Railroader

Key Takeaways

1. While Sir Richard Branson advised executives to focus on employees first, customers second, and investors third, Harrison reversed the priorities: investors came first. For him, the game was capitalism, pure and simple. You either played it or you didn’t.
2. Individuals like Hunter Harrison are rare. They are singular in their talents, possessing laser-like focus and an atomic-level understanding of their businesses. By dint of starting at the bottom, questioning the status quo, and enduring backbreaking efforts, they can slide into a niche that few others occupy. As a result, they represent extraordinary value to their companies and are compensated handsomely, while making tens of billions for shareholders. But they’re never satisfied. Even though Harrison had won the game for decades, contentment was elusive for him, as it often is for elite performers. Competitive to the core, they live by scorecards such as higher stock prices and one more championship ring. They also love it. It’s who they are and what they know. Try telling Mick Jagger not to perform.
3. It’s hard to over-emphasize the impact railroads have had in the United States and Canada. In the US, they opened up the west and connected the huge population centers of the east, providing a transportation network to service the world’s largest economy. Canadian Pacific Railway helped forge a nation, not only tying it together but encouraging settlement in the western provinces, the burgeoning population creating a protective barrier against invaders from the south. Without the railroad, British Columbia would not be part of Canada, since the construction of the CPR to the Pacific was a condition of the province joining the Confederation. Its completion meant people could travel from coast to coast in a matter of days. Goods, particularly grain, could be shipped along the CPR and what became CN. Telegraph lines would span the nation, running alongside tracks and, in CN’s case, ultimately leading to the creation of the Canadian Broadcasting Corporation. CN would also spawn a national airline, Air Canada. The construction of the CPR led to the discovery of base metals—copper and nickel—in northern Ontario. The original surveyor of the Canadian Pacific route, Sir Sandford Fleming, invented Standard Time. Prior to Fleming’s invention, there was no regulation of time zones. The US had one hundred of them, with twenty-seven time zones in Michigan alone. The impact of the railroad boom of the late 1800s was akin to the internet blossoming in the 2000s.
4. “I worked my ass off all my life so I could afford to drink a good bottle of wine, and now I can’t drink it,” he said. He could no longer play hard, unable to enjoy the rewards that had always been there for his considerable efforts.
5. Still, Harrison believed in a key message: The transportation infrastructure of North America is vital to the well-being of the continent. Without freight railroads, the economy would be crippled, so why not make them the best? He was all about being the best. Why couldn’t everybody else be?
6. An extra store of energy is one of the defining characteristics of the CEO. They can go fourteen hours a day, seven days a week for months on end, with calendars that would induce anxiety attacks in the rest of us.
7. Many people have multiple personae they present to the world, depending on the situation or person with whom they’re interacting. But Harrison was the same with everyone. He didn’t waste precious energy playing roles. He just was.
8. He became a piece of very high-end, pricey human software with the nose of a bloodhound. There’s a now-famous story of him checking into a Vancouver hotel room that happened to be equipped with binoculars and had a view of a CN rail yard. Harrison spied a locomotive—number 5867—sitting idle. A half-hour later, it was still there. He made a call and asked what was happening with 5867. The worker was startled. How did Harrison know about one damn car sitting there? The incident reverberated through the company.
9. The flip side of the railroad genius was dismissiveness and distaste for corporate protocol. Harrison had little patience for boards. Put simply, they were a pain, a waste of time and money. They didn’t increase shareholder value or improve the operating ratio (OR), the key metric for a railroad that’s constantly scrutinized by investors.
10. Other people, he observed, would rather dig than accept the responsibility of telling others to dig. It was an epiphany for the young Harrison.
11. Thompson got on the phone to Springfield and got the data. He then laid it out for Harrison, who was under the impression that if the yard was full, business was good. Thompson, meanwhile, saw a yard full of cars and immediately concluded there were delays. It was an object lesson for Harrison. “If you want to be successful in the yard or the railroad, keep the car inventory down” to avoid congestion, Thompson advised.
12. Did he model himself on Thompson? No, Harrison said. But he did model his approach on Thompson’s principles.
13. Thompson asked him how much time he spent developing people. “About 10 percent of my time,” Harrison said. “You’ve got it all backwards. You should be spending 80 percent of your time coaching and teaching and 20 percent on all the other stuff. If you spend your time developing people, you won’t have to be running everywhere.”
14. “This is what you’re really trying to do as a railroad, run cars. You’re not trying to move trains.” A train simply being on time didn’t necessarily mean the individual cars were where they needed to be.
15. As Harrison said, his basic view didn’t change during the decades he ran railroads—service customers, control costs, utilize assets, don’t get anybody hurt, and recognize and develop people—and over time, he gained more confidence.
16. Freight trains ran on volume. Customarily, when the car was full, it would depart. Neither the railroad nor the customer knew when that would be. He said, we’re going to flip this very basic premise and run on schedule. By doing so, the railroad would utilize its assets at maximum efficiency and get rid of ones that it didn’t need, saving huge amounts of money.
17. He’d come to the conclusion that if you said yes to everything the customer wanted, you wouldn’t make any money. That approach would help him make enormous profits in later years, but it would also eventually result in criticism that would hound him.
18. Harrison, though, knew human nature and was the toughest to work for when the railroad ran well. The boss worried that his people would get complacent. “When things were bad, it’s when he was most supportive,” Creel said.
19. Tellier, whose star was already high, rose even higher because he’d parked his ego at the door for the greater good of CN. He let Harrison run the railroad and got the best out of him.
20. The question was how to get by with fewer locomotives. As Harrison would say, you don’t build the church for Easter Sunday—you build it for the capacity of the other 364 days of the year. Instead of running three dayshifts, one afternoon shift, and no nightshift—which equaled four eight-hour shifts that added up to thirty-two engine-hours—he suggested spreading the work around the clock. To fill the church, so to speak, for those three dayshifts, the railroad needed three locomotives for each, a total of nine.
21. If you measured in hours, everything got more precise. Taking it even further, if you measured car inspections in seconds, they got faster too.
22. How We Work and Why: Running a Precision Railroad, Volume
23. Marquis learned a classic Harrison lesson—don’t spend a dollar of capital when all it takes is improving processes.
24. When it came down to it, he simply hated inefficiency. If something was wasteful or inefficient, it created a ruckus in his head, and he didn’t stop until the noise was fixed.
25. He didn’t necessarily want the smartest people in the world, he wanted the hardest working people in the world. “Y’all take the technology and give me the good worker and I’ll beat you to death,” he told them.
26. “Just care,” he pleaded.
27. Nobody can bullshit him,” said Hargrove in 2017. “Not the management, not the union, not the workers.” Harrison knew their jobs. That gave him credibility in the field, but it also created angst among employees.
28. He often ignored what others thought and there’s no question he got lots done that way. But it made him vulnerable.
29. “I mean this guy’s a general. He’s like Patton,” Ackman said. “And running a railroad is like running an army, right?” Harrison had made the same reference about Bill Thompson, his mentor.
30. “He’s going to die with his spurs on,” Gray said presciently in a 2017 interview. “He has no choice. He’s addicted.”
31. It was also the opposite of what he thought a revamped railroad needed—in-your-face contact with railcars. Harrison would soon announce that he was relocating head office to a rail yard. CP’s headquarters would be where the action was—next to the tracks.
32. Like he had done at CN, Harrison also visited the mail room, a place he believed sent profound signals about a company.
33. Like at CN, nose-to-nose encounters with the new chief had a way of resonating throughout the organization.
34. Soon, non-operating people like computer programmers would be trained as conductors. Managers would learn how to drive trains. This would not only give the company flexibility, but office workers would learn what it was like on the front lines of actually operating a railroad.
35. “He can be, sometimes I think, probably too tough on people.” His point was that while it was one thing to maximize returns for shareholders, there was an array of stakeholders that had to be considered. Among others, employees fell into that category.
36. As if the list of medical issues wasn’t enough, since 2015 he’d been hospitalized approximately a dozen times, the last instance in December 2016 when his temperature spiked and left him hallucinating. He’d also had his gallbladder removed during the battle for Norfolk Southern, endured a bout of shingles in late 2016 and early 2017, and had two “sun spots” removed from his face. “I do think that he’s walking a fine line,” his daughter Cayce said in the first half of 2017. “I know my mom is scared of this, that it’s to the detriment of his health. But I think that if he didn’t work, it would be to the detriment of his mental health.”
37. “All you have to do is smell. Things just start jumping out at you.”
38. No detail was too small for Harrison. Even the company ball cap got a makeover. Instead of black with white letters, it shifted to company colors, blue and gold.
39. When asked, however, if competitors would up their game and perhaps try to copy what he was doing, he said they could buy the books he’d written at CN. “[They’re each] on eBay for a thousand dollars,” he cracked,
40. “I modeled myself along a lot of his principles,” Harrison said, but “from a style standpoint, no.”
41. Managers, he frequently repeated, do things right—while leaders do the right thing. “My mandate in these jobs has never been to be Mr. Popularity.”

What I got out of it

1. A well-rounded story of Harrison’s life, the reader is given access to both the praises and criticisms of Harrison’s work ethic.  Tools that then can be applied to any business looking to make an impact.