Innovation

PROFIT W100: When turncoats attack

Written by Kara Aaserud

#24 Tri-ad International Freight Forwarding Ltd.

Fiscal 2006 revenue: $17 million

The post-9/11 transportation business is not an easy place to be. Just ask Linda Collier, president and CEO of Tri-ad International Freight Forwarding Ltd. (No. 24 on the 2006 PROFIT W100). Aside from the taxing administrative job of complying with new cross-border regulations and managing an increasing overhead produced by higher fuel costs, the Mississauga, Ont.-based entrepreneur has to do battle daily with hundreds of other freight forwarders within a two-mile radius of Toronto’s Pearson International Airport — all while remaining focused on growing her business.

Then again, if it weren’t for the inconsistency of the industry, Collier wouldn’t be there in the first place. And, besides, she’s no stranger to obstacles.

Eight years ago, Tri-ad employed 40 and was doing brisk business in the computer and electronics industries. Collier, wanting to expand into new markets, hired a vice-president to assist with that task. Eight months later, he launched a rival company, taking five Tri-ad employees with him.

“Not only did he leave with client information and pricing,” says Collier, “he took key operations people and my entire sales team. You never want people to think you’re weak, but I had a virtual meltdown.”

But Collier rebounded assertively. Her prescription for her fractured business: don’t play tug-of-war with new customers by discussing the traitor’s company; remain consistent and loyal to old clients; and wait for inconstant employees to come back if — or when — your turncoat executive goes bankrupt. Her former VP accomplished that only six months after starting his rival business, but not without costing Tri-ad an estimated $500,000.

Fortunately for Collier, the VP had a fatal flaw: inexperience. “This industry is easy to get into,” explains Collier. “To stay and grow in it is completely different.” Although her former exec had 25 years’ experience in the airline industry, he had none in freight forwarding. For Collier, on the other hand, owning a freight-forwarding business was simply a natural progression after spending summer vacations working with her mother at a customs brokerage. She subsequently joined a mid-sized transportation firm and worked her way up to air-freight manager. In 1988, the then-25-year-old ventured out on her own.

To survive in the cutthroat, male-dominated world of freight forwarding, Collier knew she’d have to work smart to stay afloat. She carved out a niche by offering safe, just-in-time shipping to the computer industry, targeting customers such as Sony, Hitachi, Compaq, Merisel and Computer Brokers of Canada. “I knew it was a growing industry,” says Collier, “so I developed a system that would protect shipments from pilferage — layers of shrink wrap and steel strapping.” Her strategy worked. Her first-year sales of $500,000 were 50% ahead of projections; they were 50% better than expected the next year, too.

Despite all her efforts to provide security for her customers, Collier neglected to implement security measures within her own organization. In fact, the incident with her VP was the second of four tries her employees have made to start rival companies, the latest occurring last year.

“I must make it look too easy,” Collier jokes. However, the last two attempts never materialized, mainly because she has put multiple security measures in place. A protected database of customer profiles and service rates prevents staff from absconding with sensitive competitive information, non-compete agreements bind staff from starting rival companies and competitive salaries and benefits make the self-employment pasture appear less green. Collier has also rebuilt trust with the employees she took back from her former VP. “These people had been with me for a while, and they were good employees,” she explains. “I didn’t take them all back, but those I did are twice as loyal.”

They should be happy, too: in the year ended February 28, 2006, Tri-ad generated sales of $17 million to its original client base in computers and electronics, plus the pharmaceutical and aerospace industries. Plans are under way to launch an outsourcing business and open a distribution facility in Vancouver, adding to Tri-ad’s current centres in Mississauga and Montreal. “We’ve grown from our mistakes and we’re much stronger,” says Collier. Will another employee launch a rival business? “I bet on it. Could it happen to that magnitude? Not a chance.”

Originally appeared on PROFITguide.com
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