The view from afar: Tips for managing remote locations

Twelve years ago, when my company took its first stab at expanding into the United States, we spent two years scouting the market, writing a comprehensive business plan, and paving the road with good intentions. We opened two terminals, hired employees, started chasing freight, and, two years and a couple hundred grand later, we admitted defeat and closed both terminals.

The cause of the failure? Our inability to deal with the 1,500-mile barrier that separated us from our staff in the United States.

Things have changed in the past 10 years. Back then, high-tech was an Atari 64 and a 15-pound handheld calculator. Today, with e-mail, video conferencing, and virtual meetings, technology makes it easier to stay in touch.

Or does it? While researching this article, I contacted the managers at our Los Angeles terminal to get their views (we did learn from our mistakes). One said so much day-to-day communication is now “matter-of-fact, faceless e-mails” that technology actually hinders any sort of personal relationship with other employees.

Communication is just one issue you need to deal with if you’re going to manage a remote location. Here are some of the things that we’ve done over the years that have proven effective.

COST OR PROFIT CENTRE? Why would you open a terminal if you’re not going to make money. However, many remote locations are set up to simply provide consolidation and pick-up services for the line haul fleet. Make sure you and your new employees know the purpose of their operations. It will have a huge impact and their performance and how you manage that performance.

WATCH THE NUMBERS. One of the greatest accounting challenges you’ll encounter is allocating the costs for the services that each branch provides for the other. If your goal is to add to your bottom line, put in place the cost accounting systems and software necessary to provide accurate financial statements for each location. It’s almost impossible to manage the people and make the decisions without accurate P & L numbers.

SHARE THE PIES. Give the manager of your remote location a vested interest in the business. Too many variables — especially the management of your staff — can get out of hand real fast when you’re a three-hour plane ride away. Our strategy was to make two of our managers partners so we gave them equity in the business. If you don’t want to give up a few points, consider an annual bonus based on the bottom line — provided the financial statements are accurate.

CULTURE CLASHES. Before I started MSM, I worked for a large American common carrier — Yellow Freight, the colour-blind company with the orange trucks. The guys at Yellow learned early that Canadians are different. We will not relocate across the country for a couple of grand and a CD player in the company car. If you’re going to manage from afar, you have to understand the culture of the people in your far-flung office. When we opened up in LA, we figured out that people on the Left Coast are different than Canadians from Southern Ontario. Since then, we have managed accordingly.

KEEP ‘EM IN THE LOOP. Don’t put pictures of the annual company Christmas party in the newsletter if your branch is not having one. Don’t schedule a conference call for 8 a.m. Eastern with your operations staff in Vancouver. Whether you like it or not, the branch location is always going to view the big brother at the head office with a little tongue and cheek. Don’t fuel the fire by doing dumb things.

VISIT. OFTEN. As my LA manager reminded me, nothing replaces face-to-face time. You just can’t have the same type of conversation with an employee when you’re not looking him in the eye. Make sure the travel is not one way. Bringing key employees to the head office is a great way to improve relationships between the branches. By planning ahead, you can keep your travel costs to a minimum.

Technology does help. If you have staff at both locations performing the same jobs have joint meetings via video conferencing or conference call. This will give each branch an understanding of the challenges each one is having while developing the type of personal relationships that produce better results.

Your remote locale is always going to be a moving target that will take time and effort to pin down. While talking to our staff in LA for this article I realized just how far we have come — and how far we still have to go to get it right.