Market disruptions are an unavoidable part of the business landscape. How a business reacts can determine the difference between collapse, surviving, or thriving.
Consider how Netflix disrupted Blockbuster’s business model, Zillow upended the real estate industry, and Wikipedia displaced Encyclopedia Britannica, says consultant Peggy Smith, who joined the United Motorcoach Association for its first of a three-part series on market disruptions.
Smith is the Chief Innovation Officer for National Corporate Housing, responsible for assessing ways to design more possibilities in a “live, thrive and work-anywhere revolution.” Prior to her current position, she was the President and CEO of Worldwide ERC. Before that she spent 13 years at Microsoft Corp., where she was responsible for implementing the strategy and execution of the company’s world-class Mobility Center of Excellence.
As an example of embracing disruption, Smith cited Apple’s iPod. The device was a best-seller when the company launched the iPhone, bringing the iPod’s technology to a phone. When Steve Jobs was asked why he would introduce the iPhone when it would disrupt the success of the iPod, he responded that sooner or later someone was going to put the iPod out of business, and he would rather it be Apple.
“We have to have the courage to disrupt ourselves,” Smith said. “If you woke up tomorrow and you didn’t have another customer, look not at what you would do, but at how you would reinvent yourself in that world and in that environment.”
In addition to Smith’s presentation, the UMA Town Hall Learning session – the first of a special three-part series – included insights from a panel of motorcoach operators:
- Roxanne Gillis, co-founder and President of Northwest Navigator Luxury Coaches in Portland, Oregon. The 14-year-old company operates 30 vehicles ranging from 56-passenger coaches to 29-passenger luxury mini-coaches, Sprinters and SUV’s.
- Jack Kaufman, vice president of Timi’s Tours in Moweaqua, Illinois, who oversees all aspects of regulatory compliance, operations and maintenance for the charter and tour divisions of his family’s company.
- Jacquelyn “Jackie” Grice, vice president of Agape Travel and Tours in Chesapeake, Virginia, which offers a full range of charters and tours operating motorcoaches and minibuses.
Timi’s Tours has been a disrupter in its local market since launching its charter business about five years ago.
“We came into a market that a large legacy carrier was leaving but that still had several big legacy carriers in it,” Kaufman said. “But there was a gap to fill, and we kind of found that gap and filled it. So the local market, we disrupted it quite a bit.”
During the pandemic, when many were downsizing, Timi’s Tours expanded and diversified. The company tripled its fleet size, including adding a trucking company and a diesel shop to work on outside equipment.
“That’s what keeps me up at night. I’m always thinking what’s the next thing we need to do,” Kaufman said. “What are the services we can provide to survive, because I really feel like the post-pandemic mindset is just survival all the time.”
Pressure to go green
For Gillis, the biggest disruptor for her Oregon company is the pressure to make vehicles zero emissions despite the lack of affordable technology for such a shift.
“There’s a huge green agenda,” Gillis said. “Our entire fleet has the latest green technologies, but it’s not good enough. Even though we’re running biodiesel, it’s not good enough. They want us to plug into a power grid that doesn’t exist and try to run an over-the-road charter up and down mountains on electricity.”
Faced with this daunting issue, Gillis has surrounded herself with experts, including the IMG Network and Spader Business Management’s 20 Group.
Small changes add up
Grice noted the challenges during the pandemic were completely different from those in a post-pandemic world. The way customers book and move have changed dramatically. So has the recruitment of employees in a tight job market.
“You have to look at being innovative by trying to maintain the way things are but looking at them from an innovative approach,” Grice said.
She has found success in bringing to her business the business philosophy of Kaizen, which is an approach to creating continuous improvement based on the idea that small, ongoing positive changes can reap significant improvements.
This process has helped Agape Travel use technology to respond faster to the needs of customers and employees, whether that’s immediate pricing for a trip or quickly providing schedules to drivers.
“There’s an urgency now, so we’ve had to look at ways that we can automate to meet that demand that we’re seeing from our employees and from our customers,” Grice said.
Adjusting to ‘right-now society’
Kaufman says Timi’s Tours is taking a similar approach.
“We spend thousands of dollars a month on software for different processes,” Kaufman said. “We use Slack for communicating within our company and BambooHR to manage all of our drivers. Drivers get their schedules through an app on their phone, and customers use DocuSign to sign contracts remotely.
“We have to streamline those things as much as possible. It’s what the client demands. It’s what the employees demand. We live in a right-now society.”
That willingness to respond quickly has paid dividends for Kaufman, who said he won a $5 million contract not because he had the lowest bid, but because he responded to the client in less than 2 hours, while the competition took two weeks.
“They said, ‘We want somebody that will be there when we need them. We want somebody that’s going to take care of our clients. We will pay your price,’’ Kaufman said.
And Grice has also found a financial opportunity in creating a model that responds to a rise in last-minute bookings her company is getting after reservations with other companies have fallen through.
“We’ve started to look at traditionally high peak times, and even though I may not have bookings for that time, I’m really pushing up our rate because I know if I had had more buses I could have booked them. So, instead of booking further out for a lower cost, now we are saving a portion of our fleet for this quick, ‘I need it now. I’ll pay whatever you want’ demand, and we’ve done really well,” Grice said.
The full Town Hall presentation can be viewed by UMA members here.