A home run in truck leasing

By , Staff writer of The Christian Science Monitor

John Simourian is a man who long ago boiled his life down to three ardent hopes: to play professional baseball, to run a trucking company - and to keep the business in the family. Since hopes for a professional baseball career went by the boards nearly three decades ago, the love of Mr. Simourian's life has been the business that bears his mother's name - Lily.

Trucking, it seems, has always been a family affair for Simourian, a native of Watertown, Mass., who founded and built Lily Truck Leasing into the largest privately owned truck leasing company in New England.

Despite competing with a host of larger public-leasing companies like Hertz/Penske and Ryder, Simourian has managed to move Lily dramatically forward in recent years, from eight trucks in 1965 to more than 2,700 today. Lily's growth shows how a small private company can create a strategy not only to survive, but to thrive in a changing market.

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``They have a tremendous asset that seems to be scarcer and scarcer these days called employee loyalty,'' says Christopher Hart, an associate professor at the Harvard Business School. Mr. Hart has been a consultant to the company.

Hart says Simourian has convinced his employees that it is important to ``sweat the details.'' This philosophy, he says, is pervasive within the company, but not in the usual sense of the ``take-charge entrepreneur who makes all the decisions.'' Instead, Simourian has shown that he can delegate authority, Hart says. It has enabled the company to grow across New England without diluting a reputation for service with quality, he says.

During the last decade, the trend toward nationwide truck leasing has gained momentum. Retail and manufacturing companies, large and small, have realized it is cheaper to leave the complexities of fleet truck maintenance and paper work to specialists. The result: a boom in truck leasing that has also produced an industry with profit margins so tight that only strong management and the very best service ensure survival.

``The way we compete is by tailoring our service to the customer and by being a quality company,'' says Simourian, who pioneered radio-dispatched road-repair crews.

The company supplies round-the-clock, seven-day-a-week service; replacement vehicles; extra trucks for seasonal needs; and computerized reports that allow customers to analyze truck performance and productivity. In short, Lily backs up promises with action that has earned the company a 98 percent lease renewal record in recent years.

Lily customers include names like Gillette, Coca-Cola, Brigham's, H.P. Hood, and Zayre.

``One of Lily's major attributes is their ability to provide us with flexibility,'' says Thomas Maguire, Gillette's logistics manager.

Another customer Lily gained by expanding operations was Sterling Engineered Products, an Auburn, Maine, manufacturer of specialized plastic products.

``It is now up to Lily to be sure the trucks leave on time, deliver on time, and to handle everything in between,'' says Peter Green, Sterling's group transportation manager.

Lily replaced Sterling's private fleet operations with a dedicated contract program, allowing managers to focus on the production and marketing of Sterling products.

``For being a small company, the Lily organization is very quick to latch on to new ideas,'' Hart says. ``They don't live in the past.''

But while the company does not live in the past, Simourian has definitely learned the lessons of the past. It began with the work ethic espoused by his Armenian father, who emigrated from Turkey in 1907.

After his father began a career in trucking by hauling freight for the government to help the US effort in World War II, Simourian began learning the ropes in the 1950s. He worked summers on his father's loading docks. After graduating from Harvard and serving two years in the United States Navy, he returned to his father's business.

``My father had a customer who wanted to lease a truck to run between Chicago and Boston,'' Simourian says. ``But my dad wasn't interested in leasing. So he asked me if I wanted to do it. I did.''

It was a small beginning. Simourian invested $4,000 of his savings in a truck. He leased the truck to run between Chicago and Boston. Before long, the truck was worn out, but the deal had been a moneymaker. He decided to go back and get a master's in business administration from Harvard. When he graduated, he was ready to roll.

``My father suggested, half kidding, `why don't you name the company after your mother,''' Simourian says. ``It sounded like a good idea, so I did.''

But it was one thing to start a company and another thing altogether to make it survive. ``I was going out and bidding on leases and losing them,'' Simourian says. ``I was losing every bid I put out.'' In all, he lost 60 or 70 bids. Finally, he landed the first contract.

``John is perhaps without parallel as an entrepreneur,'' says Robert Wallace, a vice-president at the Bank of Boston. ``You don't find many Harvard MBAs running truck leasing companies who can also outtalk a Mercedes-Benz truck leasing salesman.''

By 1966, ``business was coming in like a flood and I had 100 trucks,'' Simourian says. Lily's leap into the big leagues came in 1980 when Simourian worked a deal to purchase the New England division of Flexi-Van truck rental.

With the purchase, Lily's truck fleet became about 700-strong, and it had a new location in Burlington, Vt. An aggressive acquisition course was already charted, and Lily proceeded to purchase not only Avis's New England truck rental business, but Hertz's similar operation based in Portland, Maine.

``I was trying to get to a size where I could lower the purchasing cost of equipment and expand geographically, so I was not so dependent upon the Boston market,'' Simourian says.

Although size is important, Harvard's Professor Hart believes one key to Simourian's success has been that he ``sows the seeds of creative discontent'' and makes one of his primary roles ``rejecting the status quo.'' His aim: to encourage employees to think of new ways of doing things.

As for Simourian's last hope - to keep the company in the family - his son has worked his way up from salesman to district manager.

Maybe, too, it is the company home-grown message that has hit home with companies in the region. One advertisement shows a picture of Simourian with an arm around his mother. The words beneath the ad read: ``My truck leasing service has to be great. My mother's name is on the line.''

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