By Andrew K. Reese
Political elites across the developed world are struggling with how best to deal with aging populations, even as business executives face the departure of some of their best leaders and a wealth of intellectual capital with the retirement of the Baby Boomers. But while public- and private-sector leaders debate the best responses to these demographic changes, smart companies are putting in place programs to ensure they are able to maintain, and build on, their own leadership cadres. And, in doing so, these forward-looking enterprises are helping to build the next generation of supply chain leaders.
At Des Moines, Iowa-based Ruan Transport Corp., for example, the company has strategically refocused its recruitment and training program in the face of the retirement of a large percentage of its current employee base, many of whom hold management leadership roles. To support the company's five-year growth objectives, Ruan's management training program works to clearly identify individuals both within and outside the company who, with the right training and support, can become strong company leaders.
Riding the Wave
Ruan Transport Corp. is a privately held provider of dedicated contract carriage, bulk transportation Ruan Certified Brokerage services and integrated services including logistics, warehouse management and cross-docking among others. The company, founded in 1932 at the height of the Depression, has grown to encompass more than 5,500 employees at 162 locations. Boasting a driver turnover rate that is one-fifth industry average, the company is known for, among other things, hauling about 80 percent of the milk in California and about 17 percent nationwide.
Jim Mulvenna, vice president of safety and administration at Ruan, notes that the demographic wave generated by the start of the retirement of the 78 million Baby Boomers in 2005 is affecting his company as much as any other organization in the industry. However, Mulvenna says that Ruan is framing the challenge presented by this demographic tsunami in terms of the relationship between leadership and growth potential at the company.
Mulvenna notes that Ruan has maintained customer retention rates in the high nineties even as it has grown through a series of acquisitions, and it views customer service as one of its competitive advantages in the marketplace. The key to maintaining that advantage and continuing to grow, as Ruan sees it, is preserving a high degree of exceptional leadership from the terminal level on up within the company's organization. "We're a very decentralized company," Mulvenna explains, "with each of our locations nationwide operating as an independent business unit. The individuals out there in the field are our first level of leaders dealing directly with the customers on a daily basis. We're only going to be able to grow as fast as we can bring quality leadership into the company to maintain our high level of customer service. But with the aging population there will be fewer leaders available in the workforce."
To tackle this challenge, over the past three years Ruan has put in place a two-pronged strategy comprised of an internally focused management succession plan and the company's externally directed recruiting efforts. For the former, Ruan looks to identify future potential senior managers and bring them up through the ranks using management training courses and a mentoring program that pairs senior leaders from among the company's terminal managers with the next generation of operational executives. The mentoring program is based on the principle that leaders can only be developed by other leaders, and it serves a dual purpose: It exposes participants to the key initial rung of senior management within the company, but it also helps Ruan to develop leadership qualities among the managers themselves. "The mentoring program is a tremendous development and training tool for the terminal managers," Mulvenna says. "It really helps them sharpen their skills, and it helps us to identify any gaps in their leadership competencies."