Driving Business Through People at Truckstop: HR’s Strategic Impact on Revenue and Growth

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Welcome.

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[00:00:24] CT Leong: Ron, for those of us who don't know, tell us a little bit more about TruckStop and what you do there.

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[00:01:05] CT Leong: So you're matching basically you're connecting that 3PL chain in an easy way for both the people that are going to be distributing the goods as well as people that are selling the goods.

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And it's private equity owned. So it's been a very exciting time and it's going to continue to do that over the next few years as we continue to really grow and scale the company.

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[00:01:55] Ron Storn: You know what got us here to where our growth is not going to get you in the future. [00:02:00] So you have to really think about how to put tools, systems and operate differently. A lot of companies have different views on what HR is.

I really think that no matter what function you're at, you have to be business first and your function second. And that's no different from HR. What I mean by that is you have to think about how HR fits into the construct of how you're going to meet your goals as a business, how are you going to meet your revenue goals, how you're going to meet your EBITDA goals, and then, what those outcomes are.

I have a little bit of a unique background where I started my career as a CPA in KPMG. So I have that foundation of business and I try to bring that into the HR function. When I think about elevating HR, the number one thing that I don't see HR folks which I try to do Is really talk the language of the CEO.

one cost and the number one [: 00:03:00

What do you think that is?

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[00:03:05] Ron Storn: Correct. People. So it's the biggest expense and it's the biggest asset that you have to work with. The CEO, no matter what decision they make, there's always a financial component and the people component. If HR is not in the room to help you understand what's happening, all the dynamics from a cost structure from a productivity structure, it's going to impact it.

So if HR is not in the room, you're missing a big piece of the stool. You can have the right roadmap, the right vision. But if you don't have the right person in the right role at the right time, You probably will not succeed or earn the right outcomes that you have. And so you have to earn this trust with the CEO.

lens first and how critical [: 00:04:00

[00:04:02] CT Leong: Taking that effort up front to understand how the business works, where every dollar of investment actually turns out into a return for the business. I think that's super critical for anyone in any function. Especially for HR where there's pretty much a large cost base, a huge 50 to 70 percent of OPEX in most cases are people costs. So we got to figure that out. So you've been on the job for 10 plus months. How did the first 90 days look like for you?

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So I tried to accelerate that a little bit and meet some of the leaders in the organization as well as, what our business drivers were and got an understanding about, we're talking about the low bar, like what's important from a technology standpoint, from a product [00:05:00] standpoint, from a revenue standpoint. What are the gaps that we have? Because if you come in and say you have all these benchmarks, you have all these things you want to do, that will fail. You have to understand where the company's at, meet them where they're at, and then move them forward accordingly.

So you can't come in like gangbusters, you have to really assess. The first 30 to 60 days I was really assessing and then came up with a strategy and a framework for the people team, but then also talking with my CEO, Kendra, about what are the other gaps that we have in the organization?

And so one of the things that, came front and center is that we had some good leaders that got us here, but they haven't seen the scale to double revenue and double our EBITDA in the next three years. So a lot of my time has been partnering with Kendra to hire our next CRO, our next CFO and our next CTO.

stressing on. How can HR not [: 00:06:00

A lot of it I call is like the operating rhythm of the business. What are your weekly business reviews? What are your monthly business reviews and how we engage each other as an exec team and so forth. So some of that is still in motion, but we put some new things in place that I think is going to really help us get to that doubling of revenue , in two to three years.

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[00:06:34] Ron Storn: Success is like having that strategy of what you're going to put in place from a people standpoint. How are you going to hire the best talent? Because some people can grow with the organization to get you to that next doubling of revenue, or you might have to uplevel some of the talent.

ything that connected to how [: 00:07:00

But we started figuring out, okay, what's the best way to accelerate this talent? How can we assess our talent? And then how can we have the right experience? Because values are very important in most companies. So it's not changing the values. It's resetting or evolving the value. What it meant the values in the early days, you have a different definition now and how you grow.

That's difficult, especially if you've been around 25 plus years. There's a certain way of operating, and so you have to show individuals that if you're changing operations, if you're changing how the culture is, you want to have impact. You want to show that you're working with smart people, that everyone in their job is going to really help truck stop, get to where they want to be.

ou connect your customers to [: 00:08:00

That's a couple of the resets that we're trying to do right now.

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I like how visceral and human that is there's that human touch [00:09:00] to HR that you clearly have. At the same time, you're also a CPA. And you're also responsible and put in this place to calculate the ROI on what would traditionally be HR initiatives, like performance reviews and development and all of these different processes that are being run or the employee experience, for example.

How do you think about that?

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That's one big thing. Whatever you do, you have to measure it so you can improve it and see if it's working or not working. There hasn't been a lot of measurements in the company before. So you have to really start somewhere, right? Meet where you're at and then start inching forward and moving forward, as quickly as you can.

ght way, exit, off track and [: 00:10:00

If people are not performing, they need to exit the business. If they're off track, can we develop a plan for them? And if they're on track, they're doing really well. So to start this up leveling every manager should hire someone who has better skills than them that makes a great team. It's not everything that you know, you need to surround yourselves and I need to surround myself with people that are better than me in different areas. So to measure this, we're saying six months from after they start or the next performance review: are they on track? And if we get to 80 to 90 percent of them on track, we have up leveled the team.

So that's one measure. Again, that's it's a simplistic measure, but it's somewhere to start. The second one is we're going to talk about this a little bit later in the podcast is about managers. They are so crucial to what we do. And what we're trying to do is then have a pulse and an understanding of:

, meaning from their directs [: 00:11:00

That's the second numeric metric. And then the third one is about attrition because everyone has attrition, right? Especially if you have hourly workers, there's probably more attrition hourly than not. But what's key is tracking regrettable attrition, and regrettable means that if that person leaves , there's a business risk and something is going to suffer.

And so a goal a metric to have for that is that of all the people that leave less than 10 percent are regrettable. So those are initial ways of doing it the HR way, but to go a little bit further about how to track performance. So engineering, we have about 16 different pods.

of equation, you could have [: 00:12:00

That's something that we're doing now. Some of the leaders already have that these couple of leaders coming in also have that. So really being very thoughtful, what you're doing for the business is this is the highest and best use. And then will this develop the ROI for the company.

So it's a process, but I really think it's important for all companies to do this because that gets that connection of how people and the business can work together.

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Then we have the second piece is the manager effectiveness piece, which we are going to dive into. And with regrettable attrition, we're looking to get it down to at least 10 percent because each person that leaves that shouldn't is costing the business a significant amount of resources.

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[00:13:06] Ron Storn: So I work with the engineering leader has metrics for all the different pods and they might be a little bit different because some of the pods might be working on tech debt or they might be working on enhancing what we have and others might be connected to revenue.

This new pod is working on something that's going to be incremental revenue. So there's consistency across it, but there might be a little bit nuances depending on what that pot is working on, but it's really important. I just want to add one thing. From recruiting standpoint, a lot of times it takes a lot to hire an engineer.

And one thing to tie to the business and tied to productivity is say, measure how many hours of engineering recruiting time does it take to hire one engineer? Say it's 45 hours, a goal that the engineering team should have and that the people team should have reducing that time to hire a 45 hours per hire to 40.

s per hire is huge. It's not [: 00:14:00

Again, HR is starting to do a lot of that, but I think if you're very diligent and vigorous on this, it's going to really help the whole company accelerate that theory about business outcomes.

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So if you match these two together you're really getting efficiency if you reduce the amount of time and they continue to stay or stay even longer.

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So you have to develop a baseline and then measure progress. But what the best outcome is should not be internal metrics. It should be external metrics. Because we're early on our internal metrics, we might meet them, but we're still far away from the external metrics. So you have to have a push and pull on what are the right benchmarks, what are the right metrics to use, because I think you're selling yourself short if you're only trying to improve incrementally on where you are versus what great companies are like. That's very key is to think about both, but eventually you want to adhere to what the best benchmarks are.

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[00:16:04] Ron Storn: Yes, we are in the process of doing that. So for instance regrettable attrition, like I said, 10 percent is what we want. Right now we don't know what regrettable is. So in order to measure it, say the internal yardstick is 20%. 20 percent or less should be regrettable. I think that's too high, but we've never measured it.

We don't know. Let's set something in the short term. Do a pilot on that then start setting what the 10 percent is. And so this 10 percent metric that we're talking about is by the end of the year, it might be a little bit higher in Q1, Q2 until we start getting to know it. But ultimately you want that good benchmark externally, but you have that internal to pilot and adapt to see what works and what doesn't work.

Because if people haven't done this before, it's hard to really get to that external benchmark right away.

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[00:17:00] Ron Storn: Exactly. And what I find hitting your internal benchmarks. People claim a lot of success over that. That's great, but that's not the end goal. That's like the first step of the journey. And sometimes we forget connecting it to the external benchmark. Again, it's a culture shift.

It's a mindset shift, and it takes time. It's not going to happen overnight.

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Or is that something that's still aspirational?

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But what we've been highlighting to the board is here's our goals. [00:18:00] Here's our strategy and then have them come along with you to say, Are you doing the right things? And then they're excited to see what the outputs are. So it's still a little bit too early to really measure it. But I think that's the way to go.

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[00:18:22] Ron Storn: What we're trying to use is the same type of dashboards and tools that the company is using. So it's not just something for HR. It's something that the whole company can use and just use it differently for your specific org and how you measure things.

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[00:18:41] Ron Storn: Exactly. if you can see every org in the company wide tool, that's much better. And that's what we're working on now.

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It's that manager. How do you think about manager effectiveness and how do you drive that in the organization?

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But they don't give you the tools to do that. Being an I. C. And then being a people manager so different. And so what we found here, a lot of people have good intentions, but they didn't know how to be a good manager. What I've done and we started doing this at the end of 2023 was develop a manager accelerator program.

tals. And so it's a workshop [: 00:20:00

[00:20:05] Ron Storn: Sometimes it's every other week. Sometimes it's weekly. But what it is, it's live in person instruction and then you get to role play it as well. But there's five key things that we focus on for each of these cohorts and one which is the biggest thing I think a lot of companies don't do know the business and what that means is how do we make money?

What are our products? What are our financials look like, even if you're not working directly on any of those, I think it's important that you have to have a baseline of what the business is how are we succeeding or not succeeding, and I think that most companies do a poor job of it.

They do a great job at leadership, but not all the way down. So we're doing that. First with the managers, and then eventually we're going to train everyone on how to know the business. The second piece of the manager accelerator program for the managers is deal with ambiguity. How many things are gray?

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What's best for their org, what's best for the company. Having a toolkit and a framework of how to do that. The fourth one is communication. How do you communicate effectively? Especially if you've never managed before, you know what works for you, but there's really very rarely a one size fits all.

You have to understand your team and adapt how you communicate. And then the fifth piece is, Really, how do you develop others? Because like yourself, you grew to a manager at one point. How do you take a person that has high potential and institute some of these manager attributes in order for them to be successful and have a good transition?

ganization. And then you can [: 00:22:00

It's about 90 to 95 percent people love it. And most people don't love training. But when you can role play it, when you can hear it and you're with your peers, it's really powerful. And so this is step one, step two is going to be, how do you develop a more nuanced skills, but this is like a foundation for everyone to build and, even some of the first cohorts.

They're using some of these techniques with their teams, and they've seen an uptick in engagement or productivity that they haven't had before. Again, works sometimes. It doesn't work other times. But I think having this foundation is so important. Just as like you said, they are the center point of what activates all employee productivity, engagement and everything about them.

So that's what we're doing. It's the first part of the journey. I recommend every company you have to focus on the manager of one of your first steps as you join an organization.

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There are a lot of confounding factors. did you go about even implementing this it's a decently large investment because you have to take people off the floor to attend the training.

You've got to put that all together and then you've got to follow up.

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Our productivity in 22 and 23 in terms of how we had new products or how we evolved and modernized. The technology stack was very slow. And so what that meant was we either didn't have the right skills or we didn't have the right managers. But you have to start with the managers and most of them have been here for a [00:24:00] little while. Kendra's her role was a CRO, then became CEO. So she's seen some of this. So helpful that she saw some of the deficiencies before, but when you bring to the table saying the stats about 75 percent stay or leave because of the manager, and that we really haven't evolved over the last couple of years, knowing that we need to do this in two to three years.

That investment is going to pay for itself pretty quickly. So taking all of that data and presenting it to her, she was very bought in and then got the rest of the team bought in as well . And then as we're trying to find these new C level folks, that was a big part of it is how do you accelerate change in a very thoughtful way?

And a lot of it is the managers.

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[00:24:52] Ron Storn: The first cohort is people who are already managers and it's managers all the way to the top. So one of our executive off sites the [00:25:00] executive team went through this in a very quick one day format to just understand what it is so that we had this understanding of what the language would be and so forth.

So that was number one. The second one about the cohorts, what we did is. We went to each of the different orgs and said, we have 25 slots, nominate your top two or three that you want to go through first. So the leaders helped create which managers and directors and so forth should be in it.

And again, we limited to 15 to 25. We had that cadence to do that. then also. Once one manager goes through it, maybe their manager of other managers. We tried to get a cross section of each org, each level and so forth so that they can still help put that in practice after that cohort was done.

It really was having the first team, the executive team go through it first, and then have them select which priorities. Again, some managers might be working on more significant projects versus, more of maintenance projects. And so having them selected made more sense than having HR selected.

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[00:26:07] CT Leong: And how did you go about designing the five pillars designing the language around this?

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And so communication the understanding of the business and then the development piece, we were not seeing a lot of internal leaders growing. It was more coming from the outside. So at the executive team, we came up with these themes and buckets, and then myself and my team went through put the language out there.

sus us doing it ourselves to [: 00:27:00

[00:27:07] CT Leong: Very cool. If you could boil everything down into kind of a framework or a north star for yourself how do you gauge your own progress? And where it is that you want to go? How would you describe it?

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So it's meeting most of the company metrics. that productivity uptake. And then also talent up leveling, that's going to be success because all of this has to work together. It can't be separate. Also what it boils down to. There's two big metrics that we're looking at.

t our EBITDA metrics? If you [: 00:28:00

And that progress just tells us how far along we are on that spectrum.

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[00:28:25] Ron Storn: Again, what the company has to win. That's how everyone wins. If you're not aligned to that and, it's tricky because some of it are direct to revenue and EBITDA, others are indirect. Like HR is very indirect to it in most cases. So how do you try to figure out the metrics to do that?

And even for other orgs, the same type of thing, legal. How does legal directly, influence that it could be like, how to get through contracts and understand what the right contracts are for customers and things of that nature. So you just have to make sure that you get that business mindset in every piece of the org.

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[00:29:09] Ron Storn: Reach out to me on LinkedIn. Definitely a very responsive and a LinkedIn user. So that's probably the best way to do it.

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[00:29:38] Ron Storn: Thank you.