Establish priorities
Uremovich spent his first days as CEO listening to Pacer’s staff discuss
key business issues. His initial impression was that many of the conversations centered on internal problems and not the needs of customers. Then,
through in-depth financial reviews, he discovered that $400 million, or
roughly 25 percent, of the company’s annual revenue was unprofitable,
which represented nearly $20 million in lost opportunity. To Uremovich,
that was conclusive proof that the company’s division leaders were not
focused on the right priorities.
“All you had to do was be a fly on the wall and listen to the conversations,” Uremovich says. “Everything I heard was ‘we’ oriented, no one was
talking about our customers.”
Pacer was structured in five autonomous business units, each headed by
its own president. One of Uremovich’s first goals was to work with each
business leader to make his or her division profitable.
“I asked each of the presidents to come to me with a plan to get the
business moving,” he says. “I wanted the plans to be tightly focused,
because I also felt that we were focused on too many things and not all
of them were important. So I asked each president to focus on six
things, and I stated that I expected some of those to be customer initiatives.”
An example of one initiative that delivered increased revenue by satisfying customers occurred in the company’s transport service unit. The team
began a focused sales campaign offering heavy haul services to customers, but the initiative also included a program to improve safety and
reduce claims. As customers gained confidence in the safety of their
cargo, they began buying more of the specialized trucking services.
“I’ve never been a fan of scorecards, because they only measure where
a company’s been, not where it’s going,” Uremovich says. “I prefer benchmarking against future business objectives because it’s more effective in
driving growth.”
Several things happened as Uremovich maintained a vigilant schedule of
monthly follow-up meetings with each division leader, tracking the
progress of the initiatives. First, he discovered that he benefited from the
discipline of a monthly review schedule, because he avoided distractions
and remained tightly focused, and second, he also found that some of his
management team didn’t buy in to his vision of a unified company or could-n’t execute on the critical few components, so he began making changes.
“I think I was guilty of the same mistakes that many CEOs make,
because we’d all like to believe people will see the right path, but that’s
not always true,” Uremovich says. “I tried a couple of public executions,
in the hopes it would be a motivator, but in hindsight, I think I should have
acted more quickly.”
Now two years later, three of the five company business units have
turned around, one is improved and one is still struggling.
