Each business conducts its surveys in a different manner, and each business improves via different means. What sort of manner, and what kind of means, depends on the CEO of the business.
Yellow Freight’s Bill Zollars is a master of insight. This excerpt from an article on the FastCompany website gives US some insight, too.
Before he began shaking things up at Yellow, Bill Zollars decided that he had to explain himself and his ideas to the staff. He also decided that he had to do it quickly, frequently, and in person. But there was a problem: Only a fraction of the 25,000 employees at the time worked at the company headquarters in Overland Park, Kansas, outside of Kansas City. Most worked at terminals that were located in several hundred cities. So in early 1997, after a few months on the job, Zollars hit the road. For the next year and a half, he regularly visited terminals around the country, where he conducted a series of town-hall meetings. There were no fancy slides or videos. Just Zollars, an affable former college-football player from Minnesota, standing on a loading dock or in a sales office, talking to the people responsible for carrying out his plans. “There were days when I gave the same speech 10 times at 10 different locations,” he says. “I’d start at 6:30 AM with the drivers, then I’d talk to the dock workers, the people in the office, and the sales staff. At night, I’d meet with customers. I wanted as many employees and customers as possible to hear it from me face-to-face.”
Zollars didn’t meet every employee, but he did reach thousands. His presence made a strong impression. “People thought, ‘He’s the president of the company, but here he is talking to us,’ ” says Mike Brown, vice president of strategic market planning and marketing communications. “It’s something this company hadn’t experienced before. It was a breath of fresh air.” The goal went beyond putting a face on the new leadership. Zollars, who returned to many terminals more than once, wanted people to know that his vision for a new Yellow wasn’t just this year’s fad — it was a long-term shift. “Repetition is important, especially when you’re trying to change the way a company thinks about itself,” he says. “You’re trying to create new behaviors.”
Again and again, he reminded employees of the company’s new focus: customers. He knew that this represented a different way of thinking about the business. Early on, during a visit to one of two customer call centers, Zollars listened to calls to get a flavor of the process. Although he was impressed with the instant transfer of information to the terminals, he noticed a problem: When customers contacted Yellow, its representatives didn’t ask them when they wanted their freight. Instead, the reps told customers when Yellow could deliver it. The schedule was convenient for Yellow but not necessarily for its customers. “I remember one caller who said, ‘I’d like to get this stuff from Chicago to Atlanta in two days,’ ” says Zollars, “and we said, ‘We can get it there in three days.’ The customer thanked us and hung up. We didn’t think there was anything wrong with that. The attitude was, If you don’t like what we do, too bad.”
For a long time, he says, Yellow adhered to an “operational obsession.” Employees monitored how much freight moved through the network daily, how full the trailers were, and other internal metrics. Yellow was a model of efficiency. But it had no idea whether its customers were satisfied. At the town-hall meetings, Zollars would ask employees to guess the defect rate: how often shipments were picked up or delivered late, billed wrong, or damaged. Usually, they’d say it was 10% or 20%. Try 40%, he’d tell them. “I’d never seen a defect rate in any industry that bad,” he says. “The response was classic denial. People thought, ‘We’re as good as anyone else in the industry.’ “
In many ways, when Zollars arrived, Yellow still behaved as though deregulation hadn’t occurred in 1980 — as though everybody’s rates and service were the same. Meanwhile, the competition was reducing its long-haul transit times, and smaller, more nimble outfits were grabbing up regional shipments. “We were a defensive company — a follower, not a leader,” says James Welch, who became president and COO of Yellow Freight in 2000 after Zollars replaced Myers at Yellow Corp. “We were yearning for leadership. This company was ready to change.”
Next, Listen to What Customers Want
If Yellow was going to satisfy its more than 300,000 customers as never before, it needed to hear from them. That was Mike Brown’s job. In late 1997, with the help of an outside firm, Yellow surveyed 10,000 randomly selected customers. Since then, the company has been surveying 600 different customers a month. Those 15-minute conversations are vital. “It used to be that one anecdote or the opinion of one customer would carry the day,” says Brown. “Now we have the opinions of tens of thousands of consumers.”
For a company that relied on internal criteria, letting people from outside the company — its customers — evaluate performance wasn’t easy. Especially when Yellow learned that its assumptions about customers were wrong. “We’d had the attitude that speed and price were the most important things,” says Greg Reid, senior vice president and chief communications officer. “But according to our research, what matters most is that you pick up when you say you’re going to, deliver when you say you’re going to, and don’t damage the freight.”
The customers made a compelling case for dramatically improving reliability: Those who said that they would use Yellow again and recommend it to others had gotten good service. Those who hadn’t were less loyal. It was a fairly obvious lesson for a traditional service provider, says Reid, but it was a critical one for a company that was trying to become customer-centric. “What happens when consumers anywhere get bad service? They don’t go back,” says Reid. “Why should we expect our business to be any different?”
Nothing epitomizes the company’s new commitment to customers better than Yellow’s Exact Express. Launched in 1998, it represents a breakthrough for Yellow: its first expedited, time-definite, guaranteed service. Everyone involved, from the customer rep to the driver, is committed to doing what it takes to satisfy the customers’ needs — even if that means using an outside air-cargo partner to meet a deadline. So far, says Valerie Bonebrake, senior vice president of new services, which includes Exact Express, the deliveries have arrived when they were supposed to 98% of the time.
Exact Express is Yellow’s most expensive and most profitable service. It’s also growing at the fastest clip, with double-digit increases every year. Because of the service’s guaranteed on-time delivery and its speed, Yellow is moving the sort of “hot” freight that it didn’t get before: an overnight shipment of 40,000 flashlights from Los Angeles to Washington, DC for an outdoor event that took place during the 2001 presidential inauguration; marketing material that related to an acquisition, which had to reach 349 banks on the same Monday morning; 10,000 pounds of air freshener that was rushed to ground zero of the World Trade Center attack. Although customers call on Exact Express in emergencies, says Bonebrake, the goal is for them to make it a routine part of their just-in-time supply chain. Yellow no longer measures itself against the competition alone, says Zollars. It strives to be as fastidious about service as Nordstrom, Starbucks, and FedEx.
Exact Express is helping Yellow win back customers such as Timothy Slofkin, the traffic and purchasing manager for Interprint, a printing company in Clearwater, Florida. About six years ago, he stopped using Yellow because its shipping schedule was simply too inflexible, too limited. “Yellow was never willing to work with me,” he says. A few years later, one of Yellow’s sales reps told Slofkin about the company’s online-ordering-and-tracking capability. Slofkin was skeptical, and since he didn’t have a computer, he didn’t have much use for the Web. But Yellow persisted, persuading Interprint to equip its shipping department with a computer and then training Slofkin on how to use MyYellow.com. Now he’s one of 51,000 users registered on the site, and he’s hooked. He routinely places orders online, tracks his shipments while they’re en route, and reviews past shipments.
And Don’t Forget About the Power of Technology
One of the main reasons that Yellow has been able to expand and improve service is its state-of-the-art technology. Since 1994, the company has spent about $80 million a year on its highly integrated information systems. The investment has led to significant changes in virtually every stage of the business. It has affected how orders get processed and relayed from the call centers to the terminals, how the dispatchers assign drivers for pickups and deliveries, and how the dock workers load and unload trailers.
Yellow’s early years were rather low-tech by comparison. In the 1920s, the Harrell brothers, A.J. and Cleve, who once hauled freight by horse- and mule-drawn wagons, operated a small but growing fleet of yellow Model T taxicabs (according to company lore, the original yellow cab) and buses in Oklahoma City. In 1924, the Harrells incorporated the Yellow Cab Transit Co. Two years later, they acquired a couple of trucks to handle the freight that they had been hauling on their buses, mainly oil-rig parts bound for Tulsa. Back then, there was no way to track shipments or to guarantee that freight would arrive at a certain time. It got there when it got there. How long it took often depended on the condition of the two-lane highway that day.
Nowadays, even though Yellow essentially does the same thing that it did then, the operation is considerably more involved. What was a small regional company for many years has become a global enterprise with more than 14 million shipments a year, 377 terminals across the country, and partners around the world. And yet the technical demands are often overlooked. When Lynn Caddell left America West Airlines to become president of Yellow Technologies, a Yellow Corp. subsidiary with 350 employees, a colleague remarked on how boring trucking seemed compared with the airline industry. Caddell didn’t see it that way. “We’re moving a product from one place to another, but there’s a lot more complexity to it,” she says. “Each of my ‘passengers’ is a different size and weight and needs a different amount of space. And they don’t simply go from airport to airport. They go to hundreds of zip codes and addresses. Many of them need to arrive at their final destination at a specific time. Coordinating all of that is a huge challenge.”
Yellow has become a different company since 1996. It is driven by CEO Bill Zollars and a frontline revolution that emphasizes the customer. The following principles are its road map for reinvention.
Share the new vision every day. Early on, Zollars spent 18 months visiting employees and explaining why and how Yellow had to focus on its customers. Zollars believed that because this was a new way of thinking, employees needed to hear it more than once. They also needed to hear it directly from him so that they could gauge his conviction. “If the people doing the work don’t believe what’s coming from the leadership,” he says, “it doesn’t get implemented. Period.”
Avoid behavior that undermines the mission. When a new leader joins an organization, actions tend to get magnified, for better or for worse. “For every negative thing you demonstrate to people, it takes 50 positive things to overcome it,” Zollars says.
Get out of the office. During his first year at Yellow, Zollars spent most of his time in the field. “It’s the only place where you find out what’s really going on with customers and operations without any filters,” he says. “At headquarters, you don’t hear any of the bad stuff.”
Don’t be afraid to tell the truth.Zollars uses an employee newsletter, YFS Week, to give the staff an honest assessment of its performance and the industry on a regular basis. “We don’t just talk about victories. We talk about losing business, about claims problems. We want to give a clear picture of where we were.”
Such honesty is refreshing, and builds customer confidence and employee satisfaction.
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