Innovation and Diversity in Transport & Logistics – Freight Exchange


A recent publication by Freight Exchange CEO Cate Hull

This is an article that appears in the MHD Supply Chain Solutions Magazine March/April 2016 edition.

Industry challenges

The transport and logistics industry hires 1.2m people and accounts by 8.6% of Australia’s GDP. Companies are typically led by men, who hold 91% of C-Suite positions and 80% of management positions.

The amount of freight to be transported is expected to nearly double by 2030. As employees and leaders approach retirement age we’re facing skills shortages. Productivity growth is sluggish and costs are high relative to other markets.

A multi faceted response is needed to address these industry challenges. We will need numerous different projects and approaches to help get the most out of our existing infrastructure. We will also need to invest in new infrastructure, in growing talent and in developing great technology.

How diversity helps innovation

To innovate is to “make changes in something established, especially by introducing new methods, ideas, or products”.

Finding new ideas and products requires lots of different ideas. Lots of ideas come from lots of different people wondering, what would happen if things were done differently?

An article in the Harvard Business Review by Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin explains that diversity occurs in two ways: inherent traits you are born with, such as gender, ethnicity, and sexual orientation; or acquired traits that are gained through experience – working in another country can help you appreciate cultural differences or selling to women can help provide gender perspective. They found that companies whose leaders display inherent and acquired diversity were significantly more likely to report market share growth and to capture new markets.

Cultural diversity allows us to learn about how things are done in other countries. For instance, those raised in different cultures may have insights into markets that are more competitive, more technically advanced, more regulated or more automated.

People from different cultural or industry background may not be able to replace a fan belt in Bourke but they may have some ideas about how retailers provide wonderful customer service, or on how Japanese passenger trains run on time, every time. Or how 4,000 Mumbai dabba wallahs distribute 160,000 lunches to the right recipient every day on time, every time.

So if your team, including your leadership team have all grown up in the same town, played on the same football team, driven the same trucks, then the range of ideas proposed may not be as diverse as one that includes the young and old, women and men, engineers and artists, truck drivers and teachers, recent and not so recent immigrants.

Innovation as a process

Eric Ries, author of The Lean Startup brought new ideas on innovation processes to prominence over a decade ago.

Unlike traditional product development, process improvement or technology project management approaches, which start with months of detail business planning, the “lean” and “agile” methodology allows for rapid iteration. It starts by collating “out of the box ideas”, creatively and rapidly testing out new processes, systems and products, measuring the impacts of those tests and adopting them if proven to be superior.

“Out of the box” thinking doesn’t create change of itself. Agile methodologies won’t produce great results without ideas to test. An environment where new ideas are openly shared, where employees and management are encouraged to take small risks and fail often, is needed. Innovation requires a level of creativity, curiosity and strong culture that accepts new ideas and applauds failure. Creativity to think differently about a problem is helped by having a diverse range of minds coming up with ideas.

This approach challenges a perception in the industry that technology or infrastructure projects inherently cost millions, take years to plan and even longer to realise the benefits or failures. It allows organisation and industry to learn as they go and speeds the rate of making mistakes. By making small, measurable risks and changes, issues are known and understood well before it’s time to scale.

Hire, promote and retain a diversity of staff

The industry won’t change immediately but with sustained effort. When hiring and promoting employees a conscious effort needs to be made.

Ask the hiring manager to report on the diversity of candidates. Use this information to pinpoint areas of change to attract a range of candidates. For example: can you expand your training to attract those from different industries, can you change your job descriptions or working hours to be more suitable to students, parents or retirees.

Consider also how to remove barriers to advancement for underrepresented groups. For example are there inflexible work practices or physically challenging aspects of roles that can be altered to allow greater gender diversity?

Attracting diverse staff is one thing. Managing a diverse team is another.

A diverse group of employees means people will have different motivations, attitudes and lifestyles. Unifying the group can present challenges. For example people may feel they don’t fit it and this may lead to a high turnover. So consider introducing diversity into the leadership team, and addressing cultural issues from the top.

In all of these areas, measurable goals for attracting and maintaining a diverse workforce must be put in place and regularly monitored.

What this means for FreightExchange?

Our mission at FreightExchange is to deliver a simple, seamless and automated way for carriers to connect with shippers. We’re dedicated to reducing waste, creating cost efficiencies, revenue generation and sustainability to the industry.

As a new company with a technology focus, we recognise the need to be innovative and diverse in order to compete.

We develop our product in short, repeated cycles which often developing a prototype, calling customers or carriers for feedback, testing and measuring the impacts of those changes on a daily basis.

The team is diverse. I’m a female co-founder and CEO with experience in various industries. My co-founder and CTO Martyn Hann has spent over 15 years developing technology in the logistics industry. The team comprises 50% women & men from Britain, Australia, Brazil, Italy & China. We’ve worked in Asia, North America, Europe and Australia. Most of the team have degrees and work experience, but some don’t.

Where we fail to be diverse is in our universal comfort with using technology. As we’re designing for a non-technical customer base, this is a problem.

As a result, we’ve had to learn not to take feedback and knowledge for granted. We’ve had to consciously put processes in place to ensure we’re accessible and know our customers. For example, we regularly call customers, ask for feedback on what they’re finding difficult to use. We sit with strangers to test out new screens and processes.

With perseverance and a little luck, we’ll grow our customers, technology and talent, and contribute to a more efficient and diverse industry.