Whether you're a less-than-truckload, truckload or private fleet, you manage lots of 'moving parts.' The question is: Are you focusing on the 'right stuff?' Mastery of all functions--sales, marketing, operations, finance, etc.--would be ideal, right? But how do you decide what challenges to tackle & when? How many times do you find yourself dealing with matters simply in the order they cross your desk? We often describe this using old accounting term "LIFO," which is short for last-in, first-out? Instead of strategically prioritizing (and solving!) problems, you essentially give them equal priority. That would be OK if not for the fact that resources are scarce, making opportunity costs high. Therefore, each decision you make on what to work on is also a decision made on what you won't work on.
In our experience, the 80-20 rule truly applies. Roughly 80% of that which is critical to your bottom line is tied up in just 20% of your company's activities. This places a premium on stratifying and prioritizing your company's resources. One approach to consider is The Performance Formula. It starts with asking these key questions about your organization:
- Has your executive team clearly identified the fundamental performance elements that constitute the foundation of the businesses’ success?
- Has your executive team visually framed this formula and effectively communicated it in understandable terms to the company’s management?
- If your executive team has identified the primary profit elements and how they work together (your performance formula), have they also targeted goals for these parts of the business and communicated them effectively?
- Are you able to accurately measure how well these primary elements are working and can your executive team explain how the interrelationship of these elements affect performance?
- Are regular result-management meetings held to reconcile actual performance to business goals, thus providing needed performance feedback to accountable leadership?
Any "NO" answers to these questions is a red-flag that your management team isn't focused and is very likely working sub-optimally. Many vendors, including ThoughtDrivers, offer diagnostics, workshops and technology as solutions to this problem. The important thing is to make the first move. Be proactive. Dictate your future, rather than having it dictated to you (hopefully not through acquisition, reduction or closure of your business).
If you'd like to learn more about The Performance Formula, we recommend reading Sullivan's The Formula, Building Competitive Advantage. You can also visit ThoughtDrivers.com and subscribing to our newsletter, called The Road Ahead for more on the topic.
As always, best of luck in your business and stay tuned.
Cheers,
Sam Liberto
Chief Executive
