Moving Words – Ambidexterity

Timothy Brady

“I’d give my right arm to be ambidextrous.” Yogi Berra
 

Trucking’s a very interesting business, in which few freight carriers survive and thrive from decade to decade. Think of the trucking companies that ran for 40+ years, but when deregulation occurred in the 1980s, many of those “old” companies didn’t exist by 1990. Of course the moving and storage business seems to be an exception to this trucking industry trend. So why did they not only survive, but continue to grow year after year?

Here’s one idea as to why the moving industry and the carriers and agents within the moving industry are an example of Organizational Ambidexterity.

Stanford Graduate School of Business Professor Charles O’Reilly recently wrote: “It’s Organizational Ambidexterity: the ability of a company to manage its current business while simultaneously preparing for changing conditions. You often see successful organizations failing, and it’s not obvious why… .” O’Reilly continued, “The reason is that a strategy that had been successful within the context of a particular time and place may suddenly be all wrong once the world changes.”

In other words, doing business the same way as you’ve done in the past while expecting the same profitable results just doesn’t work in the business world, particularly within our venue of trucking.

Look at Federal Express. In the 1970’s, it was an overnight envelope and document delivery service. Today, there’s not much FedEx doesn’t ship by air and ground; from that same overnight envelope to LTL to behemoth machines to special expedited services for the automobile industry. Very different from that ‘overnight document delivery service’ thesis idea Fred Cook devised in college. At the same time as FedEx has been growing, many of the old tried-and- (thought to be) true LTL companies failed. (Think Consolidated Freight, the largest LTL company in the 50’s, 60’s and 70’s. It no longer exists.)

This ‘Organizational Ambidexterity’ is exactly why FedEx has grown to its current size. And it’s the same approach a successful micro- or small motor carrier needs to have, to grow to its greatest potential and continue to be a viable and profitable business for decades to come.

Now this is not without risk, according to O’Reilly. “If you’re a small company, you place all your chips on this one thing, whereas a large organization can do lots of experiments.” So as a small company, you must take a more calculated approach to expanding or growing your company into a different niche than the one in which you started. A very wise business advisor once told me that you don’t want your business to have a Cat D-8 bulldozer blade on the front of an old Datsun pickup. In other words, don’t spread or diversify yourself so thin that you lack the business and financial power to move your business forward. Keep a narrower focus on what you do, and do it well.

But always make contingency plans and establish an execution strategy for when ‘the unthinkable crisis’ occurs. Think of the changes caused by the new HOS, even though the trucking industry had months to prepare. The carrier practicing Organizational Ambidexterity had a procedure in place to create benefit for the trucking company and its shippers when the new law was implemented.

“Something to Think About.” – Tim Brady

“Ambidexterity is to become an organizational capability, it needs to be repeatable and not a one-off event.” Charles A. O’Reilly