In the first part of our talk, Steve Ferreira of Ocean Audit took us through his fascinating journey from a job offer at Time Magazine to discovering a systemic problem of billing errors. Now that we’ve established the "why" of his business, it's time to dive into the "how."
This week, we explore the philosophy that revolutionized how companies approach freight auditing: the "no cure, no pay" model and the powerful "Wizard of Oz" metaphor he uses to describe his work.
💬 The Talk
Fernando Roman (SC): Steve, your "no cure, no pay" model is incredibly disruptive, especially in such a traditional industry. Can you tell us more about this philosophy and how you use it to describe your work?
Steve Ferreira: Sure. I often joke that we’re like the service dogs of the shipping industry. They bring us to the door, and once we're in, people see us and don't recognize us as a threat. That’s key to our success. My business model is a reflection of my philosophy: people hire you because you want to know the truth.
Fernando Roman (SC): So, your work is like lifting a veil?
Steve Ferreira: Exactly. I use the metaphor of the Wizard of Oz. My clients are Dorothy and her team, who have come to see the powerful Wizard. The Wizard speaks to them with a thundering voice from behind a curtain, telling them their problems are too big for them to solve. My job is to be the dog, Toto, who sneaks around, lifts the veil, and reveals that it's just a regular man behind a curtain, manipulating the perception with loudspeakers. That's what we do: we reveal the truth behind the errors.
Fernando Roman (SC): That's a powerful metaphor. I understand that clients didn't want to admit they had errors. But what about the freight providers? Didn't they resist having someone audit their invoices?
Steve Ferreira: Of course they did. When we first started, I was considered a pariah. The ocean carriers and forwarders didn’t like that a "third party" was looking at their invoices. But our job is not to assign blame, but to find the truth. Over time, they realized that our reports helped them correct errors in their own systems, which also benefited them in the long run. In the end, we're not there to point fingers, but to find the root cause of a problem.
Fernando Roman (SC): And what about technology? Do you think automation could have solved this problem years ago?
Steve Ferreira: Technology has advanced, but the problem isn't technology itself, but how we implement it. Despite all the tools and systems we have today, human error is still the cause of most billing errors. It's a systemic, not a technological, problem. My model is based on the fact that errors exist and will always exist, and my job is to find them.
💎 Key Takeaways from the talk
As I reflect on my conversation with Steve, here are some key takeaways:
Business Model Innovation: The "no cure, no pay" model not only eliminated client risk but also demonstrated tangible value and built trust.
Truth as a Product: Steve doesn't sell an audit; he sells truth and transparency in an opaque sector.
Beyond Technology: The biggest issue isn't the lack of technology, but how processes are implemented and the human factor behind them.
This is only the second part of a fascinating conversation. Next week, in Part III, we'll dive into the human factor in logistics, why errors are an inevitable part of the process, and how education is the true long-term solution.
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