Schwans: Strategic Planning for the Long Term

Rarely do I watch local news, but a couple of weeks ago I happened to catch a story on our local CBS affiliate’s 10PM newscast about Marshall, MN-based Schwans and their amazing propane trucks. This is a lesson in strategic planning for the long term, and how gleeful they must be in a day when diesel fuel is approaching $5 a gallon!

Schwans is a company that got into the home delivery business when in 1952, Marvin Schwan packed his beat-up 1946 Dodge panel van with 14 gallons of his family’s signature ice cream and delivered it to rural families in western Minnesota. At the end of that historic trip, all 14 gallons were sold and the Schwan home-delivery business was born.

Now a multi-billion dollar private company with 22,000 employees and a dependence on trucks to deliver their goods — especially the sizeable home delivery portion of their business — they were admittedly stunned and taken aback during the oil crisis of the 1970’s and initiated a very long term strategic plan to ensure they weren’t in that position again.

This article (and the accompanying video there which I watched that night) says in part, “Our sales were based on the fact that we’re driving down the road and going to people’s houses, and so that’s really where the concern came in and said ‘We need to do something different,'” said Shannon Lens, Director of Fleet Acquisition at Schwan Foods.

What they did was take the mandate of Schwan Foods founder Marvin Schwan to find an alternative fuel. They discovered propane being used on a very small scale in Ohio. They eventually bought the propane technology and started converting their trucks. By the 1980s, most of the fleet was propane powered.”

This company is now paying $2 per gallon for propane fuel that runs the 5,200 trucks in their fleet nationwide.

Propane is no panacea since it’s a byproduct of oil refining. Still, as I’ve said before in many ways on this blog, there’s been a lack of leadership exhibited in the last eight years on finding any alternatives to oil, motivating we citizens to conserve, and going to war to ensure we get the last remaining oil resources vs. those emerging economies China and India.

Strategic planning, risk management and leadership are things one would hope for in our Federal government and not just with companies delivering pizza and ice cream.

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2 Comments

  1. PXLated on July 8, 2008 at 12:33 pm

    Growing up in SW Minn, I have found memories of Schwans delivering the ice cream. Very innovative company in many ways. Most don’t know that most of the frozen pizza they buy is owned by Schwans (I’ve heard 80%). They also build their own trucks over in Wisc. Good company for employees also.



  2. Nathan Ives on July 9, 2008 at 9:31 pm

    StrategyDriven contributors believe that today’s rapidly changing business environment presents a daunting challenge to executives and managers. Gone are the days when a company’s competitive advantage could be leveraged to bring it untold riches year after year. Technology and the phenomenon of the flattening world have created a new market environment in which a company innovates one day only to see its unique creations commoditized the next.

    To remain competitive in this new, flatter world, organization leaders must remain focused on the future. While crystal balls do not exist, corporate leaders must serve as the ultimate futurists; anticipating changes in both market demands as well as the availability of human, technological, and material resources. Strategic planning should incorporate these predictions while allowing for flexibility and adjustments to be made during tactical execution.

    We at StrategyDriven believe in the power of effective planning coupled with execution. Our website is dedicated to providing executives and managers with the strategic business planning and tactical execution best practice tools and techniques needed to create organizational alignment and accountability to acheive superior results.

    I hope you and your readers will visit the StrategyDriven website at http://www.StrategyDriven.com.

    All the Best,
    Nathan Ives
    Principal Contributor and
    co-Host, StrategyDriven Podcast
    StrategyDriven

    http://www.StrategyDriven.com



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