The Roemer Report February 1988

Coming to Grips with the Driver Shortage

Maintaining a stable work force of truck drivers is destined to grow into a major issue for senior trucking managers. Conditions vary depending on your region, but the overall trend suggests that the tight labor market is going to be with us for years to come. This is becoming a simple reality of the slow U.S. population growth. The number of 16-to24-year-olds in our country is declining rapidly. By 1995 there will be 4.3 million fewer 18-to21-year-olds than in 1980. These trends suggest that all of us will be forced by basic demographic realities to take all of our workers very seriously. We'll have to work very hard to recruit good employees and we'll have to invest in training them to become productive members in our organizations. Good employees will be a very scarce resource in the coming years. The hiring, training and retaining of people will become the trucker's most important job.

BALANCING THE IMAGE OF UNSAFE TRUCKS: Safety has become a pervasive public issue that affects everyone in the trucking industry. The new ATA safety programs are excellent, but every trucking executive also can take actions to balance the image of unsafe trucks. We need more individuals locally and regionally who can speak positively for the industry at times when the public's trust is being lost by default One damaging perception created by some news stories is that trucking companies put profits ahead of safety. Additionally, the sensationalism in the way some truck accidents are reported hurts the industry. There are also times when trucks get the blame for accidents caused by bad road surfaces or by passenger cars. You can't deal with every unfair story, but you can use your knowledge and experience to help the industry in a number of ways: (1) Write to the newspaper to set the record straight when important facts about truck accidents have been ignored or distorted. (2) Explain before local groups what the trucking industry has done and is doing to improve highway safety. (3) Use space in your advertising -and perhaps on vehicles-to promote safety. (4) Get high involvement and visibility for your company in any local or regional safety program of merit. (5) Have a policy-and also a high-ranking spokesman for media contacts when accidents occur.

WHY OPEC CAN'T ESCALATE YOUR DIESEL COSTS: The Organization of Petroleum Exporting Countries is plagued with internal chaos. Analysts report that the coalition is less cohesive now than it has been at any point during the past twelve months. Granted, OPEC members did agree in December to maintain prices and limit production. But most experts believe the accord will have little effect on today's sagging oil costs. In fact, prices at the pumps should continue to sink - at least for the short term. We may even see them ebb by as much as ten cents a gallon. Still, bargain-basement oil prices are a mixed blessing for consumers. We enjoy the benefits when we fill up our tank or pay our fuel oil bills. And, traditionally, tumbling oil prices ease fears of inflation. But a steady decline eventually cripples oil company profits, sending shock waves through the Dow.... Meanwhile, some OPEC-watchers are convinced that the organization will succeed in boosting prices before the year is out. The last thing they want is a repeat of the 1986 oil price collapse.

HOW TRUCKING LEADERS CAN MAKE A DIFFERENCE: Today's management requires visionary leadership. Developing your strategic vision demands going beyond a linear extension of your present state of business. Here are a few keys for visionary leadership: (1) Environmental Scanning. Your strategic vision must start with a broad-based view of the environment...collecting information from the internal and external business-scape. Strategic visions are essentially situational. Appropriate visions carefully address real world circumstances. (2) Action. ·Translating your strategic vision into actionable pieces is not easy. Once the vision is determined, it must be attacked in bite-size pieces. Translating a vision into reality begins with one small step and gains momentum with additional steps, not leaps. (3) Holistic Understanding. Strategic visions must be sensitive to all stakeholders...including competitors, suppliers, shareholders and employees. It is this sense of the "big picture" that allows your people to anticipate inevitable market changes. (4) Transformative Leadership. Your strategic vision is a beacon. It should elevate and empower your people. John McGregor Bums, in his book, Leadership, believes that the transformative leader is "one who engages the full person of the follower, who converts followers into leaders, and converts leaders into moral agents."

BALANCING YOUR CUSTOMERS AND YOUR BOTTOM LINE: Focusing on the bottom line is no longer the ticket to business success. The challenge is now a two pronged one - providing service and creating profit. If managed properly. the first feeds into the second. Unfortunately, many business leaders still see profit orientation and service orientation as conflicting goals. After all, traditional bottom-line objectives are built on a factory perspective --standardization, mass production, short-term focus, and reactive, rather than proactive, responses to market conditions. Service motives, on the other hand, stress customization, niche markets, long-term goals, and a proactive -indeed visionary-approach. In sum, we have a point-of-view problem: an internal versus an external focus...what "we" (the company) want as opposed to what "they" (the customer) want. Moreover, virtually all managers are at ease crunching production figures, while few are comfortable with the subjective nature of service feedback. Is it possible to reconcile the two? Yes. But it requires managers to recognize and confront their toughest challenge -balancing priorities. Sure, it will always be easier to justify moves that ensure short-term profitability. But long-term success depends on consistent customer satisfaction-a more fragile, but critical objective.

GETTING SERIOUS ABOUT SERVICE QUALITY: Most companies want quality improvement, but few take the necessary steps to get it. Tom Peters suggests in Thriving on Chaos several steps necessary to get quality improvements. (1) Management. Quality improvement isn't a is a way of life. Top management can't delegate quality improvement. It must be practiced and communicated from the top. (2) Systems. Peters suggests that there are two principle reasons quality programs fail: Systems without passion and passion without systems. Both emotion and systemation organization are vital. (3) Measurement. Quality can and should be measured by customers. Quality is not soft. You can't improve quality without qualitative benchmarks. (4) Rewards. You get what you reward...reward on quality. (5) Training. Continued quality improvements is heavily dependent on training. Quality is people driven and not strategically driven. In a rapidly changing work environment the ability to think, communicate and learn how to learn become invaluable. (6) Structure. Your answers to quality problems cannot be confined to a departmental or division structure. True quality comes from crossing functional borders in your organization. (7) Quality Atrophy. All efforts on quality improvement get old. You must find ways to constantly stimulate the quality appetite to avoid atrophy. (8) Quality Chain. Your quality chain includes suppliers and distributors. Supplier and distributor partners must participate in your quality program. (9) Quality Cost. There is no quality cost trade off. Peters stressed that "If you make it better, you can also make it 40% cheaper on average."

AN ANATOMY OF POOR SERVICE: The prime reason for poor customer service is often poor executive management. Front-line service people generally treat customers exactly as they are treated by their own management. If employees on the front-line are treated in a condescending manner. they will treat customers in a similar unvalued and unintelligent manner. Carnegie-Mellon instructor Robert E. Kelley describes what might be called the anatomy of poor service in a recent Wall Street Journal column. He believes that a pecking order exists in poorly managed organizations. Top management in these companies is often rude and insensitive to its own middle management. Middle management mimics this behavior, treating front-line people in the same way. Front-line people who are at the end of the order dumping line have only the customer to pass on this less-than-social behavior. High-quality customer service depends on managers to support and serve front-line employees. Managers become the servants of the employees, not isolated bosses. Employees, in turn, go about supporting and serving the customer when superiors become a true sustaining resource. If your managers don't fully meet this challenge, you should not be surprised by the inevitable foreign participation in the global service sector. However, Americans will only have accounts at Japanese banks, fly Singapore Airlines and eat in French-owned restaurants if American management fails to realize that to get service for customers you have to give service to employees.'