GSC Logistics Corporate Headquaters in Oakland, CAIn 1988, Scott Taylor and Andy Garcia left their executive jobs at two San Francisco Bay Area consumer goods distributors to set up their own firm. They have never looked back. More than two decades later, Scott and Andy have steadily driven their firm, GSCLogistics, to become the largest logistics provider at the Port of Oakland.
GSC today handles in excess of 15% of the goods that come into the port, third-largest international gateway on the West Coast. The firm has come a long way from its early years shipping Gatorade to Northern California food and drug stores, and has gained a customer list that includes some of the biggest names in retailing: Target, Walgreen, JC Penney, Crate & Barrel and many more. Yet despite building GSC into a $35 million business by 2010, neither Scott (CEO) nor Andy (chairman)were satisfied with their firm’s growth. In fact, they thought GSC should have grown much faster.
But by the end of 2010, their immediate concern was enabling the firm to better manage their existing business. Scott, Andy and their 15-member management team had scrambled to manage the biggest third and fourth quarters GSC had ever seen in its business. Shipping containers were flooding into their Oakland cross-docking facility at 30% over plan because a key customer, in an impressive vote of confidence, shifted its business to GSC from another provider in a different port.
GSC loads and rolls hundreds of trucks each dayBy December, Scott decided the management team should hold an off-site meeting to review what went well, what didn’t and – most of all -- what the firm needed to do in the future to accelerate its growth. The question would be who should lead the meeting.
Earlier in 2010, GSC’s chief financial officer, Joel Lesser, watched Rob Sher moderate an Association for Corporate Growth (ACG) panel of CEOs with a deft hand and with confidence. After hearing good things about Rob from others in ACG, Joel envisioned Rob leading the GSC offsite.
But Rob first had to sell himself to GSC’s two owners. Joel brought Rob in to meet Scott and Andy. After an initial discussion, Andy, who is skeptical of the value of consultants, challenged Rob: “How do you think you’ll be able to make our offsite more productive when you don’t know anything about our industry or our company?” Rob described his approach: before the offsite, he would meet one-on-one with each management team member to understand their issues and ensure they would be discussed at the offsite. The second benefit of meeting with the team in advance was that it would help Rob know far more about GSC’s challenges going in. He told Andy and Scott that letting an outsider without a vested interest run the offsite would be to their advantage – particularly an outsider with insider knowledge. All of that resonated with both owners.
Andy Garcia, Founder and Chairman of the BoardScott was especially impressed and excited about having Rob run the meeting. “He had a great way about him,” Scott says. “Rob was very calming and very, very engaging -- not a hyper guy. The personality came through strongly, and I really liked him when I first met him.” They agreed to let Rob facilitate the off-site meeting to be held in a local hotel that December.
Scott Taylor, Founder and CEOThe meeting went exceptionally well, bringing a number of current and future growth issues into focus. “It was a very, very effective meeting,” Scott says. “Rob found a way to solicit opinions and get everybody engaged – better than if we had tried to do it internally. He is such a good people person that he can bring the personalities together, disarm everybody, and make them feel comfortable and have equal voices. It takes somebody outside the organization to effectively lead this kind of meeting. He’s a very calming influence. Nobody feels like they better be careful about what they say. He puts you at ease.” The team came out of the offsite energized and organized, with a list of action items to work on in 2011.By February 2011, Scott was convinced the firm needed more of Rob’s help to continue the momentum of the offsite and focus the firm on growth. Scott voiced his concerns to Rob about GSC’s ability to grow at a faster clip. Says Scott: “I told him that we had to start thinking outside the box with the way the economy was going and our challenges in this industry, which is low margin and very competitive. I said that we had to do some things very differently and asked Rob whether he could help us out.” At the time, GSC was pursuing an acquisition in the Pacific Northwest, but it was getting harder and harder to expand its core business.
Cross Docking facility and yard operationsScott and Andy’s first request was for Rob to help with the firm’s sales plan. But after listening carefully and thinking about the offsite discussions, Rob suggested he help them and their management team create a three-year business plan. “At first, we didn’t see the value in that,” says Scott. “But Rob said he had a way to create a one-page business plan. We’re now knee-deep into that exercise with our top six people, both sales and operations. It’s been an extremely enlightening exercise because it has focused us and helped our team members become much more open and transparent with each other. We’re starting to see the fruits of our efforts already.”One of the ways Rob has helped the GSC management team is in learning how to evaluate ideas for growth. Rob demonstrated a systematic way to vet ideas without dampening managers’ enthusiasm for volunteering them. For example, one GSC team member suggested that the company not only deliver goods imported through the Port of Oakland but also handle goods to be exported through the port. Rob taught the management team how to conduct disciplined research to evaluate the idea, including determining the investment to implement it. They quickly realized that the export business would require specialized equipment, personnel with skill sets the company didn’t have on staff, and other big investments. They abandoned the idea.
But they didn’t reject the idea of expanding to an adjacent market segment. While researching the export plan, they realized that picking up or delivering domestic trailers at the railheads was not much different than handling their current business of transporting international containers. They even found another synergistic area of growth at their own deconsolidation facility. “Once we had filled a trailer to be shipped across the country on rail, we handed it off to another company,” Scott says. “We realized, ‘Why hand it off? Why don’t we take it to the railhead ourselves?’”
In logistics parlance, this is called the intermodal business. It’s become a new GSC division and revenue source, one that didn’t require significant investments. “It was the first time that our company had really analyzed a market segment and developed a plan on how to attack it – i.e., the people we would need, the systems and other investments,” says Scott. “Rob taught us how to create a rigorous growth plan.”
Part of the plan covers the integration of their first acquisition, which closed in June 2011. GSC acquired a Pacific Northwest distribution company called Best Way Trucking Inc. That enables GSC to expand its business beyond the port of Oakland to the Seattle-Tacoma region.
GSC now brings in Rob once a month to help keep its three-year plan on track. “Rob has a good business mind. It doesn’t matter what business you are in –- he figures out what he needs to know very quickly. He does a great job of bringing teams together,” says Scott. “Some of it is his personality: He’s non-threatening. He’s there to help you, not to criticize. He helps you be creative and look at things in different ways. I’ve been doing this so long that I get stuck in my ways. He’s able to help you think outside the box.”
Scott says GSC’s three-year plan has clarified the path to growth -- $80 million is the target for 2014 (double 2011’s revenue) –- and therefore made it more achievable. “I can see how we easily transition from Phase 1 to Phase 2,” he says. “I’m not sure what Phase 3 will be yet, but I’m sure that as 2012 starts to unfold we’ll get a better picture of the operational and sales changes we need to make.”