Culture and Values Support Digitalization
Schneider's values and culture underpin its transformation. The firm's explicitlyarticulated and consistently-stressed set of values emphasize integrity (respect, trust, honesty, and self-esteem) and performance (achievement, enthusiasm, compensation, entrepreneurship). Schneider's identity statement characterizes its culture: "The Orange On-Time Machine: Safe, Courteous, Hustling Associates Creating Solutions That Excite Our Customers". Transportation planning leader David Dietrich noted that "Orange isn't just a color, it's a way of life". Schneider's culture has helped digitalization take hold.
Creating and maintaining this culture starts in the hiring process. "We look for a rounded skill set and alignment with our values, which include learning throughout your career", said Tim Fliss, Vice President of Human Resources. "We look for people who are comfortable with technology. We do hiring in the operating centers, so when you come for an interview, you see people with PCs on their desk and headsets—it's obvious the role technology will play in your job". Thus, the selection process prunes candidates who don't relate well to technology.
Once hired, all non-driver employees spend at least two days in training, while managers spend four days. Employees learn about the industry and the company, with Don Schneider himself leading the sessions that describe the company's core values. "He talks to every new drivers' class, explains the company's values, and makes everyone aware of their importance to the company's goals", said one Schneider customer."Everyone in that operation knows that their job is serving the customer".
Although Schneider National is a private company, Don Schneider took the remarkable step of creating an independent board of directors with the power to fire him. In an interview, Don explained his rationale:
Humans need a tension to be effective. With my goals and the way I think about my values, I want to keep the company private—public companies have too short-term an outlook. But in order to stay private, I needed the same tension, so I formed an outside board and took all the voting stock and put in it a trust fund that's run by the board. That made it pure— they have total responsibility. They could fire me. I have to go through a yearly evaluation, and they could determine that it's best for the 20,000 employees if they fire me.
Schneider's culture helps it win new contracts. Ed Root, former Director of Transportation for Libbey-Owens-Ford, interviewed drivers when assessing a long-term dedicated carriage partnership with Schneider. The drivers' genuine regard for their employer was a key factor in his company choosing Schneider.
Inevitably, there is no enduring competitive advantage from technology. Today, 280,000 trucks in the industry use the satellite communication system first used at Schneider. Other firms will copy and improve what the leader initiates.
As the Schneider story indicates, however, investing in constant adaptation can move the technology forward in new ways. Firms that are close to their customers and marketplaces are more likely to have insights that lead to investments with high payoffs. And firms that have complementary investments in the broader network of skills, structure, and processes will likely achieve a kind of advantage that is hard to duplicate.
New technologies gave Schneider the chance to learn how to build a complementary web of activities that shows every sign of being lasting. This web is a complex network of factors—strategy and structure, process, people and culture–that must continually be balanced as the organization evolves to meet everchanging external pressures.
Figure 7.4 summarizes how Schneider made careful moves in strategy, technology, organizational structure, operational and management processes, and support for its people. The net result is an effective, growing organization whose customers and employees work together to thrive in a changing world.
Figure 7.4: Model of External Forces and Internal Organizational Dimensions at Schneider National
The ability to grow and evolve such an organization is rare, but we would submit that the ability to maintain this holistic balance will distinguish successful organizations in the decades ahead. One can certainly see in Schneider how technology was both an enabler and a creator in "digitalizing" the corporation. The genius of Don Schneider and his team, however, was to build the necessary related web of complementary dimensions that will let their creation evolve through time.