Episode 085: Proactive Approach to Risk Management with Tim Ammon

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Welcome to another episode of the Fleet Success Show. I'm your host, Jeff Jenkins. Hope everyone's doing great. We got a little something special for you today. We've got a guest on here that has been doing fleet consulting since 1998. And for those of you that are a little hard at doing math like I am, because I had to break out my calculator, it's 24 years of fleet consulting. So Tim Ammann, welcome to the show.

Jeff, thank you very much for having me. I appreciate it and really looking forward to having a conversation today.

Yep, absolutely. So we asked you to come speak at the Fleet Success Summit as well, right? So this is kind of a little bit of a preview of some of the things that you're going to talk about in Vegas in March. So will you do me a favor and just kind of, I guess, introduce yourself to our, to our audience? Let them know, you know, a little bit about yourself, kind of what you've done.

Sure. Yeah, I know I'm super excited to be coming out to Vegas to, to be talking with the audience and to be focused predominantly on the area of risk management. But thinking about risk as part of the four corners of the summit as they've been described and trying to integrate some of those things for, you know, for the last 24 years, as you talked about, we have been and I have been in and around the fleet world, both in the municipal side, and in the school side, looking at, at the way operations run and function and opportunities for efficiency and have focused pretty heavily on a lot of the asset management components of it and a lot of the process management components, which is where I think this, this focus on risk comes from. And so I've been super fortunate to have worked in, in many of the largest and a whole bunch of the smallest operations that you can possibly think of and have had the good fortune of actually working with several folks at RTA throughout my career, both as a, as a customer and as a, and as a colleague.

Perfect. So it's funny, before we started recording, we actually talked about a little bit of a story about how you had put together a project for Steve Saltzgiver when he was running one of his fleets. Everybody knows Steve. He used to be one of the co-hosts on this podcast before he moved back to Utah. But go ahead and like tell us a little bit about that, that story and the failure that you had.

Yeah, sure. It was a— so it was a really useful lesson to happen early in my consulting career. At the time, Steve was the state director for fleet for the state of Utah, and I was part of a team that was doing a large-scale replacement study for him for all of the departments in the state. And we had spent weeks putting this thing together and doing all the math and building all the spreadsheets and everything that had to be done again in 1998, so keep that in mind. We get on the plane, get out to Utah, sit down in Steve's office, open up the laptop, and realize that nothing is right at that point. At some point in time, I had been organizing things in such a way to try to, to create some reports and create some summaries, and I had missorted about 10,000 vehicles and applied them to the wrong organizations and applied them to the wrong departments and applied the money in all the wrong places. And immediately realized that like the junior guy on the team had screwed up in a major way. And essentially was forced to sit there at the table and look at all these senior people from the state and look at all these senior people from my organization and go, "Yeah, I screwed up and it's got 12 hours to fix it. So like, I'm going to go back to the hotel and get that done now." And to Steve's credit and to the credit of the folks I was working with, they were pretty gracious about the mistake and sort of understanding it. And nobody was too bent out of shape out of shape or too put out by the whole change in the meeting time, but it was a really solid lesson in QA, and it was a really solid lesson in, frankly, as a leader, how do you handle it when some of your people make mistakes, which I didn't really appreciate at the time, but I appreciate a lot more now.

Yeah, well, it's funny because you've let me, probably from that one instance, right, you do a lot of stuff differently than you had before.

Yeah, yeah, exactly. No, no, no. I am a— I am an adept user at this point of functions that I never thought I would be able to understand that are all focused on QA/QC and making sure stuff doesn't move around when it's not supposed to.

So amazingly enough, what I find interesting is, you know, you said fleet typically has more risk than most business, right? Well, it's almost every aspect of fleet you find that you have that risk. And the biggest risk comes from human, right? And it's human decision. It's human error. It's what an individual does, right? So when you take it from that perspective, how do you fix or mitigate the error of humans?

Yeah. So, so for me in the summit, I mean, one of the things that, that I have become concerned with over the last couple of years is this I think the lack of systemic focus in a lot of organizations. And so, when they look at something like risk management, it's often seen in a fairly narrow box of just safety programs and training. And from my perspective, this idea of operational risk management, essentially opening up the boundaries a little bit to think about risk in terms of all of the things that can happen in an organization, from whether it's bad process or or inappropriate contracts or bad technology or whatever it might be and how those introduce threats to an organization is one of the things that I want to be able to try to convey to folks in terms of opening up your viewpoint on where risk really lies. And, you know, maybe unfortunately, but I think somewhat helpfully, recognize that we are in the fleet business, we are surrounded by an envelope of risk. And so we've just got to figure out how to identify them, how to manage them, how to try to address those concerns so that they don't become disruptive in small and big ways.

Yeah, you know, people talk about like training, right? But I think one of the things that I've found when you look at overall training for most organizations, it's, hey, read this or watch this video, and then we'll consider it good training. Right? And what happens is, is you put someone in front of a video, what do they do, right? They, they grab their cell phone, they play around on their cell phone the whole time, or they sit there and they multitask on the web looking at Facebook, playing Candy Crush, or whatever else, you know. And training is usually the best way to teach better behaviors and to get rid of bad behaviors, but it's got to be interactive and it's got to be something that is engaging, or people just don't learn from it. And I think that a lot of fleets fall prey to thinking that just a video or some type of, you know, informational packet works, and it doesn't.

I would 100% agree, right? And I think there's even a predicate question to that, which is what are the things that we should be training on in the first place, right? I mean, we go into more organizations that are providing exactly the same videos now that they were 10 years ago. And if what we're looking for is employee engagement, right? If the people in the training video all have Smokey and the Bandit mustaches, like, people are probably not dialed into that anymore, right? Like, so, I mean, it might be time to sort of update the material, right? And so, there's a whole universe, I think, that goes into this that is risk-focused, right? Which is saying, you know, what are the topics that we should be training on? What methods and tools should we be using to do it and how frequently, right? Because getting everybody together for an hour a month and giving them donuts and telling them, you know, hey, please make sure you set the stoppers on the lifts so that it doesn't fall on you is probably not enough, right? Particularly in an environment like this where, you know, we're surrounded by 1,000 other problems that potentially can occur in that same in that same sequence of events that go into, you know, bringing a vehicle in, putting it up and starting to work on it.

Right. Yeah, totally agree. All right. Well, let's, let's, let's go on. What's the, what's the next goal?

So secondly, I think one of the things we just want to do is to give people a feel for how, how it's possible to incorporate this into their operation. Right. One of the challenges that I think we come to when we introduce material at conferences and in trainings and stuff like that is to say like, hey, this is all great, but like, how do I— what do I do with this when I go home? How do I take this back? And so what we want to try to be able to do is use this operational risk framework and talk about the steps through the process and how they're naturally, I think, an extension of the management and leadership activities that we should be taking anyway. But if we formalize it a little bit, I think we get a lot better results, right? So we'll take people through 2 or 3 examples of this in what we at least believe are real-life kind of situations where we can look at a condition, you know, for example, we don't have enough technicians and assess that problem from an operational risk perspective. And say like, okay, so what if we don't have— if the problem statement is we don't have enough technicians, what do we do about it, right? How do we, how do we go through the process to try to resolve that? And, and how do we also go through the process to be able to make sure we can communicate what the consequence of not having enough people are? Because I, I see that as an area where we really struggle, right? You know, we, we we do a great job of identifying the problem, which is we don't have enough people. We may not do as good of a job identifying the consequences, which is that means there's a delay in work activity. That means we may have quality issues. That means we may have challenges around balancing work between PMs and repairs. It may mean that we have a pretty significant increase in the amount of work that we're outsourcing because we don't have enough people, which may mean we have a whole bunch of delays because the vendors don't have enough people either. And so we're waiting on our vehicles to get back. Right. A huge part of the responsibility here and a huge part of the framework is being able to think through a problem and being able to proactively identify what the consequences are so that hopefully we can mitigate them in some way, shape, or form.

So how well is something like a technician shortage received? Right. Because I think that you'll find most people have a technician shortage. They struggle to find qualified people. Right? So it's not front page news, right? Everybody, everybody sees it, they're dealing with it, right? And you bring it to the attention and someone's like, yeah, well, no kidding, of course that's what we're going through. But how do we, how do we, how do we mitigate that, right? How do we change that and get, and get more technicians? And we've talked on the podcast before just about how culture matters, right? How most people aren't going to bounce and leave ship for a dollar more, right? It's, it's the things that like you're doing in the shop and you're your work-life balance or how you treat your people or why people stick around. Are those some of the things that I guess you go through and you coach about, like how to, how to like mitigate the risk of having a technician shortage?

Yeah, I think that's exactly it. I mean, our focus— so one of the questions when people tell us we have a, you know, hey, we're short mechanics, say, okay, great, you know, you're short technicians. Why are you short at the top of the funnel? In that you're not getting applicants? Are you short at the bottom of the funnel, which is everybody's leaving because you have a terrible culture and you want to— and nobody wants to stay? Are you short because the middle of the funnel is a disaster because you have terrible leadership in the shop and they're not, and they're not doing a good job of, of supporting the people who are working on the floor, right? There's the, the, the origin story of why there is a technician shortage has a thousand opportunities and And part of what the process is designed to do is to say, what are the things that we actually have to fix to mediate that? Because the nonsense story is, hey, we're just going to throw more money at people and more time off. And, you know, you can do that. And that's going to have some— that's going to have some marginal benefit. But there's a whole bunch of other process-related things that if we look through, if we look through the people engagement story, right, which is How do we recruit people? How do we vet them? How do we onboard them? How do we train them? How do we oversee them and evaluate them? And how do we, what do we do to retain them? If we look at those 6 things, that tells us a hell of a lot more about why we have a technician shortage than just we're not paying enough. Right. And so much of what we try to do is, is take an issue that everybody assumes to, like, I think your, your point is a good one. Everybody assumes they know this. Hey, we've got a technician shortage. I know this. The answer is actually you probably don't know anything until you start breaking it down into some component parts and understanding why it is rather than just what the obvious outcome is, which is we don't have enough capacity to do the work that we have to do.

Yeah. And typically the person who is causing that turnover is the one that is the most oblivious to what goes on, right? So as a shop foreman, I'm losing people because I'm a dick. Yeah, right. My boss asked me, why do you keep losing people? And I keep saying, well, because they're offering more money somewhere else. Let's pay them more money. Right.

Right.

Right.

Yeah. Or these guys don't know what to do anymore. And it's— yeah, that's a nonsense story. That's a, you know—

no, it is a nonsense story. So it's funny, the, the— so that when I went to go to take over Fleetwood in Texas, the shop there, I will tell you, you want to talk about your most disaster of a shop. Yeah, this is it. Okay. You walk out and, and one, the first year of inventory that we actually went through and did an inventory that hadn't been done in years, there was like 1.2 $2 million in parts that were outdated and couldn't be used anymore, right? But there's stuff everywhere. Like, you can't walk on the aisleways. It's not like an OSHA night. If OSHA would have come in, they would have shut the place down in an instance. Guys are smoking cigarettes while doing PMs in their, in their bays. I mean, I'm telling you, there was no fans, and it's in, it's in East Texas. It's hot, it's humid, right? And there, there was a turnover problem with most everybody there— we had some old-time people, but they were the ones that like to smoke in the bay, right? They could like kind of dress how they wanted, come and go as they pleased. And the, the shop manager, like, he didn't see a problem because this is the way he'd run the shop, and he'd been there for like 30 years. So he— this is the way he ran the shop for since he'd been there. So he thought that everything was okay, and it didn't matter really how you talk to, how you treated your people. People needed to work. And the benefit that, that they got was we paid them for what we did. But the conditions were just absolutely horrendous. Like, not nowhere in a million years would I ever wanted to have worked in a place like that.

Right.

But he was completely oblivious to the fact of all these outside factors that may cause people not to want to come and work in there because it's how we've done it for so long.

Yeah, I think it's a huge— to me, that's a, that's an almost an ideal example of, of where what we've defined as success influences how we got there, right? If success was we didn't kill anybody today and we got a couple of vehicles out of the shop, like, fair enough, right? But if success was, hey, we're supposed to have, you know, 80% of the work scheduled and we're supposed to get, you know, 100% of the PMs done on time and all of those kind of things, it's a fundamentally different place. And to me, that is actually a really useful example of how if you open up what your definition of risk is, right? If you open up that scenario to the definition of risk being the risk here is this organization just collapses because it doesn't have either the capacity or the vision to meet the requirements of the business right now. Right. Then, then you start to think about this from all of the process inputs that are affecting that thing. Right. Which is like, you know, what are the people management processes? What are the work management processes? What are the way that we're measuring productivity? All of these kind of things, which are all in my mind, at least, you know, part of the systemic consideration of operational risk.

Yeah, I agree. Well, part of the issue is, is like a lot of fleets, they don't consider data, right? They're not, they're not data analysts. They don't look at that. And they don't sit there and say, hey, if I go and analyze, you know, this data I can pull from my FMIS or whatever else I'm using, you know, to make better changes, they just don't want to do it because it's been done one way for so long that they don't recognize how important it is. And now that you've got the old guard retiring and you have newer people who are more analytical and data-driven coming up, like, it's, it's like an eye-opener.

Yeah.

For those that have never actually witnessed something like that before.

I, I totally agree, right? And I think one of the things that is important to introduce people to and to hopefully educate them on as part of this whole thing is to be able to see how even small shifts in the way that you do certain things can have outsized benefits from an organizational perspective, whether it's productivity or cost efficiency or just quality of life, quality of environment. And/or like all of a sudden we've made people happy because we've turned repairs around one day sooner. And guess what? Everybody notices that, right? And so we've got like wins on the stakeholder side, you know, with marginal changes in the way we operate.

Yeah, it's funny. Like when I first started in trucking, you know, 22 years ago, whatever it was, I was told by Kevin Knight because I started at Knight Transportation, I was told by Kevin that I'm not here to make you happy. I'm here to make you successful. Right. And there is a— I think there's a fine line. You can be both happy and successful, but people look at happiness, right, way differently. Right. Everybody's got a different gauge of what makes them happy. Right. You just want to be able to come to a place to work every day where you're not like dreading walking through the door, where you're not counting down the hours and the minutes until it's time to go. And, and a lot of people struggle with that. They actually hate their jobs. They're not very happy in it. And there are very small changes you can make to change that, to keep people around. You just got to do some self-reflection.

Yeah, I think particularly particularly managers who have grown up in organizations and they don't necessarily know what happens elsewhere. You just assume this, you know, because I've been successful, I assume this is the right way to do it. And one of the useful things about an environment like the summit is it hopefully takes the blinders off of that, like, hey, there's an opportunity to do some things a little bit differently to try to take back lessons that we may never have tried before, but we can wade into the pool on and potentially have an outsized impact on the way that we're, you know, the way that we're performing not only internally but for the customers that we're supposed to be serving.

Yep. Yep. Absolutely agree. And that's actually probably a pretty good segue into talking about, you know, not doing things the old way and changing things up, especially when technology emerges. Right? I mean, I— there's so many things out there that can help someone stay safe and to mitigate risk, anywhere from cameras, whether it's front-facing or driver-facing, right? Whether it's collision avoidance systems, um, you've got like alarms that beep when you go in and out of your lane. There's, you know, you got backup cameras. There's so many things that have been added to vehicles as safety features that people— some people implement and some people don't. But I think it's, it's worth noting that while some of these things obviously are going to cost more money, you don't know what kind of catastrophic event you're preventing when you actually implement those things into your fleet, right? I mean, technology's come a long way and we've got a lot of good stuff out there. It's just recognizing what it is, training on it, and using it the way it was meant to be, right?

And being, being conscious of the fact that when you introduce something like that, there is an adoption curve, right? There's an adoption curve that we've got to think about. There's a, there's a training component to hopefully accelerating that adoption curve. And then there's an aspect of just trying to understand and introduce to people and explain to them like, this is why we've introduced this. This is why we've changed the way that we're doing business, because here's the outcome that we expect. That will make the organization better, right? I think a huge number of managers forget that last part, that like just giving people an understanding of why you're doing this can eliminate an enormous amount of resistance because people all of a sudden go, oh, got it, fair enough. Like, that's pretty easy actually.

It's the communication of it, right? You're explaining why, what's the reason behind it. Interstate Distributor Company, trucking company I went to work for for a little bit of time. They had a huge issue with rear-end collisions, like tens of millions of dollars annually. So they installed collision avoidance systems on all their trucks. They cut that down to $1 million after they installed that. Right. But drivers were very, very resistant of wanting to do that. Why? Well, you've got to communicate why. You've got to communicate, you know, what the end result is, what the goal is. Hey, guys, if we don't get this under control, guess what? We've all lost our jobs because we're going out of business.

Yeah. Yeah. I mean, you know, I'm old enough to remember the Big Brother conversations about GPS and cameras and everything else, right? Yeah. And that conversation goes on until the first time a driver is exonerated from something bad happening because that technology was available. Right. So, and I think from a manager perspective, the ability to reach into the grab bag and bring out those anecdotes and demonstrate it and be able to say, like, I get it. I get that we're going to do something different. I get that that's going to take us a little while to get through it and to learn it. But the rationale for doing it is X and the expected outcome is Y. And this is why you're going to be better off.

Yeah.

Right. I mean, it seems so simple, but in the day-to-day maelstrom of every kind of job, it gets forgotten about, you know, better than half the time, I think, and probably better than three-quarters of the time.

Well, it does. And it's because managers are typically a part of that decision-making process. So, they've talked this thing over and over again. They vetted it. They're tired of talking about it. They just want to go implement it, right? But you miss the most important piece, which is getting the buy-in of the frontline workers who actually are going to be using this and doing it.

I mean, it's funny, right? Every time we put one of these things in place, we talk about, oh, we need to change behavior, we need to change behavior, and then we forget to tell people we're trying to change behavior, right? Right. And you go like, hey, wait a minute. Like, this seems like a cart and horse problem. Like, let's just get them in the right order.

I know, I know. It's crazy. And it's— there's going to be frustration. You will always have people who don't want to change, even if you're great at communication. I remember when we did the ELD thing, when it became mandatory and all we told our drivers, we were putting them in our trucks, right? It was a federal law. There's nothing we could have done to change that. How many guys sat there and said, well, if you— if we have to do this, I'm retiring from trucking. I'm no longer going to drive truck.

I'm done.

I'm just out of here. Right. You know what? I think I lost one driver after I had probably half of them bitch to me about the fact that they were going to quit.

Exactly right. Yeah. And I mean, and particularly near and dear, I think, to, to, to you guys and to us in the work that we do is you see it all the time in the, in the implementation of any kind of an information system where, you know, what do you mean now I've got to go record this stuff? I'm like, well, you're recording it already on the paperwork order. Yeah, but now I'm going to have to do it somewhere else. Like, yeah, but it's going to take less time. Yeah, but, and then And it's just this cascading set of reasons not to do it until you're able to show them an outcome or you're able to change the way that compensation works because now, you know, now we understand more about how productivity is occurring or we're able to go get resources because we can demonstrate how short, you know, from a capacity standpoint we are. Like all of these things that get boiled into this mess when we're trying to put systems in place. Because for pretty limited reasons other than this means I'm going to have to do something different.

Yeah.

Right. And so like, how do you, especially in this environment, I think that, you know, my take on, you know, the near term, right, near term being somewhere between sort of the next 3 and 5 years, you know, the slope of the line in terms of how fast things is going to change is pretty severe.

Yep, I would agree.

And so we've got to start building organizations that are not resistant to change because I think that's too optimistic, but are adaptable to change in a way that sort of mitigates the bitching.

And I would agree with that. You got to be limber, right? You got to be willing to pivot and to teach that because if you're not willing to, then you're going to be left behind.

Yep. Yeah, for sure. Right. And you've got to understand as the leader of an organization You know, I'm going to get resistance. So, so, and again, this is all to my mind part of the risk process. I'm going to get resistance. So what are the things and processes I need to put in place in order to try to, to try to A, acknowledge that it's, that it's happening, sort of B, provide a pathway to get out of it, and C, to show people, hey, this is, this is how this change is going to actually make your world better, because we're not trying to put a whole bunch of stuff in place to make it more difficult.

Perfect. All right, well, great. Uh, Tim, anything else you want to add to the audience? It's been great talking to you. Just give you a little—

no, this is terrific. I, I'm super excited to get out to Vegas, super excited to see, um, to see all the, all the folks who are out there, and, and, um, I'm just really, uh, thankful that you guys reached out, that we're going to be able to do this and to try to to try to be a positive part of organizing these sort of 4 principles of the summit. Yeah.

Well, listen, we're excited to have you come, honestly. Like, you know, one of the things I think that everybody can learn from is, you know, other thought leaders who have gone through this, who have the experience, who have seen effective change, who've coached effective change, to hopefully be able to take some of those things and bring them back, you know, into their own fleets to become safer, more profitable, more productive. So we're super, super excited to have you come. And I honestly, I think that our, our listeners, those that attend, will get a lot out of it. So, you know, I appreciate the nuggets you shared with us. You know, just as a reminder to the audience, that Fleet Success Summit, it's coming in March, Las Vegas. Go to fleetsuccesssummit.com. You can check out all the speakers' bios that we have. We've actually got our roster filled. So every speaker has been confirmed. We're working on putting the schedule together so you'll have that. Also, if you have any suggestions on topics that you'd like to discuss, podcast@rtafleet.com, shoot those over to us. We've gotten, we've gotten a few lately and we appreciate that. Last thing I'm going to say, the Fleet Success Playbook. If you don't have your copy and you want it, send us an email at podcast@rtafleet.com. We'd be more than happy to send one out to you. So that you can use it to help improve your fleet. That's all we've got for now. Tim, once again, thanks for joining us. We appreciate it and we'll see you guys next time.

Jeff, thank you. Thanks to you and everybody there.

Thanks for joining us on this episode of the Fleet Success Show. If you like the show, we'd appreciate your 5-star review. Be sure to subscribe anywhere you listen to podcasts and come hang out with us on social media at Fleet Success. See you next time.