The Art of Transforming Business Models for Dramatic Growth
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Episode 74 Transcript:
Chris Curran: Growth Igniters Radio with Pam Harper and Scott Harper, episode 74 − “The Art of Transforming Business Models for Dramatic Growth: A Case Study.” This episode is brought to you by Business Advancement Incorporated, enabling successful leaders and companies to accelerate to their next level of success. On the web at BusinessAdvance.com, and now here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated, and right across from me is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi, Pam. As always it’s a pleasure to join you for another episode. If this is your first time listening to Growth Igniters Radio with Pam Harper and Scott Harper, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders like you − and your companies − to accelerate to your next level of growth and success. So Pam, what’s up for today’s conversation?
Pam Harper: The artistry it takes to lead a successful company to even greater heights of success through business model transformation. Now, we’ve spoken often of how vital it is to adapt as new challenges and opportunities emerge, but the fact is, the leadership it takes to pull this off through succeeding business cycles requires not only knowledge and business acumen; it also takes a truly artistic sense of matching strategy to changing customer needs and business capabilities.
Scott Harper: So, instinct AND intellect…
Pam Harper: Exactly, and that’s why we’re pleased to have Cheryl Biron with us today. Cheryl is President and CEO of award-winning One Horn Transportation, a trucking and logistics brokerage she co-founded in 2005 with her husband, Louis. Through its “constant reinvention” strategy, One Horn pivoted from an asset-based carrier, owning tractor-trailers, to an agent-based brokerage using independent contractors to move their customers’ loads. As a result of this strategy, One Horn was ranked among the 50 Fastest-Growing Women Owned and Led Companies by the Women’s President’s Organization. It has also been listed among New Jersey’s 50 fastest growing businesses by NJBIZ for the past several years. Through her coaching practice, Cheryl is now working with CEOs and their leadership teams to grow, scale, and thrive.
Prior to embarking on her entrepreneurial path, Cheryl held marketing positions in various healthcare corporations. She earned her MBA from The Wharton School and her Bachelor of Science degree from Cornell University. She’s a board member of the Entrepreneur’s Organization New Jersey and an active member of the Wharton Club of New Jersey. You can also find a link to Cheryl’s bio at GrowthIgnitersRadio.com, episode 74. Cheryl, welcome to Growth Igniters Radio.
Cheryl Biron: Thank you, Pam. It’s great to be here, and thank you, too, Scott.
Pam Harper: Cheryl, you’ve had quite a journey here with One Horn Transportation. Can you tell us briefly about your original vision for the company?
Cheryl Biron: Back in 2005, I partnered up with my husband, Louis, and we purchased the assets of a trucking company. At that time we had 15 tractors and 80 trailers with drivers serving mainly the construction materials and equipment industries in the Northeast. Now, “Why trucking?” you might ask…
Scott Harper: Okay − Why trucking? [laughter]
Cheryl Biron: Why trucking? Like the two of you, Pam and Scott, as I mentioned I was going into business with my husband, and my main reason for going into business on my own was to leave Corporate America and have more freedom and control over my life. We looked at both of our backgrounds, and we wanted to make sure that we leveraged both of our backgrounds and enabled both of us to contribute equally to the growth of the business. So we took a look at my marketing background, and we could have bought some consumer healthcare brands. I had experience with Procter & Gamble and Becton Dickinson and these different kinds of companies. We could
have actually competed against those kinds of companies, or we could go into the trucking industry.
Louis had some experience in trucking, having worked for Brink’s, the armored car company. We thought that the experience in trucking would make a more scalable business because I could do sales and marketing for anything. With our MBAs, we could run any kind of company, so we chose the trucking route. The fact that we had some business experience made us credible borrowers with the banks to finance the deal and buyers for the companies that we bought the assets from.
Scott Harper: Always a good place to start.
Cheryl Biron: Yes, yes. Thank you, Scott. Then our vision at the time, to answer the original question, was to grow the company as an asset-based carrier, which is how we refer to companies that own their own trucks. We had visions of hundreds of trucks around the road with the One Horn name plastered on the side of them. We were very profitable at the beginning, but then the The Great Recession hit.
Scott Harper: Ew, so that was a problem for lots and lots of companies. Is that what influenced you to transform from the asset-based company in trucking to a transportation company?
Cheryl Biron: Yes, it was, Scott. 2 years into it, we took a look, and as the housing market started to go away, that was right at the beginning of The Great Recession that no one really knew was The Great Recession at the time, a lot of our clients were transporting buildings materials and equipment, and so it hit us hard earlier than it hit the rest of the types of companies in the country. I think we got a head start at the issues that were going to be facing, and so we had a lot of commercial construction materials that were stored on our trailers, and then they started emptying them out and not refilling them. Then we started to see that the rates were getting smaller and smaller that people were offering us to do the loads for them because there were so many more trucking companies out there doing work versus the demand for it that it really was a buyer’s market at the time. We decided that the brokerage side of the business would be a lot more profitable.
Pam Harper: The writing was really on the wall. You were able to recognize it, though, so kudos to you because I think a lot of people would not necessarily have put all of that together.
Scott Harper: And say, “Okay, things are slowing down. What are we going to do next?” You really transformed your whole business model.
Cheryl Biron: Yes, we did, and it wasn’t as easy as it sounded, but we were looking at it, and we were saying to ourselves, “We have to do something.” Louis actually was a strategy consultant in the past, and I had done a lot of strategy in marketing when I was working at P&G and different companies like that, and so we said, “We’re strategy people. Let’s treat ourselves as a strategy client and figure out what we should do. What would we tell ourselves to do?” That’s how we approached it.
Scott Harper: Okay, so what was the impact then − to not only your company but to the industry − of this transformation that you engineered?
Cheryl Biron: In the industry, we did happen to notice that some of the other larger companies in the marketplace did a similar divestiture of their equipment after we did. Not to say that they followed us particularly. I think we were more small and agile, and we were able to divest before a company like J.B. Hunt or somebody like that. The impact to us and the industry was we were able to make money enough to recover a good amount of the cost of the assets that we sold off. But if we had sold off later in time, like a lot of other people in the industry, they didn’t recover the costs as well on their assets.
Pam Harper: So it was just in time, in a way.
Cheryl Biron: Yes, Pam. We had also transformed after The Great Recession to a brokerage that was agent-based, so we ended up transforming our model again to hire freight agents who would come and do sales and dispatch for us, and we would run the back office. That’s really part of what we had talked about as our second stage.
Then the third stage is now our company’s so automated with the software package that Louis wrote, Stratebo, that we are spinning off a software company called Stratebo Technologies, under Louis’ leadership.
Now, as you mentioned in the opening, I have started a new company where I can pursue my passion to work for CEOs and their leadership teams to help their companies grow, scale, and thrive just like we did.
Scott Harper: The technology really has enabled you to go from a very labor-intensive model to one where the technology is doing a lot of the work, and offloading that day-to-day, now you can do other things. That’s terrific.
Pam Harper: And the results that you had from this − you had mentioned to me that it was something to the tune of 10 times growth.
Cheryl Biron: Yes. When we switched to that agent-based model, it enabled us to grow our sales to be 10 times, because originally I was out there doing sales, and for me to get another client and another client and that kind of thing, it took a lot longer versus when you hire a freight agent that comes already with a book of business, you hire an agent that’s a million, $2 million worth of business, from one day to the next you’re running rate goes up a million or $2 million. You just need to be able to finance that receivable.
Pam Harper: It’s really quite a story. We’re going to go into this a bit more, but first we’re going to take a quick break. When we come back, we’ll speak more with Cheryl Biron, president and CEO of award-winning One Horn Transportation, about the toughest decision she and her partner made to transform their business model and dramatically grow their business. Stay with us.
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated, on the web at BusinessAdvance.com. We enable visionary leaders and their companies to accelerate to their next level of growth and success. Just a reminder − check out our show notes at GrowthIgnitersRadio.com, episode 74. You can download resources for today’s conversation, including Cheryl’s bio, and questions that support our ideas today. You can share on social media so more people can find us. And while you’re there, sign up for our weekly alerts of upcoming episodes so you’ll always be up to date.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Scott and I are talking today with Cheryl Biron, president and CEO of award-winning One Horn Transportation, about creating dramatic business growth through business model transformation. Cheryl, tell us how people can find out more about you and your company.
Cheryl Biron: Pam, they can visit us on the web at www.onehorn.com.
Pam Harper: Now, you talked about the journey. How did you know that it was really time to let go? You had a certain amount of success, and there was a certain amount of writing on the wall, but how did you make that internal decision that it was time to take on transformation?
Cheryl Biron: Pam, we took a look and did an actual analysis as if we were the clients of ourselves basically. So we analyzed the trucking business, and then we analyzed the brokerage side, which we had started on the side as a way to handle loads that we did not want to handle on our own because they were further away or if we didn’t have enough trucks on any given day. We looked at the cost structures of both of those and decided that trucking for us was bad, and brokerage was good. On the trucking side, everything was upfront, all the costs on the equipment, the driver salaries and all that kind of thing, the insurance, whereas on the brokerage side, we only incurred costs once we had revenue coming in because we would only book a truck if we had a load.
After doing that analysis and looking at the trends of where our customer base was going, and the construction industry as well, we started emptying steel out of our yard, as I mentioned. We started stacking the trucks, the trailers to save room and that kind of thing. Seeing the prices driven down, and not being able to really cover the cost of operation, after a certain point we just said, “Enough is enough, and we have to take some drastic measures.”
Scott Harper: It’s a tough story. Sometimes when we talk to people about transformation, it’s hard. It’s emotionally difficult to make that switch. Other people say, “Woo-hoo! We’re done with that. On to something else.” How was it for you? What was the toughest decision you had to make in the transformation?
Cheryl Biron: Scott, at the time, we were essentially closing a trucking company after we bought it, so we were on that side of, “Oh, it’s terrible.”
Scott Harper: Yikes.
Cheryl Biron: “Why did we do this?” We felt bad about it because we really cared about our employees, and our drivers, and our staff, and we had really gone all in, basically, quitting our corporate jobs to do this. Then what we did was we decided that although we really cared about everybody, we just could not afford to pay them any longer. We could not afford to keep going this way. We even offered the drivers the ability to buy the truck that they operated from us, and they could become owner-operators and try maybe working for somebody else, but no one really took us up on it.
Scott Harper: What did it take then to from the point where you said, “This is it. We have to do this,” to actually make it work − to make it happen?
Cheryl Biron: I believe we did our analysis in the month of April 2007, and we set a target to be out of our office, to be in the Cloud, which wasn’t even called the Cloud at the time. It was called a virtual private network. We had our office employee connected to us from a home office. We sold off all the tractors and trailers in about a 3 to 4 month time period.
Pam Harper: You move fast.
Cheryl Biron: Once we make a decision, Pam, we just go for it. We say, “Action. Enough is enough,” but then we don’t dilly-dally once we decide we’re taking the action. We’re not very wishy-washy at all.
Pam Harper: Clearly that was the case. How did you adapt? This is a very different business model. How did you manage the change to this different business model and your new role with stakeholders?
Cheryl Biron: During our first pivot when we had changed from trucking to brokerage, I was still doing sales, but I actually got to target some larger corporations who shipped further away since we weren’t using our own trucks. With my corporate background, that was a comfortable space for me to be in. Unfortunately, it didn’t work out as well as I would have liked. So I ended up going back to targeting more small to mid-size companies because they were … For whatever reason, I could meet with them more quickly in person and convince them to try our services. But then when we pivoted to the agent-based model, my role significantly changed from sales to recruitment because the way we grew, as I mentioned, was to hire freight agents who came with a book of business.
At that point, I decided to leverage a social media strategy to increase our footprint in the market. This is around 2009, 2010 before people were really doing that sort of thing. Since I strongly believe in our company and our values, I could really authentically put my passion behind my discussions about why the agents should join One Horn and really identify candidates that fit with our corporate culture.
Pam Harper: It was a good fit also with your background, and in a lot of different ways to be able to move to this other role, it sounds like.
Cheryl Biron: Yes, it was because I was a marketing person. I wasn’t really a sales person, but I did adapt when I needed to be a salesperson. You know I’m very outgoing. To be able to talk about my company to somebody to get them to join − it was a lot of fun for me.
Pam Harper: What’s really interesting to note here is that by drawing on your previous corporate background, it really made a big difference in terms of your ability to adapt to all the different changes and the twists and the turns as you came to them. It all fit together in a way.
Cheryl Biron: Yes, it did, Pam. Exactly. I was really fortunate to have had the corporate background before becoming an entrepreneur.
Pam Harper: A fabulous story, and a lot of good lessons learned. We’re going to take another quick break, and when we come back, we’ll talk more with Cheryl Biron, president and CEO of award-winning One Horn Transportation, about 3 immediately useful ideas for transforming your company’s business model to create dramatic growth. Stay with us.
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Incorporated, on the web at BusinessAdvance.com.
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Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last 2 segments, Scott and I have been speaking with Cheryl Biron, President and CEO of One Horn Transportation, about creating dramatic business growth through business model transformation, and it is an art. Cheryl, tell us again how people can find out more about you and your company.
Cheryl Biron: They can visit my company’s website, www.onehorn.com, or they can look for me on LinkedIn as well.
Pam Harper: Okay, now this is the part of Growth Igniters Radio where we talk about what people can do as soon as they’re done listening to this episode. We’re looking at concrete kinds of things. We wanted to ask you, what would be 3 immediately useful ideas for transforming a business model for dramatic growth based on your experience?
Cheryl Biron: One immediately useful idea, Pam, would be a way to identify the relevant signs of change in the environment. A tool that I am now using, which is called the SWT Analysis. I give credit to Verne Harnish and Gazelles International for that. You might be familiar with the SWOT Analysis −
Pam Harper: Right, of course.
Cheryl Biron: Okay, so you have the SWOT Analysis, which looks at your internal strengths, and then your outside opportunities and threats in the marketplace. But we believe at Gazelles that the best way is to leave that to the middle managers while senior leadership teams should look at strengths, weaknesses, and trends. The reason why we look at strengths, weaknesses, and trends is because your trends in the marketplace are the forces outside the company that will have an influence on your company’s long-term direction, health, and sustainability.
Pam Harper: Absolutely.
Cheryl Biron: The trends can involve changes in technology, distribution, product innovations, markets, consumer and social trends around the world that might impact your organization, and then the strengths are core competencies that lead to success over time. The weaknesses are inherent to your company; that will unlikely change in the future, so there’s a difference. It’s called the SWT instead of the SWOT.
Pam Harper: That’s a great point, and trends are so important. That’s a lot of the reason why we’re out here talking about on Growth Igniters Radio − highlighting the trends that are out there that people have to be aware of.
If somebody were to do something immediately concrete, as soon as they’re done listening, what’s one thing they could do with regard to SWT?
Scott Harper: That’s great, and we encourage people to also engage other stakeholders in identifying trends, because 2 heads, or 20 heads, or 200 are better than 1 for this, and so it’s great to have your radar out.
Scott Harper: Yes. Now what’s another immediately useful thing people can do?
Cheryl Biron: I’m a big fan of writing down the outcomes that you want to achieve and what success means to you, because I did that for myself when we transformed from the traditional brokerage to the agent-based model. We had gone to this Wharton Club of New Jersey event where Solange Perret spoke on innovation, and it dawned on us during that meeting that if we wanted to increase our growth 10-fold, as I mentioned, we would need to completely change our business model. We sat down, and I actually wrote what success would look like as if I were looking back. A year from now, what would success look like, or 5 years from now? That kind of thing.
Pam Harper: It’s a very important thing to do that.
Cheryl Biron: Yes, it is, and it’s different for everybody, too, Pam. To some people, money means success. Other people prefer different things. I personally wanted control over my life, and I wanted to have the time to do things that give me pleasure and time with my family. It’s really more for me about the experience, not about the money and the status.
I physically wrote down what success would look like to me, almost like Cameron Herold’s Vivid Vision, which used to be called a Painted Picture. I then set goals to help me achieve the success that I would need, and set milestones along the way as well. Writing out your Vivid Vision of what you want your life to look like, and then saying, “What do I need to do in my business to create that?” and then setting goals and milestones along the way is really an actionable thing, I believe, because I did that as my action when I transformed the company from the straight brokerage model to the freight agent model.
Pam Harper: It’s so important. Everything you’re saying is right spot-on. In fact, one of the things that we’ve seen is that with the world changing so quickly, in addition to milestones, it’s really helpful to set checkpoints, too, along the way.
Scott Harper: Something a little smaller and manageable. It’s also important to identify not only the measures of success, which we absolutely agree with, but also the things that will contribute to that success − the critical success factors, if you will. “This is what we want to happen. What will it take to make that happen?” Then tracking, as you said, your milestones and your checkpoints.
Pam Harper: Another point that we’ve been talking about for quite a while, you and I, has been the power of support along the way. You clearly, in your story, emphasized how important that was.
Cheryl Biron: Yes. Definitely, Pam. As you know, I am a member of the EO − Entrepreneurs Organization − and a big advocate of peer advisory groups. EO is a non-profit group with 12,000 members worldwide, and there are chapters in most major markets. There are about 150 chapters around the world. My New Jersey chapter has 100 members broken down into 12 forum groups where we meet on a monthly basis with the same group of people, the same group of entrepreneurs to share experience because it’s lonely at the top. Pam, you have Scott; I have Louis, but we still do different roles within our companies, Having an outside sounding board of people who go through similar challenges has been extremely helpful.
Pam Harper: The thing that is interesting about these groups, though, and I see it in you, and I know for myself with ACG, Association for Corporate Growth in New Jersey, is we’re active. Now, what would you say to people about getting the most out of being part of an organization like this, a peer support group?
Cheryl Biron: What I would say, Pam, is that besides just attending for EO, for example, before a meeting, it’s important to get involved at the board level. I know that you’re involved at the board level with the Association for Corporate Growth the way I am with the Entrepreneur’s Organization, and also to attend the different learning events because we have speakers that come in, and during the time before and afterwards, there’s time for networking where we’re able to just have discussions and learn what other people are doing. Sometimes the best insights come during those moments and not from the speaker themselves, although the speakers are quite great. The interaction with the other group members is also key.
Pam Harper: That’s right. So the third actionable step is check out a group, whether it’s EO, whether it’s ACG, whether it’s something else totally − like YPO. There are a lot of groups. What’s important is to find the right one for you and to actively get involved.
Cheryl, this has been amazing. Can you share with us some final thoughts on the whole Art of Transforming Business Models for Dramatic Growth?
Cheryl Biron: There is a theory out there of the S-curve that is brought to us by Dave Power, which teaches us how to sustain long term growth by continuing to innovate. We did that with our constant reinvention strategy at One Horn − trying to keep an eye out for the next thing that would help us continue to grow, and sustain our growth, and thrive in the marketplace. So try to keep an eye out as you’re going up that exponential growth curve. It starts to curve off at the top maybe, or you might see signs of that, so what’s the next thing that you’re going to do to make sure you sustain and continue that growth?
Pam Harper: Good thoughts to leave us with. Cheryl, thanks again for being our guest today.
Cheryl Biron: Thank you for having me.
Scott Harper: Thanks, Cheryl, and thanks to you out there for listening. To get show notes and resource links for this week’s episode, including the list of “Pam Harper and Scott Harper’s 5 Questions to Ask When You Want to Move Faster,” go to GrowthIgnitersRadio.com, episode 74.
Pam Harper: Until next time, this is Pam Harper …
Scott Harper: And Scott Harper….
Pam Harper: … wishing you continued success, and leaving you with this question to discuss with your team.
Scott Harper: How are we strengthening our sensitivity to emerging challenges and opportunities that could signal time for a change in our business models?