When the rubber hit the road:
What happened at CF?

Contributing Writer

For 33 years, Dave Benak was training director for Consolidated Freightways in Menlo Park, Calif. Working for seven different CF presidents, he experienced the best and the worst of times. With his unique perspective, he offers one man's opinion of what went wrong.

"Your employment ends immediately" was the pre-recorded audio taped telephone message to all employees of Consolidated Freightways on Labor Day, 2002. The message came from Mr. John P. Brincko, the company's CEO. With that announcement, a company born and "home-grown" in the Pacific Northwest closed its doors and locked its gates for the last time, leaving many to wonder what happened. Consolidated Freightways filed for bankruptcy on Sept. 1.

What went wrong? What happened to this once-proud, 73-year-old company? What created this recipe for disaster for 15,500 employees and their families?

Was it management, the workers, the economy? Was it sales, marketing, pricing, the competition or technology? What were the telltale signs ... months of red ink, employee turnover or poor morale and bad attitudes? Or, was it a combination of all these things? When the competition is making money and you're not, you know that something's wrong.

I personally think the problem was leadership or the lack thereof. CF had some of the finest managers in the transportation industry, but sadly, they lacked the corresponding leadership, or people skills, necessary to maintain their position among the top three companies in the industry ... an industry they dominated between 1985 and 1992.

Leadership ... that engine that drives the most successful and profitable companies today. There is a difference between management and leadership and, while you need both for balance, in today's economic turmoil and competitive marketplace, it's leadership first ... management second. You manage things; you lead people.

Many CF managers were unable to "let go" of the traditional, top-down management philosophy that (ironically) got them promoted in the first place. With outdated and rigid, top-down management controls, there was little room for improvement or long-range (visionary) planning.

Driven by power, control and numbers ... nothing else mattered. Numbers became the "Holy Grail" of measuring success ... And to get them, you would resort to any means possible including fear, threats and intimidation. Nobody trusted anybody, and "CYA" was the mantra heard throughout the company.

When you forget about your employees, you might as well forget about your customers. The formula for success is simple Employees + Customers = Profit ... in that order. When you let titles or positional power, pride and ego enter into the equation, you create an environment that stifles creativity, teamwork, morale, attitude and motivation.

The most frustrating part of working for CF was not being able (or allowed) to do the job that you were hired and paid to do. The simple fact that nobody would listen to new ideas or "change" ... if it didn't come from the top, suggestions were simply ignored. We kept doing the same thing over and over again expecting different results. We were constantly being pulled off task by conference calls, meetings, flavor of the month, or quick fix programs, the "good ole boy" network and political maneuvering. Not a very healthy situation when you're struggling for survival in an industry where the profit margin is so slim. We focused on being reactive instead of being proactive; we were great firefighters but didn't spend enough time preventing them.

Once known as a company built on pride and loyalty, CF fell prey to the damaging effects of internal, self-destruction. You might say that CF collapsed or imploded ... because they failed to see the need for people skills, change and new leadership techniques at all levels of the organization. Yes, CF faced a host of problems, but sadly many of them were of CF's own making. CF died of a self-inflicted wound far greater than the economy, competition, the union or any other outside force.

What's the lesson we can all learn from this? You simply cannot manage a company to the profit levels necessary to compete in the 21st century any more than you can generate that profit on the cost side of the equation. Management and cost control are only a part of the formula for success. Companies need leadership, just like they need additional revenue (sales and growth) to leverage their position and meet their goals.

Yes, leadership does matter. It matters a hell of a lot. If you work on human capital ... it pays big dividends. Tap that peak performance or discretionary effort that's locked up the minds and hearts of your employees.

I challenge every manager in every organization reading this to answer the bell and move (or shift) to a leadership mindset. Work on the people side of the ledger. Assume a leadership role in your organization. The formula is simple: Efficient Management + Effective Leadership = a Successful Company. And, don't be afraid to change, try something new, and listen to your employees for ideas and suggestions that can save you both time and money.

CF going out of business was a terrible thing for a lot of the people, but as the saying goes, "Where one door closes, another opens." I truly believe this since many of the people I know have already found new jobs where they once again feel needed and wanted; and, where their contribution and experience is truly appreciated. Jobs where they are treated with dignity and respect. Where trust, credibility, integrity and teamwork flourish. These are the same building blocks that made CF the great company it once was. The loss of which caused the erosion and ultimate demise of this $2.3 billion company.

To all those loyal, hard working employees who helped build this great company, I wish the best of luck.

If you are with a large or small company, recognize the telltale signs of internal "people problems" ... be an innovator, not a follower ... trust your people ... be honest with them ... keep the lines of communication open. Invite your employees to join you on the journey.

Being the best means getting everyone on board with a clear understanding of where you are, where you are going, and how you expect to get there. Ask for their help and commitment to make your organization a success. And, finally, tell them what's in it for them.

When you're at the head of the herd, it's best to look back every once in a while and make sure you're still being followed. Being the best is not a matter of size, geographical coverage, gross revenue or a long colorful history. Just ask the employees who worked for CF.

Dave Benak teaches leadership, management and supervision at Clark College. He owns and operates TrainingPays, a locally based training and development company. He invites your comments, concerns and questions at TrainingPays@aol.com or (360) 944-7571.

© 2010 TrainingPays