- “Without a doubt, Harrison was tough. As an employee, if you didn’t get with the program, you were gone. You got a chance to mend your ways, but only one. If you were dragging down the team, he believed, the consequences for the company could be a disastrous spiral that would be bad for everybody. But this was a man for whom an efficiently operating railroad was like the performance of a Mozart symphony by one of the world’s great orchestras. It’s what he loved and what accounted for his peerless skills. That love, however, made him vulnerable to emotional wounds, as it frequently does to true believers who throw every ounce of their being into what they do.”
- “That he could improve a business with so many pieces—thousands of employees, locomotives, railcars, and miles of track—demonstrated that Harrison was a compound of innovator, field general, motivational preacher, efficiency expert, and virtuoso of railroad minutiae. After more than a half century in an industry where he had started at track level and worked his way to the executive suite, he knew how a railroad worked in such molecular detail that he could envision how inefficient scenarios would play out and how to avoid them.“
- Hunter Harrison’s dad had some personal and family troubles growing up. He played baseball and left his family home. When he came back, he had no place to stay – his sister took his room. He went and worked for the army just so he could have a place to sleep. During WWII, he got injured in the shoulder and couldn’t play anymore upon return. He took up odd jobs until he joined Memphis Police Department. Exhausting job mentally for him especially that he was working on drug cases, prostitution, and other challenging. Later he’d transfer to dealing with juveniles delinquencies. It is at that time that he’d discover that his son Hunter was a troublemaker and was on the police radar for misdemeanours.
- “Around the same time at Frisco, Harrison’s superiors asked him to do some extra work as foreman. When his supervisor was absent, he would fill in and receive the supervisor’s level of pay for those weeks. Like certain kids take to the violin, Hunter Harrison took to the railroad. During those periods when he was acting-supervisor, seven boxcars were repaired instead of the usual five. It might be small beer for railroaders today, but at the time it got him noticed. Here was this kid getting things done that people senior to him couldn’t or didn’t do. Leadership traits and boxcar moving skills would one day coalesce into Precision Scheduled Railroading, the operating philosophy that would become his calling card worldwide. The extra work he took on paid off, and within a few years he was asked to enter a management training program”
- ” In 1972, at age twenty-eight, Harrison became a trainmaster, the turning point that would imprint heavily on his future. Somehow he had a knack for moving cars efficiently, and moving cars was the game. If they sat in the yard, they weren’t making money. Freight trains needed to be deconstructed, reassembled, and put on the right track to their next destination. It was like playing checkers, only with big clunky railcars and multiple tracks. The faster and more efficiently you did it, the faster boxcars got to where customers needed them to go. If you needed to get two green cars between two red cars with the fewest moves, Hunter Harrison was your man.”
- “said Thompson was a perpetual teacher when it came to management principles. “Hunter,” Thompson said, “you’re a hell of a car mover, but I’m not sure how good a leader you are.” 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.””
- “Harrison was also a teacher. He loved nothing more than a hard worker who was willing to learn and wanted to succeed. Bill Thompson and his father had seen something in Harrison, and Harrison had seen something in the twenty-something Creel. The CEO would spend an inordinate amount of time with this junior employee—more than half a dozen levels beneath him in the organizational chart—teaching him the business. It paid off for both of them. He’d put Creel in the right jobs at the right times, which was good for both the railroad and Creel. Harrison had trained someone who would become a standout operator in the industry and years later his successor as chief executive officer at a Class 1 railroad.”
- “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. Adding in a spare or two, that could mean eleven locomotives. Adjusting the schedule to two dayshifts—sixteen engine-hours—plus one afternoon shift and one nightshift to make up the other sixteen, the highest locomotive requirement for the day would now be six engines for the two jobs on the dayshift. Add in a spare and it was down to seven locomotives instead of eleven for the daytime job. If CN had fifty locations where this could be applied, that alone was 200 locomotives—or $400 million saved.”
- “Previously, CN quoted delivery times in days—plus or minus a day or two for flex. Edmonton to Chicago was seven to nine days. Sometimes it was five or six, other times ten or eleven. That drove Harrison nuts. He wanted to quote in hours, not days. If a train was scheduled to leave at 8 am, Harrison wanted it to leave at 8 am, whether there were sixty or one hundred cars. If you measured in hours, everything got more precise. Taking it even further, if you measured car inspections in seconds, they got faster too. Things began to change at CN in the latter part of 1999 when precision railroading kicked in. Faster trains and better service resulted in better market share—and yield followed.”
- “While at CN, Harrison penned (with the help of CN human resources executive Peter Edwards) two highly readable manuals on precision railroading, quoting everyone from Arthur Schopenhauer to Norman Schwarzkopf. In How We Work and Why: Running a Precision Railroad, Volume 1, he makes it plain: “Railroads are very capital intensive. Every $1.00 of rail revenue requires about $2.50 in net property, plant and equipment. In contrast, every $1.00 of truck revenue requires only about 40 cents in company-owned assets. The roads are paid by your taxes.” As a result, Harrison argued that “capital decisions must be made very carefully because we live with the consequences a long, long time.” If you were buying locomotives, you’d better know your business because you might have them for forty years.”
- “So much of what Harrison taught came down to assets. Few things bothered him more than underutilized ones. If an asset isn’t used, he wrote, “it’s a liability” because of the costs associated with owning it. “Railroads only make money when cars are moving. Track is a railroad’s most expensive physical asset. Track has a 40-year life. So why would we lay down tracks just to have cars sit idle?” He got specific—one mile of track in 2005, which was used to store about one hundred cars, cost USD $1 million. If you moved cars instead of stored cars, you saved a million bucks. The more efficient the operation, the fewer assets it needed. Railroads, he wrote, “were awash in long-lived assets”—track, locomotives, and cars. He went deeper. What if dwell times in yards were cut to eight or twelve hours instead of twenty-four? What if customers unloaded faster so their cars were there for half the time? What if average velocity went from twenty-five to thirty miles an hour? “Now we’re getting more cycles from the same equipment.” As he would say, a thousand little things equal a lot of money.”
- “The word also spread beyond CN. The first of Harrison’s books was translated into Chinese and given to the Chinese National Railway. He spoke to other North American railroads at their invitation about precision railroading, and he shared his ideas and books. But just because they got the Beatles’ songbook didn’t mean they could make music like the Beatles. Many—including Harrison—have asked why every other railroad doesn’t do or accomplish what he did. One person who worked with him years later said no one else had the same “unbending will” to see it through. Harrison believed that even if you’re successful, you have to work harder every year. “Success is a lousy teacher,” he wrote. “It seduces smart people into thinking they can’t lose.” He preferred types like those who came up with the household lubricant WD-40, named numerically because the inventors failed thirty-nine times before coming up with the magic formula. 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. Reading people, getting to know what motivated them—good or bad—was one of his strengths. Mostly, he believed money and a sense of purpose were the principal motivators, but he professed that some people needed to be hollered at while others needed to be stroked. He didn’t like the word “empowerment” and believed that when employees were permitted a long leash, it was a way for managers to ditch the responsibility to manage. He was also not big on the old saw that patience is a virtue. “I hate it when people say that.” He invoked “the team” and studied great sports coaches of the modern era. While many CEOs love reading biographies of political leaders, Harrison’s shelves were full of books about winning coaches.”
- ““Great teams don’t allow people who don’t want to really play to stay,” he wrote in his first manual. “It has to be the same with us. So, we have to convert these people or cut them. To be fair, we have to be very, very clear of the negative consequences of their unwillingness to give good efforts. If after all this, they refuse to pull with us, they can’t work for us. We must protect the livelihood of those who do care. I can’t let these few damage it for us all. I will not let this happen on my watch.””
- “One of the first things he tackled at CN were “early quits,” employees leaving work before their shifts ended. In some cases, he said, certain people were packing it in for the day after only four hours and claiming eight hours’ pay. It was, in Harrison’s view, “out of control” and “its leaders never wanted to address the situation.” When Harrison confronted a supervisor about the problem, he was told, “It’s worse than this at other terminals.” “Stop it now,” he told the supervisor, his voice louder than normal. “Some of those places won’t like this too much,” Harrison was warned. “They’ll shut the place down.” “Then start with them.” “What?” “I said start with them. If we’re going to have a fight over this, we might as well start at the toughest place.” That was Vancouver. His approach was to fly there and confront “the meanest sonofabitch” at the terminal and read the riot act. His stance worked. People snapped to attention. Harrison’s view was that you didn’t have to win too many fights to establish a reputation. Once you did, it would rapidly waft through the company. Change-agents like Harrison weren’t looking for votes to be re-elected. Although he could be extremely charming and a crowd pleaser, he claimed he was never interested in winning a popularity contest, although he clearly enjoyed it when adulation came his way and reacted badly to criticism. He was only half joking when he said he was even tempered. He came to work madder than hell and left work madder than hell. “Were there deep affections for Hunter? Not necessarily,” Jim Gray observed. “Was there respect? Certainly.” It wasn’t just the workers—and managers—who had to figure out a new way to survive at the company. Customers had to adapt to Hunter World. When deliveries changed to seven days a week and customers had to receive goods when they weren’t accustomed to receiving them, there was friction. Gray said pushback came from the agricultural community and container customers. For his part, Harrison said the only time he heard about griping from customers was in media reports, but clearly board members knew otherwise. Other CN executives heard it from customers as well. One customer was quoted as saying, “CN’s message to customers is: here’s our service, take it or leave it.””
- “Still, over time, it wasn’t just that costs were coming down at CN; revenue was rising. The railroad obviously still had customers—and in return for faster service, they were expected to pay a higher price. Requests for price cuts were denied. This would not be Harrison’s last scrape with customers. A cultural shift was occurring at CN, and it was agonizing for those who had difficulty embracing change. Harrison quoted the former chief of staff of the US Army, General Eric Shinseki: “If you don’t like change, you’re going to like irrelevance even less.” He pointed no further than the fate of the cassette tape and the compact disc. As for those who say businesses just mature and get commoditized, Harrison wrote in one of his manuals, “This is simply the excuse of losers… Time after time, people and organizations entered stable, mature markets and turned them on their ears. Häagen-Dazs did it with ice cream, Starbucks did it with coffee, and CN keeps doing it again and again with railroads.” Harrison was fond of the word “mud,” arguing it built up in organizations—just like under railroad tracks—and created rot. The so-called Hunter Camps were retreats where he would sermonize to employees about washing away that mud, the obstacles to communication in an organization.4 As he told Progressive Railroading, the company was trying to convert people. “These camps are a way for us to get to the masses quicker.” Harrison was taking the church of railroading to wayward parishioners. The company started the camps in 2003 to indoctrinate or “Hunter-ize” 2,000 of CN’s 3,500 non-union employees from all levels of management within five years. They were also the basis for writing the manuals. Co-author Peter Edwards went to almost every one of the retreats, taking notes each time or whenever he spoke with Harrison, jotting down what he said on bar napkins or hotel pads. Once, when Edwards was stuck in traffic with no writing paper, he pulled the insoles out of his shoes so he could scribble down what Harrison was telling him on the phone. It was another indication of a Harrison staffer running through walls to do his best for him. Edwards allowed, however, that, unbeknownst to Harrison, he was once hospitalized for a heart issue, presumably because he drove himself so hard, not unlike Keith Creel experiencing what he believed to be Bell’s palsy due to stress. Harrison drove himself hard and expected the same from his people. Campers were put up in luxurious digs like The Breakers in Palm Beach. The message was that CN was first class and expected first-class results. Attendees were encouraged to ask questions, which got Harrison fired up and also illustrated an employee’s level of engagement. “I’m impatient. I’m demanding,” he told Progressive Railroading. “I’m asking people to stretch.””
- “In rapidly changing times, experience can be your worst enemy.”
- ““Most business leaders talk about the importance of people, but Hunter actually lives and breathes that belief.” Harrison wanted the campers to internalize his key principles—provide service, control costs, utilize assets properly, concentrate on people, and not get anybody hurt. 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. “Don’t let ’em just be a worker bee,” he implored, “’cause that’s what you’ll get.” And if there was a great person working in another industry, he wanted that person at CN. “Find me a good athlete and we’ll develop ’em,” he said. “We’ll make ’em into what they need to be.” He wanted those in the room to be passionate, arguing that people—employees—were dying to do something that mattered, to be inspired. “Just care,” he pleaded. In fact, Harrison drew inspiration by speaking to them. He told the room he viewed Hunter Camps as the most important thing he could do at the railroad—changing the culture. He lectured that most people underestimate themselves, while he wanted them to give their all.”
- “While he taught employees the principles of railroading during that camp in August 2005, CN was reeling from the collision of two trains in Mississippi the previous month that killed four employees. A fire followed the crash, destroying evidence. A visibly agitated Harrison told the room that it was unlikely the cause of the crash would ever be determined. Twelve years later, Harrison still remembered the name of a man killed in that accident, Buddy Irby. He told the silent room that the railroad’s rules were “written in blood.” To underline the point, he recounted a grisly incident he’d witnessed early in his career. A colleague had been run over by a caboose because the employee had ignored a rule and run across a track. Harrison had fetched his trench coat and covered the man, not only for warmth, but so the injured worker couldn’t see what had happened to his leg, which he would lose. While focusing on safety was first of all morally right, it was also good business. If you wanted trouble, he would say, have a derailment. Trouble was often avoided by a deep understanding of railroading—and a deep understanding also meant measurement, something Harrison was big on.
Railcars presented a good example. CN classified them by Originating and Destination points, or O&Ds. When he wrote the first book at Canadian National, the railroad had more than 200,000 O&D combinations. “Although this is a daunting number, about 5% of these O&D pairs account for more than 80% of CN’s traffic volume. Optimize that 80% and the remaining 20% pretty much takes care of itself.” When you read that quote, you can visualize Harrison the young trainmaster in the tower in Memphis, moving boxcars. Now, he was trying to teach thousands of employees to be smart trainmasters on a grand scale.“ - “In 2002, with Harrison having been COO for more than three years, CN’s OR was 69.4 percent, already far and away better than the pack. CP’s was 77; Norfolk Southern’s, Union Pacific’s, and BNSF’s were in the mid- to high 80s; while CSX’s was the caboose at 92. Back when he was at Illinois Central, he said outsiders viewed its league-leading operating ratio as an aberration, achievable only because IC was so much smaller than the rest. “Then we got to Montreal. Big time. No more little-bitty-doesn’t-matter aberration.” Along with Tellier, he proved you could get a low operating ratio at a major-sized railroad. By the time his second manual was published, CN’s operating ratio had moved from the worst in the industry (more than 97 percent in 1992 when Tellier took over; 89.3 in 1995, the year of the IPO; and 78.6 the year before Harrison arrived, in 1998) to 61.8 percent for the year in 2006, the best in the business. If you’d invested $75,000 when CN went public in 1995, it was worth a million dollars by 2008. The railroad had moved light years from the early 1990s, when Michael Sabia had said to Tellier that “just getting to one dollar of positive cash flow would be good.” In those days, the expectations were low to say the least, particularly for CN, but also for those in the industry who had never dreamed of such a low OR. “At the time,” Sabia recalled, “people thought that it was just contrary to the laws of physics that a railroad could run at an operating ratio meaningfully south of 80.” Not only was CN in the 60s, but it would eventually break through with quarters in the 50s, unfathomable to the other Class 1’s. More than half of the employee base at CN had joined the stock purchase plan, and improvements in the operating ratio and the stock price benefited many. It wasn’t just employees and the broad shareholder base that benefited. The man who was for years the world’s richest human, Bill Gates, profited mightily as well. His investment vehicle, Cascade Investment LLC, was and continued to be the largest shareholder of Canadian National.””
- “While Harrison monitored hugely successful investments, he never hesitated to get in the trenches. In 2008, while scrutinizing CN’s network via one of his screens at home, he saw a problem. Something was amiss between Jackson, Mississippi, and Memphis. As described in Trains, Harrison called the dispatcher in Homewood, Illinois, to investigate. “I’ll do the dispatching tonight,” he told the employee. “Just stay on the phone and I’ll dictate the needs and priorities. Here’s what we want to do.” Ultimately, he pulled an all-nighter—as dispatcher—to solve the gridlock that was affecting the whole railroad. While he did, the employee was treated to a master class. Such boots-on-the-ground moments are now Harrison lore. “Great leaders,” Laird Pitz said, “they kind of have this thing where they can feel the pulse of the business.” Harrison traveled constantly, so employees everywhere saw him in action. Although he argued strenuously with him and said he had to tolerate his lectures, Buzz Hargrove, the former head of the Canadian Auto Workers union (CAW), which represented CN workers, liked Harrison.”
- ““ I was not your typical Canadian operating chief or CEO,” Harrison said. “CEOs in Canada are not operators, they’re politicians. They don’t really get their hands dirty with the business. I’m not a big back-slappin’, banquet-goin’, CEO club” kind of guy, he added. “Nobody said anything to me about running for office in Canada.””
- “When a blow or even a personal slight came his way, he was touchy and defensive about it for years. He was a star performer—how could they do this to someone like him? The money was important, but the feeling of being betrayed was undeniable. Reflecting on his departure from CN seven years after the fact, he allowed that his feelings may have been immature. The people at CN were great, except for a handful who, for whatever their reasons, had grown tired of him. Companies, he said, don’t do very well with executive exits, adding that perhaps executives shouldn’t be so sensitive. But there was no disputing it—a gulf had built up between Harrison and CN. It would expand into an all-out fight two years later.”
- After leaving CN, Harrison focused on horses – his daughter is an equestrian and got married to an equestrian too. Harrison had 3 farms that came top among private competitors. Harrison though started growing restless and that made everyone restless at home. It was around this time When Pershing Square started looking into CP – and the name Hunter Harrison kept coming up as Paul Hilal researched the industry in depth. He finally called Harrison.
- “Hilal was careful not to let Harrison know the real purpose of his call—to secure him as Pershing’s candidate to run CP. Hilal positioned it as a “teach me” call about the industry. Harrison thought it would be a ten-minute conversation. But Harrison was a talker and so is Hilal. It was three and a half hours. Although he was fascinated with what Harrison was saying, Hilal was extremely uncomfortable during the call. He had to go to the bathroom, but he was afraid to end the conversation because he worried that he might never get Harrison on the phone again. “Gold is coming out of the phone and I had to go to the bathroom,” Hilal said.”
- “On the surface, if you were to sketch two characters who would be polar opposites, you might draw Bill Ackman and Hunter Harrison. Ackman is a New Yorker who went to Harvard Business School, while Harrison went to work as a grime-covered laborer at a railroad. Ackman is a polished, northeastern intellectual, while Harrison was a rough-around-the-edges, self-educated Southerner. Ackman grew up in an affluent suburb; Harrison came from working class stock. Nonetheless, they had much in common. Ackman reads financial statements on vacation and Harrison didn’t like to take holidays, or at least ones that lasted more than a few days. A book about Ackman, Confidence Game by Christine S. Richard, describes him as “brash, blunt, almost neurotically persistent.” The same could be said of Harrison. Both were fierce, competitive, single minded, and brainy. Both were fervent believers in their own ideas and skills. Both would yell at people when they deemed it necessary, a manifestation of their zealotry. As Ackman told Jacquie McNish in the Globe and Mail in 2012, “I’m exactly who I appear to be. I am unfiltered, for better or worse.” No one would ever accuse Hunter Harrison of being otherwise. They liked and respected each other, and Harrison said they could do business on a handshake (Harrison said he could do same the same with Hilal).”
- “His health issues couldn’t help but raise the issue of mortality. He professed on more than one occasion that he had come to terms with the fact that he didn’t have much time left. Dying didn’t scare him, he said. “Is there some anxiety, apprehension, what’s it going to be like? Yeah,” but not fear. What he worried about was his family, Jeannie, his children and grandchildren—a tight family unit. Would they be okay? What he meant was would they be properly provided for, almost an absurd question given the accumulated wealth. But the tradition in the family was that there was always a Big Daddy, going back to his great-grandfather. Big Daddy meant being the protector and the provider, a role that fell to him. No matter how much money he’d made, it was an emotional mindset he took seriously.”
- “Harrison was also a true believer in the “significant emotional event” for employees. If that required a culture of fear—or the label of it to highlight emotional events that change behavior—so be it. Nothing would get in the way of Harrison making a railroad more efficient and more profitable. That was always the end game. And he was all about the end game, what you’re trying to achieve. Looking back, the Thompson era was surely nastier than Harrison’s era. Pisser Bill didn’t hold Hunter Camps.”
- “Although Harrison and Jobs were different, there were commonalities. Both had problematic relationships with their fathers. Both staged comebacks. Both disliked boards. Both could command a room and hated PowerPoint. Both worked while sick. Isaacson, however, portrayed Jobs as off-putting in the extreme. While Harrison was hard-headed, brusque, and curmudgeonly, he was also charming, funny, and generous. The Southern manners he learned as a boy kept him from being intentionally rude like Jobs. And they had zero in common when it came to how each dealt with the arrival of a child. Jobs abandoned his daughter. Still a teenager, Harrison woke up to his new reality and accepted it. But both were revolutionaries, ahead of everyone else and not afraid to tell them, feelings be damned. One of Jobs’s manifestos—written with two teammates—was about people like himself, and it could easily apply to Harrison. “Here’s to the crazy ones,” he wrote. “The misfits, the rebels, the troublemakers… the people who are crazy enough to think they can change the world are the ones who do.” While there is little doubt Harrison was the not-so-secret ingredient, he would also point to the teams he developed at each stop along the way. Aside from his family, there’s no question he was proudest of the people he coached who, along with him, created enormous shareholder value—and what he described as a vastly improved transportation system. Trains that once took several days to get from Chicago to Vancouver now take fewer. Freight gets to where it needs to go faster, on time, on schedule. Thirty years ago, he said, no one dreamed what railroads could be or do. In his estimation, the importance of the industry couldn’t be overstated. People are addicted to Facebook and their smartphones but have no idea how goods that form the backbone of the economy get shipped from A to B. He truly believed the work he and his teams accomplished made both the Canadian and US economies more competitive. If the railroads slipped, economic transactions were delayed and GDP could falter. Not only did the railroads he ran become more efficient, but so have others as they’ve tried to catch and match the roads over which Harrison presided. His competitors improved because he raised the bar. There was, according to John Baird, a difference between a chief executive and a leader. Harrison was a leader, he said. “I know the way. Follow me.””
- “One thing is certain. For better or for worse, shareholder value is the ultimate arbiter of the system within which Harrison toiled. Businesses, he argued, would not exist in the first place without the owners—the shareholders. And he or she who makes the most for shareholders wins. If you didn’t think like an owner, Andy Reardon said, Harrison didn’t have much time for you. Bill Gates, whose investment vehicle profited in the billions by being the biggest shareholder in CN, once scribbled a note to him: “I do hope you stay even longer as CEO! You have done an amazing job.” That was the game. And he never played any game halfway—not golf, not show jumping, not railroading. He had to be the best. His dad, Tank Harrison, always told his son, if you can’t go first class, don’t go. Hunter Harrison not only mastered railroading, he mastered the game. And his father was right. “Bubba” would run the railroad. Four times.”
Tarek Naim's Blog 