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September 2009
by Pat Foran, editor
Innovation comes in different shapes and sizes, if it comes at all. It's typically in short supply — although "supply" implies "commodity," which is precisely what innovation isn't — and the use of the word tends to descend into the pop-business-book realm of sloganeering. For the most part, innovation resists labels and categories all together. But "innovation" and "innovator" are spot-on accurate when used to characterize a change champion who's cast conventional wisdom aside and brought something new to the table — a process or mind-set, maybe — in order to help (if not out-and-out will) an organization to get from A to B.
As labels go, "innovator" fits E. Hunter Harrison to a T.
The president and chief executive officer of CN for the past six and one-half years and a railroader's railroader for the past four decades, Harrison definitely has come to the table with something new to offer. He's changed more than a few minds about how railroads work and why, and he's done it in his own, inimitable fashion.
From the operational improvements recorded at CN and the Illinois Central during his years running those roads to the relentlessness with which he's pursued his goals and applied his talents — be it the "precision railroading" model he's championed or his ability to spot and nurture top talent and, ultimately, inculcate culture change — Harrison is the real "innovator" deal.
In recognition of his many contributions and talents, Progressive Railroading has named Harrison the recipient of the "Railroad Innovator Award." We'll present it to Harrison at our annual RailTrends conference, to be held Oct. 6-7 at the Affinia Manhattan in New York City.
Like many a rail leader, Harrison's road to the corner office began in the yard. Born and raised in Memphis, Tenn., Harrison started his career in 1963 as a carman-oiler with the St. Louis-San Francisco Railroad (Frisco) while still attending high school.
"I think I was the first person hired in that department in 17 years," he says. "That tells you something about where the industry was at during that time."
Wherever the industry was, it got into his blood in a hurry. It helped that the process-oriented Harrison — "I try to get to root causes," he says — was sure he'd be good at this thing called "railroading," that he'd be able to help the Frisco kick it up a notch.
"I felt like I had some leadership skills," he says.
Especially when he'd take in the splendor that was the sprawling Tennessee Yard. Built in 1957, it was the Frisco's first electrically operated hump yard.
"There were cars everywhere, ground speakers everywhere, there were no radios then — those voices sounded like they were right below God," he says. "The guy in the tower, he was the guy. I was fascinated by the whole logistics challenge of trying to move stuff, to problem-solve. I thought, ‘If I could ever move into that tower ...'"
And when Harrison got his chance, he developed his own voice, his own problem-solving style. A cut-to-the-chase thinker who can bellow with the best of them, he became a quintessential car mover.
"It was something I was cut out for — I loved it, I really did," he says. "That was probably the most rewarding work I ever had, by far. When you were up there, the yardmaster and you, you didn't have to have someone tell you whether you'd done your job. You knew it."
Bill Thompson knew it, too. The colorful Frisco and Burlington Northern (BN) operations guru was a mentor to Harrison.
"He could teach you to drive a spike, fix a box car, fix an engine," says Harrison. "He knew railroading. He was a real dynamic leader."
Dynamic though he was, Thompson didn't do the rugged-individual thing in a vacuum. He saw the bigger picture, helping the hands-on Harrison realize that fiercely independent thinkers need to do more than merely consider the thoughts, talents and concerns of their rail brethren. Mavericks must trust — actually, depend on — their teammates.
"He taught me about getting the right people, letting them know what's expected of them and giving them the resources to do it," Harrison says.
In the meantime, Harrison flourished at the Frisco, holding operations positions of increasing responsibility.
"At the Frisco in the late '70s, we lost 35 to 40 percent of the management in a less than five-year period — that really had something to do with my career," he says. "Anyone who was 50 to 55, they just stepped over to people like me at age 25 and 30. Some of us got opportunities."
And Harrison was determined to run with his. He'd explored the "scheduled railroad" idea that he'd heard about since the 1960s — first with the Frisco, then with BN, which acquired the Frisco in 1980.
The scheduled concept involves developing dock-to-dock trip plans for individual shipments, rather than scheduling terminal-to-terminal transit times for trains. The idea: meet your schedules, and you reduce terminal dwell time and improve asset utilization.
To Harrison, it seemed like a smart way to run a railroad, so he was champing at the bit to implement it. He'd soon get his chance.
In 1989, when Harrison was BN's VP-transportation and VP-service design, he got an offer to join Illinois Central Corp. as VP and COO. He took the job. Four years later, he was IC's president and CEO. By 1996, he'd succeeded in driving the railroad's operating ratio down by about 30 points to the low 60s. Harrison arguably had scheduled IC into North America's most efficient railroad. In 1997, Paul Tellier and Michael Sabia — CN's CEO and CFO, respectively — told Harrison they'd admired the numbers his handiwork seemed to reflect.
"They wanted to know if it was smoke and mirrors, if there was something to it," Harrison says. "I think they found it wasn't."
Harrison was on board before the Surface Transportation Board blessed the CN-IC union in March 1998.
"They said to me, ‘Do your thing,'" he says.
As CN's Executive VP and COO, Harrison spent the next 18 months preaching the scheduled (aka "precision") gospel, applying the same philosophy and methods, implementing an aggressive operating plan and refining the railroad's scheduled service to produce an industry-leading operating ratio and on-time performance.
When Tellier left unexpectedly to become Bombardier Corp.'s CEO in January 2003, Harrison took CN's reins.
"At the time, people asked, ‘What's the new agenda?' I said, ‘It's just more of the same,'" Harrison says. "We'd done this collectively, and we were going to continue to do it collectively."
And CN has, due in part to Harrison's willingness to invest so much time hammering home the continuous-improvement message while managing the company based on five guiding principles: service, cost control, asset utilization, safety and people.
Although CN's cost-control and asset utilization successes get most of the ink, it's in the "people" realm where the railroad continues to break ground.
"I consider myself a pretty good reader of people," he says. "If I've had any successes, I think identifying talent is one of them."
A "Railroad MBA" program launched in 2003 nurtures potential leaders, particularly on the operating side. For front-line supervisors who've been identified as leadership candidates, there's individual instruction in the form of "Hunter Camps" — two-and-a-half-day sessions at which Harrison imparts CN's "how we do what we do and why" message to 15 to 20 "campers."
Of course, Harrison's own sheer will has had something to do with keeping CN on the improvement track.
"I'm impatient," as he told Progressive Railroading for a story that was published in March 2007. "I'm also demanding. But I'm asking people to stretch."
They'll have to if CN is going to meet its goal of becoming the best-run railroad in North America, which Harrison and more than a few industry observers already believe has occurred.
"I think what I'm proudest of is we have a team of railroaders that understand what we're trying to do," Harrison says. "Our agenda has been consistent, and they've accepted it and joined the effort and are pulling. Now, I'm not so naïve to think that everybody's pulling with us. But people, I think, want to be part of the best. And we think we are."
But even if CN is, there's the matter of defending the title — it's a full-time job. And as the Class I continues to leverage its tri-coastal port network and make in-roads into the freight forwarding arena, CN strategists might have designs on an even bigger prize: becoming the best transportation company in North America — and everywhere else, for that matter. As CN EVP of Sales and Marketing Jim Foote told us in 2007: "This goes back to our desire to, in a rational way, unwind history."
Harrison won't be there to oversee the unwinding. By early 2010, he'll be doing some unwinding of his own, raising horses ("My wife and I are big into it") on a 100-acre horse farm, The Double H, in Ridgefield, Conn. Current CN EVP and CFO Claude Mongeau will succeed him as president and CEO.
"I'm going to take a deep breath," Harrison says, adding that he's also raising horses in Wellington, Fla. "Some people say I'm going to fail retirement, but I don't think so."
He probably won't recede from the rail landscape entirely. In 2005, he authored the book, "How We Work and Why," which features Harrison at his no-nonsense best, including his definition-by-process-of-elimination way of getting to the heart of the matter. He's considering penning another book; potential topics include leadership and "how to railroad, in detail," he says. Consulting is a possibility, too.
"I am not going to put a shingle out, but if somebody I know, somebody whose agenda I support, asks me for help, I might consider it," he says.
In the meantime, Harrison will focus on keeping CN ready for the post-recession rebound to come. And he'll keep preaching the how-we-work-and-why gospel.
As for how he'd like to be remembered once he's in the "horse business," as he puts it, more or less full time?
"I hope people think I've been a straight-shooter — that my word is my bond, and if I shake your hand, it's a deal — and that I've tried to do the right thing, as I see it," he says. "When what you see is change, it sometimes flies in the face of conventional wisdom."
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