Rolling On

Dec. 21, 2004
At Schneider National, a new leader and an emphasis on executive team interaction keep the focus on 'low cost, low cost, low cost.'

The folks at Schneider National describe Chris Lofgren's appointment as president and CEO this past August as a non-event. That's surprising considering that the 43-year-old Lofgren took over the reins from Don Schneider, whose father founded the Green Bay, Wis.-based transportation and logistics firm with its distinctive orange trucks back in 1935. Lofgren became only the third leader of the private, $2.4 billion company, and the first non-family member at the helm. That the transition has been so smooth is a tribute to the succession plan laid out by Don Schneider, who remains at the company as chairman of the board. He is a tough act to follow. The 67-year-old Schneider is the type of cost-conscious leader who, when he and his wife recently moved into a new house, rented a van and moved their furniture and belongings himself. Never mind the fact that the company bearing his name operates 14,000 trucks and 40,000 trailers that haul freight 5 million miles per day. "Don is an icon," says Steven Matheys, Schneider National's CIO. "He probably commands more respect in transportation and logistics than anybody in the industry. You don't replace an icon." To his credit, Lofgren says he has no intention of trying to replace Don Schneider. Lofgren began his career at the company in 1994 as a vice president. In 2000 he became COO and began to lay the framework for the six-person executive group that shares many of the company's strategic responsibilities. "Our approach has been to put together an executive team that has a set of skills, perspectives and experiences that, when you put that team together, is broader and bigger than Don Schneider," says Lofgren. The idea, according to Lofgren, is to have individuals with product line or functional focus, while maintaining their oversight of those areas, develop a sense of responsibility for the financial performance of the whole company. That's an issue for a company like Schneider that offers a broad range of services -- including one-way truckload delivery, intermodal services, freight brokerage services and logistics management -- to many of the same customers. It would be easy for the leaders of each of these areas to focus on maximizing their particular pieces of the pie, and not consider the big picture. "If you have people who aren't taking an enterprise position, their only role is their function or their business, then ultimately it has to go to someone who's going to referee the points of tension," Lofgren explains, adding that he didn't want "to come to work every day wearing a striped shirt, carrying a whistle and a yellow flag." To mediate the points of conflict, the executive group has had to learn how to work together. They've brought in outside counsel to help them better listen and understand one another, and focus debate on critical issues. For people who care deeply about the company, what they do, and the people they manage, it's natural to get defensive when confronted with probing questions, notes Lofgren. But the team's primary role is to "look under rocks," drawing on the experience of the team, so that appropriate strategic decisions can be made. "Conflict between people or between groups of people is not positive. Conflict around business issues is the most wonderful, healthy thing," says Lofgren. "Any business without tension will fall to its lowest level of performance." In his current position Lofgren has established some strategic discipline, making sure the company regularly reviews how well it is developing leaders and fostering diversity -- issues that are easy to overlook running the day-to-day operations -- and actively gauges how well it's performing relative to the competition. Internally, the transition to new leadership has been seamless because Schneider has been handing off responsibilities to Lofgren and the executive team for some time. When Don Schneider established a board of directors 14 years ago, the primary task he charged it with was finding a successor. Such a long-term perspective offers a glimmer of the Schneider culture, which is focused on serving the customer above all else. It's not a company where, as people get more responsibilities, they get a fancier title, a bigger office and more expensive furniture. As Lofgren notes, it is an "execution company," every day Schneider earns the right to do business with customers tomorrow. "If we're guilty of anything, sometimes we're too hard on ourselves, but that's better than being lackadaisical and being surprised. We compete in a very competitive environment, with low margins, so you're always challenging costs," says Lofgren. "If you really come on board, you drink the orange Kool-Aid, you get your tattoo on your right shoulder that says, 'Low cost, low cost, low cost.' Then you're in the family." The approach has been successful. In a tough economic climate, the company expects double-digit growth in all of its business sectors in 2002. That the company has been able to pick up so much new business at such a time can be attributed to what one company observer describes as a "flight to quality." Lofgren himself cites moves made several years ago, recognizing that the company might be getting a little fat, to tighten cost structures and be ready to compete when the economy tightened up. "Don will say there are two times when you're well-positioned to grow," Lofgren says. "One is in a recession. The other is when the economy is growing. So it's really a mindset."

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