January 2016 | Case Studies | LeaderSHIP

Steering with a Clear Vision and Open Mind

Tags: Education & Careers, Logistics, Supply Chain

Bob Shellman, CEO, Odyssey Logistics & Technology

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Bob Shellman likes to keep things nimble. Starting his career in the 1970s at Union Carbide, a global company with more than 100,000 employees, he discovered that he didn't love the environment of a large corporate bureaucracy. So when he had the chance to take the principles behind the company's UniGlobal Logistics subsidiary and apply them to a new, privately owned logistics startup, he grabbed it. The third-party logistics (3PL) company he founded, Odyssey Logistics & Technology, has been thriving, growing, and seizing new opportunities ever since.

IL: What leaders inspire you, and why?

I've always been inspired by entrepreneurs such as Steve Jobs. They taught me the importance of avoiding bureaucracy, so people are freely able to challenge the status quo every day.

Leaders need to get rid of the hierarchy associated with corporate organizational structures—flatten the organization, so they receive communications at the top from all levels. When someone at the bottom has a great idea, the last thing you want is for that idea to get filtered on its way up to the leadership team; you want to receive it directly.

IL: In your professional life, have you learned any specific lessons that left an indelible mark?

As global director of purchasing, transportation, and supply chain at Union Carbide, I had the opportunity to work with most of the company's operating groups. I noticed a huge gap in the services available in the global logistics space. At the time, no single provider could service all modes globally.

This is inefficient. If thousands of suppliers around the world are providing different services, there's no technology you can deploy that helps you to understand, monitor, and improve all those activities. A single source with capabilities across all modes globally provides control and understanding of the supply chain. That creates the best environment for driving process improvement.

I was able to convince the parent company, Union Carbide, to form a subsidiary, organized and staffed to provide a complete portfolio of transportation services to all the global operating units and joint ventures. The company was named UniGlobal, and I served as CEO.

We deployed both domestic and international services for the Union Carbide business units, and signed major contracts with several Fortune 100 companies. The vision was to spin off UniGlobal as an independent, neutral entity, which would offer the greatest opportunity for UniGlobal's growth.

This experience taught me that the keys to success are identifying a need in the market, and determining how to fill that need in a way that creates barriers to entry, so that others find it difficult to compete. Our secret sauce was a global logistics technology platform and global services across all modes, giving clients a single supplier/partner to fulfill all their requirements.

IL: How have your experiences at Union Carbide and UniGlobal shaped your strategy at the helm of Odyssey?

Leaders need to be prepared for the unexpected. In the middle of the spinoff discussions, Dow Chemical acquired Union Carbide, making a spinoff impossible. That prompted my decision to leave and form a startup company in 2002. Odyssey Logistics & Technology would provide the same services UniGlobal was offering.

I suddenly found myself in a unique position: I was launching a new company, I had no customers, only five employees, and needed at least $30 million in capital to make it work. In that position, you can't go to a traditional bank or private equity. The amount required was too large for an angel investor, so the path to funding had to be the venture capital markets. My sales pitch to investors worked; we were oversubscribed.

IL: Odyssey has experienced consistent double-digit growth for 13 years. How have you maintained such aggressive growth?

In an economy where GDP growth averages two percent or less each year, the only way you can grow at our rate is to make acquisitions in unique markets that will build up additional service capability. Each acquisition has to conform to our core thesis—we operate in large markets, providing services where there are complex requirements, resulting in barriers to entry and limited competition.

One key to our continued track of success is our pool of talented employees. And many of our most valued employees have come to us through the acquisitions. When we acquire companies, we gain entrepreneurs, because the founders and the senior leadership teams often stay on the payroll. With few exceptions, those senior leaders are still on the payroll today. We get the most from those leaders by encouraging them to innovate, and to constantly look for better ways to do things. You'll never get in trouble at Odyssey for making a mistake while questioning the existing state of affairs. We have to constantly improve and innovate our processes.

IL: What's the most challenging aspect of your growth model?

The most difficult thing is finding the right companies, and helping them reach a position in which they're willing to be acquired. Odyssey has never acquired a company that was already for sale. We look at the top companies that are the best fit for the Odyssey business model. We get to know their leadership teams, and then, over time, convince them that being acquired by Odyssey is the right thing.

IL: Knowing what you know today, what advice would you give your 20-something-year-old self?

Stick to your vision, but be open to opportunity. A good example of that came in 2015, when Odyssey launched a new, no-fee service, Web Integrated Network (WIN). The idea came up during one of our senior team's regular brainstorming sessions. We were talking about companies such as Blockbuster and Borders Books, which were blindsided by the rise of new technologies such as streaming movies and e-readers.

In Odyssey's case, companies constantly asked if they could use our global transportation management system platform to operate their own networks. In the past, that never seemed possible, but new technologies offered an opportunity. We developed a multi-tenant Software-as-a-Service offering in the cloud, giving shippers access to our technology environment, to automate their processes and drive optimization. When we deployed WIN, we thought we'd have 12 or 13 pilot clients. Currently, 130 companies are signed up to use it.

IL: What is the reasoning behind your strategy of going into big markets with significant barriers to entry? What motivates you?

Odyssey's heritage is in chemicals, which is one of the most difficult sectors of logistics, due to complex product characteristics. Few competitors have the staff and equipment to safely and effectively support chemical needs—thus the barrier to entry. Because we offer highly skilled services for challenging logistics needs, the margins are better than on more generic or commodity-type logistics services. Our acquisitions have been of a similar nature; we have acquired companies and organizations that have the skills and/or equipment required to meet the specialized needs of big markets.

IL: How do you manage all the information coming your way?

First, I stay close to my customers. What they experience and feed back to us matters most and helps us stay ahead of trends. We meet with customers to review what's going on at Odyssey, what's going on in their business, and what's going on in the marketplace. Our focus is global, as we have followed our customers to Europe and Asia.






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