What Would You Have Done Differently?
What Would You Have Done Differently?
Guest writer Tom Barry is here today with a tale from the trenches: “What Would You Have Done Differently?”
As the saying goes sometimes, you learn the hard way…
The business brevity concise version of my learning takeaway was – ‘Trust but Verify’!
I admit that I should have learned and internalized that sentiment from…
President Ronald Reagan well over a decade earlier!
The situation stemmed from my then-early decade-long background in construction equipment as well as the IT/ERP Software Industry, wherein I was contracted to advise a small Rent to Rent (RTR) business on their desired interest to become more competitive and profitable. Towards that end, the business strategy evolved under my guidance and expanded to become an OEM Distributor, which favorably impacted equipment competitiveness and revenue by way of lower initial acquisition costs and related KPIs. Additionally, I secured a new ERP/CRM software/computer package specifically earmarked for this industry sector endeavor, along with extensive physical facility layout and infrastructure modifications serving to support adding new and complementary OEM lines of construction equipment – and more.
Noteworthy: Additionally, I also sourced and instituted a construction equipment rental insurance rider policy option for this evolving and poised for expansion rental business so to have full access to rental insurance coverage for all interested renters at the point of a rental agreement. A common option widely available for decades now for those cases when a renter does not have their own blanket policy resources.
On one memorable occasion, a long-standing rental customer of decades for this business had at my direct request emailed over a signed copy of their blanket insurance policy coverage for an equipment rental pick up start planned for later in the day. The blanket insurance policy paperwork they provided was intended to save them the $45 that the optional rental contract insurance rider would have cost them for full repair and total loss coverage. This rental service insurance coverage option was something that I sourced to create a streamlined turnkey ease of rental with peace of mind via an agreement positioned by an outside insurance vendor.
A few hours later, I was in an upstairs office at my desk peering through an adjacent bay window overlooking 30+ acres of our rental equipment storage lot. It was a beautiful sunny day I recall as I was on the phone with another customer. Unbeknown to me at the time, it turns out that the customer for whom I had earlier rented equipment and received their Insurance Policy Rider for an excavator rental had their truck driver arrive as he had just walked into our downstairs rental office. The customer’s driver was thereupon informed… ‘the excavator unit intended to be rented is all set to go’… ‘the keys are in it’ and our Rental Representative gave him the authorization to proceed to take the unit given their familiarity and frequency of engagement with our yard operations.
Twenty minutes later, from the vantage point of my desk. I spied a tractor trailer flatbed heading towards an exit from our back yard facility with a boom, arm, and bucket of a loaded excavator still up in the air… (not retracted, settled, blocked, and not fully tucked and chained for legal transport onto the deck). Was he moving the truck to address that matter on more level ground or in the shade… or was this a problem?
ACTION: Immediately, I informed my customer that I was on the phone at the time that I had an emergency to address and that I will call them back asap. I grabbed my binoculars (as I kept them at my desk) and focused on gleaning the drivers’ side door of the flatbed truck 75+ yards away… to gather the phone number and immediately called that number. I told the person that answered that their driver was leaving our yard after loading his truck with the mini excavator with the boom and arm still up in the air… Stating… call them RIGHT-NOW as there are bridges in the area… and hung up to allow them to do just that.
Just minutes later, I got the return call from the same person that I had just hung up with and heard that the equipment hauling driver had indeed hit the railroad bridge and that ‘the bridge had won!’ Even the track base of the excavator that was chained to the deck had just ripped and sheared completely off the truck bed and was now lying in the road. Thankfully, the truck driver was uninjured, safe, and OK despite being shook up – and no one else was involved – Thank GOD!
Within an hour, the owner of the rental company visited me ‘Hoss’ with whom I was contracted to work. I came to learn directly that he was remarkably close friends with this long-term customer and their family – in fact, they were neighbors for decades. Hoss had just concluded a phone call that he received from the customer/owner that had just been informed of the news from his driver of the now damaged rented excavator by way of an overhead railroad bridge.
He went on and asked me about the insurance coverage status of the unit. I related that I had the proof of insurance that I requested of the customer right here on my desk and was about to call the customer again for the next steps. As I reached to pick up the proof of insurance paper that was in the rental file, he proceeded to inform me that they (his long-standing customer/friends) sent a forged/fraudulent insurance document to us. This was just verified by the very same customer and person that called him. My mistake was that I never called the customer’s insurance company on the templated form to verify the veracity of the newly signed and dated blanket coverage policy form from this long-standing customer. We were talking about an MSRP: $70K Mini Excavator value.
Result: The mini excavator was clearly totaled due to the unyielding movement specifications of the railroad bridge vis-à-vis the applied physics of 45mph. My owner/president ‘Hoss’ to whom I directly reported had extremely specific questions prepared for me. I shared all the nuances associated with why I sought out and positioned this insurance vendor resource for our business as well as how our Optional Rental Insurance Rider worked. Moreover, and specifically, he was interested to know how such optional arrangements were perfected and electronically memorialized by my required actions at the time of a rental transaction order.
I related that I was expected to act and execute on an honor basis in accordance with the rules of procedure outlined for this process not to mention the State Insurance Laws already in place which also cover the subject matter. In reply to my shared information and without delay, I then listened to minutes of an early afternoon inebriated diatribe espousing a ‘non-negotiable’ set of specific ideas on what I should do next involving the ‘available’ resource of an Optional Rental Policy Rider program that I had positioned for our business operations.
To which, I categorically declined all espoused suggestions (vehement directives) that would never hold up to the light of day – at this stage of the known circumstances. I illuminated Hoss that his personal white-hot enthusiastic hatred of insurance companies is not an actionable basis for retroactively effecting the prevention of a bell ringing sound for that which has already rung. I added that I would arrive at the customer’s office within an hour or so and address the matter directly.
I gathered the rental order file and made two copies. I replied that I would report directly back to him on where we stand upon my return from the customer’s office. Next, I made a couple of calls to put everything in place and prepared the paperwork that I needed and departed. As I passed under the Railroad Bridge in question, I noted the overly impressive stoutness of the engineering design of our still impressive Industrial Revolution! I had to pause and take a picture with my Polaroid Camera at the time.
Upon arrival at the rental customer’s main construction office, I navigated the conversation complete with life-cycle cost values, payback study scenarios, brochures, and productivity estimates for addressing their work on hand and convinced them of a remedy to the matter at hand. I sold them on buying a brand-new identical mini-excavator unit (that I had in stock) to that which was totaled and still in the road… on the spot where it fell. They also bought the ruined mini excavator at an attractive price as a ‘parts order supply’ to support the lifetime of the unit that was here now to be added brand new in their fleet. Fortunately, the ruined unit also qualified for the same new machine OEM subsidized financing given that they were both bought at the same time as the base unit with the destroyed unit ‘as a parts support order.’
Sometimes when an unintended bad financial scenario arises, you hold it close to better navigating an eventual financial position that can serve as a Band-Aid remedy that given the circumstances – works out in the long haul.
Although my approach to selling two mini excavators in this creative manner was financially welcoming and conducive to the ultimate bottom line of the customer, our equipment rental business and the OEM’s financing arm, not all was as warm and glowing as the Sun that day. There were consequences going forward. My dismissal of and complete non-compliance with the stated directives on how I was to proceed by Hoss proved consequential. In the not too far off distant future, an unspoken and unwritten basis for my unceremonious dismissal ‘without cause’ was provided via the conclusion of my Independent Contractor Agreement in concert with the favorable terms set forth therein.