Fresh Start 2002: On the Road Again

Zollars didn't meet every employee, but he did reach thousands. His presence made a strong impression. "People thought, 'He's the president of the company, but here he is talking to us,' " says Mike Brown, vice president of strategic market planning and marketing communications. "It's something this company hadn't experienced before. It was a breath of fresh air." The goal went beyond putting a face on the new leadership. Zollars, who returned to many terminals more than once, wanted people to know that his vision for a new Yellow wasn't just this year's fad -- it was a long-term shift. "Repetition is important, especially when you're trying to change the way a company thinks about itself," he says. "You're trying to create new behaviors."

Again and again, he reminded employees of the company's new focus: customers. He knew that this represented a different way of thinking about the business. Early on, during a visit to one of two customer call centers, Zollars listened to calls to get a flavor of the process. Although he was impressed with the instant transfer of information to the terminals, he noticed a problem: When customers contacted Yellow, its representatives didn't ask them when they wanted their freight. Instead, the reps told customers when Yellow could deliver it. The schedule was convenient for Yellow but not necessarily for its customers. "I remember one caller who said, 'I'd like to get this stuff from Chicago to Atlanta in two days,' " says Zollars, "and we said, 'We can get it there in three days.' The customer thanked us and hung up. We didn't think there was anything wrong with that. The attitude was, If you don't like what we do, too bad."

For a long time, he says, Yellow adhered to an "operational obsession." Employees monitored how much freight moved through the network daily, how full the trailers were, and other internal metrics. Yellow was a model of efficiency. But it had no idea whether its customers were satisfied. At the town-hall meetings, Zollars would ask employees to guess the defect rate: how often shipments were picked up or delivered late, billed wrong, or damaged. Usually, they'd say it was 10% or 20%. Try 40%, he'd tell them. "I'd never seen a defect rate in any industry that bad," he says. "The response was classic denial. People thought, 'We're as good as anyone else in the industry.' "

In many ways, when Zollars arrived, Yellow still behaved as though deregulation hadn't occurred in 1980 -- as though everybody's rates and service were the same. Meanwhile, the competition was reducing its long-haul transit times, and smaller, more nimble outfits were grabbing up regional shipments. "We were a defensive company -- a follower, not a leader," says James Welch, who became president and COO of Yellow Freight in 2000 after Zollars replaced Myers at Yellow Corp. "We were yearning for leadership. This company was ready to change."

Next, Listen to What Customers Want

If Yellow was going to satisfy its more than 300,000 customers as never before, it needed to hear from them. That was Mike Brown's job. In late 1997, with the help of an outside firm, Yellow surveyed 10,000 randomly selected customers. Since then, the company has been surveying 600 different customers a month. Those 15-minute conversations are vital. "It used to be that one anecdote or the opinion of one customer would carry the day," says Brown. "Now we have the opinions of tens of thousands of consumers."

For a company that relied on internal criteria, letting people from outside the company -- its customers -- evaluate performance wasn't easy. Especially when Yellow learned that its assumptions about customers were wrong. "We'd had the attitude that speed and price were the most important things," says Greg Reid, senior vice president and chief communications officer. "But according to our research, what matters most is that you pick up when you say you're going to, deliver when you say you're going to, and don't damage the freight."

The customers made a compelling case for dramatically improving reliability: Those who said that they would use Yellow again and recommend it to others had gotten good service. Those who hadn't were less loyal. It was a fairly obvious lesson for a traditional service provider, says Reid, but it was a critical one for a company that was trying to become customer-centric. "What happens when consumers anywhere get bad service? They don't go back," says Reid. "Why should we expect our business to be any different?"

Nothing epitomizes the company's new commitment to customers better than Yellow's Exact Express. Launched in 1998, it represents a breakthrough for Yellow: its first expedited, time-definite, guaranteed service. Everyone involved, from the customer rep to the driver, is committed to doing what it takes to satisfy the customers' needs -- even if that means using an outside air-cargo partner to meet a deadline. So far, says Valerie Bonebrake, senior vice president of new services, which includes Exact Express, the deliveries have arrived when they were supposed to 98% of the time.