers such as Udemy, Cousera, Khan Academy and edX. Want to develop group of Data Analysts? There is a course for that. Want to help your operations team learn finance? There is a course for that as well. Want to become an excel ninja? Start here. In summary, top performers stay curious and keep learning. You want to build a top-performing trucking company – you must first start with the stuff between the ears.
- Top Performers Get Out of the Whirlwind – How can you get better if you’re stuck in the daily chaos of the trucking industry. Putting out fires, responding to customers and retaining your drivers are all some of the required, and time-consuming exercises you must do most days. However, the top performers understand that improvement requires contemplation – and contemplation can’t happen with the phone ringing and a thousand unanswered emails staring at you in the face. Getting out of the daily whirlwind can simply mean going for a walk (in solitude). It worked for Tesla, Hemingway, Darwin, Dickens and Ben Franklin – it might work for you! Other alternatives are participation in a Best Practice Group, local networking and investment clubs, and industry sponsored events. Whatever you choose – make a commitment to it.
- Top Performers Embrace the Concept of an Idea Meritocracy – Although many top performing trucking companies have formal organizational structures, all of them embrace the concept (formally or informally) of an Idea Meritocracy. You can learn more about Idea Meritocracy here. Good ideas sometime result from exposure to, and experience within a industry, market, or skill set. However, some of the best ideas can come from those with fresh eyes and inexperience. Either providing a contrarian approach or a pivot. Suppressing ideas is easy – reinforce the chain of command and simply outlaw discussion above or throughout the chain (resulting in what is commonly referred to as ‘knowledge silos’). The most negative connotation associated with the word ‘bureaucracy’ is status quo, and the suppression of good ideas. If you don’t provide a way for the frontline (drivers and non-drivers) to suggest new ideas, and a way to actively contemplate and test these ideas – the sustainability of your business, in the long term, is questionable. Get rid of the barriers, add new blood (interns etc), question the status quo, embrace change, get better.
- Top Performers Spend 95% of Their Time Listening – After participating in over 20 Best Practice Group meetings over the past couple of years, one common thing I notice is that the top performers always listen (way) more than they speak. However, when they speak, the room goes quiet and the rest of the group starts writing. Having something useful to say takes understanding and contemplation. Most people can’t do that while talking at the same time. The top performers aren’t in love with the sound of their own voice, nor do the ever speak of themselves in the Third-Person (instant credibility erosion).
- Top Performers Understand the Value of Time – Although meetings can serve as a great way for ideas to percolate, they can also be massive time sucks. Top performers understand the value of meetings (and the labor expense associated with those meetings), but also establish clear rules for making sure any meeting or activity is efficient and has an internal ROI. During 2017, there were five separate Best Idea Presentations from Best Practice Group members with respect to running effective meetings – each of these companies are in the TPP Top Performers Index – coincidence? I don’t think so.
- The Top Performers Understand that Discipline Equals Freedom – ‘Discipline Equals Freedom’ is a phrase that has been popularized by former Navy Seal Commander Jocko Willink over the last year. These three words capture the essence of the top performing companies and their leaders. It is one thing to think (and talk) about action, it is another to execute – every day. Doing so, as a by-product, will present many obstacles (physical, intellectual, and technological), but applying daily discipline will remove those barriers. Conversely, the daily discipline of execution will help identify better ways of ‘doing’, and as result, improving.
- Top Performers Want to Get 1% Better Everyday – It’s easy, but also daunting to establish a Wildly Important Goal (WIG). Top performers understand that once the horizon has been established, the best way to move towards accomplishing that goal is daily and consistent improvement everyday. Doing so provides forward momentum, and if your mix of team members is right – an intrinsic reward (see ‘purpose’ above).
In addition to my conversations with inGauge and Best Practice Group members, I have read, watched and listened to very valuable content over the past twelve months. Here are my favorites:
- Seth Godin (daily blog) – the first thing I read in the morning. He posts everyday, and always has something fresh for readers to contemplate.
- Principles by Ray Dalio (book) – some consider Dalio as the greatest investor over the past two decades. This book provides a framework for both life and business, distilled as ‘Principles’. The precursor to this book, a free PDF of the same title, introduced me to the term ‘Idea Meritocracy’ four years ago.
- The Daily Stoic (Daily email newsletter) – each morning, I receive an very valuable email from the Daily Stoic. This daily email serves as a frequent reminder of important things in life.
- How I Built This (Podcast) – as a frequent traveler, as soon as the wings are up, the headphones are on – and this podcast is one of my favorites. Has chronicled the careers of over 50 entrepreneurs – from Arthur Blank (Home Depot) to Sara Blakely (Spanx).
- Theodore Roosevelt, A Strenuous Life (Book) – a fascinating read about one of great leaders of the last millennia – from birth, to death and everywhere in between.
- ReWork (Book) – the founders of Basecamp, provide their opinion on re-imagining your next workplace and work force, including the benefits of remote workers. Although not for everyone and business, your ‘fishing net’ can expand substantially if you don’t have to worry about geography when recruiting. 75% of your workforce is already ‘remote’ why not 90%?
- The Basics of Blockchain (Udemy Course) – if you’re going to ride the next wave, and one of the most important technological advances since the internet, you need to understand the basics – and build from there. Sign up for this course, sign your entire management team up for this.