Executive / Entrepreneur Leadership

ELDs and Their Impact on Driver Retention

Are you content with your ability to keep drivers? Are you concerned that retention will worsen because of the mandate for electronic logging devices?

The clock is ticking for motor carriers that are delaying implementation of electronic logging devices. The fear for some is that this new mandated technology will hurt their business. Ultimately, constricted truck capacity will again upset the economy significantly in 2017.

What’s holding you back? Do you fear:

• Your drivers will leave to go elsewhere where ELD is not yet required?  Most drivers that have begun to use the new technology are surprised about the value they receive from ‘running legal’ while yielding higher earnings.
• The cost involved to purchase and maintain the equipment and monthly service will be prohibitive? There are many ways to manage/offset the costs of purchase, training and monthly service costs.
• Productivity will be lost due to training staff and drivers to use the new technology? Just like adapting to hours of services rule changes, companies learn to accept new restrictions and limitations in operations and manage through them over time.
• You will experience inabilities to do business as you currently do, to get loads covered, picked-up and delivered legally according to DOT and shipper requirements? The anti-coercion statute, which protects against forcing drivers to violate hours of service law, will soon be in effect. This also meets the ELD hours of service enforcement requirement and will be mandated for all carriers, including your competition.
• Are you concerned about shippers cutting you off because use of ELD will not allow you to meet their pick-up and delivery schedules? Shippers will have to do a better job of scheduling pick-ups and loading and unloading times to accommodate driver’s hour’s mandates. They will have to adapt to change also.

Shippers and brokers will increasingly pull away from carriers that do not have ELDs in place. Similar to having proper insurance verification before expiration, shippers and brokers will not load you as the deadline date approaches.

Waiting until mid-year or late in 2017 is a terrible idea. The availability of computer tablets or other required hardware or installation capabilities may affect the cost, ability to deliver product and the time needed to train your people while depending upon the overworked support capabilities from the ELD vendors.

No surprise here. Why wait until the last minute?

The critical factor in all this will reflect on your already excessive driver turnover problems. Adopting ELDs can send the correct message to staff and drivers that you are a company that embraces (rather than being forced to) support regulations that protect your drivers. So what’s your strategy to implement ELDs and increase retention instead of losing more drivers at an even faster pace than you currently are experiencing?

If the majority of experts are correct in their predictions for the second half of 2017, the current atmosphere of overcapacity and falling rates will shift to a greater need for more drivers. This will be particularly troublesome as the effect of ELDs is felt as some drivers leave the business altogether while you may be continuing to contend with turnover issues

What can you do to grow in 2017, make money while working through all these pressures and ensure that your driver retention stats improve?

Part IV of this series will explore several ways you can accomplish the goals listed above.

People, especially business leaders, who obsess over goals or demonstrate obsessive behaviors need to avoid making choices that reject good sense – even if they drive great results.  Obsessive thinking and behavior can be a good thing in personal life and in business if managed correctly.  However, when they drive people away and/or create a culture steeped in “my way or the highway” thinking, that will kill motivation, enthusiasm and any great results achieved will be only short term.

It appears that business leaders around the world are finally getting the message — they can no longer continue with their obsession over short-term profits growth at the expense of a healthy society. (Survey by Price Waterhouse of 1400 chief executives – Huffington Post by Jo Confino 1/20/2016).

As outlined in an article appearing in Business Insider, the CEO of one of the largest fast food chains had a misguided obsession with a competitor that could drive his business into the ground.  He is targeting any customer by stealing market share from the competition and other chains instead of focusing on his core customer base. Thus, the business suffered financial losses for several years. The new CEO of a major internet search engine provider is described as “absurd in her obsession with details”.  The co-founder of another search engine provider is described as “obsessed with efficiency and possessing tunnel vision”.

In each of these instances described above, the CEOs ultimately were successful in varying degrees by turning their companies in the right direction and getting back to profitability but at what price with their stakeholders, customers, employees, Wall Street and the court of public opinion?

What do top logistics companies have in common? “Shrewd and experienced management teams and an obsession with service and operational details.” (Logistics Management, John D. Schultz, April, 2011)

This obsessive behavior makes total sense when it provides high levels of customer satisfaction and expectations.   Making the right choices and imposing high standards in transportation and logistics companies’ operations may be obsessive, but stakeholders understand and support the results. It doesn’t work when obsession without reason or following good business principles dominates the CEO’s thinking

Are you obsessive? Are you managing your passions correctly or are you obsessed with whatever is important to you at the expense of good results, respecting your workforce or being a good leader?

If you know you have an obsessive desire to achieve specific outcomes and recognize that you need to tone it down, then maybe change is possible and necessary.

Want to change? Consider whether these statements apply to you:

• There are some things that I can’t let go of or delegate
• I am reluctant to change even when given a reason to do so
• I am hard driving and very detailed oriented
• I am firm in my position when dealing with others
• As a leader, I impose my personality on others

A good example is the small trucking company owner in the Midwest who was obsessed with buying a piece of land and building his own truck terminal rather than continuing to rent. Economically it probably made sense, however, the company was struggling to become profitable.  The CEO’s banker discouraged the project, preferring to postpone it for a year or two.  Then came the economic meltdown of 2007 and the business came very close to collapsing.  It was essentially bankrupt but the owner refused to back off his fixation on the building that had to be built.

The banker terminated his business relationship for fear of the company closing; the owner refused to stop the project and had to resort to some very expensive sources of capital to keep afloat. It took 5 years, enormous anxiety and stress to get right side up financially. This was obsession on steroids.

How can an obsession be useful without overwhelming positive behaviors while still allowing for a success path?

Learn to manage your obsessions and passions – be confident, but don’t be a narcissist—self-centered (instead of success-centered), singularly focused, inflexible and reckless. Leaders who are humble and who focus on others are more successful and capture the cooperation and passion of their subordinates.

Stop believing that you are “special” and no one else can do what needs to be done.

• Take criticism well and do not be offended or supersensitive to constructive comments about your behaviors, passion or unwillingness to compromise
• Have empathy for others and their points of view
• Control your feelings of brilliance, power and unlimited success at the expense of alienating others around you
• Refrain from soliciting and requiring others to admire you

Managing Your Obsessions for Better Interpersonal Relationships and Results

Being obsessive can have advantages if controlled and if you truly care about results and those that help you achieve them.

Discard your obsessions in place of maintaining a passion for what you believe in and who you are –but make it work for you and not against others.

• Make a great first, but lasting impression and make it real; don’t disguise your obsessive personality only to have it surface later
• Give credit to others and take blame when appropriate
• Be nice! Project integrity, honesty and competence

Consider that in business even achievement can become—in and of itself—an obsession. You can be obsessed for the right reason and right outcome. But when it is blind obsession, it will lead you to negative outcomes.  The true test of an obsession that won’t result in a positive outcome is the notion that you can’t argue with an obsession—it’s there and will appear nonnegotiable.

Things to Think About

• Lesson #1: Don’t confuse efforts with results. Obsession doesn’t always rule.
•  Lesson #2: Look at the reason for your motivation, decisions or actions and question them. Don’t move ahead for the wrong reasons and don’t rationalize your decisions based on illogical thinking.
• Lesson # 3: Let others you trust become part of your thought process and goal setting –make it a team effort.

Do you consider yourself a great leader of people and a good CEO of your business, your department, your job? Take the Self-Scoring Seven Habits Profile Quiz and find out.

For more information and a free sample of the Profile Quiz, contact me atnorris@rredinc.com or on LinkedIn at http://www.linkedin.com/in.norrisberen

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

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.