Blue Ocean Strategy, for anyone not familiar with it, argues that to have real business success, you need to break out of the competitive bloodbath and create new market space by doing something that no one else is. Rather than fighting over the same customers again and again, create a new space that grows the overall market and assures your leadership in it. The book provides detailed instructions for doing this, but the gist of it is that you have to identify the elements that your market values and expand (or create) those, while simultaneously reducing (or eliminating) the things the market doesn't value. By doing this, you create a leap in value for your customers (which differentiates you from your traditional competitors), and you lower the cost of producing the service, which allows you to provide better pricing and still make a good profit. You can also draw in a number of non-customers who haven't previously bought the service, if you emphasize the right things. The book provides a number of excellent examples of companies that have done this and had great success with it - including diverse examples such as Cirque du Soleil, Southwest Airlines, and [yellowtail] wine - and it's a great read.
I started thinking about how this applies to trucking. I can't think of any for-hire carriers that have created a service radically different from the rest of the industry, but I'd be interested in finding one. Most fleets sell roughly the same service - "we'll deliver your freight on time, in good condition, for a fair price" - which is what most of the people currently buying trucking services want (or so the conventional logic goes). But is that really what those buyers value? And what about all the people who AREN'T buying trucking services? Why aren't they buying, and what are they buying instead? I'd be really interested in finding a trucking company that's tackled that challenge and put together and strategy for addressing it.
On the other side of that - the business of delivering the freight - there are lots of opportunities for applying a Blue Ocean approach as well. Regardless of who the customers are, all fleets want the same thing in a driver - someone who can be relied on to deliver the freight on time, in good condition, and do so in a safe and courteous manner. Traditionally, fleets get those drivers through a combination of screening tools (trying to get the best ones in the door in the first place), and a carrot/stick approach (incentives and training programs combined with discipline to keep everyone moving in the same direction). There are some variances in the screening processes, incentive programs, training, discipline, etc. but everyone is doing roughly the same things. As a result, everyone has roughly the same cost structure and therefore roughly the same comp package.
What would happen, though, if someone took a Blue Ocean approach and identified the things that are disproportionately important to drivers, then focused all their efforts on providing those things, while reducing or eliminating everything else?
For instance, every year there are surveys about what drivers want, and every year the same items appear at the top of the list - more money, more career opportunities, more education/training opportunities, more say in decisions, etc.
I pretty much discount the money thing, because every person doing every job in every company wants more money. Every time you get a raise, you give half to the government and spend the rest before it even shows up in your pay. Two months after you first received the raise, you feel like you need another one. No way to win, so let's forget about that one.
However, the other things at the top of the list - training, career path, input - can all be lumped into professional development, and very few (if any) fleets focus much attention on that at all. I've yet to find a fleet that has multi-level job descriptions for drivers with documented steps to move up the levels. Very few fleets provide robust training and development opportunities for drivers, and fewer still advertise them. What would happen if a fleet focused on providing those things, and lowered their investment in things that drivers don't value as much? What would happen if, instead of advertising pay package, home time, and a family atmosphere, the fleet created a killer career path program for drivers? Or the best professional improvement education program in the industry? What kind of drivers would that attract, and what would it do for the fleet overall?
Are you doing anything like that? What strategy are you using to break out of the bloody red ocean of competition and create a blue ocean of uncontested space?
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