International Changes Strategy: Take More Risks
November 1, 1999
International has changed from a company that was internally focused and "risk-averse" to one that is externally focused and ready to make the changes that the market demands. That's the word from Steve Keate, recently appointed president of the company's truck group.
In an interview with Newport editors at the ATA Management Conference currently under way in Orlando, FL, Keate was frank about the mistakes the company has made in the past. "When I joined the company five years ago, it was clear we had underinvested in product and in plants and facilities," he said. "There also weren't a lot of incentives for our employees to perform."
Keate said the company has since made a "monumental" turnaround. "Over the past few years, we have addressed all these issues. We restructured the culture of the company. We have made a decision to take more risks."
Keate said International's new focus is to understand customers better. "Historically, truck manufacturers have been order takers. We've defaulted to letting customers pick and choose from a huge list of options. I think that's wrong. We've abdicated our responsibility to have a market-focused approach.
"We want to move from a factory-push approach to a customer-pull environment. We need to get to know the customer a lot better and deliver business solutions, not just a truck. We need to give them life-cycle value. Ultimately, our goal should be to make our customers more profitable than their competitors."
International does not have plans to bypass its extensive dealer network to get closer to customers. "The dealer will still be the point of contact," Keate said. "Our role is in organizing the data so that dealers have the information they need and their salespeople will know what questions to ask."
International wants to increase the number of dealer locations to 1,500 (from the current 1,000), but decrease the number of dealer principals. "We need to make sure dealers have the capital and scale that will be needed to invest in their businesses," Keate said.
The company is planning to integrate dealer parts inventory systems into the company network so that parts can be restocked automatically when they are pulled off dealer shelves.
It is also developing a new truck locator on the Internet, similar to its used truck locator, which will allow anyone to search dealer inventories online.
Keate said the company has not sold any of its $50 million in used truck inventory online and has no plans to. "We want to use the Internet to provide more timely product and service information and to get more customers into dealers. It will also help us reduce a lot of the waste and inefficiency in many of our current communication processes."