In Episode 3 of Growth Decoder, Mahfuz meets Matthew Halstead, the president of Sharp Trucking, and hears how the business overcame the loss of its CEO and more than doubled its number of trucks in just over a year. Matthew also digs into how to build trust with a new team and shares how an accident completely changed the way Sharp Trucking operates.
Here’s a sample of the insights you’ll take away from this episode:
Mahfuz Chowdhury [00:00:13] Welcome to Growth Decoder, a podcast proudly brought to you by Canadian Western Bank. I'll be your host, Mahfuz Chowdury. We're going to meet businesses with a variety of different backgrounds to unpack the challenges and successes that go hand in hand with growth and find out how they got to where they are today. Sharp Trucking was founded in 2011 by cousins Marc Craddock and Brett Hryniuk. Craddock was the third generation in his family to work in the trucking industry, and he decided to go out on his own to see what he could build. They started out by servicing the oilpatch and then got into the explosives industry. It didn't take long before Craddock and her Hryniuk were competing with billion dollar trucking companies, but then tragedy struck. Marc Craddock, the 36-year-old CEO, died in a car accident in May 2020. Matthew Halstead is the president of Sharp Trucking. Matthew, thank you so much for joining us today.
Matthew Halstead [00:01:08] My pleasure. Thanks for having me.
Mahfuz [00:01:10] I'd love to start with the state of the company before you joined the team. This was a tragic story, especially for how much the family values meant to the company. As I was reading about it on the website, it seems like it was a big core of what this company was about. Can you talk a little bit about what impact Marc's death had on Sharp trucking?
Matthew [00:01:27] Sure. The business has always been growing, and the business was also in transition. It was a traditional oilfield services company and had not been that long into servicing the explosives and dynamite industry. We just opened up a second facility, getting things off the ground, and all things were headed in the right direction. The company was doing well. The company was growing, was setting new financial targets, operational targets, the truck count. And in the trucking industry, that's always a benchMarc that you look for. It had been going well and then this very untimely death of Marc Craddock.
Mahfuz [00:02:01] With Marc being the leader of the organization in the past years who stepped in? And what did that positioning look like?
Matthew [00:02:07] So Marc and his cousin Brett were very active in the business and were a really good complementary, one-two punch Marc on the operations. Better was on the business development, what we call the offensive side of the business. And immediately following Marc's death, Brett took on a far more aggressive role, looking at all aspects of the business much, much deeper than just the business development side. The business had to continue. There was a payroll to be met. There were customers to be serviced. There was a return on investment to pursue, with Brett now the primary shareholder, looking to continue to build. So it was a life-goes-on, very tragic event, but we'll continue to build and keep trucking, as they say.
Mahfuz [00:02:44] You mentioned that Marc and Brett both delved into the explosive industries before Marc passed away. Can you tell me a little bit about how that shaped where the company was before you joined and maybe some observations that you made as you started taking a look at this company?
Matthew [00:02:57] When I joined, the company was in transition, had recently gotten into the explosives market. It was an opportunity that was presented to Sharp to do then as it does now: pushed in all the chips and say, we're going to do this and just continue to do a lot of things really, really well. And our cornerstones have always been do it very safely, do it very professionally and be very reliable. And meeting those three legs of the stool, I guess on current service and on growth target, it just put us in a position where the customers and the industry continued to hear good things about Sharp and we continued to grow as a result.
Mahfuz [00:03:34] And it was very evident that taking very calculated risks was a big part of the decision making that took place not only in the early years but even now.
Matthew [00:03:42] Yeah. So, Brett and by extension myself as entrepreneurs, I mean the definition of an entrepreneur is a risk taker. Trucking is a risky business. But as I say here today and internally, almost every day in our company, we're in the business of calculated risk and strategic risk. We're not reckless in what we do. We're certainly not irresponsible in what we do. It's a very serious business. We travel in remote locations off traditional paved highways. Our drivers and our operations group deal with extreme isolation based on where a mine is. Because of that, you know, clichés aside, it's absolutely safety first, right?
Mahfuz [00:04:21] It can't be a cornerstone value for your company if ‘reckless’ is a term that gets thrown around. And I think you've really been delivering on the promise for many, many years. I'd love to get the chapter on when you joined the company, how did you and Brett cross paths, and what did it look like for someone that was joining what was already a substantial company? And how did you make your way into the business?
Matthew [00:04:42] Sure. So, I'm not from Edmonton, but I say all the time: it's the smallest city of a million people I've ever lived in. Brett and I had a mutual colleague. She was doing some consulting for Sharp. Her name is April. April reached out to me and said, I think we should talk. There's this really good opportunity with this trucking company that's doing some really exciting things. And she shared the back story with Marc and said, you know, they've hit a bit of a speedbump here and continue to want to grow. And she said, from what you know, what I know about Brett and what I know about you, I think you two would really connect in both the way you see the world and the way you'd want to build a business. And this was in 2020. This was pre vaccines. I had COVID, I was COVID positive at the time. So we had a virtual introduction by way of April for about six weeks. We spoke in some cases three, maybe four times a day and went back and forth. We spoke business and the philosophy of business and the strategy of business and the people of business, the safety of business. And it was very clear from the very beginning there was nothing about this role that was going to be custodial. We're not looking to hold this business as it is or hold market share. Make no mistake, we've been growing and we're going to continue to grow. And this is what we want to talk to you about. A short story. That's how Brett and I got talking.
Mahfuz [00:05:57] Yeah. I really believe there's a lot of key insights in that story that you just shared with you and Brett. Instantly connecting and having a lot of commonalities for a lot of listeners. They may be in a stage where they're trying to assess who to bring on to their team, or they may be about to join a team and they're not sure if is the right fit. Can you go a little bit deeper on the connection that you saw with Brett and how and why you felt like you both could work together on such a big mission?
Matthew [00:06:20] Sure. And I think it does start with everyone. We'll talk about respect. But I think before respect, there's got to be that degree of trust. And there was mutual trust and mutual respect very, very early on. We're not that different in age. We both have a sports background. So, there was a couple of boxes that were checked pretty quickly. April's background is H.R., so she's got that real sense of smell for good chemistry between people. And as I said, from what she knew about me and what she knew about Brett, she thought that was there. And the more we spoke, it was aligned and just felt right. Yeah. And when we really started to dig deep into the business, it really was about the people in the team. Good, good core foundation of the company that was there when I got there and are still there. I think there's a temptation, someone you knew in a leadership role coming to an organization, there is a temptation to say, we're going to change this. We're going to change that. You're struggling here and I can do this better. This situation was unique because of the timing of Marc and somebody new coming in. I didn't want this idea or perception that I was trying to replace Marc – I wanted to fill a need and continue growing the business. And when I say that, really what I'm trying to say is that I wanted to identify the things that we're doing really, really well. And for the first six months, let's just do more of that. Let's focus on those things that are really strong about sharp. The areas where there might be a little bit of struggle, whether it's some of it was equipment utilization, a little bit of how we administered our financing in the shop. We'll get there. All that stuff will come in due time. Let's focus on those things that we're doing really well.
Mahfuz [00:07:52] It was definitely a unique situation by pulling from both extremes, right? Being able to come in as someone that needs to continue driving growth, while at the same time, that respect for a company that might be grieving at the moment. I think it was a very interesting way for you to come in. What was the role that you had when you first entered, and what would you say was the first major change that you might have made in the company? And if not a major change, maybe a major strategy that you implemented?
Speaker 2 [00:08:15] I came in as the role of general manager and oversight for operations, finance, maintenance, H.R., all elements that encompass the full business. A lot of the principles that were in place were based on when the company was 18 trucks. I joined at the time when we were 26, and we're now close to 60 trucks. What I wanted to make sure was, as we bring on more trucks and more drivers, that the focus was the internal infrastructure that supports it, the H.R. That supports it, the finance that supports it, most importantly, the safety that supports it. When you're 18 trucks in your small-to-medium-sized business, you can do a lot of things out of a spiral notebook, you can do it ad hoc and spontaneously. And now it was our policy, our process, our structure, our internal mechanisms that had to support that growth. In the big scheme of things. Those in the trucking community might chuckle a little when I say this, but in the big scheme of things, I can go buy trucks and get drivers tomorrow. Both are really hard to acquire right now, but once you get past that, that's actually quite easy. You get those trucks on the road and you're hauling freight. It’s that army of support that keeps those trucks safely on the road and profitably on the road. That really is what allows you to continue to grow and not collapse.
Mahfuz [00:09:32] It seems like a lot of it was around building good systems, right. And the system that allows you to continuously bring on people, to onboard them in the best ways and really get them embedded in your company values.
Matthew [00:09:42] Systems and people. I am a generalist in our industry. I am not the most knowledgeable on the financial side. That's why we have a vice president of finance. I am not the most knowledgeable on the maintenance and repair side or even on the operations side or even on the business development side. I do a very good job at bringing them together and connecting them. But most importantly, once they've got their marching orders for the day, the week, the month, the quarter, what I do really well is get out of their way. And they do. They just do really good work.
Mahfuz [00:10:12] Right. It was once described to me by a friend that is a massive basketball fan, when he talks about the goal of a coach not trying to play as good as the players, but giving them the best guidance and then getting the heck out of their way so they could play their best game. Yeah, I think it's a great mindset and a really big testament to your humility of how you function and operate the business.
Matthew [00:10:31] And we're small in the big scheme of things. We service the mining industry, we compete with billion dollar trucking companies for similar work. We deal with large vendors such as Kenworth. And if I had an ego, it would be put in check awfully quick. With companies that size, we work with companies that have 32 vice presidents and 25 directors. On one hand, we have an opportunity in front of us. We will caucus as a group. Knock it around. We take an informal cooling off period of about 36 hours. We all kind of look each other and say, “Yeah. Sounds good. Yeah, right. Yeah. Okay, let's go execute.”
Mahfuz [00:11:12] Yeah, that's great.
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Mahfuz [00:11:50] Matthew, I want to shift into another very unique situation that you've been put in, which was when Sharp Trucking experienced a snowplow accident after you came on board. Can you comment a little bit about exactly what happened and more so how it impacted the business?
Matthew [00:12:02] Sure. It's the timing of this that’s interesting. As you know, I just flew in from Dallas (for the podcast recording). Our largest customer had their National Carrier Safety Convention. And I spoke about this and presented the video. And the background is this. We had a driver coming home. He was at the end of shift, end of cycle in the Grand Prairie area. So that's about 5 hours north of Edmonton. The focus by the driver and our operations group was to get the truck home. He was driving through not bad weather, but not great weather. A snow cloud had been created on the highway. And through the video you can see the driver accelerate in the snow cloud, which is in fact the opposite of what you're supposed to do. And then when the video, the dash video shows up, you just see these flashing lights and a second later, there's impact. And the good news for everybody is both drivers of the snowplow and our driver walked away from the incident. But it changed us monumentally. And the reason being is we had been paying our drivers what's called a rate pay or a mileage pay. So, we changed that to an hourly pay to change our drivers’ mindset, and to change focus so that whether I'm driving across town or I'm driving loaded out to deliver, or driving empty coming back, my rate of pay doesn't change and I can focus on my task and I’m not calculating earnings on a particular load or a particular run. It happens and it’s not unique to drivers. Distracted driving, not just on handheld technology, is one that we try to manage as best we can. So, we changed our pay structure. We changed the way that we dispatch and what we call ‘journey wrote management,’ meaning we have full understanding of where that truck is, what it's doing and what that driver is doing on any particular day or hour on his load.
Mahfuz [00:13:40] That's very interesting.
Matthew [00:13:42] We changed our GPS tracking platform, and it was one that gave us much more detail and depth on reporting on everything from the stability of the truck hard brake or hard turn. It changed our retention numbers on our drivers. We had a turnover rate that was higher than 10%. Now we're below 5%. And in the Alberta Market, it's fantastic. It’s stability for us. It's stability for our customers. It changed our company at the time and it continues to change our company. We saw a reduction in our insurance. We saw a reduction in workers compensation benefit claims. And again, our retention numbers improved. This change to hourly wage continues to provide return and dividend.
Mahfuz [00:14:22] It's an incredible response to what could have been a really tragic moment, but fortunately everyone's doing okay. Can you walk me through a little bit of the thought process for all of those changes? Because it seems like a lot of changes were made and you're seeing the end of that story with positive output. Can you talk a little bit about how you went in and discovered that those were the changes to make?
Matthew [00:14:41] Well, yeah. So, what we wanted to do was have a greater sense of control. As I said at one point a little bit earlier there, the driver needs to be focused on his work, not on what his earnings were on a day. So that gets alleviated very quickly when we convert to what we call an hourly rate. Some of the obstacles that came with it internally, we had discussion that said, well, there will be abuse and will we end up eroding the profitability, and not to talk semantics, but we had to change that mindset very quickly. It's an investment and if it costs a little bit more, we're okay with that. And I see it every day in our business and the safest trucking companies are the most profitable and we will be the safest. We had operations people that didn't necessarily agree with it. We did have some drivers that didn't necessarily agree, not on the hourly wage, but what we were trying to do on a safety standpoint, hours of service, maintenance, record keeping. There was a bit of pushback, and I was still at that point the new guy that was trying to change things. But I'm more than prepared to stand back and say, based on where we are in growth and increased market share - which is of course, is huge -let's let the numbers do the talking.
Mahfuz [00:15:48] It's very interesting to hear you not just talk about how big safety is as a mindset, but how you're being executed throughout the business. I can imagine that probably every company in your industry would talk about safety as being a key metric or a key indicator of success, but you're really delivering on that. Can you talk a little bit about how that plays out in more ways than just these procedures that you put in place?
Matthew [00:16:10] So the biggest challenge that we have in our business is the changing conditions. The weather in Alberta changes very, very quickly in summer. We go from almost 20 hours of daylight at peak summer. Then we travel to the far north, we're in the Arctic and we can have 4 to 6 hours of daylight. We travel in bulk commodities, meaning there's product that sloshes in a tank. So how the driver operates their equipment loaded as opposed to how he operates that equipment empty on the way back makes a difference. We don't travel on traditional roads where it's a flat highway between Calgary and Edmonton or Toronto and Montreal. We travel into the mountains. We travel what's called mine halls or mine roads, and they're radio controlled roads. Our drivers quite frequently have to pull out and put tire chains on because of conditions on the mine roads, because our conditions on a micro or a daily change, we as a business have to be prepared to change our philosophy pretty regularly, and we blow up bridges behind us because what solved our problems yesterday may not necessarily solve our problems tomorrow. And there's a quote that says, In business, turbulence isn't the issue. It's looking to address that issue with yesterday's logic. And it's a great expression, and it's one that really carries through, and I steal from it daily.
Mahfuz [00:17:29] If I had to pull out characteristics as a leader that you are in your industry, one of them that comes out right away is just your ability to stay adaptable, to adjust based on circumstances. Would you agree with that? And are there other characteristics that you think allows you to operate in the level that you do?
Matthew [00:17:47] Sure, yeah. Brett's always had a great line and I steal from him pretty regularly as well. His is, “there's no finish line.” There's no finish line on what we need to do to be safe. There’s no finish line on what we need to do to meet the needs of our staff, our drivers, our operations, our mechanics. There's no finish line on service, and tomorrow our customer could throw us what we could call a problem or a challenge, but it really is an opportunity to be further invested with our customers. And there is no finish line to meeting those needs. And I go back to our size a little bit. We're flirting with just about 100 people at this point. We can move, and we can move quickly. And as I opened with earlier, we don't do it recklessly and we're strategic about it, but we can move quickly. And that's what puts us in a position to compete with companies that are much larger. And don't get me wrong, our trucking community needs companies that size. They have a real place in the marketplace.
Mahfuz [00:18:48] Yeah, I bet. And you mentioned this is your fourth time opening up about the snowplow incident. And it sounds to me like you're also heavily invested in educating people based on your learnings. When were the other times and what is the goal of sharing this story with others?
Matthew [00:19:01] So it's been shared on two separate occasions with our primary customer, which is Orca, and we've also shared it with our insurance company and they have shared it internally. There was a time in trucking where it was “my problems are my problems” and “your problems or your problems.” And but it is a community. It is one where we travel the same roads, and my family is on that road as is yours and everyone else. The safer we are, the better we can make our industry and the roads safer. Happy to share.
Mahfuz [00:19:32] Matthew, I want to thank you so much for your time and for sharing the story of a very difficult transition, a legacy that needed to be kept and a company that needed to continue growing. Can you talk a little bit about what's next for trucking? You put in place a model that's working really well. You talked a little bit about the growth opportunity that could happen as fast as you wanted to, but you're doing it in a very calculated way. Can you talk about what we could anticipate coming up next?
Matthew [00:19:56] So it wasn't so long ago we went to British Columbia, and we were servicing with six trucks. We've now more than doubled our truck count down there, and revenue and profitability continues to follow truck counts. We're very pleased there. So we're going to more than double here. I will talk about the opportunity, but it's important to talk about those results, too, because we continue to do these things really well and grow at the same time. If we were just going to hold the status quo and try to maintain those numbers, that itself would be a challenge. But what we've done, to almost double in size, is pretty significant and really an acknowledgment to our operations group and our safety people and our finance group. What's next for Sharp? We've expanded our offerings within the explosives community. We now haul liquid dynamite, we haul prill, which is a dry tablet, we haul packaged dynamite. We have some expansion coming our way in the market. The other next big opportunity for us is where we continue to grow in the industrial market, which was some of that traditional oilfield services that got Sharp up and running as an entity. That part of our business continues to grow by leaps and bounds as well.
Mahfuz [00:21:04] Thank you so much for your time today and for sharing a part of you and the side of your business that maybe others don't get to see. Appreciate it.
Matthew [00:21:11] Oh, my pleasure. Thanks for having me.
Mahfuz [00:21:13] The conversation with Matthew was not only inspiring, but it also gave us a lot of key takeaways to think about. Some of my favorite takeaways from the day was, number one, the willingness to be adaptable, especially in difficult situations, and then act. This was very evident when Matthew shared the story about the snow plowing incident and how he was able to adapt by changing company procedures and put them into action to produce fantastic results. Secondly, I loved his ability to build trust with his team. He was put in a very unique situation. It wasn't easy to be accepted as someone new taking on an ongoing legacy, but he found a way to slowly work his way and build trust with the team members - and also trust that their talent could get the job done, which often resulted in him, more often than not, just getting out of the way and letting them do what they do best. And finally, proven disruption. Being able to go into a space with the mindset that you can change things and make things better. And although you may initially receive a lot of negative feedback and pushback, by believing your gut and going there with the mindset that you can make better changes, proven disruption - with the emphasis on proven - has produced a lot of positive output that delivered on the promise that Matthew has made. If you haven't already, make sure to subscribe to Growth Decoder. You can also visit www.cwbank.com/podcast for videos and a further depth on Sharp Trucking, as well as the other businesses featured on Growth Decoder. I'm your host, Mahfuz Chaudry. Thanks for listening. Growth Decoder is brought to you by Canadian Western Bank with production by Strategic Content Labs.