'Thanks for Calling Yellow, Have a Nice Day'

Less Is More: How Great Companies Improve Productivity Without Layoffs
by Jason Jennings

(Page 3 of 6)

When Bill Zollars was recruited from Ryder Trucks in the late nineties to become CEO of Yellow Freight, a Fortune 500 company, he found a troubled business that had stumbled badly since deregulation of the trucking industry. What disturbed him most was discovering that the company was very inwardly focused and had no measurements of customer satisfaction. Seeing that the company was coming off three years of extremely poor performances made worse by a strike and losses, Zollars recognized he would need to operate in turnaround mode.

Like Lantech, Yellow Freight had been buffeted by government regulation. Zollars recalls that in the regulated environment where Yellow had prospered, companies never had to worry about strategies or customers. "If you needed more money, you just sent out a letter that said, 'Hey, I need a price increase,' and you got it. The business had become completely commoditized and the company that got the business was the last one in with a load of doughnuts or free tickets to a ballgame."

The effects of deregulation were entirely predictable, Zollars says. Lots of new people came in with great ideas, they opened new companies and raised the bar, so that many of the existing businesses couldn't compete and eventually went bust. Industry analysts, he says, were forecasting Yellow Freight's eventual demise. "The question I got asked most frequently when I got here," Zollars told me with a grin, "was whether we'd be around in a couple of years."

So what had Zollars spotted as clues he could use to keep that from happening? From his early days at the company, he noticed, "When people would ask someone who worked for Yellow what the company did, they'd respond by saying it was in the long-haul LTL trucking business." (LTL, or less than truckload, describes a carrier that specializes in shipments under a certain weight, combining shipments from several customers to make up each full truckload.)

Even today, Zollars fumes as he remembers. "Where's the pride and potential in being in the long-haul LTL trucking business? Not only are you putting yourself in a box, you're putting yourself in a really little box."

His answer to the many dilemmas facing the company was a strategy, a simple BIG objective. "We are not in the long-haul LTL trucking business," he commanded. Contrasting Yellow with two major competitors, he told his people, "We're going to get out of the trucking business and into the service business. And from now on, instead of wasting our time comparing ourselves to Roadway and Consolidated Freight, we're going to compare ourselves to Starbucks."

Starbucks! That's picking a successful model to emulate.

You've probably heard the remark that if the railroad companies had understood they weren't in the rail business but in the business of transporting people and goods, the airlines today would have names like Union Pacific or Santa Fe. Zollars instinctively understood the distinction.

Today he argues that until you get the "people thing" right, no amount of technology can make you more productive. "Look," he says, "we spend as much as eighty million dollars annually on technology, but it won't do a damn bit of good and make us more productive if the people using it don't get it.

"During my first week on the job," he told me, "I went to one of our state-of-the-art customer service centers in Des Moines, Iowa, and spent a day listening in on phone calls from our customers." With a knowing wink, he added, "You know darn well they put me with our best customer service people, not a newbie or an old crank."

What he heard made his ears burn. "A customer called and said he had a shipment that had to get from Chicago to Atlanta in two days. And our customer service person tells him we can get it there in three days. The customer repeats, 'No, I really need it there in two days,' and our customer service rep says again, 'We can get it there in three days.' Finally the customer says, 'Okay, I'll call someone else,' and our agent says, 'Okay, thanks for calling Yellow and letting us serve you. Have a nice day.' "

Zollars's comment: "Imagine a 'Thanks for letting us serve you,' when the agent had just sent the customer to our competition!"

Here's the way he saw the picture: "The entire mind-set of this company was, 'Here's what we do . . . if you want it, fine . . . if you don't, that's fine, too.' No one ever asked a customer what he or she wanted or needed. How can you ever hope to become productive until you get people on your side?" he asks. Zollars's simple BIG objective was to get Yellow out of the trucking business and into the service business.

Copyright © November 2002, Portfolio Books, a member of Penguin Putnam, Inc., used by permission.

About the Author

Jason Jennings has spent more than twenty years teaching businesspeople how to build great organizations. He gives more than sixty keynote speeches every year and is the author of two previous business bestsellers: Less Is More and It's Not the Big That Eat the Small, It's the Fast that Eat the Slow. He lives near San Francisco.