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September 2012
— by Pat Foran, Editor
In Class I country, achieving next-level goals has always been a team sport. And as railroads cast a wider net in their quest to build strong management teams, they occasionally tweak the talent blend. Witness CSX Corp., which earlier this year did some tweaking of its own. Oscar Munoz, who had been chief financial officer, was named chief operating officer. Fredrik Eliasson, who had been vice president of sales and marketing for the chemicals and fertilizer business unit, was named executive vice president and CFO, succeeding Munoz.
Given his nine previous years as CFO, Munoz carries with him a certain institutional stability to the COO post. He also brings brain power — "Oscar is one of the smartest guys in the C-suite," Avondale Partners L.L.C. transportation analyst Donald Broughton told Managing Editor Jeff Stagl, who wrote this month's cover story. And with stints heading the railroad's emerging market and chemicals business units, Eliasson — who also served CSX as VP of financial planning and analysis — brings a service focus and customer empathy to the CFO seat.
The other four executive team members have been in their current posts a bit longer, a couple quite a bit longer. Nonetheless, the slight executive deck reshuffling requires the group to "rebuild the dynamic," as Chairman, President and Chief Executive Officer Michael Ward told Stagl. And it's a rebuild by design.
At CSX, cross-functional experience matters — see the resumés of Munoz, Eliasson and all the other executive team members, including Ward. Gender diversity also matters. CSX ranks among Fortune 500 firms with the highest percentage of women executive officers, according to Catalyst Inc.'s annual list of companies with 25 percent or more women executive officers.
Given the emphasis on diversity of experience and ideas, the CSX team dynamic is in a constant state of tweak. Arguably, it's one of the things that makes the team dynamic "dynamic." Similar scenarios are unfolding in other C-suites as rail strategists re-evaluate the way they blend talent and assemble leadership teams. Expect the tweaking to continue.
Speaking of talent-blend tweaking, diversity of experience and the like: In the past, North American railroads weren't renowned for tapping non-traditional talent at leadership levels, but that doesn't mean they didn't tap it. During a recent interview, new Patriot Rail Corp. President and CEO John Fenton invoked the names of two non-traditional rail CEOs: Mike Walsh and Paul Tellier.
"They were two of the people who had the biggest impact on railroading that I had encountered, and they both came from outside the business," Fenton said.
The candid and charismatic Walsh came to Union Pacific Railroad from Cummins Engine Co. in 1986 and served as CEO until 1991. A hard-driving change champion, Tellier headed Canada's Privy Council before joining CN in 1992. He shepherded the Class I as CEO through 2001. Fenton worked for Walsh in the late 1980s and Tellier in the late 1990s.
"Mike Walsh brought an outsider perspective to the railroad — he challenged some of the traditional and conventional thinking," Fenton told me. "Paul Tellier was a brilliant administrator, an amazing executive. I could sit down and listen to him for hours. He could see things. I was very fortunate to be able to work around him."
Plenty of people feel the same way about Fenton, based on what I'm hearing. He's spent the better part of 30 years serving the rail industry as a turnaround specialist, so he's no outsider, but he's a non-traditional talent in other ways, supporters say. Fenton's penchant for leaving organizations in better shape than he found them has made him a leader to watch in previous stops, and the Patriot Rail gig's no different.
For more on the career route Fenton has taken and what he hopes to bring to the short-line holding company, please see Profile: John Fenton.
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