10 Lessons I Learned from Sara Blakely That You Won't Hear in Business School

At last week’s inspiring National Association of Professional Women’s 2^nd annual networking conference, I had the opportunity to attend the keynote presentation of Sara Blakely, Founder of Spanx.  In her one-hour talk, Sara highlighted her fascinating journey from launching a start-up with $5000 in savings to becoming the youngest self-made female billionaire in history. Anyone who’s heard Sara’s story knows it’s exhilarating and motivating, but to see her live brings a new dimension to her story.  She’s fresh, exuberant, funny and completely passionate about helping women feel and look their best, and about reforming all of the misguided trends that have kept in women in painful and ill-fitting undergarments over the last 50 years.
Sara delivers surprise after surprise in her tale of phenomenal entrepreneurial success.  As I love to be “contrarian” in my work, I’m very taken with her non-conventional lessons that fly in the face of all the best business school advice we received from the business pundits and gurus.
Here are the top 10 lessons I learned from Sara’s journey from fax machine saleswoman to entrepreneurial superstar:
Fail Big – Sara’s beloved father followed Wayne Dyer’s guidance in teaching his children the power of failing big.  Each day, her father would ask – “So, what did you fail at today.” And if there were no failures, Dad would be disappointed.  Focusing on failing big allowed Sara to understand that failure is not an outcome, but involves a lack of trying — not stretching yourself far enough out of your comfort zone and attempting to be more than you were the day before.   Failing big was a good thing.
2)      Visualize it – Sara is a big fan of “visualizing” your big goal, in specific, concrete ways.  She saw herself clearly on the Oprah TV show 15 years before it happened.  She simply knew it would happen.  She’d see in her mind’s eye sitting on the couch with Oprah having an exciting conversation, and wondered, “What are we talking about?”  The rest was just “filling in the blanks” to get there.
3)      Don’t share your fragile idea with the world too soon.  Sara kept her idea of making a fabulous new undergarment for women under wraps for an entire year while working on developing the prototype.  Only after she was 100% committed to it and ready to launch, did she sit her friends down and explain her new direction.  Sara explains that ideas are vulnerable, fragile things.  Wait until you’re completely read to move forward before you share it with people. Meaning well, they’ll shoot it down, offering all the reasons why it won’t work.  But when they do,  you’ll be ready to deal with it.
4)      Don’t take no for an answer. Sara reached out to slews of manufacturers and lawyers to help her patent her idea and create a successful prototype.  In every conversation she had with potential manufacturers, she was asked three questions: 1) Who are you? 2) Who are you with? 3) and Who is backing you?  When the answers to these three questions remained, “Sara Blakely,” no one wanted to take a chance on her, until one manufacturer called her back and said “OK.”  Why? Because he had gone home and told his daughters about the idea, and they said, “It’s brilliant!”
5)      Hire people you like and trust (even if they don’t know a great deal about what you need them to do).  Sara hired a head of Product Development and a PR director who had been friends and supporters from the beginning.  Neither knew anything about the functional areas they were hired to oversee, but Sara trusted they’d be fabulous at their new roles, and they were.
6)      You don’t have to go in order. Sara’s passionate commitment to her new Spanx product was so fierce, she just tackled each task in the development and marketing journey as they came up, not necessarily in the best order for a smooth launch.  She landed a Neiman Marcus deal involving placement of the product in seven stores, before figuring out how to mass produce “crotches” for the product. The Oprah show called to do a feature on her in a staff meeting in her “offices” before she had an office or a staff.  She winged it, and it all went well.
7)      You CAN figure it out – you have the ability.  Sara knew absolutely nothing about women’s undergarments, patenting a new product, manufacturing, marketing, product development, website development, online commerce, and more.  But that didn’t stop her. She researched what she needed to, hired out what she couldn’t do, and marched forward with undying commitment and energy. Don’t stop yourself from pursuing an idea because you don’t think you have what it takes.
8)      You can build a billion dollar business starting with $5,000.  Sara had only $5,000 in savings on that fateful day when she cut the feet off of her stockings in order to wear them under her white pants for a more flattering look (and thus, realized the world needed a new undergarment product that would be comfortable yet flattering to the female form).  From that $5,000 she embarked on designing a prototype, securing a manufacturer, naming the product, legally protecting her product, and getting the word out to potential buyers.  You don’t have to be rich to move forward with your fabulous new idea.
9)      Don’t worry about the outer “stuff” until the time is right. Sara worked tirelessly from her apartment creating her product, avoiding investing in outside office space or other marketing and business tools until the product had taken off.  She didn’t have a formal website until she made it on the Oprah show and needed one.  Anything that wasn’t essential to building the product and getting the name out there simply wasn’t a priority.
10)   Breaking the mold is a good thing.  When Sara began to research undergarments for women and how they’d been made for the last 50 years, she was astonished.  From the absurd sizing protocols (only one average waist measure was used on all the products, regardless of the size of the garment), to how products were tested (on manikins not real people), Sara saw that the undergarment industry needed a female perspective – insights from a real woman wearing these items to shape the product development direction so the products were useful, effective, and as comfortable as possible.  She broke the mold, and developed a completely new approach to developing women’s undergarments.
Sara’s most important tip:
“Believe in your idea, trust your instincts, and don’t be afraid to fail. It took me two years from the time I had the idea for Spanx until the time I had a product in hand ready to sell into stores. I must have heard the word “no” a thousand times. If you believe in your idea 100%, don’t let anyone stop you! Not being afraid to fail is a key part of the success of Spanx.”
In the end, Sara Blakely’s story shows us what’s possible when we believe, when we’re resourceful beyond measure, and when our passion and commitment to something outside ourselves brings us to a calling.
What are you most afraid of failing at? Will you get in the cage with your fears and take a step toward your dream today?

 

‘Wrong Way’ Krugman flies again, and again

By Steve H. Hanke
The infamous pilot Douglas Corrigan was dubbed “Wrong Way” in 1938, after he filed a flight plan that would have taken him on a transcontinental flight from New York to Long Beach, California. Instead, Wrong Way took a transoceanic flight from New York to Dublin, Ireland.
Corrigan’s “Wrong Way” attribution should be applied to the fiscalists led by Nobelist, Princeton professor and hyper-productive New York Times columnist Paul Krugman. He argues that the only way to put the major economies around the world back on track is to “stimulate” them via deficit-financed government spending. There is just one problem: Prof. Krugman and his fiscalist followers are selling snake oil. If nothing else, Prof. Krugman’s “success” proves the wisdom of advice which management guru Prof. Peter Drucker imparted to me over lunch in 1998: “the key to successful salesmanship is nothing more than repetition enhanced by incremental product improvement.”
Statements made by the likes of Nobel laureates carry weight – even if those statements amount to nothing more than factoids. Recall that, according to the Oxford English Dictionary, a factoid is “an item of unreliable information that is reported and repeated so often that it becomes accepted as fact.” The famous “Dr. Fox Lecture,” which was presented at the University of Southern California’s Medical School, illustrates just how so-called “experts” can effectively work and influence a crowd. The lecture was presented by Dr. Myron Fox –an advertised heavyweight – to an academic audience. The response to Dr. Fox’s lecture was unanimously favorable. Little did the audience know that “Dr. Fox” was an actor who had been cloaked with an impressive fake curriculum vitae and trained to deliver a nonsensical lecture filled with contradictory statements, double-talk and non sequiturs. When the big guns sound off, they are heard.
In the political sphere, the fiscal factoid is catching on. France has just dumped an economically incoherent Nicolas Sarkozy and replaced him with François Hollande, who is the first Socialist to reside in the Élysée Palace since François Mitterrand did 17 years ago. Not surprisingly, President Hollande is proudly flying the fiscal stimulus flag. And that’s not all.
Greece has just announced that a government couldn’t be cobbled together after the 6 May 2012 elections, and that new elections would be held on 17 June 2012. In the wake of the May elections, the fly in the ointment has been the surge in support for the Coalition of the Radical Left (SYRIZA), which is lead by Alexis Tsipras. Where does SYRIZA stand? A top adviser to Mr. Tsipras, Prof. Euclid Tsakalotos couldn’t have been clearer when he recently rejected fiscal austerity and embraced the fiscal factoid. To finance more government spending, he asserted: “We need a central bank that prints money, euro bonds, and a system that transfers money from rich countries to poor countries.” It looks like Wrong Way Krugman has found his man in Prof. Tsakalotos. Both should be grounded, pending the completion of a short course on the efficacy of fiscal stimulus programs.
Let’s take a closer look at the fiscal facts and the effectiveness of the Keynesian fiscal elixir. Nobelist Milton Friedman addressed the issue in a 1999 Wall Street Journal column (8 January 1999). Prof. Friedman wrote:
The Keynesian view is that government deficit spending is cyclically stimulative whether it is financed by borrowing or by newly created money. The monetarist view is that spending financed by newly created money is cyclically stimulative whether the spending is by the government or the private sector. Government spending financed by borrowing may or may not be stimulative depending on how much private spending is crowded out by government spending. Either outcome is possible, depending on conditions.
It is not easy to distinguish between these views on the basis of empirical evidence, because fiscal stimulus generally is accompanied by monetary stimulus. The relevant evidence is provided by those rare occasions when fiscal and monetary policy go in different directions.

To test whether the Keynesian or monetarist view was supported by the empirical evidence, Prof. Friedman recounted two episodes in which fiscal and monetary policies moved in different directions. The first was the Japanese experience during the early 1990s. In an attempt to restart the Japanese economy, repeated fiscal stimuli were applied. But monetary policy remained “tight,” and the economy remained in the doldrums.
Prof. Friedman’s second example was the U.S. experience during the 1990s. When President Clinton entered office, the structural fiscal deficit was 5.3% of potential GDP. In the ensuing eight years, President Clinton squeezed out the fiscal deficits and left office in 2000, with the government’s accounts showing a structural surplus of 1.5%. Ironically, the two years in which fiscalist Prof. Lawrence Summers was President Clinton’s Secretary of the Treasury (1999-2000), the U.S. registered a structural surplus of 0.9% and 1.5% of GDP. Those years were marked by “tight” fiscal and “loose” monetary policies, and the economy was in an expansionary phase. Note that Prof. Summers has clearly had a sip of snake oil since his heady days of 1999-2000.
Prof. Friedman concluded with the following remark: “Some years back, I tried to collect all the episodes I could find in which monetary policy and fiscal policy went in opposite direction. As in these two episodes, monetary policy uniformly dominated fiscal policies.” …
As it turns out, there is plenty of austerity out there. But, in general, it’s not fiscal austerity, with real cuts in government spending, as the fiscalists claim – a cut is when you have spent $1 billion last year and will spend $900 million this year. Never mind. As Prof. Friedman taught us, money matters. And when we look at money, we see two pictures. One is the size of the central banks’ balance sheets. They have exploded since the Lehman bankruptcy of September 2008. If you just focused on those balance sheets and the associated growth in high-powered money, you would conclude – as many have done – that we are facing a wall of money and liquidity and that hyperinflation is just around the corner. But that would be a wrongheaded conclusion.
The second picture, one that plots the course of broad money (derivative measures of high-powered money), shows very subdued growth in the money supply (see the accompanying chart). Indeed, in the United Kingdom, broad money is contracting. No wonder the U.K. economy is mired in a double dip recession. It has little, if anything, to do with the Cameron government’s alleged fiscal austerity, but everything to do with the U.K.’s money and banking policies. Note that I include the word “banking.” Most economists nowadays might find this strange since their models don’t even include banks.
In the wake of the financial crisis that has engulfed us, the chattering classes have embraced a wrongheaded set of policies to make banks “safe.” One who led the charge was Britain’s former Prime Minister Gordon Brown. In the prologue to his book Beyond the Crash, he glorifies the moment when he underlined twice “Recapitalize NOW.” It turns out that Mr. Brown attracted many like-minded souls, including his successor, David Cameron, as well as the central bankers who endorsed Basel III, which mandates higher capital-asset ratios for banks.
In response to Basel III, banks have shrunk their loan books and dramatically increased their cash and government securities positions (both of these “risk free” assets are not covered by the capital requirements imposed by Basel III and related capital mandates). This explains, in large part, why the explosion in high-powered money has not flowed through to broad money measures and why we have not bounced back from the crisis induced slump that our friendly central bankers pushed us into.
We are in deep trouble – trouble that has nothing to do with alleged fiscal austerity. Today, the source of our economic malfunction resides with government-mandated bank regulations that have thrown a monkey wrench into the banking system. Wrong Way Krugman and his followers should abandon the fiscal factoid and keep their eyes on what matters – money. They can start by contemplating the monetary contraction in Greece: in the last year, broad money (M3) contracted by 17.1%.

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins
University in Baltimore and a Senior Fellow at the Cato Institute in
Washington, D.C.

Ideas over Interests - Dani Rodrik

CAMBRIDGE – The most widely held theory of politics is also the simplest: the powerful get what they want. Financial regulation is driven by the interests of banks, health policy by the interests of insurance companies, and tax policy by the interests of the rich. Those who can influence government the most – through their control of resources, information, access, or sheer threat of violence – eventually get their way.

CommentsIt’s the same globally. Foreign policy is determined, it is said, first and foremost by national interests – not affinities with other nations or concern for the global community. International agreements are impossible unless they are aligned with the interests of the United States and, increasingly, other rising major powers. In authoritarian regimes, policies are the direct expression of the interests of the ruler and his cronies.

CommentsIt is a compelling narrative, one with which we can readily explain how politics so often generates perverse outcomes. Whether in democracies, dictatorships, or in the international arena, those outcomes reflect the ability of narrow, special interests to achieve results that harm the majority.

 Yet this explanation is far from complete, and often misleading. Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas.

CommentsConsider a struggling firm that is trying to improve its competitive position. One strategy is to lay off some workers and outsource production to cheaper locations in Asia. Alternatively, the firm can invest in skills training and build a more productive workforce with greater loyalty and hence lower turnover costs. It can compete on price or on quality.

CommentsThe mere fact that the firm’s owners are self-interested tells us little about which of these strategies will be followed. What ultimately determines the firm’s choice is a whole series of subjective evaluations of the likelihood of different scenarios, alongside a calculation of their costs and benefits.

CommentsSimilarly, imagine that you are a despotic ruler in a poor country. What is the best way to maintain your power and pre-empt domestic and foreign threats? Do you build a strong, export-oriented economy? Or do you turn inward and reward your military friends and other cronies, at the expense of almost everyone else? Authoritarian rulers in East Asia embraced the first strategy; their counterparts in the Middle East opted for the second. They had different conceptions of where their interest lay.

CommentsOr consider China’s role in the global economy. As the People’s Republic becomes a major power, its leaders will have to decide what kind of international system they want. Perhaps they will choose to build on and strengthen the existing multilateral regime, which has served them well in the past. But perhaps they will prefer bilateral, ad hoc relations that allow them to extract greater advantage in their transactions with individual countries. We cannot predict the shape that the world economy will take just from observing that China and its interests will loom larger.

CommentsWe could multiply such examples endlessly. Are German Chancellor Angela Merkel’s domestic political fortunes best served by stuffing austerity down Greece’s throat, at the cost of another debt restructuring down the line, or by easing up on its conditions, which might give Greece a chance to grow out of its debt burden? Are US interests at the World Bank best served by directly nominating an American, or by cooperating with other countries to select the most suitable candidate, American or not?

CommentsThe fact that we debate such questions passionately suggests that we all have varying conceptions of where self-interest lies. Our interests are in fact hostage to our ideas.

CommentsSo, where do those ideas come from? Policymakers, like all of us, are slaves to fashion. Their perspectives on what is feasible and desirable are shaped by the zeitgeist, the “ideas in the air.” This means that economists and other thought leaders can exert much influence – for good or ill.

CommentsJohn Maynard Keynes once famously said that “even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist.” He probably didn’t put it nearly strongly enough. The ideas that have produced, for example, the unbridled liberalization and financial excess of the last few decades have emanated from economists who are (for the most part) very much alive.

CommentsIn the aftermath of the financial crisis, it became fashionable for economists to decry the power of big banks. It is because politicians are in the pockets of financial interests, they said, that the regulatory environment allowed those interests to reap huge rewards at great social expense. But this argument conveniently overlooks the legitimizing role played by economists themselves. It was economists and their ideas that made it respectable for policymakers and regulators to believe that what is good for Wall Street is good for Main Street.

CommentsEconomists love theories that place organized special interests at the root of all political evil. In the real world, they cannot wriggle so easily out of responsibility for the bad ideas that they have so often spawned. With influence must come accountability.

Doing Development Better

CAMBRIDGE – Jim Yong Kim’s appointment as World Bank president may have been predictable, given the long-standing tradition that renders the selection an American prerogative. But even the appearance of competition between Kim and the other candidates, Ngozi Okonjo-Iweala and José Antonio Ocampo, served to expose a deep fissure within the field of development policy, because Kim and his two rivals represented dramatically different approaches.
The vision for which Kim stands is bottom-up. It focuses directly on the poor, and on delivering services – for example, education, health care, and microcredit – to their communities. This tradition’s motto could be, “Development is accomplished one project at a time.”

CommentsThe other approach, represented by Okonjo-Iweala and Ocampo, takes an economy-wide approach. It emphasizes broad reforms that affect the overall economic environment, and thus focuses on areas such as international trade, finance, macroeconomics, and governance.

CommentsPractitioners in the first group idolize NGO leaders like Mohammad Yunus, whose Grameen Bank pioneered microfinance, and Ela Bhatt, a founder of India’s Self-Employment Women’s Association (SEWA). The heroes of the second group are reformist finance or economy ministers such as India’s Manmohan Singh or Brazil’s Fernando Henrique Cardoso.

CommentsAt first sight, this might seem like another dispute between economists and non-economists, but the rift runs within, rather than between, disciplinary boundaries. For example, recent work with field experiments and randomized controlled trials (RCTs), which has caught on like wildfire among development economists, lies strictly in the tradition of bottom-up development.

CommentsThe relative effectiveness of the two visions is not easy to determine. Proponents of the macro approach point out that the greatest development successes have typically been the product of economy-wide reforms. The dramatic reductions in poverty achieved by China over the span of a few decades, as well as by other East Asian countries like South Korea and Taiwan, resulted largely from improved economic management (as much as earlier investments in education and health may have played a role). Reforms in incentives and property-rights arrangements, not anti-poverty programs, enabled these economies to take off.

CommentsThe trouble is that these experiences have not proved as informative for other countries as one might have wished. Asian-style reforms do not travel well, and, in any case, there is significant controversy about the role of specific policies. In particular, was the key to the Asian miracle economic liberalization or the limits that were placed on it?

CommentsMoreover, the macro tradition vacillates between specific recommendations (“set low and uniform tariffs,” “remove interest-rate ceilings on banks,” “improve your ‘doing business’ ranking”) that find limited support in cross-country evidence, and broad recommendations that lack operational content (“integrate into world economy,” “achieve macroeconomic stability,” “improve contract enforcement”).

CommentsDevelopment specialists in the bottom-up tradition, for their part, can deservedly claim success in demonstrating the effectiveness of education, public health, or microcredit projects in specific contexts. But, too often, such projects treat poverty’s symptoms rather than its causes.

CommentsPoverty is often best addressed not by helping the poor to be better at what they are already doing, but by getting them to do something altogether different. This calls for diversification of production, urbanization, and industrialization, which in turn require policy interventions that may lie at considerable distance from the poor (such as fixing regulations or targeting the value of the currency).

CommentsMoreover, as with macro-level economic reforms, there are limits to what can be learned from individual projects. An RCT conducted under specific conditions does not generate usable hard evidence for policymakers in other settings. Learning requires some degree of extrapolation, converting randomized evaluations from hard evidence into soft evidence.

The good news is that there has been real progress in development policy, and, beneath the doctrinal differences, is a certain convergence – not on what works, but on how we should think about and do development policy. The best of the recent work in the two traditions shares common predilections. Both Conventional development policy has been prone to fads, moving from one big fix to another. Development is held back by too little government, too much government, too little credit, the absence of property rights, and so on. The remedy is planning, the Washington Consensus, microcredit, or distributing land titles to the poor.

By contrast, the new approaches are agnostic. They acknowledge that we do not know what works, and that the binding constraints to development tend to be context-specific. Policy experimentation is a central part of discovery, coupled with monitoring and evaluation to close the learning loop. Experiments do not need to be of the RCT type; China certainly learned from its policy experiments without a proper control group.

Reformers in this mold are suspicious of “best practices” and universal blueprints. They look instead for policy innovations, small and large, that are tailored to local economic circumstances and political complications.

The field of development policy can and should be reunified around these shared diagnostic, contextual approaches. Macro-development economists need to recognize the advantages of the experimental approach and adopt the policy mindset of enthusiasts of randomized evaluation. Micro-development economists need to recognize that one can learn from diverse types of evidence, and that, while randomized evaluations are tremendously useful, the utility of their results is often restricted by the narrow scope of their application.

In the end, both camps should show greater humility: macro-development practitioners about what they already know, and micro-development practitioners about what they can learn.

Reprinting material from this Web site without written consent from Project Syndicate is a violation of international copyright law. To secure permission, please contact us.

the psychology of debt

Financial Post Article
It is an everyday dilemma – whether to plunk down cash or plastic for a new outfit or a car, a washing machine, a dinner out, perhaps a holiday. Plastic postpones the moment of reckoning until the bill comes due. But the dilemma is more than the rational one of whether you really need the new appliance or a meal somebody else cooks.
It is about splurging to buy an outfit that confirms or changes your identity or hoarding old clothes for fear of not being able to buy other things in future. The problem is that it is hard and often impossible to detach the emotion from the purpose of spending and to separate the rational part of spending on genuine needs such a home from the anticipated pleasure of a holiday. The former is a durable good that will provide service for decades. The latter lasts not much longer than a tan.
Scott Hannah sees the wreckage of wrong decisions.  President of the Credit Counseling Society, a national non-profit organization based in Vancouver that helps people find solutions to their financial problems, he sees the spend or save dilemma as a reflection of two problems – omnipresent marketing and low interest rates.  One, marketing and the manipulation of buyer psychology by advertising, appeals to emotions. The other, the fact that money saved in cash returns little before inflation and less than nothing after, is an incentive to spend.
“We live in a society so heavily marketed in the media that there is a rush to keep up with everyone else,” Mr. Hannah explains. “Then add in the fact that the one asset that people can buy and use well that may appreciate – a home – is often out of reach and it becomes rational in a way to spend money on what one can afford.”

Add in the fact that money held in fixed-income accounts such as guaranteed investment certificates earns little and cash in bank accounts almost nothing and there is an incentive to spend before inflation, which is not insignificant and which compounds price increases, prices things out of reach. “Low interest rates punish thrift,” Mr. Hannah notes. As well, he adds, when people elect to finance consumer purchases with low-interest home-equity lines of credit, they borrow for transitory needs against the most durable of their assets. That is a decision that they would not make as readily if interest rates were higher, making saving worthwhile and showing the true cost of spending.”

Related

• Make tax refund smart money
• Getting used to working longer

What’s new in Canada’s consumer boom is the easing of guilt about spending.
Of course, a core of consumers remain wedded to an older feeling that thrift is good and spending is bad. Those on fixed incomes may fear running out of money and so tumble into a vortex of hoarding cash and old products for fear of poverty. It is distinctly if not uniquely a problem of the elderly, says Derek Moran, head of Smarter Financial Planning Ltd. in Kelowna, B.C. “My mother and father get a feeling of discomfort from shopping. They are traditionalists who find it hard to reverse the belief that one should always spend less than one earns.”

The problem is cash myopia – insecurity and a desire for liquidity often go together

The spend or save, splurge or hoard decision really comes down to confidence about the future or fear of it, says Ivan Bilash, a clinical psychologist who practices in Winnipeg. “The problem is cash myopia – insecurity and a desire for liquidity often go together,” he explains. “If people fear the future, then most of the time they want to maintain cash balances and not squander money on transitory pleasures. On the other hand, people who are secure may be more willing to spend on the pleasures of the moment.”
There are rational ways to allocate money and to exclude most of emotion from the process.  Setting up a budget and living within it means that, down the road, there won’t be a surprise when payments for pleasures bought long ago come due to be paid.  “You want to avoid buyer’s remorse,” Mr. Hannah says.  The solution, of course, is to practice anticipation – the essence and the purpose of budgeting.

Issue: With profit margins in the transportation industry growing increasingly thin and more scrutiny on the environmental impact of the industry, transport providers are under increased pressure to find cost-effective and eco-friendly means of transporting goods
Shift: Collaboration between the transport sector, government and safety groups is resulting in more transport operators doubling up loads and reducing the number of engines on the road
It might be a rare sight in Ontario, but at certain times of the day, motorists may catch a glimpse of an LCV travelling the 400 network of highways.
What is an LCV, you ask? It’s a term used in the transportation industry for Longer Combination Vehicles. A more common sight outside of Ontario, these extended units interconnect two fullsize trailers. The idea behind the approach is to reduce the environmental impact of over-the-road truck traffic.
While double trailers have been commonly used in a smaller format (maximum 25 metres per trailer), these extended-length combinations (35 metres per trailer) are another thing altogether.

Related

• Innovation turning wood waste into bio-fuel for transportation
• Prairie food waste fuelling vehicles of the future

LCVs have been traversing roads in the Prairie provinces and Quebec for some time, with New Brunswick and Nova Scotia coming to the table more recently, reports David Bradley, president and CEO of the Ontario Trucking Association in Toronto. “Ontario was the odd man out. It really became a case of political will at a time when we’re seeing manufacturing leaving the province.”
There’s a reason why Ontario only recently came on board with LCVs, Mr. Bradley notes. “Government was rightfully concerned about how the public will receive LCVs despite the fact there’s no question they offer both economic and environmental benefits. It was really more of a perceptual issue since there are no real questions in terms of their safety.”
Ontario also has infrastructure challenges that other jurisdictions don’t. Traffic and population density have presented a major stumbling block.
“The 400 series is the most congested highway network in North America,” says Brian Patterson, president and CEO of the Ontario Safety League in Mississauga. “Obviously there’s a considerable amount of testing and requirements to get approval. If you live in Alberta, once you’re 15 minutes outside of the city you can keep driving.”
What finally tipped the scales for LCV approval in Ontario? Despite the perceived resistance, the trucking companies and shipper community have been on board with the idea for some time, as have provincial governments for the most part, says Robert Ballantyne, president of the Canadian Industrial Transportation Association in Ottawa. “It’s not only efficiency issues driving this. It’s a means to minimize fuel and congestion, as well as to address an imminent driver shortage.”
Anything that improves the productivity of a supply chain is of value to the people who produce and ship the goods and, in the long run, to the consumers that buy them, he adds. “Transportation is a big producer of greenhouse gas emissions, so reducing fuel consumption helps in terms of commercial operations and productivity.”
Even though safety groups and railway players have tended to oppose the use of LCVs, in Ontario, the collaborative effort on the part of government and industry went a long way to allay any concerns. Through its co-operative approach, Ontario has in fact managed to establish the most stringent safety guidelines in North America, Mr. Ballantyne reports.
“No one is fussing about it too much now. Everyone involved understands that they really have to do this right.”
The initial LCV permits were issued in the summer of 2009 to a select few carriers. Canadian Tire was the first out of the gate in August 2009. Currently there are 54 participating carriers operating 150 vehicles in Ontario that can travel on routes covering the Oshawa-to-Windsor corridor. (The government dictates a four-permit-per-carrier limit.)
Qualifying for these sparsely distributed permits is a significant feat. There is a long list of stipulations, including the times of day they can run (not during rush hour); what highways they can operate on (only the 400 series where there are hard shoulders); tractor horsepower and model year; weight limitations (lightweight cargo only); maximum speeds (90 km per hour); emissions compliance; available rest stops and access ramps; weather conditions; and time of year they can be used.
In addition, only the most experienced drivers with a spotless record can operate the vehicles. The same goes for the trucking company. “Not just anyone is qualified to do this,” Mr. Bradley says. “They have raised the bar very, very high.”
The Ontario Trucking Association reports that since 2009, there have been more than 45,500 LCV trips in the province covering 14.8 million kilometres, without any major incidents or violations. The metrics are showing a 40% productivity enhancement over conventional vehicles.
Neil McKenna, vice-president of transportation for Canadian Tire Corp. notes that while rail is a less expensive conveyance, destination points are an issue.
“There are not a lot of rail terminals between Toronto and Montreal. Besides, over-the-road is still more suited to time-sensitive travel.”
He estimates that LCVs save the company about 30% in delivery costs over conventional modes, and each LCV permit reduces greenhouse gas emissions by 136,000 pounds each year.
However, LCVs are unlikely ever to be commonplace, mainly because they are strictly cut out for direct runs on multi-lane highways.
“They’re really, really good in a straight-line operation with minimal turns,” says Mr. McKenna. “You don’t want to be going up and down mountains with these.”
Given that turning must be minimized, carriers also have to work closely with engineering analysts and municipal authorities to ensure the trucks can be safely negotiated when arriving at terminals.
In fact LCVs are only a smart part of a much broader spectrum of approaches to reducing fuel consumption and emissions. These include more aerodynamic truck designs to reduce air drag, speed limiters, engine improvements and route-optimization software.
What really makes Ontario’s LCV story unique, however, is its collaborative history. Initially, the Ontario Safety League was opposed to the idea and demanded a number of changes from the Ministry in the interest of public safety.
“But they agreed to every single one, and there have been no issues since,” says Mr. Patterson.
“When all safety requirements we asked for were taken, obviously the industry had to step up and do their part to meet them. And they did,” he says.
As far as the future of LCVs is concerned, rumour has it that Saskatchewan is piloting three-trailer “road trains” to travel between Regina and Saskatoon and selected northern runs. But Ontario and its counterparts to the east needn’t worry, says Mr. Ballantyne.
“The chances for that happening anywhere between Ontario and the east coast are virtually nil.”