Successful Business Leadership

By Rob Ukropina

CEO, Overnite Express Delivery

It seems a cliché to say a business should care for its customers and care for employees. But at Overnite Express, that is the essence of our business, and it makes for a better one. It is a function of your attitude.

Who is Overnite Express?

When you think of a package delivery company, the recognizable brand names are Federal Express and UPS. Well…

Overnite Express is a customer driven service company dedicated to providing unmatched reliability, with 9:00 pm pickup, and delivery throughout California, Arizona, Nevada & Mexico.
The Company provides opportunity for professional and financial growth for the entire organization. Our leadership is committed to increasing financial stability, as well as long term
value and profitability for our shareholders.

Our mission statement consists of only three sentences. The first describes our value proposition for customers. The second sentence identifies how we value all our employees. Then we discuss our responsibility to owners.

What is Overnite Express and how did we get started?

In business, we are often taught to think big and grow. But sometimes growth comes from thinking small. I discovered the best way to compete against the big name brands was to stay focused in a defensible niche. When FedEx, DHL, and others stopped picking up packages after 5:00 in the evening, I extended my package pick-up hours until 9:00 p.m.

The business started in 1992 with just 2 employees and has grown to over 250 today. The niche was to provide a service to businesses that needed more time for overnight delivery services, as often times rush work done cannot be completed before a 5:00 p.m. deadline. Our customer, therefore, risked missing important requirements to their customer.

Overnight Express was funded with a Small Business Administration loan of $200,000 for working capital in 1993. Ten years later, the business expanded into Nevada and purchased a 62,000 square foot building in Southern California. In 2006 we expanded to Arizona. We simplify our customers’ lives by delivering to these states and now Mexico. We are being pushed by our customers to expand and we want to meet those clients’ needs.

Overnite Express provides 1,000 drop box locations (and 500 direct customer pick-ups) for 7,000 clients, earning $20 million per year in revenue and growing 15% per year.

But how is this really done?

A business only exists to serve customers (ours just happen to be in three states and Mexico). And customers are best served with a motivated and effective workforce.

To care for customers, I started with talking to my former printing customers to test and try our business concept. They went ahead and took a chance with me because they knew of my passion for excellent customer service. Over time, I studied deliveries for Federal Express customers and found that 3 percent of the packages weren’t even delivered because of address errors. Such a package may sit at the FedEx office for a day or two before it’s returned to the customer. Our goal was to make these customers former FedEx customers by taking the extra step to correct those packages using two-way Nextel phones to communicate between headquarters and customers to find the correct address. Listen to what a customer, Cecilia Ulloa (of commercial real estate developer Snyder Langston), says:

“They inform us when addresses are incorrect and give us the correct one. The (package) tracking system is wonderful.”

We cannot overstate in business the importance of listening to customers and creatively developing solutions to their needs.

In our business, listening to customers is a constant requirement, and they have communicated a consistent message. To compete effectively, Overnite Express has to provide better service, not just equal service. Therefore, I needed the commitment, skill, and effort of every employee in order to provide better service. I began to think of them as associates, not just employees. Truthfully, this is the right thing to do because they are people, not just because there is a customer need.

First, I have to communicate the value of a customer to all associates. The average shipment cost for a package is $14, and the average customer sends one package a night. Our associates are trained to think of a customer, not as worth $14 to Overnite Express, but as worth about $37,000, the amount a customer could spend over 10 years. We’ll spend $200 to make it right with a customer because the lifetime value is so much more. Associates don’t have to get supervisor approval to spend that $200; they are empowered to make decisions for the customer.

Next, more significantly, associates’ pay is linked directly to package delivery. Drivers aren’t paid by the hour but receive a percentage of the gross revenue of each package. A package sent for 9 a.m. delivery costs more than one for 4 p.m. delivery, so the drivers make more on those early deliveries. Associates who work at headquarters receive a salary plus a few cents for every package the company handles. In the process, all the associates are more motivated and happy, which then results in happy customers who send more packages and stay with Overnite Express longer. All associates have an incentive to provide customers with superior service. Listen to what a customer, Dione Tomasetti of Howard CDM Construction in Long Beach, says:

“Their pricing is competitive, and the service representative is always there when I need to speak to someone, and they placed a drop-off box right outside our office so we don’t even have to drive down the road.”

Overnite Express, however, also does simple, common sense things to keep associates happy. When Kristine Balandra, who handles marketing, wanted to attend her son’s graduation from preschool, she didn’t need permission. Our associates are encouraged to work around family events. “It’s like a family working here,” she said.

And there is more to it. While Overnite Express has millions of dollars invested in buildings and vehicles, technology and the Internet make a regional service possible and profitable. Overnite Express software programmers made package processing efficient and accurate by creating a Web site where customers can order supplies, arrange a delivery and track packages. And when we had to replace the dispatch and delivery technology, they developed a customized Palm Treo Smartphone solution, the first to visually record the location of a delivery. Drivers use an interactive process to scan bar codes, capture electronic signatures, and then transmit photos and other delivery information to our website. Near real-time communication of delivery information then is available via email or the website to our customers. Drivers also receive near real-time delivery instructions which significantly reduce delays. This solution gave us a competitive advantage and lowered operating costs. Listen to what an associate, Shane Lougheed, says:

“We were looking for a way to stand out in a competitive market, so we thought about how cool it would be to take a picture of deliveries that were left without a signature…Drivers feel empowered by having the devices. If there is any discrepancy about whether a delivery was made, the Treo lets the drivers prove that they did their job…You can imagine the reaction from a customer when they actually see a photo of the delivered package.”

But technology can also change markets. Increasingly customers have sent documents electronically rather than use package services. So Overnite Express has continually sought to develop new markets and capabilities that can use overnight deliveries. Paper now accounts for about 60 percent of the deliveries, with the rest being products, like blood, that cannot be e-mailed. Our business needs to continually innovate.

In summary, here are some things for you to think about as you develop your leadership style:

1. I’m one of 250 associates now, so I only have 1/250 experience in this business this year. So who has got more experience this year? The 249 other people. How could I be arrogant enough to think that I have more experience in my one little year here versus 249 years? It’s just absurd.

2. If you run an authoritarian, top down company, you’re not letting anybody grow and make mistakes. You’re not going to know who the leaders are. By being totally participatory and letting people make mistakes and grow, the leaders are going to emerge.

3. The people doing their jobs know a lot more than the management. If the leadership at each level above them entrust those people, the quality of the company will come up faster. Those people will feel they participated in the growth of the company, feel good about themselves, and that will continue all the way up.

Postscript by Alan K Rudi

The Small Business Administration awarded Rob with the 2007 Small Business Person of the Year Award. They said:

Rob Ukropina, Founder and CEO of Overnite Express in Irvine, CA, has been named California Small Business Person of the Year 2007 by the Santa Ana District Office of the U.S. Small Business Administration (SBA). District Director J. Adalberto Quijada announced his selection saying “Rob Ukropina’s uncompromising commitment to serve both his internal and external customers coupled with his leadership and visionary qualities have led him to become a true American small business success story.” Robert Dodge, Senior Loan Officer with Southland Economic Development Corporation, nominated Ukropina “because he recognizes that a business is worth nothing without its employees and Mr. Ukropina strives to share the success of the company with its associates.”