Consolidation's impact

Nov. 1, 1999
"The same business practices that have made a difference for 50 years still apply today."Consolidation is affecting everyone's business today. In our industry - the trucking industry - the impact cannot be overstated, and I believe it is just beginning. In reviewing the entire supply chain over the last five years, virtually every industry participant has been affected.Your company has probably:*

"The same business practices that have made a difference for 50 years still apply today."

Consolidation is affecting everyone's business today. In our industry - the trucking industry - the impact cannot be overstated, and I believe it is just beginning. In reviewing the entire supply chain over the last five years, virtually every industry participant has been affected.

Your company has probably:

* Been "consolidated";

* Had the opportunity and passed it up for the time being;

* Is interested but is waiting for the right offer to come along;

* Competed with someone that has been "consolidated"; or

* Had customers or suppliers that have been "consolidated."

There has been much debate about the real value of consolidation to an industry. After watching numerous industry participants attempt to go through the process, it still comes down to the same basic business principles that differentiate successful businesses from those that are less successful. The development of a sound business plan and the ability to generate employee support for the plan is crucial.

The unique challenges to successful implementation of a strategic plan within a consolidated company are as follows:

Buy-in. There is no history or continuity of a strategy for the people to fall back on when decisions need to be made. Many of the recently consolidated companies have operated with the same business plan (and the same management) for 30 years or more, leading up to the current situation. The entire plan is new to the entire work force. This causes uncertainty that leads to a slowdown in decision-making. Communication has always been a critical yet difficult charter for management. Communication of a concise plan and people's role in that plan will help employees buy into the strategy, which in turn will ensure greater success.

Demonstrate early success. Industry players will be watching any consolidation effort and the critics will pounce on any problems as evidence that consolidation does not work. There will be internal as well as external critics. It is very important to demonstrate small victories early on to help balance the turmoil that is sure to come. As an example, obtaining a national account previously unavailable to the individual companies can partially offset the pain of "having to change our entire computer system."

Attitude. There is a delicate balance between demonstrating a positive attitude and implementing difficult actions that affect people, suppliers, and even customers - and they will all be affected either in a positive or negative fashion. It is crucial for top management to be in sync with the plan and with each other as the plan is implemented. An attitude that allows open disagreement followed by universal enthusiastic support of the chosen path will separate the successful enterprises from the unsuccessful ones.

It is ironic that at a time when the game, the rules, and the players are all changing at such a rapid pace, the same business practices that have made a difference for 50 years still apply today. I suspect when we look back in five years at those who have won and those who have lost the race to reap the rewards of consolidation, it will be these simple principles that in large part determine who's who.

About the Author

David H. Olsen, senior vp, business development, Transcom USA

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

The 20:1 Solution: Unlocking the ROI of a Modern Asset Maintenance Solution

Discover how modern fleet maintenance software can drive step-change improvements in shop efficiency, cost control and vehicle productivity, along with how to calculate the ROI...

Digital and AI Solutions for Rideshare Safety

Anyline’s study, “How Digital AI Solutions Can Enhance Rideshare Safety,” reveals rideshare drivers are overly confident in their tire knowledge, risking passenger safety. Download...

Introducing the World’s First Mobile Tire Tread Scanner

Anyline’s innovation allows accurate tire tread measurement via any mobile device, ensuring legal compliance for fleets. Read more and find out how you can cut operating costs...

Modernizing Fleet Tire Maintenance

Anyline conducted an in-depth survey of nearly 200 U.S.-based fleet professionals from diverse industries. Learn why modernizing fleet maintenance is crucial for safety and efficiency...