Omnitracs CEO Ray Greer is a well-respected leader in the transportation and logistics industry, having worked in leadership roles at BNSF Logistics, Greatwide Logistics Services, Newgistics, Ryder Integrated Logistics, and FedEx. Omnitracs is a global pioneer of fleet management solutions to transportation and logistics companies.
Ray shared with me some very compelling insights, including why he thinks he rose too early in his career, his greatest challenge as a CEO, and why cultural transformations are critical but easier said than done.
You earned degrees in mathematics and information systems. What was your career goal?
I always thought I would go into aviation. I wanted to design and build airplanes or missiles or things of that nature. I discovered during that initial part of my career that I enjoyed people too much to be sitting behind a computer all day. I ended up taking a management track pretty early in my career at FedEx. Transportation is one of those industries that once it gets into your blood it becomes part of your DNA, and it’s hard to break away from it.
I actually did masters work in aviation, thinking I would get into airport management. Then I got into the coursework on federal aviation regulations and realized just how regulated it is. I couldn’t imagine trying to run an airport where you are told what, how, and when to do things and the creativity is somewhat limited. So I took the tech route, and that has served me well.
Now FedEx obviously has reputation as a well-run organization. At that time did they provide significant management training or did they just expect you to figure it out?
FedEx actually created a leadership institute where they took executives from inside the organization to run it. You had access to it as a way to develop your leadership skills. They did a phenomenal job. I’ve tried to replicate this in organizations, but it’s a hard thing to do in different cultures.
FedEx in the early days would not allow just anybody to get into management. It was a six to nine-month process to determine if management was even for you. Many people go into management not knowing what’s expected and are not prepared. At FedEx you had to ultimately go before a panel of directors to determine if you had a good grasp of what it meant to be in a leadership position and whether or not you were ready. Without their blessing, you couldn’t even apply for a management position.
They did a very good job of not just grooming talent for management but ultimately making sure they had confidence that you were ready for it. I’m very thankful for that time in my career, because it prepared me for things that I’ve used throughout my whole career and still use today.
When did you first think this CEO gig was something you could do?
It was pretty early in my career. With my first job I had the option of being a programmer or project manager. I chose the latter, since I enjoy working with people. Because of the projects I worked on in that job, I learned to connect the dots across the organization from marketing to sales to technology to operations. That was the first time I recognized that I had an ability to not just connect the dots but also work with a vastly broad range of topics and skill sets.
I then got my first management position quickly at FedEx. At that time if you applied for a job at FedEx and were not selected, you could appeal the decision. Several employees appealed when I got the manager position instead of them, because I was half their age. It went all the way to the president, and ultimately FedEx kept me in that job.
When I got to Ryder, they did not have similar leadership programs. I became the head of operations, then the head of technology, and ultimately the president of the logistics group. I think I was 32 years old when I got that position. I felt like at that point I had arrived and that I could be the CEO someday.
I do think I rose too fast early in my career. There’s a lot to be said about learning the ropes and experiencing the lifecycle of economies in and out of recession. So I went through a phase of rapid advancement, but I learned that I could do it. I felt like I could run an organization and drive a strategy. But I know in those early days I was still learning a lot at that kind of C-level position. When you move rapidly you don’t get enough time in any one job to really learn the cycle of a position.
Long story short, I think it’s when I got appointed the president at Ryder that I was ultimately going to have the opportunity to run my own company someday and felt like I had the wherewithal to do it.
Did you have a particular mentor or sponsor who helped along the way?
Ironically, one of my first mentors was Fred Smith, the founder of FedEx. I never reported to him, but I was the program manager on some of his pet projects. I was fortunate enough to be exposed to him and his team on a frequent basis. He may not have known it, but I was using those moments to be mentored informally. I took the opportunity in meetings to listen to them debate, discuss, and explore issues.
Tony Burns, the CEO and Chairman at Ryder, was also a great mentor to me in those days. He had trust and confidence in me. Part of growing sometimes is having somebody who has enough confidence in you to give you a chance, and then not disappointing them. I’ve always had people along the way that have helped me grow and develop. Most recently at BNSF (a Berkshire Hathaway company) where I was running logistics, I learned great insights and perspectives from Chairman Matt Rose.
Fred Smith is certainly a legend. Do you have a favorite Fred Smith story?
I was always so fascinated with his boldness and willingness to stretch the thinking and imagination of his people well beyond what was reasonable at the time – whether it was technology or the global expansion of FedEx. Fred was always one who valued his people greatly. I felt very welcomed by him. My best times learning from him were flying with him and having those moments where you could ask questions and have dialog. He was just a real stand-up leader and still is. Every chance I get I take the opportunity to listen to him and see what he’s thinking.
When you got the CEO role did you find anything that you wish you’d learned, experienced, or studied before?
Before I became a CEO I had not appreciated what’s involved in leading cultural transformations. At organizations I grew up in such as FedEx and Ryder, their cultures are things you inherited and embraced and worked within. You learned how to navigate those cultures to achieve your goals and agenda.
When I became a CEO, I took over a company with a culture that needed to change. This is very different than starting a company from scratch where you can mold and shape the culture you want. In an existing company, learning how to take the good and throw out the parts you feel should change is not an easy thing to do. You’re dealing with people and what they’re used to, and asking them to change.
They can’t really teach you this in school or grad school. You can’t really learn it on the job. It’s something that you’ve got to learn through experiencing it.
That’s probably the single greatest thing is when you have organizations that you feel need cultural transformation, it’s easier said than done. You can’t master the art of that until you’ve been through it a couple of times. I’ve been through it three times. Omnitracs is the third. It’s a real journey.
Most companies would say our culture doesn’t need changing; we just need people to execute. In some companies culture can be the barrier to progress, transformation, and results. Especially in modern times with the pace of technology, cultural transformation is even more critical than it might have been 15 or 20 years ago. That’s the thing that stands out the most.
What would you tell a first-time CEO stepping into a change/turnaround situation? What kind of mistakes do new CEOs make?
The greatest mistake is thinking you know what the answer is, when in fact I have a saying: Seek first to understand then to be understood. A CEO who goes in reversing that to say, “I want to be understood and then I’ll understand,” later runs the risk of doing more harm than good. In most cases employees, managers, and C-level executives know what is good or what is not as good about a culture. Generally the human condition is one where we all want to be successful and aspire to greatness. I think new CEOs might be surprised if they took more time up front to listen before drawing their own conclusions.
Do you do anything to measure the culture/employee engagement at Omnitracs? I figure as a math guy that’s something you’d want to quantify.
I’m big into balanced scorecards. My real training and development in this area came from FedEx. They had a People Service Profit culture – what they called a PSP. The philosophy was that if you take care of people, they’ll deliver outstanding service, and that will in turn drive profits.
That model stands true today. What you have to measure is your people and customer satisfaction and engagement or disengagement. Then of course there are your financials, which tend to follow the other two. If you have a highly engaged workforce, your customers will see it and hear it and feel it. That experience drives a satisfied client.
So on the front end I focus on employee sentiment, with an eye towards trying to improve that wherever it is. Are they excited to come to work? Is that reflected in how customers perceive the organization that they are buying their products and services from?
I try to really filter down the significant few things that can move that needle the most. It can be things that leadership either is doing or not doing, or things where they are demonstrating willful or deliberate ignorance. That’s where they know something’s wrong but have not taken the steps to address it.
I always think about who the constituents of your organization are. Usually it’s people, customers, and shareholders. The inherit struggle of any CEO is finding the balance between those three constituencies. Some businesses have more than that. It’s important that the agenda you adopt and drive through the organization recognizes the importance of those three. You must move the culture in a direction to drive harmony among those three constituencies and make sure your leadership understands that.
It’s funny you say that. I wrote a book called The CEO Tightrope where I represent those three constituencies in a “Decision Nexus.” To make good decisions, CEOs must consider the needs of all three groups.
People often ask me what my greatest challenge is, and I say it is balancing the needs of the people within the organization and shareholders. I think tightrope is a great way to characterize it. If any one of those is out of balance or out of kilter you’ll see it. But at the beginning of all that I would say as a math guy you can only optimize one variable at a time. Hands down I would always start with the people.
As a leader in the transportation industry you are certainly in the middle of the economy. Are you seeing anything that CEOs in other industries might want to know?
From an economy point of view, the transport industry has had some of their best years the last two or three. Transports lead into a recession and they lead out of a recession. So when you think about economic cycles, the transport sector is a leading indicator of how good or bad things are or could become.
The greatest challenge this sector deals with is continued regulation. I’m sure regulation hits a lot of different industries. We’re even seeing it in social media and digitization and privacy with the rights and ownership of data. Our industry sees a lot of regulation as it pertains to drivers: Are they fit to drive? Have they been too long on the road without rest? We are under a lot of strain in terms of regulatory changes. At the end of the day, I think these changes are very much needed, because it drives a safer industry.
The other thing I would say is this multi-channel retail change between shopping in stores to shopping online and all the options available to us now. We as an industry don’t completely have an appreciation for how much it’s going to change the industry over the next five or 10 or 20 years. I haven’t seen the most recent numbers, but I want to say that retail is 15% e-commerce now, and that’s growing every year. That has a profound impact on the infrastructure and the companies that serve the transport space. That’s where the technology is going to have to play a critical role to ensure the industry operates efficiently.
The economy right now is good. We’re seeing a bit of softness in the first quarter of 2019, but that’s also coming off record highs in terms of freight volumes and tonnage and just general market demand.
Ray to Joel: How do you think CEOs are different now than they were 10 or 20 years ago?
Joel: I think technology has changed their ability to interact with people. Their one-on-one interactions are worse. Their one-to-many communications might be better, but I think personal connections are worse.
Ray: We as leaders and CEOs have to identify that and find ways to develop those leadership attributes so that whether it is one-on-one or a group setting, that leaders are capable of navigating their way through both. When people ask me what I’m most grateful for in my career, it’s not the money, it’s the people I’ve met along the way. That to me is what makes this job fun. My hope is that this young generation can still place the same value on people as they do the technology that can do some of this work. We must make sure we strike that balance.
Joel: The successful ones will because the human being as an animal didn’t change the last 20 years. We still crave human interaction, so the most savvy ones will figure that out.