Craig Roeder was preparing for the worst two years ago at ProTrans International Inc. He was hoping the logistics services company would have a lot of goods to transport and services to provide its customers. But with the manufacturing sector forecast to take another big dip and the auto industry on life support, it didn’t look like that was going to happen.
“There was a tremendous amount of shrinkage of capacity that went on at the end of 2008 and through the first six months of 2009,” says Roeder, founder, president and CEO at ProTrans.
“As it turned out, it wasn’t quite as bad as was anticipated. So now we’re no longer shrinking capacity. Now we have to add capacity. Just making that switch back and forth in a timely fashion on an on-demand-type basis has probably been the most challenging thing that we’ve dealt with in the last year and a half or two years.”
Roeder and his team pulled the 461-employee company through the tumult, but it left everyone feeling pretty stressed out. It wasn’t an experience Roeder wanted to repeat.
“We wanted to become a better managed organization,” Roeder says. “We didn’t say, ‘OK, we’re already working 50 hours a week, let’s all go out and work 65.’ That wasn’t the concept. We said, ‘We’re going to become a better managed organization. We need better data and information that we’re making decisions off of.”
Roeder wanted to get a better grasp on what was and wasn’t working in his business and prepare his people for change to better position ProTrans to adapt to the evolving marketplace.Assess the problem
One of the first things Roeder discovered as he began digging was that the company was relying too much on top-level data to judge performance.
He learned this as he gathered a dozen or so managers and directors together for a couple of days of dialogue to discuss how everyone went about doing their jobs.
“I had everybody submit to me what you would do differently,” Roeder says. “I encouraged them to talk to their people. What would you want to change? What would you want to see different? When I did that, I got 12 or 14 different formats. It required me to say, ‘I’m going to put this in a format that I can give it back and review it with them.’ That’s what we did with each individual.”
“As we started to drill down to understanding the numbers, we started to see we were looking at numbers way too much on a macro level. There were dynamics going on that a macro level just didn’t bring to life.”
Roeder took the example of one of the company’s facilities where multiple logistical services were provided.
“The facility would show up being profitable,” Roeder says. “When you really drilled down to the different service types and then, even more importantly, down to individual customers, you started to realize that not every aspect of that facility is producing the results you anticipated or desired. So why is it down? What’s driving this particular piece of business to meet or not meet expectations?”
The key thing to remember when considering change in your organization is that you have to know where you’re starting. You can’t fix a problem when you don’t know exactly what the problem is.
“You have to start with the data that you have,” Roeder says. “You can’t start and say, ‘I’m going to build a measurement based on data that I’ll have in the future and that I don’t have now.’ You’ve got to start with what you’ve got. You may make a project in the future and say, ‘I’m going to change my data source so I can enhance my effectiveness in doing this.’ That may become a desired future state. But you don’t start there. You start with the data you have.”
Roeder gathered his data by going through each functional area of his company.
“We started off by saying, ‘OK, let’s look at our material handlers,’” Roeder says. “We have some who are doing validation and check-in at our northern center where we consolidate. Then we have some that are down on the receiving end that are unloading trucks and making deliveries to customers. We just said, ‘How many pieces per man-hour? How many tons per man-hour? We’re fortunate we had a computer system with the software to support that functionality that has a clock on it. We could start to see how much volume at what time of day is flowing through that location. So you come up with a productivity measurement.”
After the data were gathered and distributed to his leaders, they could begin talking about what they had found.
“We started to understand how people’s projects might interface and have a cause and effect on another sector,” Roeder says. “From that, we said, ‘These are the major initiatives we want to take on for each group.’ It really gave us a nice single document that we were tracking the change against.”
Roeder had his baseline from which he could begin to make changes. But there was still some heavy lifting to be done.Ease the fear of change
Next, Roeder had to convince his people that there was a better way to do business and that it was worth the effort to make it happen. The ability to take action on change rather than just talk about it is obviously the big difference maker.
“One of the definitions of insanity is expecting things to change without changing anything,” Roeder says. “It’s human nature. When you’re managing activities and you’re getting the job done doing things this way, your receptiveness to changing it is, ‘You don’t understand how hard that was to get under control. This is what works. We’re not changing it.’”
It takes an effort on your part to break that mentality, and Roeder faced an immediate obstacle in his endeavor to enact change.
“I sat down with the management team and we were having a meeting,” Roeder says. “I was being told, ‘Listen, Craig, we can probably, as an organization, only take on two or three major initiatives to make organizational change. If we can do a couple of those a year, that’s pretty good.’”
That’s not quite what Roeder was hoping to hear.
“You’re sitting down and there are 14 individuals leading different aspects of your organization,” Roeder says. “So then you ask the question, ‘Which 12 of you want to volunteer to not change anything this year so we can go focus on a couple of other areas?’ Now if I would have had anybody volunteer, I would have known I had the wrong person leading that section. As a manager, they should all be looking to enhance their area of responsibility ‘How do I make this better? How do I lead this to a new day?’”
To help the process along, Roeder gave each of his managers a copy of the best-selling book, “Who Moved My Cheese?” by Spencer Johnson.
“It’s a little 45-minute read,” Roeder says. “It’s starting to look at change and realizing that most change that occurs in life is positive and it’s for the good. It’s to start not only looking for change but to embrace change so you can be improving constantly. We started to say that there’s nothing really sacred here. Just because we’ve done something a certain way for two, three or four years, that doesn’t mean we can’t change it and come up with a better method.”
It’s all about breaking down barriers and fighting the natural instincts that humans have to resist change.
“You have to break that mindset that we can only change one thing or two things at a time,” Roeder says. “You have to start off with the premise that you can’t be improving if you’re not changing anything. You’re not going to find better ways to execute needs or operations or processes if you don’t change it. It has to change. That’s part of the culture. We have to foster an organization that embraces it.
“If they start seeing that the other directors and managers are looking to enhance and improve their areas, there’s a little pressure to say, ‘You better have a plan, too.’ It’s having a culture that embraces change. If I change something that doesn’t work, that doesn’t mean we failed. That means we found something that doesn’t work. What else can we try?”Know where you want to go
After the numbers had been crunched and the reasoning had been laid out, Roeder had his team in a better frame of mind to consider change. But to really get them to believe, he had to provide a plan of how it would be done and specifics as to what it would accomplish.
“You need some mechanism, some methodology, some process by which you manage your change and you manage the evolution of your organization,” Roeder says. “Whatever kind of company you are today, you better think in five years you’re going to be a very different organization. To do that evolution in a planned, managed format is far better than trying to react to market changes, competitor pressure, customers’ demands and financial climate.”
“We come up with a desired future state. Based on that desired future state, what’s the value proposition? What will that change do for us? You go through doing a little bit of [return on investment]. If you do it correctly, it becomes a process. You have to have a process to manage change.”
A process involves developing initiatives with action items that have names and dates attached to them.
“Maybe you have five to 15 action items to complete the initiative,” Roeder says. “Or it requires a project. This is an initiative that has multiple phases to it. Action items get a completion date put on them and they get a person’s name put on them. We know what it is that has to get done, who’s doing it and when they are supposed to have it done by. Now we have the necessary tools.
“We meet as a management group every other week and that’s one of the things we review. What were the action items for the last two weeks that were supposed to be completed? Were there any action items that weren’t completed? It gives us a way to put it into a process by which you manage that change. You have to take it from, ‘We know what we want to do’ to, ‘OK, now how are we going to do it?’”
Roeder used this process to make a software change within the company’s international group to improve performance.
“We had names associated with that,” Roeder says. “Who is doing testing? When do we go live? That entire process of identifying the software we wanted, then rolling it out because it has operational implications and it has accounting implications, that’s what I’m talking about. Within that whole process, there were different things that had to be accomplished.”
It’s that ability to enact a workable action plan that makes the difference between successful leaders and ones who just talk a good game with tired clichés and empty promises. Roeder believes this is making a difference at ProTrans and will put the company in a much better position to handle future turbulence in the market.
“There’s a lot of people who have good ideas,” Roeder says. “There’s a much smaller subset of that group of individuals that actually implement them. Those who know how to take it from an idea to an implemented process, that goes a long way.”
How to reach: ProTrans International Inc., (888) 744-7669 or www.protrans.com