We live in world of unrelenting impatience.
Consumers’ expectation of immediacy has fundamentally changed the way we transact. We’ve discussed this “Amazon Effect” and its impact on user experiences with many of our guests. How it’s decimating retailers, and how it’s changed the way we market our products and services. On this week’s show, we discuss its effect on what happens behind the curtain, specifically on logistics and the supply chain.
Jon Slangerup and Blake Schumate, CEO and COO of American Global Logistics (AGL) give us their recommendations for how mid-market companies can keep up with the demand for instant gratification. To stay ahead of the behemoths in your industry, you’ll have to apply both technology and heart; artificial intelligence with TLC; machine learning plus compassion. Having earned its place on the INC 5000, AGL is successfully using this approach with its clients, its community, and itself.
Find a Way to Meet the Need
Winners will find a way to meet the need, adjusting their business model in whatever ways are necessary. According to Schumate, “The key [is] how well companies adapt. One of the challenges is that the consumer wants the product now, they want it immediately. In addition, [they] want to see the milestones, they want to see the steps; they want to feel it coming to them.”
In a Huffington Post article last year, Richard Howells, Global Vice President of IoT and Digital Supply Chain at SAP, points out the dangers of failing to meet this imperative, “Companies need to evolve supply chain strategies to stay relevant in their industry. Amazon has set the bar high for its competitors and has changed the retail space. The current trend in the retail industry is to make sure that the customer experience is as seamlessly convenient as possible. If organizations do not adapt their business models and incorporate these technologies, they will lose even more business to Amazon.”
Yes, this means you—even in B2B, even in professional services. But, you might say, “I’m not in retail!” The interview we did a few weeks ago with Mike Dickerson from ClickDimensions serves as an important signpost. Dickerson observed, “Those trends have disrupted things in our consumer lives and companies are no longer around, like Borders and Blockbuster… Those same trends are taking place in the B2B world, just at a little bit later stage, and at a little bit [of a] slower pace.” While those of us in service industries may be somewhat insulated for the moment, all signs indicate that the disruption is to every aspect of business.
Leverage Logistics Technology
Meeting consumer demand on a 24/7 schedule, with seamless hand offs, full transparency (and free shipping, too) is a daunting task. American Global Logistics points to technology as the key equalizer. According to Slangerup, “The mid-level companies and the smaller companies are saying, boy, what do I do to compete with those juggernauts? So, they simply rely on technology; they can look and feel like an Amazon and be just as efficient and just as responsive as those big companies. But they have to embrace the technology. They have to embrace systems that allow them to do that.”
Not only is there an accessible answer for mid-market companies, there’s an even better part: companies do not need a Walmart-sized technology budget. Third-party solutions, like AGL’s, enable companies to access supply chain innovation without undertaking the burden of developing it themselves. Partners of this kind keep you on the cutting edge and out of a reactive mode. In the end, we must all be forward-thinking and creative to keep up.
But, Have a Heart
While their technology is an important solution to consumer needs, it’s instructive that Slangerup and Schumate don’t necessarily believe technology is their biggest competitive advantage. Like so many leaders we’ve had on CEO Exclusive, the AGL team cites how they treat their people as what has set them apart. Slangerup explains, “Our entire franchise was built around the customer experience. It was built because we’re uniquely positioned, where every one of our customers has an individual, one person in our company, that is their go to person. So, every single, complex supply chain boils down to one gatekeeper in AGL that represents the customer’s interests—knows the customer’s business, inside and out, and over the years, becomes part of the family of that company. It’s that set of relationships that really has made AGL so successful and has [made it] grow so fast, because it’s all about our people.”
In fact, Slangerup points to Schumate as the “heart” or emotional leader of the company, through whom this culture was built. He praises his COO saying, “He is the head of the family. I mean the people respond to him—his honesty, his transparency. His pain when things are tough, and he celebrates with the employees. Of course, I’m right in there with him, but it’s been his show, for all of these years. And he’s developed an environment in the company where it’s great to celebrate. It’s great to say a prayer. It’s great to have those kinds of practices where it really is very much like a family would operate. So, that’s what I think it’s about. And he’s embarrassed, but the truth of it is, he really is the heart of the company.”
A boring supply chain, software/consulting company talking about care, family, prayer, and heart. This has become an ongoing theme here at CEO Exclusive. Maybe our sample is skewed, but I don’t think so. In a dataset that he followed for 15 years, Raj Sisodia in Firms of Endearment, found that companies with this purpose or mission driven ethos grew 21% per year more than the rest of the market as measured by the S&P 500.1
There’s really something here to pay attention to. Beyond technology, beyond meeting the market’s incessant need for instant gratification, it pays to have a heart. In fact, for a mid-market company it may be the only sustainable way to meet that need. So, don’t be afraid to be a little mushy, behind that business suit and cutting-edge technology.
In loving memory of our CEO Exclusive teammate Bill Gibron. Bill was an important member of our team and we will miss him dearly. A gofundme account has been set up to help his wife with expenses. If you would like to make a donation, please visit this page.
 Table A-1, Page 278, Conscious Capitalism: Liberating the Spirit of Business, John Mackey and Raj Sisodia