Business of the year: Yanke Group of Companies.

When the list of candidates was presented for the 2002 Saskatchewan Business Magazine Business of the Year, we soon came to the realization it was a rather short list. There were indeed far more companies in Saskatchewan who were simply trying to maintain the status quo than there were companies such as the Yanke Group of Companies, who continued to flourish despite a stagnating North American economy.

This seemingly smaller number of candidates is not in any way intended to discredit or tarnish those finalists, nor most certainly, our winner. Quite the contrary, in fact. Rather, it further accentuates their vision and leadership; because companies which used to consider single-digit percentage increases as unacceptable are now content to just be staying in the black, or at least not too far into the red.

Thus when determining our Saskatchewan Business Magazine Business of the Year, we had to look for a company which has stood the test of time, particularly one able to withstand the toughest of tests being adjudicated the past 16 months. When it came to looking for a solid, steady company in Saskatchewan, we didn't have to stray very far. Indeed from this reporter's perspective, across a tiny community of 400 (population circa 1980, when we both called Viscount our hometown) was all that was required.

But, it would be ludicrous to suggest that the decision to herald the Yanke Group of Companies may have been strayed by a hometown bias. All one has to do is look at their list of qualifying criteria - winners of countless awards and distinctions including being named one of Canada's Top 100 Employers in 2002 and 2003, one of Canada's 50 Best Managed Companies 1999, 2000, 2001 and a good bet to repeat in 2002, a National Transportation Week Achievement Award 2002, the SABEX Award for Strategic Alliance 2002 -- and that's just the recent accolades. If one were to delve back into the annals of the Yanke Group of Companies, you'd find enough awards to fill one of their trademark semi van trailers you see virtually every time you're traveling anywhere on any highway -- (well almost).

But the Saskatchewan Business Magazine Business of the Year is far more than a selection based on other award-winning criteria. In fact other awards have no bearing whatsoever on the SBM Business of the Year. Rather our criteria is as follows: the Saskatchewan Business Magazine Business of the Year has to have a proficient track record, have withstood an outstanding turn of events, was innovative, well respected, and perhaps more importantly than any other criteria, the SBM Business of the Year has to be a good, solid benevolent corporate citizen.

Thus when each criteria was scrutinized in its own right, each successive stage further separated Yanke from the pack. And indeed when we were done with this process, standing high, above and beyond their peers was the Yanke Group of Companies.

Began as off-farm income

It's been anything but a smooth and easy ride to the top. The Yanke Group of Companies, as we know it today, took shape on the Grant Marcoux farm near Viscount, where 12 children -- six boys and six girls -- were each expected to pull their weight and then some; whether it was with helping on the extensive grain and dairy farm, or with the laundry, food preparation and clean-up required of such a crew.

Russel Marcoux, being the oldest of the six brothers, recognized that by virtue of his place in line, there was a certain responsibility on himself to become a self-sufficient member of the family as quickly as possible. Once finished university, where he studied in the College of Agriculture, Marcoux returned to the farm, where he also saw the need for some off-farm income.

"There never was any great, grand vision," Marcoux concedes of the company's trip from its origins to the present day. "Being the oldest boy, I was the first to finish university and to farm. (Brothers) Joe and John weren't that far behind. They decided that they wanted to farm and there just wasn't enough for us all to do there."

Thus Russel made the decision to purchase a tandem truck and haul gravel for the municipality and neighbors. Now married to wife and business partner Bonnie, and also in partnership with his two younger brothers, Joe and John, in the fall of 1976 the fleet doubled with the purchase of a tractor unit and flat deck trailer used for hauling flax straw.

"We did pretty good with that -- we thought we were big-time truckers," Russel recalls with a smirk. "Then we bought a highway tractor and grain trailer unit"

Growing successfully in its formative years, Marcoux Brothers Trucking found industry regulations to be too stifling to continue to compete in the tough domestic market. Their restricted license was such that they were limited to hauling grain from within a 50-mile radius of Viscount into Alberta and backhauling fertilizer from Alberta back into that same 50-mile radius.

But a "phone call out of the blue" resulted in the offer from a retiring transfer operator, Norman Yanke, who had been in business since 1968 and had general merchandise authorities from Alberta, Saskatchewan and Manitoba. Thus in the fall of 1980, Marcoux Brothers Trucking became known as N. Yanke Transfer, and the company has not looked back since.

Decisions, decisions

The decision to drop the relatively well-known name of Marcoux Brothers for the lesser-known Yanke Transfer, just like that of buying that first gravel truck, was not the first, nor by any stretch, the last, difficult decision Marcoux would make.

By 1985 he could see that hopper bottom trailers were becoming an all-too-familiar sight on Western Canadian highways. Indeed competition was becoming fierce and cut-throat pricing would make it a difficult market in which to thrive. Marcoux then made the decision to get into van trailers, which could haul product like yellowcake uranium for companies such as Cameco.

By late 1987 and early 1988, three factors led to one of the most critical decisions Marcoux made for the company. Firstly, deregulation of the industry took place where something called a designated commodities list made products such as fertilizers, potash and grains -- products which were the lifeblood of Yanke and for which Marcoux paid dearly to obtain the rights for hauling -- were now fair game for anyone and everyone with an A1 license and a unit to load.

Compounding this huge influx of competition was a relatively poor crop year, where drought conditions adversely affected the amount of grains available for hauling.

And thirdly, a national postal strike in the fall of 1987 left Canada Post in search of a transportation provider. Yanke stepped up when one of Canada Post's incumbent carriers refused to cross the picket line. This would prove to be a vital decision, but one that would be deemed rather insignificant in comparison to the monumental decision which this scab labor issue inspired.

Following the strike, Canada Post, encouraged by Yanke's professionalism and willingness to do a difficult job, offered Yanke three scheduled lanes from Eastern Canada to Western Canada with some balanced traffic on a two-year contractual basis. Should they have accepted the contract, Yanke would have incurred significant debt resulting from a substantial increase in the company's fleet -- a monumental decision that had to be made virtually over a weekend.

"They gave us one week to make up our minds if we wanted the business. And in that same week if we wanted the business, we had to have 25 tractors in place at each end of the schedules and 60 trailers in place in the pools of each postal facility," Marcoux recalls, adding that meant the company had to purchase all of the equipment in order to fulfill the obligations.

"So needless to say, we had some quick decisions to make and that's where we decided, A) We were going to sell the bulk business B) we were going to move the company from the farm in Viscount to Saskatoon and C) we were not only going to get out of the bulk business, but become a full truck load dry van carrier.

Learning lessons along the way

To fulfill the just-in-time delivery requirements of the Canada Post contract, Yanke was one of the pioneers of the industry by implementing a double-team driver system. That way, with the exception of loading and unloading, drivers' days off and scheduled maintenance of the equipment, Yanke trucks were moving their cargo 24 hours per day, seven days per week well before the term 24-7 would catch on in the mainstream.

This just-in-time delivery philosophy also began to take hold across major retail and wholesale centres, who began to take measures to rationalize their distribution centres. Instead of paying the overhead associated with storing merchandise in mega wholesale locations, industries began changing virtually overnight so product would arrive at the point of sale without incurring these exorbitant inventory costs.

Under these conditions, and with a new five-year deal on an expanded Canada Post contract signed in 1990, Yanke experienced exponential growth from the late 1980s to mid 1990s. "We were really growing our company based on running these double-team operators," Marcoux says. "That really opened a lot of doors for us and allowed us to grow. In fact over the next six or seven years, we probably averaged 80 per cent growth per year. There were some years we were over 100 per cent growth."

"This was both good and bad," he continues. "It was good in the sense that we were growing and adding equipment and doing okay financially, but it was bad in the sense that we were very much in the entrepreneurial management style. We didn't really know what we should have known in terms of running the company. We hadn't made the transition from an entrepreneurial to a professionally managed business environment."

Indeed during that period of growth between '88 and '95, Yanke's revenues ballooned from $8 million to $60 million. And although those figures weren't public knowledge, it was no secret that Yanke was doing well. Once again their competitors took note and followed Yanke's lead. So when the Canada Post contract came up for tender in 1995, it's little wonder that others were looking to follow Yanke's trail.

"A couple of other carriers saw us coming from nowhere to become a player in the industry and attributed our success to our Canada Post business," says Marcoux. "They thought there must be a lot of money in Canada Post. So they came in and hammered the rates and left us with nothing."

Marcoux says losing the Canada Post contract resulted in losing a client which represented 28 per cent of Yanke's revenues -- no small number to replace. Thus Yanke was left to scramble in an attempt to recoup some of what had been lost. As always, this process was a learning one, where a company policy has since limited the size of any client Yanke now serves to represent a maximum of 10 per cent of company revenues.

"So 1995 was another one of those years, much like '87-'88, where it was a realignment year," Marcoux says. "1995 was the first year, and hopefully the only year ever that I'm in this business where we lost money -- and we lost a lot of money."

MVCV - much more than an acronym 

Losing money was something that Marcoux obviously was not accustomed to. "That caused us to take a couple of steps back and say, 'How did we find ourselves in this position?'," he says. "We ended up doing a lot of structural changes and cost-cutting and rationalization, but what I became more interested in was what had we become culturally."

"What did our company stand for, what were we all about? We tested that on a number of our people, our operators, technicians in the shop, and staff people. What was quite interesting about it is that none of the answers were the same. And none of them were the answer that I might have given for what our company stood for at that time."

"We really didn't know why we existed or what we stood for," he continues. "We really were nothing other than just another trucking company. And that sort of evolved to not even being a very good trucking company."

"We were doing a good job from the service and delivery side, but looking at some turnover statistics in 1995, we had 100 per cent turnover of our operators that year. We had 478 operators in the fleet and had hired 478 new operators that year. We also had about 120 staff people and we had over 70 staff people leave the company in the same year.

"So on the one hand, you look at the growth in revenues and you think, 'Geez, we re pretty good.' Then on the other hand you look at 478 people and another 70-some people obviously didn't think we were a very good place to work because they left."

"So it was on the basis of that analysis that we set about developing our mission, vision and core values (MVCV). That really has been the driving force behind what we are today."

This implementation of a new mission, vision and core values, essentially, has been the birth of a new corporate culture for Yanke, which has in a sense been a re-birth for the company overall.

Indeed it is in these last seven years that Marcoux believes the company has begun to fulfill its potential. And ironically, this realization is not a result of extensive concentration or focus on the bottom line of the company, but rather, its people. Those who drive Yanke trucks are referred to Professional Transit Operators, or PTOs. This reflects the level of importance and professionalism that Yanke places upon its PTOs.

"Our slogan is we're on a quest to be the best," Marcoux says. "It's not about trucks and trailers, it's about hiring good people. It's about our vision, which states this relentlessly mentoring, training and supporting good people and creating an environment where people want to do good."

"People want to do good, feel proud of what their contributions are and be properly recognized for what those contributions are," he continues. "That's what a quest to be the best is all about."

To accomplish this quest to be the best, the company operates on an inverted pyramid, says company president Scott Johnston, who like Marcoux, has had a pivotal role in converting the company from an entrepreneurial climate to a corporate one. Johnston joined the company in 1990 and rose through the ranks before being promoted to president in 1999, after being named executive vice-president and general manager in 1996.

"We've gone from a traditional pyramid to an inverted pyramid," he explains of the hierarchy. "My role in the organization is I virtually have only one person in the organization working for myself, and that is Russel. Hence, I work for the entire organization, they do not work for me."

"Until you realize that business is all about people," Johnston continues, "do you truly understand the true essence of what you are attempting to accomplish and that's when you'll start to be successful."

Today, Yanke sees a turnover of about 35 per cent of its operators, or roughly one-third of the industry average, an average which Marcoux found to be unacceptable for his company.

Aside from the corporate culture fundamentally based on respect for others, there are many other benefits of working at Yanke. Company policies have been developed whereby PTOs are guaranteed, in writing, that they will haul each and every work day, (PTOs are paid for the amount of kilometres driven) and that they have a guaranteed home time.

"Our operators move every day that they are working," says Johnston. "Even if it means to haul an empty trailer, we'll have them do that so they can get in their miles. And we offer them a guaranteed return date. If circumstances prevent them from returning on the date of their return, we'll fly them home."

Yanke also implements a profit sharing system, where all eligible employees qualify for a portion of 15 per cent of the after-tax profits of the corporation on a shared pool basis. Obviously in order to do this, the company must share its financial statements with its employees -- a practice usually unheard of with privately held companies.

Ironically, such a focus on its people has left less time to concentrate on the company's bottom line, an effort which used to be the full-time pre-occupation with virtually everyone in upper management. But because of the fundamental change in management styles, such a pre-occupation is no longer required. Since 1995, with each successive year, Yanke has achieved growth to the point where it now has revenues in excess of $100 million, while its net profit is higher than ever before.

Today Marcoux sees things such as employment family assistance programs, a company health and benefits plan, or a prospective pension plan, expected to be coming soon, as investments in his employees and his company -- not costs. And he means it.

"I want to give them the comfort, the stability and the security that they're working for an organization that cares about them and has programs in place that ensures that their welfare is looked after, not just the welfare of the company," he emphasizes.

A caring community partner

This welfare goes beyond the company's four walls as well. The Yanke Group of Companies reflects its CEO'S philosophy of contributing to a better community. Marcoux believes success comes from balancing a successful career with a rewarding family and community life. Hence the company has long contributed to various community endeavors, which in 2001 became more structured through the Yanke CARE (Community Assistance through Resources and Education) initiative. In fact it is this commitment to benevolence that ensured the Yanke Group of Companies as the 2002 Saskatchewan Business Magazine's Business of the Year.

Yanke CARE has a stated objective of "...enhance our good corporate citizenship by supporting worthwhile charitable organizations and programs that enrich the lives of the members of our community, primarily our youth. The primary focus will be on children living with illness, and a secondary focus on health and wellness issues."

As such The Yanke Group of Companies has committed three per cent of after tax profits to the foundation to be utilized in support of the objective. This year, however, the focus grew considerably when the Yanke Group of Companies undertook to underwrite the Children's Health Foundation of Saskatchewan "Save a Bundle" campaign to support the development of a Children's Disease and Discovery Centre in Saskatoon. This commitment is comprised of $350,000 over three years with a total fundraising goal of $5 million.

The road ahead

Today, the Yanke Group of Companies heads down the road knowing full well that they are a facilitator of commerce by being a transportation provider from Point A to Point B, either of which could originate from virtually anywhere on the globe.

Seven years ago Yanke recognized the limitations of highway trailers and instead began a new company, Container Port of Saskatchewan, which specializes in multi-modal containers, which can be loaded onto truck, rail, naval or air cargo modes of transportation, essentially assuring them of getting virtually anything, anywhere. This realization has expanded Yanke's services exponentially and allows them to live up to their motto of 'Bringing the world to your door.'

Container Port of Saskatchewan has since been complemented with Container Port of Manitoba. Also under the Yanke Group of Companies helm is Marcoux Brothers Trucking and N. Yanke Transfer, the two predecessors of the global conglomerate which now employs in excess of 600 people.

The company now sees 20 per cent of its overall revenues generated from transport via rail, which is accomplished with a strategic alliance with CP Rail. Yanke Group of Companies facilitates commerce in 58 different countries around the world.

For Marcoux, who spends almost as much time contributing to efforts to create a better community as he does leading the company he is so rightfully proud of, the bulk of his day-to-day responsibilities consist of continuing to guide the company's vision and ensuring that it stays true to its mission, vision and core values.

"The culture of the company will live long beyond my being a part of the company," Marcoux says. "The company isn't me, the company is the culture that we've created and that is so ingrained in the people that are here that it will live well beyond my being a part of the company. I feel responsibility to ensure what has allowed us to be successful since 1995 continues to be what the company is all about."

It is for reasons such as the ones this article outlines, and for many others too numerous to mention, that the Yanke Group of Companies is heralded as the Saskatchewan Business Magazine Business of the Year. Like Doepker Industries, our inaugural winner a year ago, the Yanke Group of Companies further entrenches a lofty precedent to which future Businesses of the Year will have to strive to reach. And for that, we salute, and show our humble appreciation for the Yanke Group of Companies.

CONTACT

Russel Marcoux, CEO 

Scott Johnston, President

Yanke Group of Companies

[phone]