Have you taught people to make decisions or to avoid mistakes? Having just spent the last five days in Las Vegas, I've been thinking a good deal about risk and how it shapes our behavior. Gambling at a casino involves putting money at risk in the hope that you'll be rewarded with a quick and large payoff. Judging by the crowds and the casino construction boom under way, many people obviously consider taking such risks to be highly entertaining.
Few business managers think of themselves as gamblers, at least on the job. Who, after all, wants to be responsible for taking unreasonable risks that may put jobs or security in jeopardy? No, most managers are looking for the sure thing, the course of action that involves the least risk possible. But risk aversion, especially if it's institutionalized throughout all the decision-making levels of a fleet or other business, may be as destructive as compulsive gambling.
Service businesses like trucking have evolved into highly decentralized operations as they look for ever-greater efficiency and market flexibility. Instead of the old military chain-of-command, today's fleet-management model is more like a rock thrown into a pond with decision-making responsibilities pushed out as close to customers as possible.
Managers today have to count on everyone in their company or department to make good decisions. And good decisions aren't always the "right" decisions. In fact, if your dispatchers, drivers, and operations people aren't making the wrong decision on occasion, my guess is that you have a real problem, one that's quietly and invisibly costing your fleet money.
Take dispatchers, for example. If their primary motivation is to keep everyone happy, all of their decisions will be based on avoiding situations where drivers, customers, or managers might complain. They never move outside of highly restrictive guidelines they've set for themselves and often miss the better solution to tough problems. Or in business school jargon, they become highly risk averse.
The same scenario is all too often played out with drivers. It doesn't take many reprimands to learn that you must avoid the dispatcher's wrath, even if it means disappointing a customer, who's more likely to take the freight elsewhere than to complain. Even if the dispatcher might agree to one particular customer request, why take that risk and bring it up?
On a biological level, aversion to risk is a survival skill that's probably been hard-wired in our genes by evolution. In a business environment, however, risk aversion is learned behavior. In most cases, it's simply the result of a company culture that emphasizes the consequences of failure over the rewards of success. It's usually far more subtle than George Steinbrenner's Yankee management techniques -- often a manager's focus on specific failures rather than the good intentions behind them sends the message loud and clear.
I'm not suggesting that a good manager is one who encourages risky behavior. In a business that involves public highways, high speeds, and heavy vehicles, there's no room for people who are willing to take chances when it comes to safety. What I am suggesting, however, is that you take a critical look at how people in your fleet reach the decisions they need to make in the course of their work.
In all likelihood, you've already moved to a decentralized or distributed type of management. The trucking industry's constant pressure for improved productivity and lower operating costs have made that move all but inevitable.
But have you taken the next step, the one that brings the real payoff from such an organization? Empowerment is an awful term, one that usually makes me cringe, but the concept outweighs my own risk aversion when it comes to using cliches. You can't expect people to make good decisions unless you teach them how good decisions are made. And that process inevitably involves risking failure.
