“If you don't change your beliefs, your life will be like this forever. Is that good news?” –Dr. Robert Anthony
Here’s a thought for you: the workday beliefs that guide all of us through the business side of our lives might have a much bigger impact than one might think on whether we’re ultimately successful or not – and that may be especially true for those pounding it out in the rough-and-tumble trucking industry.
We’re not talking religious beliefs here; that’s a whole ‘nother topic. We’re talking “business beliefs” that are “unconscious” in the sense that we may not be fully aware that they even exist at all, much less affect how we conduct ourselves in the office or in the truck cab.
This is a theme Jerry Osteryoung, professor emeritus of finance with the College of Business at Florida State University, has been hammering on of late. I’ll let him explain where he’s coming from on this subject:
“All of us have a set of beliefs that guides us through this life we live. These beliefs might be something like ‘theft is bad’ or ‘with hard work I can achieve anything.’ There are, unfortunately, a bunch of beliefs that we do not even realize we have, and these unconscious beliefs tend to shape our behavior. If we are responding to events around us without recognizing the forces that are driving us, it is a recipe for disaster.
For example, we were helping one woman who was struggling with her restaurant. Her husband had just lost his job, and she had to keep the restaurant going as it was now their only source of income to care for their ill son. There was just no other viable alternative.
After working with her for months, I could see that she was a business owner who really wanted to be successful, but she just could not put the pieces together no matter how hard I coached her. In my last conversation with her, I tried to get her to see that in order to make a decent income, she would have to go out and sell her catering services. While we both knew this was her best alternative, she just could not break free to put the plan into practice.
As I was talking to her about this paradox—wanting something to happen but being unable to make it happen—she finally admitted the reason she did not go out and sell more is because she was afraid her staff would think less of her if she was not in the restaurant cooking.
I replied, ‘So you are letting the feelings of your staff determine whether you succeed or not?’ A light seemed to go on as she came to the realization that this belief—a belief she had not even known she had—was destroying her business and her life.
Another entrepreneur has been struggling for more than five years with flat sales and very little forward progress. When I got to talking with this entrepreneur, he discovered that he had an unknown belief that he did not deserve to be successful. On the outside, he has the appearance of someone who is very aggressive and successful, but his belief is keeping him from truly realizing his potential.
In most cases, beliefs form because they served us well at some point in our lives. However, as circumstances change, some beliefs become obsolete and no longer serve us at all. A great way to ascertain whether an unconscious belief is holding you back is to ask a family member or close friend—someone who can be very candid with you. Typically, once these beliefs are recognized, they dissipate and no longer affect behavior.”
Now, a lot of folks in trucking might be asking, “Glad the restaurant owner worked this out. But I ain’t in the restaurant business.” No, that’s certainly true – but you’re in the freight business, and one of the big “unconscious beliefs” dogging many freight carriers is that without discounting their services to some degree, they aren’t going to get contracts from shippers.
My good friend and editorial compatriot Tim Brady had some things to say about that recently – and his view echoes what Professor Osteryoung said about the impact of “unconscious” beliefs:
“Under the current economic atmosphere, large segments of the trucking industry have fallen into the trap of ‘volume discounting,’ [meaning] the greater volume a customer has to ship, the lower his shipping cost. While this works to a point, beyond it lies the eventual collapse of the trucking company.
Let me recommend an excellent volume for your business reading list: The Profitmover’s Guide to Business Success by James B. Larsen. While his book is focused on the moving and relocation services part of the transportation industry, still a lot of his observations hold true for us all. Here’s a quote that resonates with any business, especially a small business:
In a typical scenario, the company informs its salespeople that they can sell at a certain price or discount up to a certain percent to get the order … . What this really means is that salespeople are being allowed to set price without knowledge of what the actual COST is for the product or service they are selling. Does this make good business sense?
No, frankly, it doesn’t. So don’t do it. There will always be a (usually new and inexperienced) trucking company that figures the best way to line up shipping contracts fast is to undercut every other motor carrier out there. It’s sad, but they’ll be holding an auction to sell off tractors and desks before they realize they didn’t run their numbers to know their costs and have a business plan in place to take the company beyond the first round of paychecks.
[On a different topic, watch the clip below to get Tim's thoughts on whether truckers should in engage in "factoring" to help improve cash flow.]
On the other hand, you know the numbers you deal with, day in and day out, that determine the profitability of your company and whether it grows or stagnates.
Most shippers understand ROI and other costs. Actually, if you took the time to sit down with your ‘old reliable’ shippers and showed them exactly how you arrive at your shipping costs on their invoices, my bet is they’d be impressed. You’d show them that not only do you know how to keep your stock rolling and get their products where they need to be on time and in perfect condition, but you also understand the dynamics of the entire logistics chain.
[To read Tim's complete column on this subject, click here.]
Maybe your pitch to shippers needs to be a short background lesson on how you figure your prices. Invite them into your motor carrier’s office for a short business meeting. Your shippers won’t be left scratching their heads and wondering why their shipping rates went up when they’ve been with you for a year already. You can show them why the customer service you provide them has gotten a little costlier, and also let them know you want their company to succeed just as much as they do.”
Just one example of how you can turn potentially troublesome “unconscious” beliefs into a fully conscious business plan that gets shippers on the dame page with you. And that can only help a trucking business survive and thrive over the long term.