4 areas where freight forwarders must become future-ready
The future of freight forwarding is about creating new possibilities – for employees and customers.
Imagine an industry where people collaborate on a true global scale, where people can be in Vietnam, and help solve a problem in South America. An industry that is vital for the well-being of billions of people, intertwined with all companies in the world that produce and sell something across a border. It’s a fantastic place to work, and there is an extraordinary level of commitment. This industry is called freight forwarding.
Now, imagine an industry where people are working very long hours, being paid less than in many other industries. An industry where margins are ultra thin, but the customers are expecting nothing less than zero defects. An industry where “silo” behaviours, hierarchical thinking and “Command & Control “ leadership is still very present. Sometimes it looks like “People don’t matter”. This is unfortunately also the freight forwarding industry.
The freight forwarding industry is one of the most diverse and challenging industries in the world. It should be a front-runner industry that leads us into the future. But freight forwarding companies have to change first!
Transactional thinking, reaction to circumstances and often even denial of the critical situation dominates many freight forwarders, and they miss out on being entrepreneurial, visionary and innovative.
Freight forwarders must become more attractive to work for as an employee, and to work with as a customer.
In order to survive and thrive in the future, freight forwarding companies need to create a strong and inspiring vision for both employees and customers. The leadership must ask some deep questions and be ready to create new answers that are outside of where most companies currently are. It’s about becoming ready for the future – today!
Here are four areas that senior leaders must address:
1. Build a future-ready culture
It’s about people, mind-sets and behaviours. It’s about intentionally creating the culture, taking measures that are forming mind-sets and guiding constructive behaviours. It is much more than just glueing new initiatives on to what is already there.
If “entrepreneurship” should be part of the new culture, then eliminate frustrating and slow decisionmaking. If you want “innovation”, be willing to accept failures without blame and shame.
To make this change happen, authentic role-models, deep-reaching educational efforts and lots of team-work is required. And it also requires an environment of “safety”, where people speak up and engage. Therefore it is important to understand, that teams who went through a succesful change, are measured to have a 60% higher level of “psychological safety” than teams that are unsuccessful. But Freight Forwarding companies hardly invest into this today.
It is also releveant for potential M&A considerations. Companies who have already embarked on culture change programs, have a big advantage. Because they are used to work with their people in a deeper and more meaningful way.
2. Turn Employee Experience into an asset for Customer Experience
The correlation between EX and CX must be given much more attention. According to McKinsey, the upside of great EX is significant: Employees bring 40% more effort, 23% improved individual performance and it leads to a 10% increase in customer satisfaction.
When customers buy services, they also buy a piece of the culture. Employee experience and customer experience is linked!
It is not only HRs task to improve the experience of the employees; It is a company-wide challenge, where all leaders must be authentically driving this from the top and from the back at the same time. This requires investments into the leadership capabilities and well-being of employees, and the establishment of a more collaborative way of working and communicating. When companies establish a collaborative culture internally, it soon spills over on the communication with customers, delivering the benefits that Mckinsey is referring to.
3. Develop leaders with future-ready facilitation capabilities
In a research from the ChangeLab released last week, it was identified that leadership styles based on “Inquiry” accounted for 69% of the successful change programs. Approaches based on “Telling” what to do, only accounted for 31%. But are your leaders having the skills needed to „facilitate”?
The art and skill of giving space and facilitating teams and complex developments, is not a skill that we see a lot in the freight forwarding industry today. Traditional leadership styles of advocating and controlling are prevalent, which is not an inspiring role model behaviour.
Future focused leadership development programs must include:
Facilitation skills, including “deep listening”, open inquiries and appreciative communication. The “Appreciative Inquiry” methodology is a great fit.
Deeper self-awareness, with the capability to identify, differentiate and regulate own emotional states.
Mind-set of empathy, collaboration and authenticity, learning not to be constantly in control and allowing oneself to be vulnerable.
A new understanding of how teams function as a “system”, developing skills to have constructive conflicts and tap into the collective team intelligence.
4. Magnetize talents, and give them space to build the future
Inspiring and visionary senior leaders and companies magnetize talents, because they support the dream of being part of something exciting and purposeful. The competition for talent is brutal, and visionary industries and companies invest heavily in creating and innovation environment based on facilitation rather than management.
Many freight forwarding “Innovation Labs” are managed by people from the Line Organization, making it too difficult to take real risks and innovate. “Line Managers” often turn “innovation” into “continuous improvement”, focusing on small steps only. The horizon for evaluating ideas is too short, and it is often no fun to work there.
Finally, look for talents that can innovate other areas than “Digitization. Look for people who can create more value for customers, and look for people who can create more value for employees. Expand the agenda for talents and innovation.
In an industry with more than 600.000 employees in the top 20 companies, there are also several encouraging initiatives:
A new breed of top leaders are communicating openly and deeply into their organizations, bringing their authenticity into how they inspire, both personally and on social media. This is helpful to remove boundaries and create a safe environment in which innovation becomes possible.
Other companies have embarked on culture-boosting programs, and are addressing the importance of the Employee Experience.
Some companies have initiated real coaching programs, that help leaders and talents to develop new capabilities.
It’s a start, and the industry needs much more of this.
It’s time to create new possibilities for the future of this fantastic industry.
Go beyond the usual stuff: invest in your people and help them to learn. Invest in creating real value for customers and take some risks!
This article was originally published in March 2019, therefore, it does not take the coronavirus pandemic and its consequences into account.
Henrik Kofod-Hansen has held senior leadership positions with several global logistics companies in Europe and Asia, and today works globally to enable organizations to evolve their cultures and grow leadership capabilities.