When the going gets tough, the tough get going. — Joseph P. Kennedy
If you operate commercial motor vehicles as trucks and buses, then you are in what is known as a safety critical industry. A safety critical industry is one where failure to perform as expected can have dire consequences.
If you are in the trucking business, operations are always sensitive to market turbulence, economic cycles, seasonal variations, and the like. It’s no secret that the general freight market is not as robust as it once was. When the economy sneezes, the trucking industry catches a cold, as the old saying goes . . .
One serious mistake, that is oft repeated in times like these, is to react, not respond to market conditions. And the biggest reaction might be in cutting back in safety and then, in maintenance. Orientations, safety meetings, and training can be trimmed, service of equipment can be delayed, safety personnel and mechanics can be laid off . . .
After all, they are an expense, part of the overhead, and don’t bring in revenue, right?
Oddly enough, things may even keep running smoothly for a while, confirming the decision.
But the problem is not a short term problem. The problems start showing up in the long term. Dumb stuff starts to happen. Wheels begin to fall off vehicles. Turnover increases. And right or wrong, a new reputation soon emerges . . .
Plan For Turbulence
In a service-based economy, swings in demand are the new normal. Plan for them.
- Keep staff informed. Nobody wants to find out from secondary sources on what is going on. Nobody likes surprises. Without real-time information, drivers and staff may believe things are far better than they are . . . or things are much worse.
- Structure your communications so that every person who is working in the business plays a part in helping to work on the business. Your employees know, better than anyone, how to best improve operational inefficiencies and save money.
- Talk to your customers as well. Seek ways to add value. Help them to better manage your accounts receivable. Review your accounts. Offer discounts for quicker payments and perhaps add on fees for late payments.
- Bonuses are not entitlements, but at the same time should not be modified or changed during the year for any reason. Your bonus structure should relate directly to your goals and be non-discretionary. Bonuses should inspire employees to apply their best efforts to meet mutually-agreed upon results.
- What are the mission critical success factors of the business? What are your top three strategic initiatives? How do you add value? How can you add more value?
In turbulent times, beware of the quick fixes and avoid them. Think about the repercussions of your decisions to cut back or under-invest in recruiting, safety or maintenance.
A better solution may be to involving all of the employees in finding alternative ways to put the business in an improved competitive position.
Thank you for reading this.