It was a kick in the gut, very personal.

And we had gone through significant growth.

And at our annual user conference, I had a customer come up to me and say, we love the product, Matt.

Can't put my finger on it.

It's just not the same as it used to be.

Everybody's focused on the short game.

And that was like a knife that pierced me.

I did personal interviews with every single employee of the business to say, what could we do better?

What are we doing wrong?

That entire process led to me launching a new business operating model at that company called the Pillars of Excellence.

Direct personal engagement is where you find the real nuggets.

Are you looking to increase sales, grow your brand, and share your leadership message?

Then check out our business podcast program.

Each week, more people listen to podcasts than have Netflix accounts.

And one third of the US Population listens to podcasts regularly.

So your customers and team are already listening to podcasts.

It should be yours.

Discover our five step profitable podcast framework and what results you can expect for your company by setting up a 20 minute call with my team@BenLeads.com schedule.

That's BenLeads.com schedule.

Welcome back to Lead the Team with number one, bestselling author and in demand corporate trainer, Ben Fanning.

On this podcast, the world's most innovative senior leaders share their top success strategies to motivate your direct reports, cultivate your top leaders, and accelerate your career.

Let's get started.

Here's Ben.

Hey there, and welcome back to Lead the Team.

Rapid growth, especially in today's unpredictable market, isn't accidental.

It's the result of a deliberate strategy, a unique approach, and a secret sauce.

And today we're unlocking that secret with Matt harmon, chairman and CEO of One Compass Holdings.

Now, since 2020, he's overseen remarkable growth at One Compass and its primary holding, ST Logistics.

And he's here to share the foundational principles that have driven their success.

Principles that can be applied to any business facing any challenge.

Let's discover these ingredients today of sustainable growth with Matt right now.

Matt, welcome to lead the team.

Thank you, Ben.

Thanks for having me.

Yeah, and thank you for your patience because, y'all, I just had to read that intro about five times, so.

He is such a patient leader.

Thank you for that.

Now, One Compass holdings at FSC Logistics, as I mention, experienced significant growth since you took the helm back in 2020.

Please share with us a philosophy, an action or a strategy that's been key in driving that success.

Yeah.

Thanks, Ben.

So when I came to One Compass holdings, or the FST logistics.

Back in 2020, the company had undergone some pretty, pretty significant changes.

They had some leadership that had left the business, the original owner, founder left the business.

And in 2019, some new leadership took the helm.

And for all intents and purposes, the business was, was on a downward spiral and they were wondering how if they were going to be able to survive and continue.

I came on board as a consultant.

I spent a lot of my career in the technology sector.

And in the technology sector, a lot of that time was spent on business process automation and really developing software that helped businesses optimize business processes, streamline, create efficiencies and drive significant improvements in their in their business that not only improve bottom line, but created a better culture for their and also created delivered excellence to their to their customers.

So what we call that is the pillars of excellence.

And what I brought to FST Logistics back in 2020 was our pillars of excellence business operating model.

It's a business operating model that I wrote back in 2014.

And that business operating model focuses on essentially getting your employees to make better decisions day in and day out.

Ben I mean you look at everybody, everybody shows up to work every day and what do they do?

They sit and they make decisions.

From the very first moment they walk in the door, they're making decisions.

They're making decisions on their interactions with other employees, interactions with their customers.

And so how do you get people to make the very best decision more than they make the wrong decision?

And so that's how you deliver excellence in a business from my perspective.

Okay, so the pillars of excellence business operating model is based around an expectation that the company has to put people in the best position to make better decisions.

And that starts with having really good, well defined processes.

Once you have well defined processes, you've got to educate people on how to work within those processes.

And then once you get them working within those processes, you have to have good technology and systems that allow you to track and measure.

So you have to measure the performance of those processes that you put in place.

And then you've got to hold people accountable.

And what that ends up being is a mentality within your business that ultimately leads to, it applies to your hr.

How do you better best onboard people, it applies to customer service, how do you take care of customers, it employ, it applies to your truck drivers, how do they greet somebody when they're making a delivery?

Every aspect of our business, we're constantly reinventing processes, measuring the performance of those, holding people accountable, and then going back and looking at those processes again, so we can get to get that continuous process improvement.

And so that's what the business operating model that we've deployed at FST has led to our success.

And it's something that we.

It's just become a part of the culture of the constant focus on making decisions that drive excellence.

And it's for our customers, it's for our employees.

We have to deliver excellence in our financial performance and we've got to be an excellent partner.

So those are our four pillars of excellence that has been the secret sauce to our success and that we're taking to all the new acquisitions that we do within One Compass holdings today.

Well, it sounds like a very robust and thorough business model.

And I love the idea of it being based on the simplicity of decision making and how people make decisions.

Was there one decision that you look back on, you're like, yeah, the team was making decisions like this and it was leading to the.

All these other challenges.

And then by applying this and understanding the decision differently, they start making different decisions and made a big difference in the business.

Yeah, I mean, a lot of it comes down to process and, and it.

If I were to, if I were to just look at the decisions that we were making as it relates to our employees, our employee engagement, how you compensate your employees is a decision that you make from a leadership.

How you reward your employees is a decision that you make related to your employees.

How do you respond to a customer challenge in a difficult time?

Do you.

When a customer approaches you and you.

And there's, there's a problem with your service.

A lot of companies look to find a way to protect themselves as opposed to accepting responsibility for things that may not have gone wrong.

That deli that delivered the quality service that that customer was expecting.

And so the accountability is not just us holding our employee owners accountable to what they do.

It's about us holding our.

Ourselves accountable to making the right decisions and doing the right thing more, more times than not.

And I, I would say the, you know, the biggest impact on that is customer satisfaction, retention of our customers.

We do not have a lot of customer churn.

Our customers know that if we make a mistake, we're going to own that mistake.

And then what we're going to do is we're going to go back to root cause and we're going to figure out everything that we can do to make sure that that never happens again.

Because every time a mistake is made, you've got to go back to root cause analysis to find out what you can do better and how do you improve the process?

And that's that business operating model that we were.

Yeah, it's big.

It's just that mindset of, okay, the decision is we're going to own the problem versus find a place to hide the problem.

And when you own it, you're much more likely to do the root cost analysis.

But if the culture is, hey, there was a problem with this order, we got to go pin this, we got to go find someone to blame it.

It's not us.

Yeah.

Or we don't.

And, and I suspect sometimes, especially in logistics, rarely is the problem just yours because there's other people involved in this.

But at least you got to find the piece that you own.

Yeah.

What you can.

A lot of cases, Ben, I mean, what you find is a lot, a lot of leaders, the first thing that they want to do is they want to pin a mistake on somebody and hold somebody accountable to that.

And very few companies do a good job of looking in the mirror and accepting responsibility for why their people make mistakes.

More times than not, people make mistakes within a business because they were not properly onboarded, they were not properly trained, they didn't have a good solid process that put them in a good position to make better decisions.

And so that's part of what we talk about, accountability.

We as an organization have to be accountable for the decisions our people make and then allow them to make decisions and learn from the mistakes that they make.

And that just makes everybody better.

Because you learn a lot more in life out of your, out of your mistakes than you do out of your successes.

I always say our successes make us complacent.

Our mistakes make us make us better.

And so we want to look at every mistake and get and understand why we made, made those.

So do you have a favorite mistake in your career or something you did along the line that that served as a really valuable lesson and helped you, helped accelerate your growth.

Recent mistake that our business made, what was, was related to shipping some product that it was aged out and because we're in the food and beverage space and so we had some product that got set aside, it had to be tagged, it was wrapped, it was isolated, and it was put on product release hold.

Ultimately those products got shipped out to Amazon by mistake.

Our vendor obviously was, was very upset about that.

Our response to that was, was not to try to reverse that the error and put it back on our customer.

It was to sit down with our employees.

And we met with, we had about three or four employees that were involved in shipping the product out.

And it was a big, it was a big issue.

It could have been a serious issue.

And it wasn't go fire those, those people because they didn't file a process.

Our approach to that is we need to talk and understand what we could have done better.

Right.

What could we have done better from a leadership standpoint?

Some of the, there were about three or four people involved in it and one of the, one of the people ended up being terminated because they had a carefree attitude about it.

But the other three people had had legitimate things that they said well I made the mistake because of this and this was what led me to making them mistake.

And so we went back and looked at well what do we do different so that this doesn't happen again?

Yeah, I love that.

And it shows the power of the business model and the pillars of excellence and really helping there's a place for corrective action.

And it's like I love the idea of educating your people, using those as growth opportunities.

And it's not necessarily to fire them, but it's to give them a chance to grow from it and then thus the business is growing from it.

Yeah.

And you talk about, and Ben, when you look at the customer perspective, we've had instances where we had customers that were in trouble and the mentality within the business before I got here was we talk about making excellent decisions that are in the best interest of our, of, of us as a company, our employees and our customer.

Another prime example of that is, is when you have a customer that's, that's in trouble and they've got, they've got a extreme need.

Let's just say it's a warehousing need that they run out of space at their facility and they need, they need spillover space with us and we're the only ones that have temperature controlled space where they need it and they come to us and say we, we, we need this space.

Price is not an object.

We've got to have the coverage prior mentality was charge that customer, the, whatever you can charge them because they need us.

So you take advantage of that.

And that's not a good decision.

Right.

So that's not a good decision for the customer.

So you know, just being fair in the way you make decisions to say, you know what, what's a fair price?

What's a good middle, middle ground price for, for this need that you have.

We're not going to take advantage of it, which a lot of companies do.

They're, they're looking to they're looking to squeeze as much as they can out of everything that they, that they do.

And ultimately that doesn't lead to excellent relationships.

And so yeah, I love that.

It's like, hey, our decision is to take a long term view, not a price gouging opportunity like correct.

In a hurricane.

Hurricane.

Just like during COVID I mean we were right in the middle of that during, during COVID And there's a lot of trucking companies, transportation warehousing companies that completely took advantage of, of.

Of customers related to transportation costs and warehousing.

And we've had a lot of new customers that are customers with us that came to us because they said you guys didn't take advantage of the situation, you didn't take advantage of the market and the situation that we were in.

And we've gotten rewarded with really good long term business that the other people lost because they did take advantage of it.

Well, that's the power of playing the long game.

Yeah.

With your relationships and with your clients.

Would you or your CEO be a good fit for this podcast?

If you know a uniquely talented leader who has a story to share and a message to deliver, then we'd love to host them on the show.

Go to benleads.com apply to fill out a quick form where you can let us know a little bit about yourself.

And my team will take a look to see if we're a good fit.

That's bentleads.com apply now.

Thinking about the going back to the business model idea and it's been such an instrumental part in what you do, I'm curious, was there a specific moment early in your career where you realized like, hey, I've got to operate this thing on a business model or you identify this pillars of excellence model or.

Yeah, great, great question.

And yeah, so if I go back to 2014 and my technology company, I started a techno a software company back in 2001 that we launched a market, had some really successful growth and at our user conference, I think it was in either 2013 or 2014, we had gone through significant growth between 2010.

We spent the first five, six years as a startup software company trying to find our way and just getting by.

And then we achieved a lot of success over 2009-2014.

And at our annual user conference, I had had a customer come up to me and say, just ask him how everything's going.

Just, you know, you're happy with product, you happy with our service.

And he said, we love the product, Matt.

And he said, but it's just not the same.

He said, I can't put my finger on it, but doing business with your comp with tour de force is just not the same as it used to be.

And that was like a knife that pierced me.

And I was.

I said, well, what do you mean by that?

He said, well, it's just.

They're just not.

People just don't seem to be.

Everybody's focused on the short game and I don't feel that you guys are making the best decisions anymore for the customers.

I feel like there's a lot of decisions that are being made for the best interest of the employees and the best interest of the company and maybe not the customer.

And so that's what led to.

I left that event, I went back and I did personal interviews with every single employee of the business to say, what could we do better?

What are we doing wrong?

Ultimately, that entire process led to me launching a new business operating model at that company called the Pillars of Excellence and realizing that we can't always make the.

We can't always be so focused internally that we're looking at what's best for us.

We've got to look at the customer, we got to look at what's best for them long term.

So, yeah, that was the moment.

And it.

I launched that in my software company.

It became a fundamental part of our software company.

When I sold my business to private equity.

Private equity did not necessarily have the same feelings because they love the one pillar which was drive financial results, but taking care of the employees, taking care of the customers, making good, good, equitable decisions for your customers, that wasn't something that we saw eye to eye on.

And that's why I exited that business because it compromised my core beliefs of how you run a business.

And so I exited that business.

FST Logistics was my first consulting engagement.

I left the software business, I started a consulting company.

FST was the very first client that I had.

And ultimately I wrote a business recovery plan for them and ended up getting hired by the board and brought on and to run the business.

And the rest is history.

So.

Wow.

So I never extended it very, very far outside of.

I never did a lot of consulting around the Pillars of Excellence business operating model, but that was the plan.

But I think the success of what we've seen at FST Logistics by being able to organic growth of 150% over four years, and we formed an entire M and A team and we've done acquisition growth, we've done organic growth and seen tremendous financial success.

So Holy smokes, what a journey.

And I just love this idea of, hey, yeah, this was working really well.

Things changed and they weren't using the dang model.

Right.

They, they wouldn't let us do it.

And I was going to go become a consultant and my very first client ended up wild success.

Yeah.

And they hired me and then that's it.

That's what we do.

It must be a pretty darn good model.

So, yeah, it's.

I would say it's, it's done very well.

So.

Yeah, that's so cool.

So a couple.

I'm experiencing that on a lot of different ways.

One is that you and I can see this conference playing out and you're like, oh, you see one of your customers and you're expecting them to high five you after your presentation.

Instead they give you that kick to the gut.

You're like, no, it's not working right.

And instead of being like, oh, they just don't get it, you're like, no, I'm going to use that as a reflective, like call to action to go really dive deeper into the business.

And it sounds like too you didn't delegate that you felt like it was so important that you needed to go do all these interviews yourself.

Do you remember how many you did roughly?

I mean.

Oh, I did 60 plus.

Yeah, I mean, that's a lot of time.

Yeah.

Oh, it was.

I basically stopped what I was doing for three to four or four months and I went out, I grabbed, I got somebody else who was in the business at the time because one of the very first things that we, that I wanted to do is start to build out the framework for an intranet site to better disseminate information to better onboard people.

And coincidentally, the gentleman that worked at my prior software company, I ended up hiring him and he's now employed at FST Logistics and he leads, he builds out the framework for all of our internal customer portals.

And we've got a couple of developers that used to, used to work at my software company that now work here at FST Logistics and they build out the external customer site that allows us to better engage and deliver analytics and deliver information to the customer.

So it also reminds me of this adage of, hey, success is a terrible teacher.

Like, if you hadn't got that kick in the punch in the gut at the conference, like, who in their right minds.

I meant like, you didn't have time to take three or four months interview everybody.

Yeah, but you had that and you were able to, to create something really powerful from It.

And I think a lot of times leaders either delegate it or they don't really.

It's just easy to get caught up in the mundane of a busy day.

And I'm curious, you can think back to that time, like, how, how did you navigate that all like, hey, you're like, this is your job.

This is why I need to be doing this, to run the business.

But I'm going to put all of that aside and focus on these interviews to really problem solve the business.

And you didn't hire a bunch of consultants to come do it for you?

I didn't hire any consultants.

I didn't read any books to tell me how to do it.

It was just, I, I've always been a learn through experience and learn through engagement.

And the direct personal engagement is where is where, where you find the real nuggets.

And if you're not participating in the conversations, then you're not, you're not going to get the most of those conversations.

So I didn't, I didn't want anything secondhand.

Those interviews were not just employees.

They were interviewing customers.

There was a multitude of large customers that, that I went through interviews with all of them to help understand what, what we could do better as an organization.

And it was a, again, it was a, it was a firsthand I, I, it was a kick in the gut, as you said.

And, and it was one that I took very, very personal.

And before we went on to the next phase of our evolution of the business, I wanted to have that corrected.

So was there a, in those interviews?

I do a lot of podcast interviews because I always, I'm always curious.

Was there one question that you asked people that seem to be the most revealing?

Do you, like, if you think back, like, was there one thing that seemed to be helpful?

I don't think there was.

There was one thing.

I mean, there was a multitude of things that we, so we were going through some significant growth.

And so we were hiring consultants very rapidly.

And, and for, for example, we had consultants that we would engage into working with customers that Maybe we're charging $250 an hour for that consultant, and the customer is feeling like t.

This person isn't exactly at the caliber that I'm used to paying $250 an hour for.

And have they really been prepared and engaged and trained and onboarded appropriately to be able to deliver that?

And so just things like that, I mean, and then that also puts the employee in a very difficult position where they're not going to be happy.

And so you get the same, that same problem has an impact on the customer and it also has an impact on your employee because you're not putting your employee in the best position to be successful, to be able to deliver excellence to the customer.

And so typically what you find is that if you get down to root cause of those situations, there's an impact to the employee and there's an impact to the customer both.

And then you sacrifice turnover with your employee because nobody likes to be put into a position where they can't help, where they feel like they're unprepared, where they feel like they're in a position to fail.

Nobody wants to be placed into that position.

And the customer's not, not happy either.

So.

And then it impacts the bottom line.

So you look at the, the continued business process and as you make decisions and run a business, you've got to make sure that every process and everything that you do is, is providing excellent service to the customer, taking care of your employees and putting them in a position for success.

It's got to be financially efficient so that you're, you're returning the proper amount to the bottom line when you achieve success.

And so you can have processes that are great for the customer.

They love it, the employees love it.

But the company's taking it in the shorts because you're losing money.

Well, that doesn't work work either.

So that's where that perfect balance of really analyzing what you do and how you do it.

Yeah.

And a lot of good, a lot of good insights and for leaders to think about like who are you going to talk to?

Don't delegate the conversations that you need to have and that show up with questions, not answers.

It's so hard I think for a lot of leaders who are used to directing their teams, leading their teams out front, but not used to having an open ended conversation with your customers or your employees or your team.

And there's a lot of value in that.

And I think this is, this interview is really like, that's really coming strongly to me.

Yeah, we, we have what we call when we do orientation and it's a very, it's something we, we teach every employee when they hit the door is always question the why, always understand why you do what you do.

And because if you understand why you're doing something, the best example is we, we have a lot of customers that have some very unique needs and we have employees that come in and we have, that are terribly inefficient and they're, they're, they're not automated, they're cumbersome.

And, and we know it.

But when you bring a new employee in, they say, why are we doing it this way?

There's got to be a better way.

And we say, well, because this customer, they only need us to do this two or three times a year.

It's not repetitive enough that we can automate it or create efficiencies.

Unfortunately, they have a customer that pays them to do this.

And so they're willing to pay us and they pay us a lot of money to manage this really poor process.

If your employee understands that, oh, you mean we're getting paid because this is so inefficient, they're a lot more receptive in accepting that the company's not a bunch of knuckleheads having us do something in a terribly inefficient way.

So if you understand why you're doing what you're doing, people are going to be more engaged in that process.

Yeah.

When you're doing, having such a tailored process per client and maybe they don't have advanced systems and they can't do it the way that like Walmart handles everything correct.

It's going to be a different animal.

And yeah.

And who knows, that could be an opportunity for you all down the road to help build their.

It sounds like.

Do you ever go the extra step in that situation and say, hey, your inefficiencies are costing you?

Oh, absolutely.

Yeah.

Yeah.

And how open are they to that conversation?

Cost savings analysis and take solutions back to them.

And we, we want to try to automate as much of that.

Or we'll go back to them and say, hey, if you can get your customer.

We deal with a lot of small emerging brands in the food and beverage space.

And so those emerging brands don't have the expertise of dealing in the large retail with a Walmart, a Costco.

So we understand, we're very, very good at understanding how, how to work the most efficiently with Walt Walmart.

And so if we have a new customer in the retail space that's doing things terribly inefficient, just for example, with their labeling, how do they label pallets when they come in and go out to Walmart?

And if you, if you are doing that inefficient, you can create such a significant cost back on your, your products.

And so we'll take them solutions and say, listen, here's what you need to do.

Go back to Walmart, tell them this, change your process.

And if you change this, we can save you five touches.

When, when Your product hits the.

Hits our warehouse versus the time it's going to.

When it, when it ships back out to a Walmart.

So.

Yeah, we do a lot of that.

Yeah.

It's like you're distributing the pillars of excellence to your, to your customers.

And having worked.

I worked for the Sports Authority years ago.

Okay.

Chargeback program for people who labeled things incorrectly.

Oh yeah.

Was nasty.

Yeah.

I'm assuming for Walmart and every other retailer deal.

Walmart and Amazon, the chargebacks that you get from.

From Amazon if stuff doesn't come in exactly right is significant.

And Walmart, they're all, all of them are the same.

So you guys have a pretty easy time earning your keep, I think.

Yeah.

With like one consulting run on that were very sticky.

Yeah.

No, that's great.

Well, this has been such a cool interview and we may have to do it again because, Matt, we only got to a tiny bit of the questions that I had.

Really, really good stuff here.

Give you, give you the last word.

What's your parting thought for our listeners?

You can take it anywhere you want.

Parting thought for a listener.

I think, I think a lot of leaders today, part of our business operating model.

One of the, one of the key requirements for any leader to be able to lead in our operating model is that that leader has to be vulnerable.

They have to be receptive.

They have to be great listeners with their employees.

Because the way you improve process and drive efficiencies is you have to be able to be willing to listen to your customers.

This all started with me being willing to listen to a customer and take what they had and not just kick it aside.

And so you have to do that same thing with your employees.

Every great leader, way too many leaders are too.

They think they know better than everybody else and they're not willing to listen and they're not vulnerable in realizing that there is always improvement that can be made.

And if you have everybody in the organization pushing towards that and feeling like they can contribute, the impact of that long term is significant.

Great place to wind up today.

Thanks for coming on the show, Matt.

Thank you.

Want to boost your productivity and decision making?

Get vital insights from each episode delivered directly to your inbox.

A great resource whether you've listened to the episode or not.

Go to benfanning.com insight.