Recently, during a conversation with a TPP Best Practice Group member, he relayed his initial motivation for applying to the program. After almost a decade of continued growth, and the advantage of a smart operations team, his company’s Operating Ratio hadn’t budged, in fact it was trending in the wrong direction – despite a fairly healthy freight market. His passion for the business was waning as well. Since he hadn’t heard of the Best Practice Group (BPG) program, he did what many business owners do when faced with similar challenges – he started planning to form a Board of Advisors.
Having seen a fellow entrepreneur implement a Board of Advisors, and subsequently thrive as a result, it sounded like the solution. He quickly reached out to a local accountant, a friend who operates a very successful agricultural equipment dealer and rounded out his ‘draft’ with the former owner of the truck dealer he buys most of his trucks from. On paper, this team appeared like the dream team to guide him on the path to a solid strategic plan, and improved profitability. However, despite some initial wins from the recommendations that came from the board, the group simply turned into a well-compensated social club. Further, the lack of industry (carrier-specific) expertise was becoming a growing liability in their discussions.
After hearing about the BPG program from a fellow state association member, along with this member’s testimonial on the value of the program to their business, he felt he may have found the solution to his strategy and execution issues. Fast forward to today, he counts joining a Best Practice Group as one of the key turning points in the lifecycle of his business (for the better). Financially speaking, it also saved him money. When compared to the cost of creating, and managing a Board of Advisors, he estimates he kept $35,000 – $45,000 per year in the business by opting to join a Best Practice Group instead of continuing the Board of Advisors.
The funny thing about this story is that I’ve heard similar stories from other members. In fact, one member said in passing that the his Best Practice Group is like a “Board of Directors, but on Steroids”. I use that phrase all the time when speaking about the program.
In summary, here are my top 3 (admittedly biased) advantages of the BPG participation compared to forming a Board of Advisors:
BPG Members Know the Trucking Business Inside and Out – In fact, they may know your specific operating model better than you do. Having a group of professionals, that feel the market turn when you do, that understands the potential risks (and rewards) of today’s trucking environment, is the foundation of the program. You’re in a room 2-3 times per year together, and in constant dialogue, with the leaders of the best managed trucking businesses in the world. Conversely, if you form a Board of Advisors (unless you have deep pockets), you’re going to select local professionals to round out your team. It is unlikely that you will select a local trucking entrepreneur, that despite having the right expertise and drive, is competing for freight and drivers with you.
Speaking a Common Language – Unless your Board of Advisors are willing to do significant market research, they are unlikely to be able to provide the necessary external feedback loop to determine if your best-laid plans are realistic, or perhaps not ambitious enough. The TPP program provides, as a table stake, a rich standardized dataset of financial and operational data, from carriers of all sizes, modes, and operating models. Providing members with access to credible benchmarks initiates the conversations in group meetings, to dive deep into the best methods to achieve similar results.
A Shelter from the Storm – I’ve heard endless stories about how, when faced with massive operational obstacles, fellow group members have stepped up and saved the day. It could be weather, equipment failure or additional capacity for an uncovered load, your fellow BPG members will help. Further, the social bonds that develop within these groups are unlike anything else I’ve seen in business. For companies that get invited to their first group meeting, the openness can almost be a shock to the system. However, by the time they leave that first meeting, they are always sold.