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March 2007



Rail News: Canadian National Railway - CN

Postcard from Hunter Camp - Hunter Harrison preaches his 'how we do what we do & why' gospel to CN's next-generation leaders



by Pat Foran, Editor

It’ll take time for Canadian National Railway Co. to inculcate 20,000-plus employees with the principles of “precision railroading,” a concept President and Chief Executive Officer E. Hunter Harrison has championed since the late 1980s. It helps to have believers out there, walking the talk, and CN does. But Harrison would like to have more.

One way is for Harrison to reach more of them himself. Enter “Hunter Camps,” two-and-a-half-day sessions at which the process-oriented Harrison imparts his “how we do what we do & why” message to 20 employees who’ve been identified as leadership candidates.

“It’s not unlike a preacher. Every Sunday morning, they try to convert people,” says Harrison, who’s been at CN for eight years and in the rail industry for 40. “What we’re going through is a culture change. These camps are a way for us to get to the masses quicker.”

Helping Harrison preach the precision gospel is CN Senior Vice President-People Les Dakens, who details the ways CN aims to effect cultural change through the ABC (Antecedent-Behavior-Consequence) model of managing performance. “Many of us went to Boy Scout camp and learned about rules, and a little about life,” says Dakens. “Campers also would rally around the flag, which is kind of what we’re doing here.”

CN began conducting the camps in 2003 so that Harrison could connect with up-and-comers in CN’s operating department. Now, the goal is to “Hunterize,” as Dakens puts it, 2,000 of the railways 3,500 non-union employees by 2008’s end.

“People are really responding to the message,” Dakens says. “You’ll see people from IT and finance get a better understanding of the railroad, and the operating folks get a better appreciation of what they are doing to support the railroad. It’s helping everybody connect the dots.”

I had the privilege of witnessing Harrison and Dakens try to reach 22 more CNers during a camp held Dec. 4-5, 2006, at The Breakers Hotel & Resort in West Palm Beach, Fla.

Why they’re here
The campers seem to be in pretty good spirits as they trickle in for the first session. Participants include trainmasters, superintendents, payroll managers, legal counsellors and labor relations execs from across the CN system. Seven have been with CN for more than two decades; three, fewer than four years. One’s been with the railroad only six months.
“We’ll spend a lot of time speaking about behavior and how all of us as leaders have to influence behavior,” Dakens tells the campers as they settle into their seats. “It’s also a great opportunity to network.”

And to engage in dialogue with the CEO.

“The more questions you ask, the better he is,” Dakens says.

Not that it takes much for Harrison to lock in. He’s a very visual orator; Harrison’s hard-scrabble vocabulary is a tonal match for his homespun storytelling. Sometimes, he’ll relate anecdotes as if he were conducting a self-Q&A, posing a question and answering it in rapid-fire fashion. Other times, he’ll shift gears in mid-thought, challenging campers to keep up.

“I’m impatient,” Harrison acknowledges. “I’m also demanding. But I’m asking people to stretch.”

By doing so, he’s stretching, too.

“Instead of solving problems himself, he’s teaching others to do it,” Dakens says. “That’s partly what Hunter Camp is all about.”

As attendees soon learned, Hunter Camp is also all about Mr. Harrison cutting to the chase. After succinctly summing up the North American rail realm since the Staggers Act and CN’s post-privatization successes, Harrison asked campers to keep four words in mind:

  • Leadership. “We looked in the mirror back in ‘98-’99 and said, ‘We have some weaknesses in this area,’” Harrison says. “Why? We haven’t taken the time to train. Why is that a problem? Because there’s so much change going on.”
  • Change. “In rapidly changing times, experience can be your worst enemy,” he says, paraphrasing oil magnate J. Paul Getty. “Reflect on that for a moment.”
  • Why. “It’s the most powerful three-letter word in the world,” Harrison says. “Just tell people why we do what we do. If you will take time to explain to people why we have to change, people learn to accept the change better.”
  • Mud (as in misinformation, miscommunication or anything that muddles the message). “Mud consumes organizations, folks,” he says. “I’m trying to run around it because some of you leaders are builders of mud pies — ‘I know what they said, but here’s what really matters.’ That’s something we’ve got to change.”

Harrison brandishes these four words frequently during the next two days.

“Stay with me on this,” he says.

Just as they have with the precision railroading concept that Harrison championed during his late 1980s-to-late-1990s reign at the Illinois Central Corp. and honed for the past eight years at CN.

Precise & Principled
Precision railroading is all about providing good service — or doing what you say you’re going to do — at an acceptable cost, Harrison says. It’s about developing dock-to-dock trip plans for individual shipments rather than scheduling terminal-to-terminal transit times for trains. Meet your schedules, and you’ll reduce terminal time and improve asset utilization.

“We’ve done great, but we’re in eighth grade with the scheduled railroad,” Harrison says. “We’re not close to a PhD. But there’s power here.”

Particularly if they stick to CN’s five guiding principles: service, cost control, asset utilization, safety and people.

“Every process change is not a miracle,” he says, citing example after example of CNers working through the “mud” and shoring up previously poor-performing yards and terminals. “We’re all better than we give ourselves credit for, or we hold too much in reserve.”

Witness CN’s massive MacMillan Yard. “In 1998, it was probably the worst operating yard I’ve ever seen,” Harrison says. “Today, it’s the best.”

Implementing remote-control technology made a difference, but changing the Toronto yard’s “early quits” culture did wonders. Dwell time has been nearly halved since the late 1990s.

“Now, the place is world class,” says Harrison. “But why didn’t anyone stand up and say this was wrong? How did that evolve?”

He’s getting into it now, he’s zeroing in: “See how things happen? See how things work, how cultures can become in-bred? Guess what it does? You compromise service, you compromise safety.”

One mind-set change Harrison believes CNers clearly have embraced is the need to get better at asset utilization. “We reduced the [locomotive] fleet by 30 percent, from 1,900 to 1,300, by simply changing switches,” he says. “We worked with locomotives, rail cars — a lot of things. We started to gain momentum. And guess what? The operating ratio came way down.”

But there’s still room for improvement.

“Remember, it’s not just about moving cars and trains — it’s about doing the right thing,” Harrison says. “Every time you misbehave and make the wrong decision, there’s a price to pay.”

Nowhere is that more apparent than on the safety front. A culture that historically permitted the breaking of rules continues to frustrate Harrison.

“I am a stickler for the rules — I don’t want people to interpret what we’re saying,” he says. “When I got to CN, I said ‘zero tolerance’ and people said, ‘What?’ That kind of culture is hard to change. Sometimes what it takes is to shake people into doing the right thing.”

By “shake,” Harrison means a “significant emotional event” (SEE), citing a term he picked up from behavioral consultant Morris Massey, whose video on that very subject campers will view at the end of Day One. SEEs run the gamut — from workplace injuries (or worse) and disciplinary action on the job, to myriad personal crises at home.

Cultivating Change
Unfortunately, railroading has more than its share of tragic SEEs, says Harrison, recalling a four-year-old deadly collision between two CN locomotives that could’ve been prevented.

“Again, it’s just so hard to change culture,” he says. “I don’t want to have to change it one funeral at a time.”

But that’s often the way cultures do change, he concedes. Nevertheless, CN must try harder to embrace and effect change.
“This is about people, folks,” he says.

He sheds his sport coat as he comes out from behind a makeshift lectern and sits on a table. He’s a little closer to the campers.

“People,” he says, letting the word linger. “They’re assets, not liabilities.”

And CN leaders and leaders-in-training must think and act accordingly.

“Here’s why: If you think they are liabilities, you will contract out everything,” Harrison says curtly, as if he were gearing up for a combative conversation. “We’re a railroad; we insource.”

He isn’t finished.

“We don’t just say these things in this room — we act like we talk in this room,” he says, borderline angrily. “Last week, we talked about how much contract work we’ve been doing. Well, we’re not going to contract trackwork out. I believe in keeping a stable workforce. So I said, ‘No more contracting.’ People abuse it, they’re going to lose it.”

Bottom line: CN must continue to recruit the right people, clearly define their roles, nurture them, reward them and, ultimately, figure out how to retain them. If people understand what’s expected of them, have the tools they need to do their job and are rewarded when they do it, CN leaders will be able to say that they’re actually exercising leadership.

“If you take ‘people’ and the other four pillars, season them heartily with integrity and passion — and passion, in my view, is just caring — and you know what we’re about,” Harrison says. “If you can unleash the power of people, it’s amazing what can be done.”

On that note, the campers break for lunch.

The afternoon session is a little less intense, as Harrison spends less time talking theory and more on practical problem-solving approaches.

“How you make the transition from this environment, where it’s easy to talk about, to the real world — that’s the real challenge,” he says. “Some of you are thinking, ‘I can’t do this by myself.’ You’re right. That’s why we need champions to stand up.”

Conflicts & questions
To identify them, campers must know their direct reports better, he says. They’ll also need to be more proactive on the problem-solving front.

To that end, campers were asked to come to the session ready to share a challenge they’re facing, with Harrison offering potential solutions and thought processes a precision railroader would use to “do the right thing,” as he puts it.

A camper says he’s having trouble supervising people he “hired out with” in the 1950s. “They’re basically looking to retire, criticizing management, and so on,” he says. Harrison’s response: You can’t win over everybody. “Be upfront, be fair and ask them to produce,” he says.

And if that doesn’t work, the supervisor might need to create an SEE.

“One way to deal with cancer is you cut it out before it spreads,” Harrison says. “The tragic thing is, we created that employee. If for 30 years this has been allowed to go on, and somebody comes in and suddenly says ‘change,’ it’s not going to be easy. But good leaders make the tough calls.”

Other campers offer up challenges — from issues surrounding the implementation of an onboard locomotive recording system (“A bad thing in this world is too much supervision, but the worst thing in the world is a weak supervisor.”) to questions about how to appropriately accommodate a disabled worker. (“I don’t believe in light duty, and I don’t believe in modified duty ... but if our policy is too restrictive or doesn’t fit, call me.”)

The afternoon session ends with campers viewing the aforementioned Massey “SEE” video.

Have Harrison’s words resonated with campers today? Have they bared their professional souls enough to Harrison’s liking? Are they buying in?

He’ll let them know soon enough.

Campers begin Day Two by watching another Massey video, “What You Are is Where You Were When.” The overriding theme: Ignore people’s values at your own risk.

“When we ignore them, we can seriously screw up,” Massey says in the video. “What people think is right, wrong, normal — you name it and you’re correct. The truth is, it’s OK to be different.”

After the tape ends, Harrison offers up what he terms as “reality check” based on his observations the day before.

“How many of you felt a little uncomfortable because it was difficult, because it didn’t fit your hymnal?” he asks. “I could see it. A lot of you were formed with different values, different type cultures. And that’s one of the things we’re trying to gauge.”

He pauses ... then says loudly: “If you don’t think I didn’t see mud in this room, you’re wrong. A few of you — I’d say four of you — are still saying, ‘B.S. — I’m not buying it.’ Look, you’re going to make yourself difficult doing that. Decide to buy in or not, but don’t turn your back on the cultural differences. You have to be aware of them.”

It’s just one of the things campers will have to be aware of if they have any thought of becoming a “true, good leader,” Harrison says as he offers a few tips:

  • Be a good follower. That means taking direction and recognizing that railroading is a team effort, he says.
  • Know your role — or “understand where you fit in the pyramid,” as he puts it. “You can’t individually go off and do your own thing.”
  • Communicate the game plan — or the “Why?” — effectively.
  • Instill confidence. “If they don’t have confidence in you, they’ll waver,” he says.
  • Inspire people. “It’s one way to get people to stretch. We’re all better than we think we are.”

Would-be leaders also need to manage and reward performance, as well as apply consequences, which Dakens will delve into later.

“A lot of people have a hard time telling people they’re not doing their job,” Harrison says. “But, again, the real great leaders make the tough calls.”

It’s lunch time, and campers originally were going to spend the afternoon golfing, fishing or otherwise recreating. But it’s a windy, rainy day in West Palm Beach, so they elect to finish the session this afternoon. And they’ll do so without Harrison, who’s preached enough for one camp.

“These sessions are always learning sessions for me — I hope they are for you,” he tells the campers. “We’ve got a long way to go ... but you’re part of the best-operating railway in the world right now. We’ve been doing things that are unimaginable — especially with the operating ratio, which isn’t the be-all, end-all. But it indicates we’re doing things right.”

That shareholders are happy — and customers are getting happier — is another indication, Harrison adds.
“All I ask you to do is keep getting better — execute on a day-in, day-out basis,” he says. “Do what we say we’ll do, and we’ll all continue to have success.”

Getting ‘Hunterized’
After Dakens discusses the ABC performance model, the CN leadership model and organizational development continuum (for more information, see page 2), he thanks the campers for being active participants, each of whom receives a bronze-colored “Hunter Camp” pin. He also tells them what to expect when they get back home.

“Somebody will say, ‘Oh, you went to a Hunter Camp. Isn’t that cute? You’re going to get Hunterized,’” Dakens says. “Is there a little bit of brainwashing at Hunter Camp? You bet. The point here is for the message to sink in.”

Campers also will be grilled about getting to go to West Palm Beach. Don’t sweat it, Dakens tells them. You deserve it.

“We’re at the top and we want to stay there,” he says, reiterating Guiding Principle #5 (“CN is powered by passionate people”). “That’s what this thing is all about.”



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