When a Bright Shiny Light Takes You into the Deep, Dark Ditch

The hallmark of an entrepreneur is their “Can Do!” and “Let’s Go!” attitude.  They have an energy and sense of possibility that drives them and can be infectious.  A new idea or concept comes into play and, BOOM, they are all in and want to make it happen as soon as possible.  Carpe diem is a daily diet.  Seize the opportunity and run with it!

Max is like that.  He runs a successful distribution company and is a leader in his industry.  Much of his success is due to the fact that he’s able to see opportunities and make a quick, decisive run at them.  Recently, business changes are threatening the economics of their outsourced logistics model, above and beyond the current market dynamics.  The solution?  “We’ll set up our own transportation company!”

On the surface, this may indeed be a brilliant solution.  Many businesses have their own transportation company or division that contributes to the overall value and profitability of the enterprise. Alternatively, it may blow all 18 wheels at high speed, tossing the company into a deep, dark ravine. 

The logistics systems for Max’s company are very different than those required to run a profitable transportation company.  Beyond the investment of an average of $75,000 or more for a new semi, he can expect to incur approximately $180,000 in annual operating costs according to industry experts.    To effectively manage that resource, Max wants to ensure that he not only gets his product to where he wants it to go, but that his trucks are hauling goods during the other side of the trip.  Otherwise, they’ll be dead-heading – running an empty truck - which generates only costs with no offsetting revenue. This stroke of genius demands that Max and members of his team need to master the world of freight forwarding, brokering, and lane management.

Fleet management is a business model distinct from managing the arrival and departure of independent carriers.  Someone needs to be available 24/7 to dispatch and communicate with the drivers when there is a 3 a.m. breakdown or dock issues, or the stressed, overworked driver walks off the job. Fleet repairs and maintenance become a part of the operations. Transportation regulatory, insurance, and safety requirements need to be understood and complied with.

What seems like a bright, brilliant idea may become a distraction that derails the team from focusing on what they do best – bringing their products and product knowledge to their customers in such a way that makes the customer look fabulous with the end client.

On a recent road trip, I popped Traction by Gino Wickman on and listened to it again.  He discusses clarifying your vision for the company with your entire team and emphasizes having, and sticking with, your core values and focus when running your company.  It’s key to driving profitability and creating long-term, transferable value. 

Too often, I hear pushback from business owners that discussions around mission, values, and vision are too fluffy.  It can feel that way sometimes.  However, devoting the time to defining, clarifying, and communicating your core focus and values throughout the organization is how you drive success and stay in your lane.  It becomes your filter on opportunities and guards against shiny lights distracting you.

Simply stated, your vision defines:

• Who and what your company is?
• Where you’re going as a company?
• How you’ll get there?

This translates into building consensus and clarity around the organization’s:

Your Core Values – These are the everlasting principles that guide you, your team, and your company every day. 

While many organizations share similar values, such as integrity, honesty, and teamwork, the best-in-class companies take their time in working through the possibilities to ensure that the three to seven they pick truly reflect who they are and what values they commit to live by.  A common definition of the terms is hammered out to ensure everyone knows what, for example, “integrity” means, looks like, and is delivered.

Once selected and affirmed, these companies take it to the next level by communicating these values, with illustrations, stories, and reinforcing repetition, throughout the organization.

Your Core Focus – Your core focus is the reason you are in business in the first place.  It reflects your purpose and passion and why you are in the business you’re in.  Wickman urges laser focus to the point of naming your specific niche. He uses the example that Orville Redenbacher isn’t a snack company.  They do one thing. Popcorn.

Your Target – Questions such as “Where do we want to go?” and “Where will we be in X years?” are the next questions to be answered in forming the vision.  Wickman suggests a ten-year horizon, although that may be a stretch for some teams to think about. 

I push my clients to think a minimum of five years out and literally close their eyes and envision what it looks like.  How big is the company?  Where are we?  How many are we?  What’s the vibe? What does it feel like to be our customer? Supplier?  Employee?  Grant permission to stretch and daydream with your team. 

Your Strategy -  With the target in mind, constructive conversations naturally flow to “How will we do this?”  An organization can consider where they are now versus where they want to be and begin to formulate the paths necessary to get them there.  While the five- or ten-year vision feels “out there,” the team starts chunking it down into manageable bites.  Where do we need to be by year three?  Year two?  The end of this year?  The pieces begin to fall into place.

For Max, the core focus has everything to do with being of service and ultimately helping his customers and their end client live more comfortably within the framework of his industry.  He’s narrowed this focus to serve key players in the supply chain rather than the end-users themselves.  The vision is for significant growth, more than doubling in size.

The pivotal question that obviously follows is “How does building or owning a transportation company fit into this focus?  This vision?”

The answer isn’t readily apparent, at least not yet.  Like Elmer Fudd and Buggs Bunny, the chase was on.  Gut intuition was driving the rig.

If this sounds familiar, you’re not alone.  Every one of us makes decisions each day that are based on our intuition.  By some reports, up to 95% of the decisions we make every day are based on our intuition rather than pausing to think it through.  For those that like to move quickly and seize big opportunities, that style can come with big risks.  We need to expand our level of discipline in our thought processes. 

The following approach provides a framework for evaluating the next big idea:

• Include a small but diverse group in the process - This manages group think at the same time it draws differing perspectives into the conversation and analysis.
• Welcome dissent – Create a safe space for people to share potentially contrary perspectives and data. Don’t let people get away with nodding their heads just because the expert or leader says so.  When that occurs, nothing is accomplished other than sucking up peoples’ time and pretending there’s consensus.
• Bring the data – Do the homework, build a reasonably detailed models, and reflect on the supporting data and research. Use data to inform and generate different ideas, perspectives, strategies, and solutions.
• Filter everything – Use your core purpose and vision as your filter. If the discussion, analysis, and data show that new opportunity contributes to its fulfillment in a meaningful way, excellent.  If it doesn’t and feels like it’ll be a huge detraction, move along.  You have your answer.

Max did pause, eventually.  He recognized that the most important next step was to inform his gut intuition, not write the check for the truck they were looking at.  His team needed to balance his great idea with analysis and consideration of its impact on the company, its core focus, priorities, and resources.  He invited them to test his theory and prove him right or wrong.  They’re going through the steps.

They still have that “We can do this!” attitude working for them.  They’ve merely added a touch of discipline to it.  Time will tell which way they go and what strategies they use to solve their logistics challenge.  They’ve struck that happy balance between “Let’s Go!” and being sure this move keeps them in their lane instead of dumping them in a deep, dark ditch.