Episode 082: Risk Management with Don Osterberg

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All right. Welcome back for another episode of the Fleet Success Show. I'm your host, Josh Turley, joined today again by Jeff Jenkins.

Hey everyone, how's it going?

Today we've got a very special guest, and Jeff, I'm gonna turn this over to you a little bit and have you introduce our guest host today, Mr. Don Osterberg.

Absolutely, it'd be my pleasure. So a little, little story, and I just told Don about this prior to us recording, is when I went to go work at Schneider National, my first week at the company, I was walking down the hallway with this, this lady that I worked with, very, very respected. And Don's walking down the hallway and she stops me and she goes, you see that guy right there, Don? He runs our safety for Schneider. He is the best boss that I've ever had as far as leadership and everything, because he cares about the person, not necessarily everything else that goes along with it. But he puts you first, which I really, really thought was very interesting at the time after coming from my previous employer where it was nothing but results-based and that's what they cared about more than the person. Right. So it was a very different type of an attitude that I appreciated. So, Don, glad to have you on board. I know that you're retired after a long and illustrious career and we welcome you to the Fleet Success Show.

Well, thank you, Jeff, and I appreciate you mentioning, uh, uh, what you just said. That means an awful lot to me, and I am delighted to be here.

All right. Well, uh, Don, why don't you, for our listeners, you know, give us— it sounds like you guys, uh, you know, crossed paths in the trucking industry, but, um, give our listeners a little background, you know, a little resume, and just what is the Don Osterberg story? You know, what's, uh, what are some of the things that you've done in your career you're really happy about and proud of?

Well, Josh, I'll give you kind of the Reader's Digest version. I spent most of my adult life in the military. I'm a retired Army infantry officer. Once I retired from the military, I was the chief operating officer of a distribution company headquartered in Atlanta, which is where I cut my teeth in transportation. Just a vignette, true story, my very first day of work at that job, we got a debrief from a DOT audit of our private fleet, and they didn't get a conditional rating. They got an unsatisfactory rating. And it was my job to really crash the FMCSA regulations and learn everything there was to know about trucking and regulations. So that, with that dubious beginning, I left that position and joined Schneider in Green Bay. I was the general manager of Schneider Specialized Carriers. And then I was promoted to senior vice president and I was accountable for safety, security, regulatory compliance, uh, and driver training. And for a while I was even accountable for driver recruiting. Uh, in addition to my accountabilities with Schneider, I did a fair amount of external engagement. I was on the executive committee of the Transportation Research Board, which is part of the National Academy of Sciences. I was, uh, the chairman of the American Trucking Association Safety Policy Committee. I was the chairman of the Research Advisory Committee of the American Transportation Research Institute, and I served on the Federal Motor Carrier Safety Administration's Motor Carrier Safety Advisory Committee. So I had a lot of external engagements as it relates to transportation safety specifically. But that's kind of me in a nutshell. I retired in 2015.

All right. Well, uh, you know, you're telling that story about, you know, first thing in, you get the, uh, the unsatisfactory rating. It's like, hey, welcome to the industry, I guess, right?

I should have walked right back out probably, but the— yeah, I accepted the challenge, and we did pass the re-audit, by the way, so we did succeed.

Yeah, well, that's a good lesson for everybody too, right, is that, you know, you come into that and you're like, okay, now I've gotta, I've gotta take ownership of this and, and really dive in and get to understand everything and start implementing all the processes and, and practices so that we can go through and do the re-audit and succeed. You know, but it'd be so much better if you just, you know, like if somebody before you had been proactive and identifying that beforehand, right? It's always ideal to— So you're going to be coming to the Fleet Success Summit. And, you know, that's, you know, if you haven't heard us on the podcast before, but March 21st, 22nd, We're going to have, you know, 12, 13 different speakers on the stage talking all about the 4 different pillars of fleet success. So stakeholder satisfaction, intentional culture, resource efficiency, and risk management. And clearly, given your background, like, we're bringing you in and one of our heavy hitters in risk management. Why don't you give our listeners a little bit of a preview of, you know, like, what you're going to be speaking about some of the things that, you know, you'll kind of touch on during your session, you know, that they can look forward to?

Yeah, I'd be delighted to do that, and I'll be essentially talking about— I don't consider myself an expert in too many things, but one of the things that I do have tremendous amount of experience and I think some expertise in is leadership. So I'm going to look at risk management and the challenge thereof really through a lens of leadership. There's a lot of people who use the phrase risk management. I use the phrase risk leadership because making the changes often necessary within an organization to really mitigate your risk requires leadership. So I call the presentation that I will give Mitigating Risk Through Effective Leadership. And so on that theme, I will start out by making a case for change and give people a sense for what the trucking industry in aggregate has done and what the safety trend is in the industry. And just to give you a little peek at one of the key themes that I'll talk about is that we individually and collectively have to do more and be better. And if we're talking about risk management, job one is to prevent the crash that results in the risk. Uh, so I'll spend some time talking about tactics and strategies that carriers can use to be better and in so doing reduce their risk. I'll spend a little time, Josh, talking about culture, and people say, "Geez, not another speech about culture," and I know there's another pillar that's going to address that, but I'll briefly talk about that because what I've learned is until and at which time you get your safety culture right and make safety a core value, one that's not something that you will compromise on, that's job one. And absent that, anything that you do programmatically to try to improve safety and reduce risk will meet with limited success. So we'll talk about espoused values, what carriers say, and enacted values, what they actually do, and making sure that those two are congruent. And then I'll really conclude with what I— feedback I get from the times that I present is most fascinating to people is I'm going to give people a glimpse of how our minds work and why it is that we behave the way we behave. And by extension, and by connecting with that, if you do, you'll get a sense for why our people behave the way they behave. And that— I'll give some examples of that. And it's, I think, entertaining and enlightening at the same time. So, you In a nutshell, that's kind of an overview of some of the things that I'm gonna talk about.

Yeah. Hey Don, so I worked at a company that their, their slogan was safety first and always, right? So from the outside looking in, it's like, okay, we've got this as our tagline, safety first and always. But as a dispatcher, there's a load that had to run 1,000 miles over in a day to meet that service. Then they would ask that you call the driver and see if they could do it, right? Can you finagle your logbook? Can you go and can you do this? So, it's interesting, right, when you talk about how you've got to have that culture versus your active values, because a lot of people, until there's a catastrophic safety event, they preach safety, they preach risk management, but they don't actually live by those words.

Well, you just made precisely the point when I talk about espoused values, what we say versus what we do. And that is relatively common in the industry. That we all talk about safety 24/7, safety 365, safety first and always. Every headquarters that I've walked into, they have a beautiful placard that says, you know, safety is a core value. And then when you test that in terms of the enacted value, it's really a double negative because what happens in the minds of the driver and driver leaders is that they know that your espoused values and your enacted values are different. So you lose credibility in their eyes when they know that you're really not being truthful with what you're saying. And so we'll talk about the importance of bringing those things together and make sure that you're kind of walking your talk. And sometimes that's difficult. And sometimes the easiest path is to push the envelope. And I'll talk about competing demands because drivers, driver leaders, others in the organization confront competing demands every day and how we reconcile the tension between those competing demands, like service, as you mentioned, and like safety and so on. How we reconcile that tension really speaks to our real culture. And so, it's, I think, important that we spend some time chatting about that.

I think that's one of the things we talk a lot about when we talk about an intentional culture. And I love that you're doing this in the lens of safety, in the lens of risk mitigation. You know, but it really isn't about what you preach. It's about what you tolerate.

Right?

And we talk about, you know, like, what is written on the walls versus what's written in your hearts? And we talk about that for all your core values, you know, and safety just happens to be one of the ones that gets neglected probably most often. Or at least, you know, it's the one where you have that dissonance, that cognitive dissonance between the two that has to be resolved. I love that you're talking about that. That's really insightful.

Absolutely. And one of the things after I retired, I, there were a few carriers that would call me and ask me to come in and help them to kind of assess where their opportunities were. And I did some of that and I would typically go into the executive suite and I would listen to the executives espouse safety first and always safety 24/7. And then you can imagine what I did next. I left and I went to where the drivers were, whether that be in the driver's lounge or out on on the yard. And I would talk to the drivers and I would give them scenarios where perhaps, as Jeff brought up, a service-sensitive load was really in contravention with safety and regulatory compliance. And the drivers would tell me what the real culture of the organization is because they're at the pointy end of the spear and they know. In fact, I was sharing with the driver the example about you're delivering a service-sensitive load, you're tired, you've run off the road a couple times, you know the right thing to do is to pull over and stop and take a nap. And before I could even finish, he stopped me and said, "There'd be hell to pay if I did that." Well, I learned all I needed to learn about the culture with that statement. And taking that message then back to the executives, and they often would give you kind of a shocked look like, "I can't believe he said that." Now they can believe he said that because that's the culture that they have fostered in the organization.

Well, and I'm curious what you think, you know, I don't know if you're familiar with Mike Rowe and, you know, like the Dirty Jobs and Mike Rowe Works and all that. Sure. But he's got a whole segment he calls Safety Third. I don't know if you're familiar with this at all, but he kind of talks about like, you know, there's this willingness that we have, you know, we have to make profit as a business, otherwise the business fails. You know, the entity as an organization ceases to exist, it dies. So that's obviously very— that's got to be a high priority. And then the second priority is like, in order to make that profit, we have to have a willingness to engage in risky behavior. You know, like just by virtue of stepping out the door and engaging in commerce, like we're engaging in risk. And so therefore, because those two things have to be true, safety can't be first because of that. And so he's like, but safety is too important to rank. So like, if you're going to put it anywhere, I guess then Truthfully, safety is probably third, you know, and I think it was one of the first times I've heard somebody call it out and say, you know, we say safety first all the time, but really, like, it's got to balance out those other two things, which is we've got to be profitable and, you know, we, we step out the door, right? Like, we go out into the world.

Yeah.

And I think Mike is right with that. And, and I often talk about safety has to be a core value, and I distinguish between values and priorities. Priorities change within the organization. They're situational. Core values, generally speaking, don't change. So, if you're actually successful in making safety a core value, it really provides guidance to the organization that says you will— I go back to my competing demands conversation— you will mitigate the tension between those competing demands in the name of safety. And in so doing, we can say that we have a core value of safety. But I will tell you that that is the minority. And one of the things I'll talk about is I, many years ago, I created what I call a trucking industry safety continuum. And I'll talk a little bit about what the good carriers are doing and conversely what the poor performing carriers are not doing. Uh, and you know, I typically end that by talking about the fact that we have a moral obligation to the motoring public with with whom we share our workplace to operate as safely as we can. That's the obligation as transportation professionals that we have. But oh, by the way, there's a financial lens to the point that you made, Josh. There's a financial lens that we have to look at. The good news is I absolutely believe and can prove that safety pays. So when we look at it through either the moral or the financial lens, they will both lead you to a place where you do more and you are better in the area of safety. And we'll talk about that.

That's awesome. I like that you balance those two and you're just so articulate about that, that there is a moral obligation. We talk a lot about that, like our stakeholder satisfaction pillar, but also from that risk is that, you know, like you owe it to the drivers on the road to put out a safe vehicle and to operate with safe practices. You know, that you have this, this ultimate consumer and this ultimate You know, like stakeholder in your organization's behaviors. So I love that you're balancing both of those, the financial aspect and the moral obligation.

So, and we'll talk a little bit about the desensitization because most drivers, you know, if you ask them if they're a safe driver, they'll, they'll say that, that they believe they are. In part, that's because we haven't created context for them. But one of the challenges that we have in the area of safety is people will cut corners or push the envelope. As it relates to safety and nothing bad happens. And then all of a sudden, you know, the 10th time that that behavior is engaged in, reading a text message while driving or doing something else that distracts a driver, something bad happens. We say, well, how did, how in the world did that happen? Well, it was inevitable that that was going to happen, but we got desensitized to that risk. So we have to constantly remind drivers, and maybe it's from my military background, but Be disciplined enough to do what you know is right, even if there will be near-term negative consequences from perhaps your driver leader or the customer who, who had to receive a load late and really hit on that theme of discipline. And that's, that's one that resonates with me. And I think it does with most people. They want to see themselves as a disciplined professional. So we hit that theme a lot.

From the perspective of somebody, so let's talk about like if you're a driver manager or you're somebody who's like that middle management area and you've got your leadership that's pushing you to do things that you know are unsafe or illegal or whatever you want to call it, how do those people go about getting that leadership to, um, back them or to actually take it from a lens of safety and risk management? Because a lot of people say, well, I'm being pressured to do this.

Yeah, it's a great question. And why I lead with a conversation about leadership, and there are many different types of leadership, the most difficult type of leadership is to lead up. Relatively easy to lead peers or lead down, but it's a whole different ballgame to lead up. But what you have to be able to do, first of all, you can't use what I call the Wizard of Oz scarecrow, where they say, you know, it's everybody's fault but mine. And there's nothing that I can do about it because I'm not in a position of leadership. But, and perhaps you don't have the ability to make a decision. You're not a decision maker. You can influence people. And we do that every day in the conversations that we have and the way that we bring up maybe the contravention between espoused and enacted values and have the courage to challenge. And sometimes it takes courage to challenge people. But communicating, not leading with and arguing for the limitations of the organization, but the capabilities and the opportunities that are presented, and to present those things in a positive way to those leaders to, one, raise their awareness, and two, change the way in which they lead the organization. We can't let ourselves off the hook just because we're not the decision maker.

Yeah, I agree. So there's an example I have where, You know, when I was dispatching, when I first started in trucking, I mean, it was all about just, you know, making money, having the most miles. And so it was damned on the rules and everything else. And we move. And I, one, didn't have the balls to step up to my leadership and say, hey, I'm not gonna do anything that I know is illegal, right? That's just, to me, I wanted to be number one and I would do that at all costs, right? Obviously not the best mindset. But there was another guy by the name of Brandon who started and he had another mindset. He obviously had a lot better integrity than I did because his exact comment to his operations manager was, I will not do anything illegal. I will not lie. I will not cheat. So if that's what you want here, then you need to find somebody else. Right? And that took courage. But what that did with him is that operations manager stopped asking everybody to do things that were against the law or illegal or just not right. So it did take Brandon to set the example for everybody else to get that leader to stop.

Yeah, and it's important that you have people like that. And I got to tell you that that was drilled into me from the time I was a young second lieutenant in the Army, is that we are not obligated to carry out an unlawful order. And it's not a question of swallowing hard and saying, you know, I was told to do it. There's a lot of atrocities that have taken place over the years with, you know, I was directed to do this. But so it's a thought process that I've lived with my entire life, but will come with some discomfort for some people. But to have the courage to address those obvious disconnects, I think, is an important strength that we need to strive for and really inspire others to carry that same mentality with them.

Yep.

Great. Great. I appreciate that, Don. If this conversation is any indication of how your speech is going to go over at our Fleet Success Summit. I'm even more stoked to hear you do it, and our audience is going to be even more stoked because you, my friend, are just a great leader and a great thought leader. And I do appreciate this conversation that we've had.

Well, thank you for that, Jeff. And I will certainly, as I mentioned perhaps to you earlier, I want at this point in my professional life to inspire others to, one, think about things differently. Such that when they go back to their organizations, they go back armed with a kit bag of tactics and strategies that they can— that are actionable, that will materially improve their safety performance, which by extension will help them to manage their risks. I look very much forward to the opportunity to talk with your audience.

Well, I'm excited for it. I know, you know, just after this last little bit, I've gotten even more pumped up for the session. So, For those of you who are interested, fleetsuccesssummit.com, you can go out and get registered. It's March 21st and 22nd. You'll be able to hear from Don himself, and it's going to be an amazing session. I can already tell. I've got notes. I was writing down notes on a little Post-it pad about, "Oh, I want to look at this and check this out," just from our little snippet that we've had here. So I'm looking forward to it. It's going to be a lot of fun. But thanks for joining us today, Don. Thanks, Jeff. And with that, we'll go ahead and sign off. Until next time.

Thanks, everyone. Thanks, Don.

Thanks, folks.

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