D. Lynn Kelley
Senior Vice President, Supply Chain & Continuous Improvement,
Union Pacific Railroad
January 23, 2018
BG: Lynn, thank you so much for taking the time to meet with us. You have quite an
interesting career path. You grew up in Michigan?
BG: Where in Michigan?
LK: Detroit Area. Suburbs.
BG: Talk a little bit about your early childhood: education, where you left off to start a family, went to school. Could you talk about that a little?
LK: Sure. I actually had a really good childhood, though I have to tell you, I was a rebel.[laughs]
BG: Well that sort of comes through…
LK: Could you tell? You know when you get to a certain level in an organization and they send you all those personality tests? At one point they told me that my test came back, and only four percent of the population has this characteristic as a dominant personality trait. I have it. When somebody tells you to do something, you do the opposite. That’s not a good thing in the corporate world in many cases [laughs].
When I was young I had to find my own path, on my own. That meant that even though both of my parents went to college, and they wanted me to go to college, I was not going to college. I joined a band, and I played with this band that traveled around the country.
BG: What did you play?
LK: I played flute, keyboards, and sang backup.
BG: And what was the name of the band?
LK: Oh, we had different names. We had a few albums. We formed ourselves and reformed ourselves. Anyway, for a couple years I did that.
BG: That’s a great education in itself.
LK: It was really interesting. This was the early ‘70s; kind of the tail‐end of the hippies.
BG: Did you ever open for any major…
LK: No, we were pretty much on our own. I’ll tell you what, it was hard going to college afterwards. I started my Bachelor’s when I already had two children. So that was the hard part. Look, I never would have had that experience any other way. You’re young once, and I met people I never would have met. It was interesting. And then I got married young, at 19. We sang our vows, I had made my dress, and I had daisies in my hair.
BG: And this was in Michigan?
LK: Yeah. On the hillside, outdoors. It was different. Nontraditional. I didn’t have a college degree, and at some point, I had to get a real job. All I could do? I had typing skills, so I became a secretary. I was pregnant with my daughter at 25. At that point I was making basically minimum wage, and we had my daughter in daycare, so I just decided I’ll quit that and stay home. I had my son and daughter back to back.
Then the energy crisis hit the US. The automotive industry suffered huge layoffs. My husband was working for General Motors. We had a house with a house payment, car payments, and we had no income. I knew that I could get a job as a secretary, but I decided that I had two children, and needed to grow up. I was 28, and I went to school full‐time, and I worked full‐time.
I was Administrative Assistant at a hospital. By the time I left there seven years later, I went straight through from my undergrad right into my Masters, and then moved my way up to Chief Operating Officer at the hospital.
BG: Where is the hospital?
LK: Downtown Detroit, called Doctor’s Hospital; a little private hospital right by the river. That was my early path.
BG: I think I read somewhere that one of your supervisors pushed you to keep going for the degree. Is that right?
LK: Yeah, that was the president of the hospital. I was actually his assistant for my first job at the hospital. He knew, obviously, that I was getting my undergrad at night. And then he said, “Listen, you need to go on for your MBA.” There was a program ‐‐ an MBA lock‐step program ‐‐ and it was through Michigan State on their satellite campus near Detroit where the automotives were. They let 65 people go in a year, and they saved half of those for the automotives, and the other half of the slots they filled with anybody. My old boss was tied in with Michigan State, and he actually put in a good word for me. I got into that program.
BG: And that was a real turning point.
LK: It really was.
BG: So, it took you seven years to get the MBA?
LK: Two years, so four and two, with a little bit of extra time in there.
BG: Just in looking at that, you became the hospital administrator in your early 40’s?
LK: No, actually I was in my 30’s; about 33. By the time I was 33, I was just starting the MBA program, and I was just moving into the role of Chief Operating Officer.
BG: Just looking at that experience, do you see any connection between your subsequent career choices, or the career that you’ve had? Is there any connective tissue between the hospital, the aerospace industry, and railroads? We’re trying to piece that together.
LK: I think things are more alike than unalike no matter where you are, but every place hasits own culture. That’s often more different than the actual work. Work is always going to be slightly different, but leadership is leadership, supply chain is supply chain, HR is HR. But the cultural piece, for me ‐‐‐ being in different worlds and places ‐‐ the cultural piece has been the most interesting. Even working internationally a couple of times. I’ve gotten tripped up before on culture. I can always figure out the job, but if I’m going to get in trouble, it’s the culture.
BG: That’s an interesting point, because I’m going to talk about that a little bit later, with Union Pacific, because you’re talking about a company with a big heritage.
BG: Staying within the hospital for a little bit, how long were you Chief Operating Officer?
LK: I was there about seven years, so for that last two or so years, I was Chief Operating
BG: And then what was next?
LK: What happened next is, in one year’s time‐frame my mother died, my husband’s mother died, and my husband’s brother died, all in the same year. I’d gotten very, very close to my mother at that point. What I realized is that when I started working and getting my degree at the same time, I had done it with the pure intention of being able to support my family. But somewhere along that path my priorities had switched, and it was the thrill of the job, the thrill of moving up, the thrill of getting the next degree.
What I realized, in one year losing everybody that was so close to us...my husband was in crisis, I was in crisis. I looked, and I said, “What do I really care about? Why am I doing all this again?” Here I was, on call all the time, and that was before the age of cell phones, so you had a beeper, or you’d have to find a payphone. It was a really hard life. I was burnt out from all the school back to back. I just said, “Wait a minute; what’s really important in my
life? I realized it was my family, really, at the end of the day, but I love working. It’s not that I don’t work, but I need a job that will allow me more of a life. And being in the office of a small hospital without a cellphone…
BG: That’s 24/7.
LK: So, I talked to a recruiter, and I said, “Alright, I’ve got this track record, and I’ve got an MBA. Find me something that’s not so challenging in regard to my time. I love the work, but not the time.” I needed to have more of an 8‐to‐5 job. And she said, “Well, you know what you probably never realized when you got into health care? Unlike a lot of other fields, health care skills are not recognized as being transferable in the marketplace. So, you can be a great president of a hospital, but you probably won’t be able to run a manufacturing
firm or a service firm or an insurance firm. But if you’re any of those, you could probably, in some way, run a healthcare facility or nursing home. So now you’re talking health care, and you can go into a larger hospital system or job, but you’re not going to be able to change fields easily.
So, then I thought, if that’s the case ‐‐ and my husband was working again at that point, since the automotive industry had come back ‐‐ what do I really want to do? I love school, but I never got to go to school and really enjoy it. I always worked full time and took care of the kids. Why don’t I see if I can get into a PhD program ‐‐ quit my job and go to school? I applied to a bunch of programs. By the way, Michigan turned me down [general laughs]. I
really wanted to go to Michigan but…
BG: Did you post that rejection letter on your…
LK: [Laughs] No! Both of my kids went to Michigan, so I like them at the end of the day. But they didn’t accept me. But Wayne State University gave me a full‐ride for the PhD and a Regent Research position so that I could work half‐time. They wanted my MBA skills ‐‐ my business skills ‐‐ to run a small institute, a grant‐writing institute for developmental disabilities. It was really a perfect fit. I had a lot of flexibility, so I was able to do that.
BG: What was the PhD in?
LK: Evaluational Research, which was quantitative and qualitative analysis. Most of the classes were statistics, and that’s when, ultimately, I became a statistics professor after that. The really intriguing part of this degree is that not many degree programs that have a statistics foundation also focus on the qualitative aspect. So, I learned to run focus groups to create surveys, but then to analyze them statistically or in qualitative ways; how to do
even more observational research. I loved the degree, a really great degree for me.
BG: Well, the timing was interesting, since the 80’s were ‐‐ this is in the 80’s now, right?
LK: Yes. Late 80’s.
BG: I remember all these books were coming out about qualitative management, continuous improvement. And ‘good‐to‐great’ comes later, but there’s all this looking seriously at change in the workplace, right?
BG: So, you were coming in right at that moment.
LK: Yeah. When I was in my MBA program, we ended up ‐‐ because it was such an automotive class ‐‐ we did one semester in Japan at Toyota. I don’t know if you remember the NBC white paper where the Japanese were taking over the automotive industry, and it was all because of this total quality management, which actually was foundational in Dr. [J. Edward] Deming, who was a statistician who came from the US. That intrigued me. In fact, I
applied a lot of those lean ‐‐ now we call them ‘lean’ ‐‐ lean tools in healthcare when I was at the hospital. There was a book that came out, and in the very first page it mentioned what we were doing at that hospital. I think it might have been one of the first hospitals to apply lean tools.
BG: How would you summarize lean tools? Because I think it’s applicable to later on in your
LK: It is. There are a couple elements to it, but primarily it’s really looking at what customers value, whoever they are, whether its internal or external customers. And then developing systems around what they value, trying to deliver the best thing to them, with the best quality and the best value.
BG: That’s great! So, you’ve got your PhD. You’re teaching. And then Textron? Is that next?
LK: Yes. I seem to go in seven‐year cycles. I taught for seven years. I was doing a lot of consulting for Textron before it was Textron. You mentioned that I’m aerospace, but I’m actually planes, trains, and automobiles because I actually started with automotive. Textron had an automotive division. Before Textron had bought it, it used to be a fastener company that was privately owned, with 15 manufacturing facilities in Michigan. They approached me
because they wanted a lean manufacturing methodology for all their 15 factories. So, I helped them design it and helped them put it in place. Their productivity increased, their employee engagement increased, their quality, their sales ‐‐‐ everything increased. They won the Michigan Quality Leadership Award. That caught the attention of Textron. Textron was in the process of becoming the largest automotive fastener company in the world. They were buying fastener companies all over the world.
BG: What’s a fastener?
LK: Nuts, bolts and screws.
BG: Ok. Anything that ties it together.
LK: I can tell you that one of the companies that Textron bought in Europe did the original rivets in the Eiffel tower. So, it’s pretty cool. That’s the fasteners. So, this is a job you can’t refuse. One day they came to me, and they said, “Textron just bought us, and they put us in charge of all the fastener companies, and they’ve also just bought the French and the German fastener companies that are combining, and they want us to take somebody over there and teach them to do what we did in Michigan with these 15 factories. Will you do it? We’ll offer you a job and you’ll live in Paris.”
LK: I mean, what do you say to that?
BG: When was this?
LK: Oh, boy. I don’t remember exactly.
BG: Was it in the 80’s?
LK: No, it was in the 90’s at this point. Actually, it was 2000; late 90’s, 1999 and 2000. My daughter was in college, my son was going to be starting college, so I did it.
BG: How long were you in Paris?
LK: For a year. It was great.
BG: There must have been so many highlights. What was the most memorable?
LK: No one’s ever asked me that. I think the most interesting thing ‐‐ and I talked about culture a little bit ‐‐ is that I underestimated culture, and I underestimated the differences in culture between countries. I was working half‐time in Germany, half‐time in France. I was going to about six plants in Germany, and six plants in France. I would go on a round‐robin; I’d go around Germany, and then I’d go back to France and then back to Germany.
When I went there, people told me, “Oh yeah, people have different cultures depending on where they live.” And I thought, “Well, yeah…Indiana, Colorado, those are different cultures. I can deal with different cultures. What’s the big deal?” And then I realized these are just totally different ways of operating, and people who are very proud of their cultures in a good way, in the sense that, the only thing that keeps them intact when they’re so closely and physically grouped together as countries is that they know what their culture is. They’re proud of it, and they know what the other culture is. That’s not what they are. They have to protect their culture. You very much have to be aware; are you violating the culture? Oftentimes it’s hard to tell.
BG: That’s a great point. So often we read about, in my work at the Smithsonian, what does it mean to be an American? Identity. I know the French are going through that right now, and the Germans went through it. This whole idea, what does it mean to be French? Language unites them. Religion. Some other things. But it’s critical to do what you were doing. To be sensitive. Did you change your approach once you got a sense of what those
different cultures were?
LK: I’ll tell you what. I really messed up in France. I was okay in Germany. My parents are German extraction, so maybe that was more natural for me. But in France I really messed up, and I never really recovered. But I went back a few years later when I was working in a different division of Textron, so I was working in France again, and I had learned my lesson. The second time around, I was able to blend in, and was able to actually work very well in
BG: That’s interesting. So, you made that adjustment, and it was an adjustment in terms of your management style?
LK: Yes. For instance, you may have read that French women don’t smile that often. You don’t smile on the street. You don’t smile when you’re talking to people. You only smile when you’re with someone you’re really comfortable with. It’s a stereotype, but it’s also a cultural aspect. I smile a lot. I don’t mean to, it’s just the way I am. What I’ve read afterwards is that when you’re young you’re told that if you smile a lot, people will think you’re stupid. Because I smiled, I was considered maybe not that bright.
Also, back then I usually dressed for comfort. Parisian women will dress very well, and I didn’t recognize that was an important aspect of being respected in the workplace. I’d walk to work for 45 minutes, and I’d wear my tennis shoes, get to work and change into my no thigh‐ heels, but a pair a little higher than tennis shoes, and not realize I was doing anything wrong. I mean, I’d eat pizza with my hands. No! You don’t do that. I did a lot of things not
realizing their implications. I just appeared not up to their level or their standards.
BG: That’s really interesting. So, you came back, and when did you get to go to Providence?
LK: So, I came back. I was transferred to Chicago. At this point I was divorced, and I spent a year in Chicago, and then I was transferred to South Africa. I was transferred into Textron’s mining industry. There were three of us, and there were facilities all over the world. The three of us who had the same type of job had to cover all the facilities. So, one person had North America, one person had the UK, and I had ROW ‐‐ rest of the world. So, I had to do a
regular round‐robin. I’d start in South Africa every month, go over to Australia, then go up to Europe ‐‐ and that’s when I was in France the next time. I’d do Switzerland, France. And I didn’t really have anything in the US, but our headquarters were there so I’d pop over to the US and then go back to South Africa.
BG: And headquarters were in Michigan?
LK: No, they were in Providence.
BG: So what kind of mining was it?
LK: It was called ‘fluid and powers’. It was gearboxes for the mining industry, and that was South Africa and Australia. But the fluid part was building big pumps for the nuclear and the water business. These pumps would be multiple stories high. That was in Switzerland, outside of Zurich, and also in France. It was fun!
BG: Awesome. And what was your title there? You were in charge of those operations, but was it a vice president for something?
LK: No. What I was doing there was lean, so it was process improvement. And then on the engineering side it was trying to improve internal processes. For instance, only engineers worked in Zurich, so working with engineers on how they did their processes and trying to get things engineered and manufactured faster.
BG: So, South Africa. When did you come back to Providence?
LK: So, I was in South Africa for a year, and that’s when I met my husband, the man I’m married to now. But at that point we didn’t get married for five years, ten years? I can’t remember actually [laughs]. So, then I came to Providence, and I stayed there seven years, of course ‐‐ since that’s that number of years I stay anywhere ‐‐ until I came here.
BG: In 2004?
BG: What was your role in Providence? Just to close the loop.
LK: I should probably tell you that when I was hired to Textron originally, I was brought in as a Vice President in that division. Sometimes when I’m giving a career talk with people, I draw a mountain range, and I ask the students, “What is this?” And they’ll say shark teeth, a mountain range, and I’ll say, “Well, it’s my career if you go by my titles.”
Early in my career I made a decision that I was going to choose jobs based on the ability for personal growth. In my MBA program I read an article, I read [Stephen R.] Covey’s book [The Seven Habits of Highly Effective People], and he had also talked about writing your own personal mission statement. There’s all these questions you answer, and then you end up writing what’s important to you. He says that if you don’t define, early in your career, what your mission is or what your goal is, you don’t know where you’re going to end up. Weirdly enough, I wrote my mission statement: To continuously improve myself and the things I touch. And then my job was Vice President of Continuous Improvement!
What I tried to do is this: take jobs that were different from what I’d had before. That often means you go backwards. When I came back from South Africa I turned down a Vice President title to be a manager, because that’s something I hadn’t done before. I just said to myself, “If I take that Vice President job, it’s Continuous Improvement again ‐‐‐ been there, done that. Being a manager is different, and I want to learn this, need to learn this.
Eventually I’ll work my way up again. That’s been the philosophy I’ve always followed. When I came back, I came back as a manager, but Textron was starting its own university ‐‐ Textron University. They’d never had anything like that before. They had hired a director todo it, but when they found out about me being a professor, they said, “We want you to be involved in this. But another business wanted me to run their continuous improvement, so I
took that Textron University job and stayed there for a year. And then my next job was something else.
BG: And that brought you back to Providence. How did you like it there?
LK: I love Providence.
BG: I think it’s great. My sister lives there. It’s such a great college town with a great history and all that. I didn’t realize they had companies there. Is it mostly the executive, because you’re all over the world?
LK: No, we are all over the world. It’s just the headquarters of all our businesses, and our finance team, HR ‐‐ it’s all in our corporate office. And we’re right across the river, across from Brown University and RISD [Rhode Island School of Design]. I lived right next to the Brown campus and had a ten‐minute walk to work. It was nice.
BG: So Lynn, so you’re in Providence, and the next step into your career is in railroading. Can you talk a little bit about how that came about? What led you to take that step?
LK: I can tell you. There’s a short answer and a long answer.
BG: I want to hear the long story.
LK: Okay. So, in the meantime, the gentleman ‐‐ who is now my husband ‐‐ that I had met in South Africa, he and I dated long‐distance for five or six years…(He says ten years, but I think we knew each other for ten years and dated for seven. Of course, seven everything!) Anyway, finally I said to him, “Listen, I’ll marry you if we can live on the same continent. And I’m not moving, so if you can get a job in the US, I’ll marry you.”
Within three months he had gotten a job in Indiana. I was in Providence, and he had two sons. Perfect timing for him; his youngest was going into high school, his oldest was about ready for college. So, the three of them came over, and we got married right away. But again, we weren’t living together. I was traveling all the time, so I would stop in Indiana on the weekends, and then go back.
And then, his son was starting his Junior year, and we said, “Ok, now — because we didn’t want to move in together until he was finished with high school — let’s talk about how we’re ever going to live in the same place.” And I said, “Well, I love Providence. You could move to Providence!” And he said, “You know what, I moved for you from South Africa, and I don’t like the East Coast. I ended up being in the Midwest. It reminds me of South Africa. I really like the Midwest. So, can you get a job in the Midwest?”
There wasn’t anything for me where he worked or lived then, so I said, “I’ll tell you what. A year from now, which is when Vincent will be a Senior, why don’t I start looking for a job in the Midwest, somewhere where there’s enough industry for you to get a job, and then I’ll get a job, and then as soon as Vincent graduates you can look for a job too?” And so, we agreed on that plan. It was a Sunday. I went back to Providence. I look, and I’ve got a voice
message. I picked it up, and it was a recruiter. They said, “We have a job exactly like your own, only for a bigger company, reporting to a Chairman and CEO, in the Midwest. Would you call us?” [Laughs.]
BG: You’d have to think of serendipity or something.
LK: Isn’t that funny? I had never returned a recruiter’s call. I really loved what I was doing. At that point in Textron, I had gotten an excellent promotion, for me, because I just loved it. What happened was, at the holding company I was responsible for manufacturing, engineering operations, really everything in the company but HR, Finance, and a few other things at the holding company level. All I did was go from site to site, from my position at
headquarters to headquarters, meeting with the engineering teams, the manufacturing teams, and I loved it. I loved it. I’d just gotten it a year before. I knew I didn’t want to leave any time soon, and I really liked my boss.
So, I called the recruiter back, and I kinda made a joke, but he thought I was serious. I said, “Thank you for your voice message. I love this job. It’s perfect for me, but can I get it a year from now?” So, this is a joke, but he was like, “Okay, Lynn, let me explain to you how this works. It doesn’t really work like that; the job’s available now.” And I told him, “I’m really kidding you, but I am serious in the sense that this is exactly the type of job that I would like,
but I can’t do it now because I’m really loving my job, and I don’t want to move for at least a year, but probably two years. So, I thought I’d look in about a year, but since I’ve never worked with a recruiter, I thought I’d call you back and ask how this works.”
What he said to me was, “Listen. Why don’t you do this? You probably haven’t interviewed in a long time. Why don’t you take all of our tests, and if you pass the test, we’ll put you through some interviews. You can practice interviewing, and if you pass those, we’ll get you in front of the company, and I’ll get to know you, and a year from now, when you’re ready, I can look for something for you. And I said, “Wow, you’d really do that?” And he said,
“Yeah!” And I said, “Well, I’d feel really bad if I got the job and had to say no.” And he said, “Lynn, there’s a lot of really good candidates, you’re probably not going to get it.” [Laughs] And I said, “Okay, I’m in! Yes, let’s do it!”
BG: Can’t wait to fail! I can’t wait to get rejected!
LK: Yes, exactly! So, I go through all the first steps. And he says, “Okay, they’re going to fly you out to Omaha, and you’re going to meet with Jim Young, Chairman and CEO, who is now deceased, but is a legend at Union Pacific. People here still revere him. I met him, and I interviewed with him for an hour, and I called my husband from the airport, and I said, “I’m going to work for this man.” Just like that.
BG: What was it about him? That’s pretty unusual.
LK: I know. I know! His integrity and his leadership skills, his authenticity, and the way that he clearly cared about the employees, and clearly cared about wanting to do the right thing.
BG: And was it for the job you’re in now?
LK: No, it was Vice President of Continuous Improvement [laughs]. And I’ll tell you what was exciting about it. It felt a little bit like my very first lean activity in Michigan, because what they said was that they’d been doing a little bit in lean, in continuous improvement, but they wanted to go all in. But they didn’t want to use it just for productivity. They wanted to use it to engage employees, to have every employee feel like he or she had the ability to improve their workplace and make things better for the customer.
The sincerity behind that ‐‐‐ and the challenge ‐‐‐ because at that time it was 45,000 employees and most of them not under a roof. I mean, you’d walk into a manufacturing facility and have a meeting to get to know everybody ‐‐ the challenge of that...I was trying to think of how to translate all the things that I’d been used to doing in a facility to a factory under the stars in a system that’s interactive. When you talk about ‘continuously improving
myself, and everything I touch’, I thought, “That is the continuous improvement challenge! To deploy there; that would be amazing!” Seventy percent of all new corporate initiatives fail ‐‐ that’s been studied again and again ‐‐ and so it excited me that the odds were against me.
BG: And so, he was asking you to introduce a new program?
LK: Yes, to develop it. Though there were some people who had been hired to work in the continuous improvement department, but they all brought their own philosophies and methodologies, so there wasn’t an overarching methodology. There was a point solution. So, there’d be a problem, and one person would be sent out, and they’d go fix it and come back, almost like industrial engineers. But there wasn’t an overriding methodology or
philosophy for the company. There wasn’t a team of people, and a way to deploy that, and a sense of ownership; leaders that said, “This is the way we do things now.”
BG: So, was that unusual for the railroad industry to have a department like that? Because the railroad industry, as you know, has this image of being kinda stodgy and resistant to change; “We’ve always done it this way”. Is that wrong?
LK: Well, no. I think that’s true. I think that, just as Union Pacific hired a few people, trying to do some things and having some point successes where they sent somebody out there, and they would succeed in that location. They might improve the velocity in that location or solve a problem. I think some of the other railroads were doing that, too.
I think what might’ve been new was the very top of the organization saying, “This is going to be our methodology of engaging our employees, and our goal is to run our business this way.” They made a name for it. They called it ‘The UP Way’. If you look at our company strategy, right at the top it says, ‘The UP Way.’ The whole idea was, this is the way we run our business.
BG: How did he become aware of doing this? He was a railroad guy, right?
LK: Lance Fritz, who is our current chairman and CEO, had come from GE and a few other manufacturing organizations that had these types of things in that world, so he knew the power of it. He was the one that started this in Operating, and things went on from there. At some point, we had someone who reported to a former Chairman and CEO who came from manufacturing, and he also had hired a few people to do this. There were a few fits and starts here, but when Lance was promoted to the EVP of Operations, that’s when Lance Fritz said with Jim, “Let’s do this, let’s do it broadly. Let’s start in Operating with the goal of really having the whole company be agents of change and continuous improvements.”
BG: How do you measure success when you see 70 percent of these kind of innovations fail? How did it work?
LK: What we did was a challenge. We wanted to detect failure early if it was gonna happen. Across twenty‐three states, we could succeed anywhere and fail anywhere and wouldn’t know unless we had a detection methodology. Back from my PhD days where I learned to research, we put together a research design which we called a ‘panel survey’. What we did is we made a random sample that represented the whole population of the Operating
department, and it was statistically significant, so our sample represented the population. We contacted everyone in that group. There were around 400 people, and we said to them individually, “We’d like for you to be a part of our future, and we need your input. No one will know who you are, and what will be asked of you is, we’ll send you a survey every six months. It’ll either be to your work e‐mail or your personal email, or you can get an online
link. You get it back to us, and we’ll tell you what we’re learning from you and your peers.” If someone says, “No I don’t want to do it,” we had to randomly choose someone with the exact same demographic. Then if people quit ‐‐ you get the idea. It’s continually evolving, but was random and representative and allowed us to see all 45,000 employees because of that.
Then we devised a survey that had partially engagement questions. Because remember, what we wanna do is increase engagement, improve the workplace, make things better for the customer, increase productivity, and also find out, “How does your leader treat you, and are you asked for your opinion?” We got the results. We didn’t change the questions once we developed them so we could get patterns, but we could also deep‐dive and say, “Hey, look there’s a connection between engagement and UP Way, and this is our lowest engagement location and the lowest UP Way.”
We started to see what was going on there. We started to problem solve, and usually we could say, “Is this the right leader for this location?” We did that throughout the whole system and after four years, we looked at operating results and found that there was a strong correlation between operating results and UP Way engagement. The higher their buy‐in and employment of UP Way, the higher their operating results. It’s been game changing.
Now I can tell you, that if you talk to people in the operating department and talk to them about how they solve problems, it’s the way we created.
BG: It sounds like you’re helping an organization to learn about itself, handing it down as young people come in and as people retire. It sounds like a great plan. This gets to the question of culture. In this organization that has such a strong history, working in that environment, what was it like to come into that alone?
LK: It was really good, and yet I had some slip‐ups. Textron owns Bell Helicopter, which had its own culture; Susten Aircraft had its own culture; EasyGo Golf Car, mining and automotive‐‐ all these different companies have their own culture, and I learned to operate in those cultures. Then I come here, and I think, “Okay, I can do this; piece of cake!”
The thing that I noticed that was amazing to me ‐‐ all these other places I had worked were good, good companies. Nobody had ever, in this degree, come up to me in the first week; so many people said, “You are gonna love working here! We love it here. You’re gonna love your job. This is a great place to work!” Everywhere I’d ever gone, every once in a while you’d hear, “This is great work, and you’re gonna love it here,” but this is everybody! I was
like, “Whoa, this is really amazing!”; directly aligned with the fact that people are really proud to be Union Pacific employees. You don’t only just hear them say that and see that, but that’s one of the things that comes in on surveys. That’s one of the highest grossing questions, is that I am proud to work for Union Pacific.
BG: That’s also a measure that I often found in retention, turnover, and I assume you look at those basic things to judge and measure statistically what you’re getting anecdotally from people; just having that loyalty and feeling that job satisfaction and fulfillment. You got that right away. What did you say you messed up?
LK: Keep in mind that I came from the east coast, the last job I was in. I was there for seven years, and if you look into all the industries I worked in ‐‐ automotive and also factories ‐‐ it’s in‐your‐face. You get things done; biased for action, but also really outspoken. Even in corporate, in Providence, being on the east coast if you’re in a meeting, people would take you on. They’d say, “You know what, I don’t agree with you”, and then you’d go back at ‘em, and you’d walk out, and everything’s fine ‐‐ you don’t take it personally.
I grew up in the Midwest, but the thing that I had forgotten was people are nicer here. I don’t mean that as being negative against Providence, because I love the in‐your‐face stuff, I love just getting stuff out on the table. I’m not saying one is right and one is wrong, but it’s different. What I found was, especially in the beginning, I was much more assertive and open about things I didn’t agree with than was probably appropriate for this culture. I didn’t
recognize it right away. I’m not sure why, except that maybe I’d gotten so accustomed to not having to watch culture any more, that I wasn’t careful.
BG: That’s interesting because it’s more of a geographical culture that you’re talking about than the industry. The nature of railroading and the sense that I get sometimes from talking to people in the industry that I’ve got this sense of, “We’ve always done it this way. My grandfather worked in the railroad, my great‐grandfather worked in the railroad”. ‘I worked on the Pennsylvania Railroad’ was still in the blood of the stock. So, did you feel any of that?
LK: I think that’s human nature not to change. You have long‐term employees. You don’t have the turn over, so you have long‐term employees that have always done it that way. You have human nature. You have, “I’m proud to work at Union Pacific” ‐‐ which in many ways seems, “We do it better than everyone else.” You put all that together, and you do end up with a culture that was harder for people to change. I can tell you I’ve seen a big
difference though, and part of it is Lance’s leadership. Jim Young was really open to change, too. He started down that path of being more open to change.
BG: Well, I think it took some courage for him to introduce this continuous education and get improvement, I think.
One of the reasons we wanted to talk to you, in particular, was women in railroading. Just thinking about your career, when you get into industry and manufacturing and mining and automotive and railroading, you’re really a minority. Can you talk about that a little bit? Was it ever a factor in your career?
LK: I think it has to have been a factor and an opportunity. You always say, you’re the only woman in the room. For years, whatever meeting I’d go to ‐‐ certainly after a certain level in an organization ‐‐ I would be the only woman. With all the talk now about sexual harassment and all of the things that have gone on (and of course I’d experienced that, and I won’t go into that); but I think the other thing is when you’re the only woman, it makes you
very careful never to give any kind of vibes that will open yourself up to any advances that would be unwelcome ‐‐ and they all would’ve been, actually.
I think I went to great lengths to be buddies with the guys, but never to hang out with them. They would all go golfing together, and they would all do things together ‐‐ and remember this was a long time ago and things are easier now ‐‐ but I know that I kept myself separate in some ways.
But I found that I was able to be a part of the group through humor. I think you have to find how you can find your place, and what I ended up using was humor and always messing around. That was effective for me, and I think it also kind of kept at bay some of the other bad things that come from being the only woman.
BG: That’s on a personal level, a personal strategy, but on terms of being taken seriously as a professional (you have a PhD and all of that) that must’ve been challenging to say, “Well who’s this person coming in?” Not only are you a woman, but you’re coming in with these very research‐based, evidence‐based approaches to what had been traditionally nuts‐and bolts industries. Forgetting about the personal stuff, that must’ve been challenging professionally, too.
LK: There were so many times, especially when I would walk into a factory, where I saw immediately all the things that they needed to improve, but I’m not going to just tell them, “Do this, do this, do this.” It’s not going to go well, particularly if I walk into a factory in Germany or Switzerland or France ‐‐ anywhere. I learned a lot about how to get buy‐in, and I think those skills have helped me my whole life; finding out what problems they have. Every
manager, every leader is struggling with something.
I have enough confidence in all these tools that I’ve learned all of my career that I think I’ve got a tool for everything. There’s not a problem I have not been able to figure out a solution to. I know how to approach them, how to analyze the problem. I was trying to get some wings and show that, I’m not here to show you how smart I am and think that I can run your facility. Instead, I’m here to help you. Also, if they didn’t want my help, I’ve got other people that do ‐‐ and I make that clear. I wouldn’t waste my time. Confidence in what you give them, that they could do it well on their own; I think that approach for me has really helped.
BG: Do you have a chance to meet other women coming up in the industry of UP? Do you see yourself as a mentor or role model? What do you tell women coming up ‐‐ to sharpen their sense of humor?
LK: I do mentor people. I don’t mentor people in the sense that I have mentees, specifically assigned mentees. I don’t really believe in that model. For the mentees, everyone wants to find a mentor because there’s a specific thing they want to work on. So, find someone who’s really good at that one thing, and then go to them and say, “Can you help me with this specific thing?” When you get that, what’s the next thing? Maybe you’ve got to deal with a difficult employee. Well then, who could you ask about that? Then maybe you go to someone else. Then you get a group of mentors around the business from all different areas ‐‐ and people love to give advice. What’s hard is to commit to a weekly lunch or gettogether. I’ve kind of abandoned the traditional mentor thing and just say, “My door’s open. Just come and talk to me” ‐‐ and then people will.
BG: Men and women? Mostly women?
LK: Yes. There’s a lot of women. Basically, depending on the situation, I would give different elements of advice. Back to your first question about how they navigate in a male world is, what I believe is, you have to find your own voice. What is good for one person may not work for another person. I think authenticity goes a very long way. I really believe in finding what your niche is, your inroad, or what is the best way for you ‐‐ because you want to be authentic. I think everybody respects that no matter what.
BG: I didn’t ask earlier, did you have mentors? Was there anyone, or more than one person, who you went to seeking advice?
LK: I did, actually. I had mentors periodically. I never asked anyone to be my mentor. I practiced what I ended up believing, so if I did have a situation, then I would go to different people and ask them. I was coached at some point that I needed more political savvy. I was used to working in the factories, and then I moved to Providence into corporate. That was my first time in the corporate environment, first time since the hospital. I’m used to these
factories, and now I feel like I’m watching paint dry. I wanted things to happen. I asked around, “Who’s really good at that?” They said, “Mary Lovejoy”, who’s the treasurer of Textron. I went to her, and I talked to her and said, “Will you coach me?” She coached me and gave me some advice. We met like two or three times. She gave me really good advice, and now she’s one of my best friends. We ended up really forming a wonderful relationship.
BG: That’s great. I mentioned to you earlier that I attended Railway Interchange in Indianapolis last year, and you were there. I was just bowled over by the technology. Can you talk a little bit about what’s coming up for the railroads and the railway industry and how that connects with your current job of supply‐chain and everything else? I think that’s an unknown chapter.
LK: If I can, I’d like to back into your question and talk a little bit about what we’re doing here, and then we’ll lead into that. As a corporation, of course we have a strategy, and we have never had innovation as a strategy. You have to prioritize your strategies, so innovation never made the grade, and we talk about being a conservative company ‐‐ so I think that makes sense. We’re not a high‐tech company, so why would we have innovation? Well, last year we made innovation one of our six strategies as a company. Now how are we going to do innovation?
What’s been fun is Lindon Tenneson, who’s in IT, and I were asked to lead innovation and think about how we’re going to do innovation in this company. Well, we asked Lance Fritz, “When you think of innovation for this company, what do you think of?” He said, “I think of improvement; that everybody has a role and is continually improving their job; and I believe everyone has a role in innovating, thinking in a creative and innovative way.”
We know that our innovation path is going to be multi‐phased, but we said, “If that’s what Lance’s mission is, how can we start it?” We started something called ‘Innovation Station’. Last year we ran four official campaigns on that. What it is, is we decided on a space we wanted to innovate in. For instance, we wanted to innovate around track work, another one was safety ‐‐ so we had these various things we wanted to innovate on. When we chose the
campaign and we put a message out – e‐mails and online notes to our agreement employees
‐‐ and said, “Go onto Innovation Station, and make a suggestion.” It’s crowd‐sourced; vote on the suggestion, thumbs up, or make comments: ‘This would be a good idea if we applied it to this’. We crowd‐sourced it to employees in this company. The highest vote‐getters then started in our gate innovation process, which we also have adopted in the company. The next step was the highest vote‐getters made pitches, and if their pitch passed that gate, then they go onto the next gate, which was to start developing a business case.
BG: Who were the gatekeepers?
LK: It depends on which gate. The early gatekeepers were process owners, then some people from Innovation Station, so it’s a cross‐functional team that makes decisions. We’re really serious about innovation.
BG: Making that transition from what I call business jargon to a real result is what you’re trying to do. Then you have to evaluate return on investment. What’s the pay off? How is that playing out? Give an example.
LK: One of the things that ended up coming out of some of that…so there was another portion of…we ran four company‐wide campaigns, but we also ran a marketing and sales group that focused on customers. One of the things that came out of that is something called the “customer experience map.” So, what we’re doing is innovating in the customer’s space. What we’ve done is we’ve gotten data on our customer journey ‐‐ so the customer
from point to all the way at the end. High points ‐‐ what do they like about dealing with us on their journey with us ‐‐ and their pain points. A lot of the pain points ‐‐ what they have to do with is ‐‐ we’re so used to, right now, when we’re getting something from E‐bay or Amazon, anything that we get, we can watch where it is and say, “Okay, it’s been shipped yesterday, and it arrived in Minnesota. It’s out on delivery.” As consumers, all of us have an expectation.
If you look on the railroad on the freight, our business customers don’t have that visibility, but yet in their home life and their personal life, they do. What we’re seeing in pain points is that they want visibility. We’re doing innovation like, how can we give them better customer experiences, and how can we use technology to be able to give them the best customer experience possible? That’s a really exciting experience for us. We have other
innovations that have to do with drones and all kinds of things.
BG: When you’re at a cocktail party or something, and you hear, “Lynn, what’s the most exciting new technology that’s coming up in railroading,” what do you say?
LK: I think the use of sensors is eventually going to really change the way we do everything. It’s not that unusual to lose cars, but sometimes we’ve lost locomotives. You have sensors. Maybe you have sensors in the rail that can detect wheels that we have problems with, or tonnage. We have sensors on bridges that can predict early failures. I think sensors could really ‐‐ they’re so cheap, and they’re getting cheaper. I think that could be the internet of things, connecting everything. I think PTC [positive train control], though it’s been a mandate, I think where that’s going to take us eventually as we optimize all that technology will be really, really interesting.
BG: That’s directly in your supply‐chain direction, all that is connected and relevant to success in that area. It’s really interesting.
Getting close to the end of the interview, reflect a little bit on your career. What has changed you the most, especially here at Union Pacific? What change have you made? What’s your contribution, your legacy? Can you talk about that a little?
LK: The thing that’s changed...let me answer the second question first, because that’s clearer to me, and I want to give some thought to the first question. I think my legacy, both in the continuous improvement world and more in a microcosm in the supply‐chain department, has been engaging employees. If you take a walk around this floor, which is the supply‐chain floor, you’ll see that there are pictures of employees everywhere, and we’re celebrating their successes. They’re self‐directed; people are empowered to make decisions, and I feel like the team we have here in supply‐chain is high‐performing, evidenced in the results. All of our metrics are exceeding, and they’re not easy metrics. We’ve really got a good team.
BG: That was a new department, right?
LK: Well, continuous improvement was new. The supply‐chain department was here before, but we’ve made a lot of changes. What we did is we took all the UP Way tools and just applied them to supply‐chain. We’re applying them in this department, and so then the results of that are tremendous, and people are empowered, and they’re engaged. They give you discretionary effort because they want to. The results are unbelievable! You can’t force
it; it has to be something people want to do. This has really demonstrated that, and it’s something that’s occurred in the past few years. It’s been fun, and I’ve loved it. UP Way and continuous improvement isn’t perfect. I can tell you all the problems, but it’s better than it was.
BG: It always comes down to people’s capacities, and people’s limitations, and giving them a chance to grow. Not to put too fine a point on it, but in terms of this journey that you’ve been on ‐‐ which is quite amazing, really, to start from the rock band (and maybe the rock band analogy is not inappropriate, you have to look around to play together and harmonize) ‐‐ but what do you see as any next steps? Do you have any plans for the future beyond
LK: Yea, I do. What’s exciting is I’m retiring in eight weeks [March 15, 2018]. At the root of continuous improvement ‐‐ I think you heard it coming up periodically ‐‐ is change. Through the course of my career, it seems like everything I’ve done has been to implement change. In order to be successful in that, you have to be able to get buy in. In order to be successful in that, you need to know ‘What could go wrong before I roll this out?’
What I’ve been doing ever since I started is creating a change playbook. It’s a series of excel spreadsheets, but it’s intended the way it’s been formed. When we want to roll out a change or new program, we take the team that’s going to be rolling it out, and we say, “Okay, first page of the playbook, this is what we do”. Then the second page comes, and we say, “What’s in it for them?” What are the questions they’re going to have about it? What are the answers we’re going to have for them? Let’s get it out now. You do all of that before you actually do all the change because, remember, if 70 percent of all change fails, why wouldn’t you put that time up front?
What I’ve found since the playbook has become more developed, which is probably the last 15 years or so now, is very rarely does a change fail if we go through it. They all succeed. I started teaching that at Ohio State University, and have been requested to teach it other places, so now I’ve got places I’ll be teaching at this coming year.
BG: So, you’re going back to the classroom?
BG: Are you going to be based here, or you’re not sure?
LK: No, we have our retirement home in Park City, Utah. We’re both skiers, so we’re going to move there, and actually, it’s just a one‐day course. What I do at Ohio State, it’s a little different. I’m looking forward to doing all that, and I have two little granddaughters, so I’m looking forward to spending more time with them.
BG: One more questions, what led you to choose your community involvement in the Joslyn Art Museum? You could’ve maybe chosen the ballet or any number of things?
LK: I had never grown up around art or understanding art, so when I moved to Paris I thought, “Okay, this is the time that I’m going to learn about art”. I was pretty lonely there. I was actually going through a divorce, and the Parisians, because I was a pariah, had shunned me, so I didn’t have any friends. I ended up going to museums. I bought a gallery guide to the Louvre, and I bought a year’s membership, and I’d work my way through the galleries at the Louvre. I’d stay for 30 minutes: take the metro, get to that gallery, study those paintings, kinda figure out what was going on, and then leave. By the end of that year, I found that I loved art and that it just resonated with me. So, wherever I lived, I always sought out the art museum. I don’t have any skills myself, but I just love art. So, when I came here, I really, really loved the Joslyn. Jim Young was on the Joslyn board, so that was
already taken, but he was going to step down, so he asked me if I would do it.
BG: That’s great. So, that’s been pretty gratifying. Did you take an active role in any particular area?
LK: Before he had stepped down, what I had settled for instead was to be a docent. They had trainings on Mondays, so I would go over and pick up my training and do my readings, and on the weekends, I would give my tours. I think then he realized I was interested.
BG: What was your favorite work in the museum?
LK: I can’t answer that because I have too many. Did you love Chihuly's glass?
BG: Oh, yes!
LK: I really love Flemish painting, but when I’m in the Joslyn, the Chihuly glass ‐‐ you don’t see that very often. That’s something that’s also very special.
JK: I want to go back to Jim Young, and I don’t even know how to get there. You gave a number of descriptions of him as a man of integrity. His authenticity came through, his character came through, he clearly was a very charismatic person. Something in the course of a one‐hour interview turned your head, got you to change your life for him…
LK: You know what, I bet you that people probably wouldn’t describe him as charismatic. When you said that, I realized it probably came across like that, but he wasn’t charming. He was very quiet and shy. He was an okay speaker ‐‐ but I’ll tell you what impressed me. Everything he said about why he wanted to do continuous improvement didn’t sound like a typical CEO to me. It was all about the people.
I knew I didn’t want the job, so I just said things that I really believed in. I figured, that’s going to rule me out. For instance, one of the things that I learned in my change playbook is that when you roll out change, the worst way to roll out change is to do it all at the same time with everybody. We know one of the reasons is that 20 percent of the people resist change off the bat, 20 percent of people are the early adopters, and 60 percent of people
are in the middle. With that whole spectrum of people, who have the loudest voices? The resistors. And they’re going to influence the people in the middle. That’s one of the reasons it fails. Instead, you always start change with pilots and you identify change agents, or early adopters. You assess things there, and you publicize the heck out of it and make everyone want it. That 60 percent are going to come over there.
The problem is when companies roll out change, the primary way they do it is called ‘operational speed’, which is ‘Everybody’s going to try and change by this date”, and ‘By this date you’re going to have everybody in line’. What it doesn’t do is, the value you want to get out of whatever you’re doing, it’s not measuring that. It’s also going across the board at the same time.
The way that a few companies do it is called ‘strategic speed’. It means I implemented in one place slowly and, instead of saying ‘Everybody train’...Why do we train people? We train people to use a skill. I’m not going to measure how they were trained. I’m going to measure how you’re using it. You say, “What value do I want to get out of it?”, and that’s what we measure. So, when you get out of the panel survey, you don’t ask how you were trained. We said, “Are you using UP Way? Are you getting value from it? Is it improving the customer results?” We measured value, but most people who come from operations, it’s ‘Everybody gets it, and this is the date’.
With Lance and with Jim, I said, “Well, if I were to roll this methodology out, I wouldn’t give you a time frame. I wouldn’t tell you, “In a year you’re going to have it done”. I don’t know. And no one wants to hear that, but he was intrigued by it, and he asked why. I didn’t give him the detail I just gave you, but I just said, “I believe that’s the path to failure. I believe you have to start small.” And then I talked a little about the value, and he was all about it. I
said, but you need a strong leader to support that because most of the time people will say, “We gotta get this done”. Even if you don’t, even if you say, “Well, this is my pilot”, you have these people going over here saying, “Well, we want to train. We want these people to be trained”. You want to create that these are the special people, so you have to say no to them. You want to create this, ‘This is really special’. It’s the psychological momentum so
the 60 percent will go here. He was just right there with me. I mean, not many people do that, especially a CEO ‐‐‐ and he came from finance!
JK: What was his impact on the culture here?
LK: Amazing. I’m telling you, we would go out to the yards, and he would spend a lot of time in the fields. He would stay there as long as he needed to and answer every single question, and he would be honest with people. When he got sick, we would still do senior staff visits to the various locations, and the number one question was, “How’s Jim?” If I’d be out there by myself, they’d say, “How’s Jim?” These are people out there running trains, and they care about the CEO enough to say, “How’s Jim?” He was a really good guy; grew up here in Omaha, very poor.
BG: Thank you very much, Lynn. It was a great conversation.