Do you have what it takes to be a New Millennium manager?
Pinning down critical skills needed to manage a fleet or one of its operations is a difficult thing to do, even if you're already doing the job and doing it well. So how do you plan for the skills you and your managers will need to run a truck fleet in the new millennium?
The simple answer is to get ready for more of the same. Whether you're responsible for a private or for-hire fleet, you're currently facing rapid change in your business. And while you can choose from a full menu of contradictory predictions about trucking in the new millennium, they all share a common, not unfamiliar theme - you're going to continue facing rapid change.
For trucking, the roots of that change can be traced back to deregulation, or as University of Michigan Business School Professor C.K. Prahaladcalls it, the transformation "from cozy to competitive." His essay "The Work of the New Age: Managers in the Emerging Competitive Landscape" (The Organization of the Future, Jossey-Bass, 1997) points out that service industries in particular are reacting to the pressures of privatization and deregulation. "The era of managing supply levels, prices, profits, investments, and patterns of technological evolution on the basis of secretive negotiations between managers and bureaucrats is giving way to a healthy respect for the voice of consumers and the marketplace." In trucking that transformation is already complete.
The second factor driving business change is the move from local to global competition, according to Prahalad. While at first glance trucking would seem to be a wholly domestic business protected from global competitors, NAFTA has already supplied the first lessons in international transportation markets. And even if the nature of trucking protects you to some degree from outside competitors, your customers, whether they be internal in a private fleet or external in a for-hire operation, are looking to world markets. They need and are actively seeking logistics and transportation services that can take them into those markets.
The third element identified by Prahalad is the change in "competitive dynamics" from a small number of well-known companies competing in the same market to an explosion of small, fast-moving "challengers." And related to that is a move "from clear to indeterminate industry boundaries."
Today, new competitors in trucking seem to spring up almost daily, sometimes even from internal operations or from joint ventures with fleets that still continue to vigorously compete with you in other markets. As for clear boundaries, it's becoming harder and harder to even make gross distinctions such as "private" and "for-hire." When does a fleet stop being a trucking company and become a logistics provider? Do the terms truckload and less-than-truckload even make sense anymore?
The fifth business characteristic driving change is volatility. "Given the indeterminateness of industry boundaries and migration paths, and the uncertainties surrounding customer expectations, firms must experiment with new products and services," according to Prahalad. But even if your experiment succeeds, "a smashing success can be replaced by a new product in a very short space of time."
With technology such as the Internet removing intermediaries between producers and their end users, business models for manufacturing companies are also being altered dramatically. This direct access is not only changing distribution patterns and requirements, but is also raising the profile of logistics as a competitive strategy, presenting trucking operations with yet another challenge.
The move away from well-established vertical integration to reliance on specialists or emphasis on "core competencies" is another factor contributing to the rapid changes facing business today. In fact, says Prahalad, today competitors often trade core components or subsystems among themselves even while they fight for the same end-user's businesses. While that change is clearest in manufacturing operations such as the automotive or PC industries, trucking is filled with highly successful "niche" carriers. And it doesn't take much imagination to see this concept extended to private and for-hire operations with complementary and underutilized competencies.
The final change factor identified by Prahalad is the transformation "from a single to a multiple intellectual heritage." In other words, successful businesses are now looking outside of their traditional areas of expertise to develop hybrid products, which means "managers have to learn, adapt to, and exploit basically different reasoning processes," he says. For example, many trucking companies are becoming experts in electronic commerce in order to continue doing business with their retail distribution customers.
Although such a summary of the forces driving the current dramatic business changes may seem overwhelming, there are probably few surprises in Professor Prahalad's list. What's more important to you and your fleet are the management and organizational skills that will be required to succeed in this new environment.
The first, and most important, need will be the ability to "conceive and execute complex strategies," he says. You'll have to look beyond strategies focused on market share and profitability to those that will attempt to influence the evolution of your markets and allow you to enter what are now seen as nontraditional markets. That means conceiving and executing collaborations that include suppliers, customers, and competitors.
While such collaboration will be necessary and beneficial, it will also require managers to understand and protect the value of their "invisible assets," or intellectual property. Your trucks may represent a considerable capital asset, but in the new business environment it will be your company's collective knowledge of how goods are moved most productively that will represent its real value.
Another critical skill for the new millennium manager will be the ability to create and maintain "a flexible system that can reconfigure resources to address emergency opportunities," says Prahalad. Too often, a company's organizational structure becomes an impediment to reacting to market changes, rather than offering a framework to channel and exploit those changes. "The ability to conserve and re-deploy resources rapidly is a critical capacity for the future," he says. "This means learning fast, forgetting even faster, becoming boundary-less, and focusing on winning in the marketplace."
How can a manager foster the flexibility needed to take advantage of "emergency opportunities"? In Prahalad's view, you must "create a shared competitive agenda for the entire organization." Sometimes called "corporate DNA," this agenda provides a clear view of your fleet's future for employees, customers, suppliers, and everyone else involved in your success.
While at first glance this "shared competitive agenda" might seem like another fuzzy, New-Age cliche, its importance becomes clear when you step back and take an objective look at how information technology is changing the trucking business. The widespread adoption of distributed, networked information systems means those employees and business allies closest to your customers now have the ability to make decisions and suggest strategies to keep your fleet closely focused on its markets and flexible enough to satisfy them. As a senior-level manager, your roll will be to "define the 'sandbox,' but not every game that is to be played within it," says Prahalad.
Faced with such radical changes in the business environment and the skills needed to succeed in that environment, who will be the ideal manager for your fleet in the new millennium?
The most important characteristic will be the ability to see the big picture, "to conceptualize and synthesize the whole, to see the connections between parts and be able to imagine the future," says Prahalad. And that ability will extend beyond analyzing hard data to also include intuitive understanding of "soft information" that will provide that critical head start on the competition.
The second characteristic will be "intercultural competence," he believes. Think about the changing makeup of your current work force, and then add the growing importance of global trade, and it becomes clear that managers in the new millennium will need to understand other cultures and other languages.
"As firms become part of the global marketplace and increase their dependence on other cultures (for markets, suppliers, employees, and investors), intercultural competence becomes a significant advantage," says Prahalad. If you doubt that "intercultural competence" will have much of an effect on trucking in the future, take a look at fleets that have succeeded in developing profitable service in Mexico.
The third characteristic is obvious - an appetite for extensive and continuous training. Rapid change means rapid obsolescence of our knowledge. "Managers must continuously be exposed to new ideals, technologies, business practices, and cultures," according to Prahalad.
Less obvious is a strong commitment to personal and business standards of behavior. "No dispersed organization with continuous pressure for change can survive without clearly spelled-out standards of behavior," says Prahalad. Building a flexible, fast-reacting company requires "commitment to performance and accountability, concern for due process, interpersonal and intercultural sensitivity, and the development of others."
Finally, says Prahalad, a manager in the new millennium "will not just be a doer; he or she will be a thinker as well. ... The next decade will be full of opportunities for those who are willing to challenge themselves, to learn, to share, and to change."
Actually, that sounds like the recipe for a successful manager in any age.
One thing that's certain to remain unchanged in the new millennium is trucking's need to attract and retain productive employees. High turnover among drivers, a shortage of skilled mechanics, a seemingly insatiable demand for information technologists, and the ever-present pressure to find and keep "quality" people aren't going to magically disappear with the 20th century.
What could change, however, is your approach to managing employees. And that might not only help you attract and retain the drivers, mechanics, and other critical employees, but it might also make life more exciting and rewarding for everyone.
In his new book, The Gifted Boss, How to Find, Create and Keep Great Employees (William Morrow and Co., 1999), Dale Dauten says: "The fundamental task of the best manager is not to manage... The job of the gifted boss is to create a magnetic environment, one capable of attracting great employees - the kind who don't need management, who lift up their co-workers and even their boss." While his book clearly spells out all the characteristics of such a boss and how they go about surrounding themselves with exceptional employees, Dauten says the central issue is freedom - "Freedom from management, mediocrity and morons."
It starts with humility, he told Fleet Owner. "You have to recognize that you can't motivate people," he says. "You need to find people who are motivated and give them an environment that doesn't interfere with their passion."
Asked how a gifted boss might approach the turnover problem among longhaul drivers, Dauten suggests he or she would find a creative way to be unique, to give the best employees solutions to their problems. "The gifted boss doesn't care what the average employee wants," he says. "They want to solve the problems of their best employees, and they might not be the same problems."
While he can imagine "creative solutions" to driver turnover such as sabbaticals or family travel privileges, Dauten believes that drivers themselves will know what it takes. "They have a lot of time to think about what it is they don't like," he says. "If you tell them you're willing to experiment, they'll come up with the best ideas."
"You can't go on saying, 'Here's the job, who wants in?' Once you recognize that you have to create an environment that lets people do the things they love to do, that gives them the opportunity to be exceptional, then the rest is relatively easy."