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rredinc

Jun 23 2015
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7 Secrets to Say Goodbye to High Commercial Driver Turnover: Secret 1

By | Blog, Transportation | No Comments

Today’s Truck Drivers and the Truth about Retention and Recruiting

Keeping commercial drivers today is challenging and finding drivers is even more difficult. You need a solution now that will help your company overcome this major obstacle – but where to start? Which comes first – recruiting then retention or retention then recruiting?

In an industry that loses 9-1/2 out of every 10 people they hire, mostly within the first 3-6 months, nothing seems to be working to reverse the trend. With all the money spent on recruiting, paying sign-on bonuses, providing all sorts of real or perceived perks, benefits, brand development and on and on – drivers still leave.

Retention and recruiting of truck drivers, especially independent contractors/owner-operators is like the weather.  Everyone talks about it but few change their strategy to prepare for the dismal results.

So what is missing?  Why do only a few companies enjoy low turnover and high productivity while most don’t?

The difference is simple to understand but very challenging to execute; let me explain.

Most drivers are smart – street smart – and know a poker player when they see one.

Secret #1 to avoid driver turnover prevention is to avoid broken promises, and it begins in the hiring process. You can solve this problem by training your entire company staff on message delivery, accuracy and completeness.

Follow-up with a continued focus on the driver is a must. Stay tuned in to what drivers really value in working for a company, not what you as chief executive think they want. What are their needs, what is important, what works and what doesn’t work from their point of view?

The key to reversing the driver crisis starts with the company CEO and his (her) commitment to do what needs to be done internally and externally to change the culture. Core values impact customer relations, customer cooperation, employee relations with drivers and the synergy necessary to make drivers happy.

Today’s trucking company is not your grandfather’s or even your father’s company.  Even the older, ready to retire drivers know that life is very different in trucking and blame company leadership for the sorry state that we find ourselves in with respect to turnover, driver pay and lack of new entrants.

You can change the game for you and your company. The formula is alignment with the driver, senior management and key personnel — and this alignment must be in the hearts and mind of everyone.

Here are just a few action steps you can take to begin to set the stage for ‘driver friendly’ and necessary policies, procedures and behavior execution.

  1. Select top management officials to conduct one-to-one onsite chats with each driver over a period of a few weeks
  2. Reduce the disconnect between departments – train on inter-department communication, collaboration and cooperation with drivers. Bring in an outside trainer who is an expert in these matters
  3. Empower fleet managers/dispatchers to be advocates for drivers
  4. Fleet managers should provide personal one-on-one contact and attention to drivers; call them by name, not their truck number…know their spouse/significant other’s name.
  5. Do retention seminars for everyone – including communication skills and sensitivity training

Begin the process of building your company brand by developing these traits that matter – ‘attractor factors’ – to draw and retain drivers.  This will become your competitive advantage for the best-in-class drivers.

Up Next – Secret #2: Knowledge is power. Learn what you need to know to begin to build a world class retention strategy for your company.

From The Executive’s Playbook by Norris L. Beren of RRED, Inc. – Coming Summer 2015: How to Find and Keep Truck Drivers and Independent Contractors – Motor Carrier Driver Retention and Recruiting

Norris Beren, CEO of Risk Reduction Education located in Mt Prospect, Illinois, provides executive advisory services to transportation and logistics CEOs and their executive teams to ‘get out of stuck’ and become a top performing company again through a different lens analysis of legacy thinking.

Jun 05 2015
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Advanced PEOPLE Strategies Summit for Motor Carrier CEOs & Executives

By | Blog, Transportation | No Comments

PEOPLEASE, the leading provider of HR solutions and services for the transportation and logistics industry, announced today they will be hosting an Advanced ’People’ Strategies Summit on June 18, 2015 at the Hilton Oakbrook Hills Conference Center in Oak Brook, Illinois.

This half day conference will address critical driver retention and recruiting issues motor carrier executive teams are facing on a daily basis.

“CEOs of transportation companies are concerned about many matters that are negatively impacting safe and efficient operations, and ultimately profitability.  With the annual truck driver turnover rate close to 100 percent, the market is experiencing a real crisis,” stated Norris Beren, CEO of Risk Reduction Education (RRED, Inc.).

We think it is critical, now more than ever, to address these issues head on; therefore, we decided to create an opportunity where motor carrier executives can hear from industry thought leaders regarding these crucial matters.

During this half day event transportation experts will present on a variety of key topics.  The agenda will include the following sessions:

  • Develop an “Attractor Factor” to Get and Keep Drivers
  • Learn to Develop Advanced and Robust Strategies to Recruit, Hire, and Retain Drivers
  • Learn the “ROI” of Advanced Safety and Compliance Strategies
  • Prepare for the Future and New Normal of Human Resources, Payroll, Management, Safety, Risk, and Compliance Management Challenges
  • Learn Seven Secrets That Will Improve Your Recruitment/Retention Initiatives

Founded in 1994, PEOPLEASE is a full-service, professional employer organization headquartered in Mount Pleasant, SC. The company serves hundreds of transportation customers nationwide, managing tens of thousands of employees.

For further details and to register for this complimentary event, please visit the Summit Registration site, or call 1-800-948-4453.

May 15 2015
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Trucking Company Mergers & Acquisitions: Behind the Scenes – Part I

By | Blog, Transportation | One Comment

According to a statement made recently at the TIA conference in Orlando, there were more than 1000 deals made last year involving transportation companies. The expectation is that this year there will be over 1400 transactions. Why?

Do you want to be included in this exclusive ‘Former Owners Club’? Will your transaction, buy-side or sell-side, deliver the expected benefits? Let’s explore several reasons to sell and potential pitfalls of poor planning and execution.

It can be argued that fear is driving owners to sell – the risk of outrageous liability claims, potentially increased insurance coverage minimum requirements, commercial driver shortages, regulatory pressures, wages and freight rates issues, increasing cost of trucks and trailers and a host of other issues.

Another factor some consider is that the next generation is not interested in the transportation sector or succeeding dad or mom; “if it’s not tech, it’s not good” say the millennials.

The real reasons for so much activity from the point of view of the sellers are:

  • There are a lot of potential buyers for the same target companies
  • Sellers can get more than “top dollar” – six, eight or even ten times earnings is a common formula
  • Sellers are motivated because the stock market provides exciting options to invest
  • Sellers know that a drop in the stock market could change the game quickly –the time is now (and has been for about 2 years)
  • Private equity firms are a second source of buyers compared to the years when only other transportation companies were potential buyers
  • There is a lot of money to buy and cash is a very likely payment method
  • The real currency in trucking today is drivers, more so than in years past; it’s no longer about buying customers and equipment
  • Selling truck freight capacity to shippers has more value than any other asset or service they have to offer
  • Organic growth is not very likely and efforts to increase margin over time are dim
  • Sellers know that rising freight rates and the improving economy provide the best environment for maximum sales price
  • The smarter owners that have been living off of high fuel service charges know that as fuel prices remain at presently reduced levels, their profitability could disappear. Time to get out?

On the other side of deals, buyers know that the transportation industry is fragmented. Many potential buyers know that with their current platforms the driver shortages will also limit their ability to grow so acquisitions or mergers make the most sense.

The transportation companies that have cash and robust balance sheets know that they can leverage their way into making an acquisition. In a different economic environment, this would not be possible. Companies often see as a new strategy acquiring smaller regional companies to help build density, especially in east west traffic lanes.

Buyers are interested in consolidations to offer services, technology and building scale that they might not easily be able to provide internally. Other reasons for the high level of acquisitions is to access and diversify customer concentrations, enter new markets and acquire proprietary know-how, especially technology.

Of particular importance in these transactions is the potential failure or at least major complications that often arise from these transactions, sometimes immediately and perhaps even after weeks or months after closing.

The three most common results of a ‘bad’ deal arise from:

  1. Failure to prepare properly and plan for a transaction
  2. Failure to do proper due diligence or not challenge assumptions effectively
  3. Failure to anticipate and execute the economies of scale and implement and protect the culture and changes that result

In Part II of this article we will explain these three steps and provide a blueprint to help you increase your company’s value, properly plan for a transaction and help you make the transition as a seller with a company to an employee of your former company.

To help you analyze a potential target company or your own, download a complimentary copy of my Buy Side/Sell Side – Due Diligence Checklist for Trucking Logistics.

May 06 2015
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Politics Trumps Leadership?

By | Blog, Executive / Entrepreneur Leadership, Transportation | No Comments

In corporate America leadership is about having a vision, inspiring others to support that vision and maintaining the clarity and decision-making power to know the right things to do to make something good happen. It is about trusting and being trusted. Great business leaders do not concern themselves with public opinion or politics, but with making the customers, employees, vendors and shareholders realize an appropriate level of gain for their efforts and investment.

In Baltimore it seems quite obvious that elected officials exhibited a different view of what leadership is amounting to little more than making reactive decisions and taking (or not taking) actions apparently motivated by politics. Inevitably, it is fair to conclude that the sum total of their actions could result in another round of major civil disturbance on some near-term future date.

It is true that facts aren’t facts until they are known, but more often than not, police investigations take weeks or even months to complete. In Baltimore, however, within a few days of the incident, it appears that the information available was indisputable mostly based on a citizen provided video that gave rise to a press conference where pages of ‘facts’ were presented in narrative form by the state attorney against six police officers.

Guilty until proven innocent was real clear in the tone and voice of the press messaging. Politics or leadership? Justice or political correctness?

The mayor then announces the handling of sweeping reforms of the police department that has been somewhat out of control in certain parts of the community for years. So where has she been?

Is it possible the lack of leadership is the casualty of being focused on a greater goal – the satisfaction of political correctness with an eye always to the next election instead of doing what these people were elected/appointed to do? Run a city, take care of the citizens and properly administer justice for defendants, not the family, not the victim and not the political process.

Right or wrong on any of the issues is not what is important here – what is important are the issues with leadership and the failure to act and the consequences the community suffers as a result. In business, CEOs lose companies, customers and their jobs for committing improperly motivated acts.

The apparent lack of leadership in anticipating possible events led to the fallout of a very unhappy community over an alleged mishandling of a suspected lawbreaker, the failure of the police to step in and quell disorder rather than stand around and look at lawbreakers, the failure to call for help when needed.

One can argue that behind the scenes the decision-making was based on facts as yet known but not released to the media or the public and therefore the “right” moves were made despite the consequences.

So now the politicians argue that the lessons learned were useful, but at great cost. We will do better next time. Really?

The notion that lessons learned have any real value is false. Lessons used in business, in life, and politics are what really counts and what the community should be able to count on.

So, in the final analysis, was leadership exhibited by telling police to stand down; let the community have space to exercise their constitutional amendment rights despite the high price the community ultimately paid in injury and damage?

Leaders who delay actions and make political decisions don’t protect their employees and will ultimately fail long term.

Dithering is not part of good leadership. As leader of the city, did the mayor exhibit the sort of leadership needed or the sort of leadership necessary to get reelected?

Mar 31 2015
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The 3 Threats that Should Be Keeping Your CEO Awake at Night

By | Blog, Executive / Entrepreneur Leadership | No Comments

While coaching and mentoring CEOs, many of whom are immensely successful, I observed that so many of them were kept up at night by important but outdated issues. In a recent Harvard Business Review article, the authors conducted a survey that showed that the greatest 3 concerns as expressed by CEOs queried were talent, operating in a global environment and regulation and legislation.

While these areas indeed are important, are there not new and emerging issues that can affect a business and its reputation faster than the speed of light? Are there more important and potentially very damaging issues to consider?

The recent Starbucks’s campaign #RaceTogether is a great example of a CEO concerned about a social issue, bringing it out, apparently without a great execution strategy, and seeing it fail miserably almost instantly. Starbucks’ PR executive was essentially forced off his Twitter account by the avalanche of negative comments about the campaign.

What this really means is the millennials (18-24) are now the largest influential population segment. They are totally embracing social media. They are the customer and at the same time the de factor employee of thousands of companies providing all the labor to produce the information, product or service, mostly online.

They are the airline ticket agent, the online self-service purchasing agent for thousands of companies they buy from. They do all the work except for the delivery of the product. They control the vast majority of information and opinion development; they provide reviews and recommendations and critiques of every product and service imaginable.

So, what does all this translate into for CEOs? As a CEO you need to worry about this very visible army of customers that will punish you and your brand reputation in nanoseconds.Then in minutes, millions of people know how your company failed them.

Consider then the 3 most important concerns that threaten a company’s reputation that should keep a CEO awake at night:

First, a product or service failure, or stated simply, the failure of the company to match expectations and perceptions of their customers. When something goes wrong, real or perceived, the CEO and his team need to understand how quickly the word can spread and damage sales, employee morale and reputation.

Secondly, failure to take ownership for a disaster or a crisis. The real disaster is for a CEO to avoid taking a leadership position and to blame others for causation and tragic results. The CEO of Lufthansa initially was upfront, and impressed most people with his forthright and honest comments about the airline crash in the French Alps. He did it right. But that changed when some very damaging information about his company’s handling of information about the co-pilot’s was revealed. BP’s CEO, Tony Hayward did it wrong with the Gulf oil spill.

Finally, avoiding the use of social media and taking too long to respond to an event can be worse than the event itself. CEOs who face an issue head on via social media can almost instantly guide reaction and opinion rather than having it preordained by the initial round of comments from the public.

CEOs need to acknowledge that when they wake up in the morning a firestorm may already be brewing – and at a fever pitch by the time they reach the office. There will be little hope of regaining momentum unless they already have a plan in place to respond instantly to negative publicity.

To all CEOs: Don’t be consumed by trending issues – be sure to also think outside of the box and address what is right in front of you in everyday life. It’s not the talent search or government overreach that should be top of mind, but the ease in which the magnifying glass that the public has on your business can create a backlash before you awaken on a new day.

If you have had to combat a threat to your reputation on social media, please share the outcome. If you don’t have a damage control plan and want to learn how to develop this, send me a message and we will chat.

Norris Beren, Chief Executive Advisor | norris@rredinc.com

Mar 15 2015
0

Need to Revive Your Network? Flip the Script.

By | Blog, Executive / Entrepreneur Leadership | No Comments

One of the most difficult jobs in growing your business is meeting people who either can hire you as a vendor or lead you to people who can.

Most sales people, business owners and entrepreneurs will agree that the vast majority of new business opportunities stem from relationships, referrals and connections to others, a process commonly called networking, over any other activity such as responding to advertising, e-mail campaigns, etc.

Networking is productive for getting your message out and cultivating opportunities. Most networking is done in groups, formal or informal, designed around the single purpose of meeting other similarly situated people looking for business. Other networking is done throughout daily activity—church, sports activities, supermarket, conferences, etc.

Experts in sales training and business development skills tell you to target prospective customers, connect with people who work where you want to get their business and focus on people who are well connected that can get you more connections.

These are all significant strategies but isn’t it all one way? We want our network to do the work for us, we want our contacts to become or introduce us to the next big customer. Aren’t there people in your network waiting to receive the same benefit from their network?

Flip the script and try Reverse Networking. You can get more value out of your contacts and, more importantly, give real value to others as the inducement to help you and keep you and your business situation top-of-mind.

The reverse networking approach is based on how you can work together with others and/or share some connections and resources.

Meet people and develop connections at networking activities around the notion of how we might interact to see if any of the executives, presidents and owners of companies I know may make good introductions to you and your business growth. Ask questions about their business and what issues they might need help with. Ask whether they are looking to solve any problems for which you may know some quality business owners whom they should meet.

In other words, be a connector, not a ‘connectee’, and lend your ability to provide valuable connections to others instead of only focusing on who can be a customer or who can connect you to one.

This is about giving, not taking – fostering meaningful introductions for others makes you an asset to their network not just your own. Reverse networking is a very powerful approach to developing relationships and creates sustaining value for both parties.

If you have tried this approach, please share how it has been successful for you.

>>If you want to learn how to develop this strategy to maximize your networking activities or re-connect with people and awaken some relationships, send me a message or email me at norris@rredinc.com.

Mar 09 2015
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Future Technology – Real Threat or Real Advantage?

By | Blog, Executive / Entrepreneur Leadership, Transportation | No Comments

“Real Threat”… is how Warren Buffett summarized his thoughts at the six-hour 2014 annual meeting of Berkshire Hathaway, his flagship enterprise. These two profound words are in reference to one of the most memorable comments at the event: continued advancements in cutting edge technology – and it keeps Mr. Buffett awake at night.

Clearly the world trend today is towards hyper connectivity – connecting everything to everything with new technology or the ‘internet of all things’. The best estimates are that by 2020 fifty BILLION “gadgets” will be connected to each other everywhere. Connected devices followed by enormous data harvesting will result in an explosion of further technological engineering; continuous attempts at developing new ways to help companies earn more revenue, cut costs and hopefully increase profits.

On the surface, this would seem advantageous as technology is known for creating efficiencies and reducing costs in many ways for many businesses. But, as Buffett highlights, it doesn’t always guarantee increased profits.

To illustrate his concerns, he gave as an example the advent of self-driving cars that combines many technologies into a single product. This advanced collaboration of technologies potentially poses a threat to one of his business units – GEICO.

As an insurer of vehicles, Buffett predicts there will be fewer accidents with the adoption of self-driving cars which will result in lower insurance premiums and therefore lower profits would follow. The ‘Real Threat’ according to Buffett? Lower profits!

While his scenario suggests how external improvement for customers can in fact become a consequence for a business, technology can pose a real threat in numerous ways. Most CEOs are quite satisfied with assuming that the usual advances in technology will give them a competitive advantage over time. The associated risk is amplified when the focus instead remains on selling price considerations, best service levels or other tired concepts that are not distinguishable between vendors, product or service.

To complicate the issue further, a great amount of advanced technology is accomplished in an uncontrolled manner – a company may become significantly impacted without warning. Will your business model be prepared for the next big thing, or will it crack under pressure?

An advantage is only realized if you know how to use technology to become truly unique and competitive in your space. One must remain abreast of new technology that will be available to their industry in the future, spend time considering how everything can and should connect within the business, and how it connects to other businesses. If you think this applies to the big guys with lots of money, vision, and IT capability – think again. It’s the nimble, little companies that will capitalize on the opportunity.

This concept of hyper connectivity is the way life and commerce will grow. These changes can potentially shrink the lead you currently have on your competitors overnight.

Will you be ready?

Action Item: Become more aware of the technological advances in your industry and learn how to take advantage of the advancements to help you and your customers develop greater competitive advantage as well as helping your customers become more competitive with their customers. This is the most effective way to provide value in your role in the supply chain.

How: Read, establish Google alerts on technology topics in your industry, attend conferences, talk to vendors, share information with your LinkedIn connections and participate in discussions in your online groups.

» For more information on how you can become ready for the Internet of Things (IoT) and develop a true competitive advantage send me an email at norris@rredinc.com and I will send you my 7 point outline on How to Become an Industry Leader in the Next Industrial Revolution.