Get the basics right

Topics DHL express | DHL | BOOK REVIEW

Book cover of Radical Simplicity: How simplicity transformed a loss-making mega brand into a world-class performer | Photo: Amazon
What can one learn from the life of a man who went from being an ordinary accounts clerk to becoming the chief executive officer (CEO) of DHL, one of the most globalised companies with a presence in over 220 countries? To paraphrase Robert Frost, Ken Allen took the path less travelled, and that made all the difference. 

 

The first takeaway for youngsters reading this book will perhaps be that pursuing a global career is likely to yield far richer dividends than confining yourself to one nation. The author was the son of a coal miner and a nurse from Yorkshire, England. Around the time he came of age, both textile mills and mines, which had been the mainstay of the economy so far were closing down. With jobs hard to come by near home, Mr Allen decided to pursue opportunities overseas. During the course of his career with DHL, he worked in West Asia, Southeast Asia, Canada, Europe and the US. This kind of international experience is prized highly by multinationals. But to operate successfully across geographies requires humbleness of character, the ability to mix easily with people, and respect for local cultures—traits that Mr Allen possessed in plenty.

 

Second, an ambitious young man’s goal should not be to steer clear of problematic assignments, but rather to seek them out. Early in his career, Mr Allen acquired the reputation for being a turnaround specialist—someone who could take on a loss-making operation and turn it into a profitable one. Reading his story, this reviewer was reminded of the tale of Aurangzeb and Dara Shikoh. The former, who was not his father’s favourite, was sent to all the troubled hotpots of the kingdom like the Deccan and the northwest. These difficult assignments gave him invaluable combat experience and toughened him up. During the war of succession, when he came up against the mollycoddled prince who had spent all his life amid the luxuries of the royal court, the outcome was a foregone conclusion.     

 

Today, multinationals send their most battle-hardened managers to troubled regions. Fleeing from problems is a basic human instinct. But managers who purposely take on such assignments greatly burnish their reputation. During the course of his career, Mr Allen took on the loss-making operation in Canada and turned it into a profitable one. Later, on a much bigger scale, he turned around the US operation which was hemorrhaging badly. It was his success in turning the latter region around that cemented his claim to the CEO’s position. 

 

The book’s most interesting chapter is on Mr Allen’s handling of the US operation, which was losing over $100 million every year. About $2 billion had been sunk into building the domestic infrastructure in the US. DHL competed against UPS and FedEx on price. But prices had been pared so much that DHL was making losses. Volume expansion only resulted in bigger losses. Mr Allen’s survey convinced him that however much money DHL threw at the problem, it would not be able to beat its rivals in the domestic business. So, he decided to close down the domestic operation and maintain only an international operation in the US.   

 

So much money had been sunk into the domestic business that managers before Mr Allen had been afraid to advocate this line. But he succeeded in persuading the global board that this was the only way out of the quagmire. The moral of the story is that when the rot runs deep, incremental changes will not cut it. Nothing less than a complete excision will suffice in such circumstances. 

 

In a service-oriented business, keeping the frontline staff motivated is a leader’s key responsibility. During his tenure in Canada, Mr Allen focused not on cutting costs but on motivating the staff to increase productivity. It required him to step out of his office, interact with the staff, listen to their concerns, and remove the constraints that were preventing them from functioning at optimal capacity. Mr Allen was also a fanatic about being customer-centric. He advocated that members of the staff should feel sick in their stomach if even a single DHL customer returned disappointed with its services. 

 

The book is titled "Radical Simplicity". This idea lies at the core of Mr Allen’s approach to management. He defines it as stripping away everything superfluous and focusing on the most important thing that needs to be done in a certain moment.

 

Many of the values and approaches that Mr Allen espouses in this book may strike the reader as being simple, obvious and commonsensical. Alas, those simple and obvious tenets are usually honoured more in the breach than in the observance by managers. Getting the basics right, then, is perhaps the key lesson one can take away from a book penned by a man who retained his simplicity and humbleness despite attaining high office.

Radical simplicity: How simplicity transformed a loss-making mega brand into a world-class performer 
Author:  Ken Allen
Publisher: Ebury Press
Price: Rs 799
 



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel