Driving Innovation in a 100 Year Old Company with Judy McReynolds
This week on the Be Epic podcast we are kicking off a short series of conversations with the 2023 Arkansas Business Hall of Fame Inductees. We begin the series with Judy McReynolds, Chairman, President and CEO at ArcBest. ArcBest is an integrated logistics provider based in Fort Smith, Arkansas. They are celebrating their 100 year anniversary of being in business in 2023. We begin the episode with Judy providing an overview of ArcBest, where they are today and their growth strategy along with how they approach acquisitions, challenges in the market and innovation. Judy then goes into more detail about the innovations that are currently taking place at ArcBest to better serve their customers. They finish the conversation with a look at how ArcBest has continued to grow and plan for the future.
Transcript
What we did was we put ourselves in their shoes.
Judy McReynolds:And we, we approach these conversations in a way that was
Judy McReynolds:mode agnostic is what I'd say.
Matt Waller:Excellence, professionalism, innovation, and
Matt Waller:collegiality. These are the values. The Sam M. Walton
Matt Waller:College of Business explores an education business, and the
Matt Waller:lives of people we meet every day, I'm Matt Waller, Dean of
Matt Waller:the Walton College, and welcome to the be epic podcast. I have
Matt Waller:with me today, Judy McReynolds, who is chairman, president and
Matt Waller:CEO of ArcBest, which is headquartered in Fort Smith,
Matt Waller:Arkansas. Thank you, Judy, so much for for joining me today. I
Matt Waller:really appreciate it.
Judy McReynolds:Oh, it's a pleasure to be with you today,
Judy McReynolds:Matt. It really is.
Matt Waller:Well, Judy, during your career at ArcBest, you've,
Matt Waller:you've been in a lot of different positions. But a lot
Matt Waller:of your experience in life, professionally, and at ArcBest
Matt Waller:earlier was in the area of accounting and finance. But, you
Matt Waller:know, you've transitioned and I want to talk about the journey a
Matt Waller:little bit in a moment. But one of the things that is really
Matt Waller:stood out to me and I want to make sure we get to this in the
Matt Waller:moment, at some point in our talk is innovation, because I
Matt Waller:think that's been a theme of your leadership. And it's really
Matt Waller:clearly paid off. But, but before we really get into any of
Matt Waller:that, I want to mention to all the listeners that we have
Matt Waller:something called the Arkansas Business Hall of Fame. And
Matt Waller:Walton College established this back in 1999, to really
Matt Waller:recognize Arkansans, whether they're Arkansans by birth or by
Matt Waller:choice, who've been really successful leaders. And so the
Matt Waller:Arkansas Business Hall of Fame is designed to honor, preserve
Matt Waller:and perpetuate the names and the outstanding accomplishments of
Matt Waller:these business leaders. It's a way of celebrating the people
Matt Waller:who are behind the achievements and business. And we pick
Matt Waller:people, the committee picks people who are, you know of
Matt Waller:significant not only achievement, but also
Matt Waller:significant integrity. And, and so, Judy, is being inducted in
Matt Waller:February at the so it'll be set for Friday, February 17 at the
Matt Waller:Statehouse Convention Center in Little Rock. And if you can come
Matt Waller:you can go to if you if you Google Arkansas Business Hall of
Matt Waller:Fame there's you can buy tickets on our website. But
Matt Waller:congratulations, Judy, on this honor. Well deserved,
Judy McReynolds:Thank you so much. I mean, I just I just feel
Judy McReynolds:so blessed and honored to be recognized. It's It really is
Judy McReynolds:amazing and exciting. You know, I've I've actually served on the
Judy McReynolds:selection committee years ago, so I know the process and and
Judy McReynolds:then being in attendance at some of the the events, just really
Judy McReynolds:very special. And just the association with the University
Judy McReynolds:of Arkansas business school, Walton College, is also an honor
Judy McReynolds:in itself.
Matt Waller:You know, I love I'm ex officio on the committee.
Matt Waller:But I really love reading through all of the nominations.
Matt Waller:I've learned so much over the years about business in
Matt Waller:Arkansas, and people by reading them. And it's tough because
Matt Waller:every nomination is held for five years. And you know, we've
Matt Waller:got so many now, just want lots of nominations of people that
Matt Waller:are worthy, it does get challenging. But usually the
Matt Waller:people that are selected came up real early in the conversation,
Matt Waller:as you know, from your experience, but for the
Matt Waller:listeners who might not be as familiar with it. On our
Matt Waller:website, we also have videos of every person who's been inducted
Matt Waller:since 1999. And I actually taught a course a while back
Matt Waller:called Arkansas business where we we looked through some of
Matt Waller:these and studied some of the people and actually had them as
Matt Waller:guests. It was a fun course to teach. But if you look back at
Matt Waller:the very, very first cohort was William T. Dillard, the founder
Matt Waller:of Dillards, Charles Murphy, of Murphy Oil, Jack Stephens of
Matt Waller:Stephens, Inc. Sam Walton, of course of Walmart. And but each
Matt Waller:year we've inducted pretty amazing people. And, and the
Matt Waller:other thing is kind of interesting, Judy, and you'll
Matt Waller:appreciate this. Joe Ford was in the second cohort.
Judy McReynolds:Oh Wow.
Matt Waller:Many of the people are not alive now going way up
Matt Waller:in the cohorts, many years, Joe is still alive and strong. In
Matt Waller:fact, I heard him speak recently, and it was pretty
Matt Waller:amazing. But at any rate, if you if you go and you look at the
Matt Waller:website, you'll see it's an amazing list of people. And I
Matt Waller:think Judy, well deserves to be on this list. And we're proud of
Matt Waller:you.
Judy McReynolds:Well, I wanted to add one thing, which is
Judy McReynolds:really exciting, I think for for me and for our company is in
Judy McReynolds:2023, when this event will occur, it's our 100th year of
Judy McReynolds:being in business as a company. So that's, that is just really
Matt Waller:It is it's it's exciting. 100 years, for those
Matt Waller:special.
Matt Waller:of you listening that don't know the history of transfer of you
Matt Waller:know, trucking, it's worth looking into this. But back in
Matt Waller:about 1980, there was something passed called the motor carrier
Matt Waller:act of 1980. And it deregulated the trucking industry and 1000s
Matt Waller:of companies went out of business, only the strong
Matt Waller:survive, but to be around for 100 years, that was certainly a
Matt Waller:key milestone in transportation for our country. Actually a
Matt Waller:miracle that that was passed and it was so good for our country,
Matt Waller:that you all made it through that.
Judy McReynolds:We did. And that was a significant point in
Judy McReynolds:history for the company. And, you know, I have the benefit of
Judy McReynolds:getting to hear you know about that transition from previous
Judy McReynolds:leaders that, you know, I had the the experience of working
Judy McReynolds:with, but yes, very unusual time. And if you operate it in a
Judy McReynolds:regulated environment, just thinking about the transition
Judy McReynolds:to, you know, that world of deregulation, there were some
Judy McReynolds:pretty significant leadership changes at our company that
Judy McReynolds:helped enable our ability to navigate through that and
Judy McReynolds:navigate well through it. And many of those principles around
Judy McReynolds:pricing that we use today, were key to our ability to
Judy McReynolds:successfully endure that time and, you know, come out in the
Judy McReynolds:place that we are so interesting.
Matt Waller:Well, you know, you think about it. I mean, the
Matt Waller:company's been around through the Great Depression. You know,
Matt Waller:World War Two, the Korean War, the Vietnam War, the oil crisis
Matt Waller:in the early 70s, runaway inflation and interest rates in
Matt Waller:the late 70s. The 9/11, the great recession and many, many
Matt Waller:other big challenges,
Judy McReynolds:and most recently, the pandemic, right,
Matt Waller:Yeah. Yeah.
Judy McReynolds:Yes. Yeah, when we get sometimes we'll be asked
Judy McReynolds:questions about different changes in the economy, major
Judy McReynolds:shifts, you know, things that are we're faced with, or our
Judy McReynolds:industry is faced with. And we can almost always say, we've
Judy McReynolds:been through that. We've been through something like that.
Judy McReynolds:That's, that's amazing.
Matt Waller:Yeah. It's reassuring too for employees, I think
Judy McReynolds:It is.
Matt Waller:So Judy, I'd love for you to take a moment to talk
Matt Waller:about who is ArcBest? And then also make sure in the process to
Matt Waller:talk about your role and your background, some of the
Matt Waller:challenges you've faced, you know, when you started as CEO,
Matt Waller:and where ArcBest is today, just some of those topics. And then
Matt Waller:I've got some other questions as well.
Judy McReynolds:Sure. Well, today ArcBest is is an
Judy McReynolds:integrated logistics provider. And we're based right here in
Judy McReynolds:Arkansas. In the Fort Smith area, we have close to 2000
Judy McReynolds:people, and our company has 15,000 overall. So that gives
Judy McReynolds:you some perspective about what we have here in Arkansas, and
Judy McReynolds:then how that impacts the rest of what we do. But, you know, we
Judy McReynolds:really see ourselves as keeping the global supply chain moving.
Judy McReynolds:And, you know, we have an integrated and full suite of
Judy McReynolds:solutions that really work well for our customers, especially
Judy McReynolds:whenever they're faced with supply chain challenges, it just
Judy McReynolds:comes across so well for them. But you know, what is remarkable
Judy McReynolds:in that 100 years that I mentioned is really our people.
Judy McReynolds:We have endured a lot of different circumstances, but
Judy McReynolds:that really has been a constant you know throughout. I remember,
Judy McReynolds:you know, when I first took my role, just recognizing that
Judy McReynolds:after going out and shaking hands and being with people
Judy McReynolds:across our company, just the longevity of people, and the
Judy McReynolds:care and concern that our people have for our customers, we also
Judy McReynolds:have great customer relationships, and, you know,
Judy McReynolds:many of those have been around for a long time, 80% of our
Judy McReynolds:customers have done business with us for 10 years or so. And,
Judy McReynolds:you know, so that's, that's a really good solid, what I like
Judy McReynolds:to think of as foundation, you know, for success. And, you
Judy McReynolds:know, the the interesting thing for me coming into my role as
Judy McReynolds:CEO in 2010, as you mentioned, you know, some of the challenges
Judy McReynolds:that that that we have faced. Well, one specific one was the
Judy McReynolds:Great Recession, as I was taking my role. So, in 2009, the year
Judy McReynolds:before I was asked to be CEO, or actually the year, I was asked
Judy McReynolds:to be CEO of the company, we lost $100 million as a company,
Judy McReynolds:and there were just certain circumstances that, that arose
Judy McReynolds:that cause that, you know, we were facing the great recession,
Judy McReynolds:the impact of the 2008 financial crisis. And then also, there was
Judy McReynolds:a bit of a price war in our in our competitive group. And the
Judy McReynolds:reason for that was, you know, there was one company that was
Judy McReynolds:close to being out of business, which is still in business
Judy McReynolds:today. So whatever they were trying to do didn't work. But it
Judy McReynolds:put us a company that really had those solid relationships and
Judy McReynolds:wanted to defend them, you know, in a difficult spot. But, you
Judy McReynolds:know, when I was looking at the situation, thinking about what
Judy McReynolds:was good, and what needed to continue, and then what needed
Judy McReynolds:to adapt and change, you know, I really was able to stand on
Judy McReynolds:those people and relationships. And you know, what, what's
Judy McReynolds:interesting was the knowledge that we gained through that,
Judy McReynolds:just looking at ourselves, trying to look at ourselves
Judy McReynolds:through the lens of a customer thinking about those green
Judy McReynolds:shoots, those things that we saw that were going well, you know,
Judy McReynolds:we really had a lot to think about. But it centered around
Judy McReynolds:our customers and our opportunity that honestly, we
Judy McReynolds:had already invested in. So we just pursued, change in the
Judy McReynolds:company that really was to position ourselves to better
Judy McReynolds:address the opportunities that we had in those customers we
Judy McReynolds:knew well, and that we knew we could execute with the people
Judy McReynolds:that we have at the company. And we find ourselves today a $5
Judy McReynolds:billion integrated company with many logistics solutions. When I
Judy McReynolds:first took my role. We were 93% an LTL, a less than truckload
Judy McReynolds:carrier. And so there's really been great transformation in the
Judy McReynolds:company. You know, since I've been in my role, which is now
Judy McReynolds:it's kind of hard to believe, but 13 years.
Matt Waller:So it is. It's been an amazing journey, indeed. And
Matt Waller:congratulations on that. Yeah. And I have to say, even though I
Matt Waller:know you're an integrated logistics company, I have known,
Matt Waller:ABF Freight for so long.
Judy McReynolds:Yeah,
Matt Waller:that still sticks in my mind.
Judy McReynolds:Sure.
Matt Waller:Right.
Judy McReynolds:And it should, it's good.
Matt Waller:Yeah. And I, I'm aware of your acquisitions and
Matt Waller:the new things you've you've done, which is pretty amazing.
Matt Waller:But as you said, ArcBest looks like a different company today
Matt Waller:than when you took your role and as CEO, would you tell me a
Matt Waller:little bit about the journey and what this growth growth strategy
Matt Waller:entails?
Judy McReynolds:Well, when I look at us now, you know, it
Judy McReynolds:really is somewhat satisfying, although we still have so much
Judy McReynolds:more to go. But, you know, we, we really looked at, through
Judy McReynolds:market research, data gathering insights that we had from our
Judy McReynolds:customers at what they were spending their dollars on how
Judy McReynolds:they were approaching, you know, success in their own business.
Judy McReynolds:We looked at ourselves, and we said, we want to better match
Judy McReynolds:what our customers are spending their dollars, on what matters
Judy McReynolds:to them. And one of the more significant decisions I'd say,
Judy McReynolds:was to say, okay, if I'm the shipper, I'm the customer and
Judy McReynolds:I'm trying to develop a successful strategy for my
Judy McReynolds:business. I might not necessarily choose just LTL as
Judy McReynolds:my solution. So, you know, what we did was we put ourselves in
Judy McReynolds:their shoes. And we, we approach these conversations in a way
Judy McReynolds:that was mode agnostic, is what I'd say. And, and that was
Judy McReynolds:really, really important. Because if you think about the
Judy McReynolds:risk involved in that, it might not result in you having the
Judy McReynolds:same business that you had before. And we had to get to a
Judy McReynolds:place where that was okay with us that that was our path
Judy McReynolds:forward. And customers really appreciated it. And, and so that
Judy McReynolds:another thing that we did that really was it synchronized well,
Judy McReynolds:with some training that we had been doing for years, was an
Judy McReynolds:approach that was really more about the solutions that a
Judy McReynolds:customer needed, rather than it being just a service
Judy McReynolds:conversation about one solution. So, you know, we were we were
Judy McReynolds:training our people to understand a customer's
Judy McReynolds:business, know what was important to them, understand
Judy McReynolds:where their challenges were, and what could make them successful.
Judy McReynolds:And, and we saw we had very experienced people doing that.
Judy McReynolds:And as a result, you know, we learned that that close to 80%
Judy McReynolds:of our accounts were comfortable buying logistics services. In
Judy McReynolds:many cases, they were spending a lot of their dollars on
Judy McReynolds:truckload solutions or some consolidation of shipments into
Judy McReynolds:truckload. We learned that we had some specific expertise that
Judy McReynolds:was valuable in premium logistics and time definite type
Judy McReynolds:solutions. And so one of the things that we did in 2012 was
Judy McReynolds:we bought a company in Ohio called Panther Premium
Judy McReynolds:Logistics. And it folded in really well with those interests
Judy McReynolds:and needs that customers had at the time. You know, sometimes
Judy McReynolds:they want a shipment moved exclusively on a vehicle. And
Judy McReynolds:it's not to be combined with other shipments like you do in
Judy McReynolds:an LTL operation. And so that worked out well, was successful.
Judy McReynolds:And then a more recent acquisition we made was MoLo.
Judy McReynolds:And that stands for Modern Logistics. It's, it's a company
Judy McReynolds:that's based in Chicago, a true truckload broker. The great
Judy McReynolds:thing about Molo was, you know, that just the success that they
Judy McReynolds:had already had, you know, with their customers, larger
Judy McReynolds:customers, but that that gave us even a more solid truckload
Judy McReynolds:solution. So we had our LTL network, ground expedite and
Judy McReynolds:premium logistics through this Panther acquisition, and then we
Judy McReynolds:in a more fulsome way, we're able to offer, you know,
Judy McReynolds:truckload based solutions, as well. So, put that together, and
Judy McReynolds:we're facing the customer as of 2017, you know, as ArcBest with
Judy McReynolds:this set of solutions. And it really has worked well for our
Judy McReynolds:customers. And, you know, today, we have solutions that are
Judy McReynolds:unique to each customer, it might be a supply chain
Judy McReynolds:optimization, they might want us to manage their order
Judy McReynolds:fulfillment, they might want us to find carriers for them to do
Judy McReynolds:business with. And so it is truly a logistics company that
Judy McReynolds:works on behalf of that customer. And, you know, that's
Judy McReynolds:very different than just executing in one solution. But,
Judy McReynolds:you know, I mentioned all of that because it really did take
Judy McReynolds:courage and great listening skills, willingness to look at
Judy McReynolds:ourselves and be disrupted or transformed. And I think the
Judy McReynolds:pandemic has shown us the agility that's really necessary
Judy McReynolds:in the business. You know, there are many customers that might
Judy McReynolds:have approached their business very differently pre pandemic
Judy McReynolds:than they do today, for instance, and we have to be
Judy McReynolds:willing to be adaptable with them so that we're doing the
Judy McReynolds:right thing.
Matt Waller:You know, I I've really enjoyed watching your
Matt Waller:strategy change over that timeframe since you've been CEO,
Matt Waller:and I remember, I don't remember what year it was, when it was
Matt Waller:really clear to me you were making a big change
Matt Waller:strategically, you invited me to your rebranding event called,
Judy McReynolds:yeah,
Matt Waller:I don't even remember what year it was,
Judy McReynolds:well, 2014, we rebranded the company ArcBest.
Judy McReynolds:But in 2017, we did that what I would call a an enhanced market
Judy McReynolds:approach where we were facing customers, you know, with
Judy McReynolds:ArcBest as the company with the solutions that we've been
Judy McReynolds:talking about.
Matt Waller:Yeah, that's the event I was thinking of. And I
Matt Waller:thank you for allowing me to participate in that because it
Matt Waller:really gave me clear insights into you, as I was watching the
Matt Waller:news and seeing press releases that helped me understand what
Matt Waller:you were doing. But and so it's clearly been an effective
Matt Waller:strategy. But one challenge you always have when you create new
Matt Waller:strategies like this is putting a structure in
Matt Waller:Oh, yeah,
Matt Waller:to manage that strategy. How have you done that?
Judy McReynolds:Well, first, it starts with the the knowledge or
Judy McReynolds:the idea that you have to be collaborative, as a group of
Judy McReynolds:leaders. There are many cross functional efforts, or teams
Judy McReynolds:that just have conversations constantly in this in this
Judy McReynolds:approach that we use, it actually is harder to execute
Judy McReynolds:inside the company, then, because you're trying to make it
Judy McReynolds:easier for the customer, if that makes sense to you. And so when
Judy McReynolds:we did this enhanced market approach, we combined our
Judy McReynolds:customer facing groups into one. So Field Sales, for instance,
Judy McReynolds:you had before you had LTL salespeople, or you might have
Judy McReynolds:you know, truckload salespeople, but we put that together, and
Judy McReynolds:we're approaching, you know, sales in a combined way, and
Judy McReynolds:then marketing, our training and development, which is a huge
Judy McReynolds:part of who we are, and what we do is a combined effort. And our
Judy McReynolds:pricing philosophies, you know, had to come together as one. And
Judy McReynolds:so whenever you do that, you're you've got leaders, in my direct
Judy McReynolds:reports that really work across solutions. You know, for
Judy McReynolds:instance, you know, the person that's the chief yield officer
Judy McReynolds:has responsibility for pricing, in ABF, the LTL network, but
Judy McReynolds:also, you know, with our, our truckload offerings, and then
Judy McReynolds:when those kind of work across for instance, as a customer
Judy McReynolds:might utilize both, or even, you know, in those managed solutions
Judy McReynolds:that I was talking about, so, you know, I've my direct
Judy McReynolds:reports, have to work across the organization, they're in a
Judy McReynolds:functional areas. So, you know, customer, I have a chief
Judy McReynolds:customer officer, that has responsibility for those
Judy McReynolds:customers that we've been talking about, and, but you
Judy McReynolds:know, has to really not look at the business just through one
Judy McReynolds:silo of a service offering. And, you know, we have a training and
Judy McReynolds:development team that has to be nimble across that, we might
Judy McReynolds:have some initiative or something going on, and one of
Judy McReynolds:those solutions to better serve our customers that has to be
Judy McReynolds:addressed. And our people need to really embrace the thought or
Judy McReynolds:the idea, which I believe most of them do, that we're doing the
Judy McReynolds:best thing, you know, for the future success of the company,
Judy McReynolds:as we're executing the business. But, you know, I never
Judy McReynolds:underestimate the difficulty that we can have in some
Judy McReynolds:instances, because these decisions, you know, have to be
Judy McReynolds:reviewed, as, you know, what maybe is good in the short term
Judy McReynolds:or long term, for instance, for, you know, a specific account or
Judy McReynolds:a decision. And, you know, so so there are those difficulties,
Judy McReynolds:you know, that that we have at times, but you know, when we
Judy McReynolds:when we're doing an integration of a of a new company, like we
Judy McReynolds:bought MoLo, when, basically a year ago, when you bring that
Judy McReynolds:together, you have accounts that were their accounts, you have
Judy McReynolds:accounts that are ArcBest accounts, how are you going to
Judy McReynolds:deal with that? You know, so we've had to navigate through
Judy McReynolds:that and do the best thing for the customer. But, you know, it
Judy McReynolds:takes people with integrity, character, willingness to both
Judy McReynolds:listen and share, raise their hand when there is a challenge.
Judy McReynolds:And we have to kind of come together and address these
Judy McReynolds:things, we don't always agree. And that's healthy. I, you know,
Judy McReynolds:my leadership style is one where, you know, I feel like
Judy McReynolds:it's not all about something I want to do just one person, but
Judy McReynolds:you know, we have to listen, collaborate, develop those best
Judy McReynolds:thoughts and strategies and action plans and, and go
Judy McReynolds:execute. But we have different ways we do that our strategy
Judy McReynolds:team meets once a quarter. And then we develop what those
Judy McReynolds:initiatives or action plans are to achieve that strategy. And we
Judy McReynolds:meet on those monthly and behind them is an allocation of
Judy McReynolds:resources, that has to match up, it has to make sense. And as you
Judy McReynolds:know, the world changes so quickly, those priorities can
Judy McReynolds:change. So we really have to stay in sync and, and not get
Judy McReynolds:too far from, you know, the issues because you'll look up
Judy McReynolds:and you won't be in the right place.
Matt Waller:Well, I mean, of course, I'm very familiar with
Matt Waller:ArcBest. And I'm aware of some really cool things that are
Matt Waller:going on at ArcBest. And but I'd like to hear how you think about
Matt Waller:innovation?
Judy McReynolds:Well, we have the benefit of this history that
Judy McReynolds:we were talking about earlier, you know, being a business 100
Judy McReynolds:years. And just being able to say that is is just pretty
Judy McReynolds:exciting. When you think about the word innovation, it's like,
Judy McReynolds:well, you wouldn't be here today, if you weren't willing to
Judy McReynolds:disrupt yourself, be innovative and transform your business. So
Judy McReynolds:we really do believe in the power of that. And we believe
Judy McReynolds:that we have a lot of expertise and experience with it. But we
Judy McReynolds:we spend about $150 million dollars annually that's
Judy McReynolds:dedicated really to innovation, it can it can be spent in
Judy McReynolds:running the business, which, you know, is good and necessary, but
Judy McReynolds:can also be spent on doing something transformative for the
Judy McReynolds:business. And I think, you know, Michael Newcity, who was he
Judy McReynolds:graduated from the Walton College, the MBA program, I
Judy McReynolds:think, too, and he, he is the leader, he's our Chief
Judy McReynolds:Innovation Officer at the company, and very, very capable.
Judy McReynolds:And just always, he's a lifelong learner. And that, you know,
Judy McReynolds:that's something that's really important in this area, but
Judy McReynolds:something he reminds us of, is that we need to spend more of
Judy McReynolds:our dollars transforming than we do on running the business if we
Judy McReynolds:can do that. And that's what he tries to achieve. And I've
Judy McReynolds:thoroughly embraced that.
Matt Waller:Well, I I have a question about that. Because I
Matt Waller:know Michael Newcity well, he he graduated undergraduate with
Matt Waller:information Information Systems degree from the Walton College
Matt Waller:And he was summa cum laude, which is not easy to
Judy McReynolds:He did, uh huh
Judy McReynolds:accomplish, but also in his MBA. He was summa cum laude. But the
Judy McReynolds:other thing that's noteworthy, especially given what you're
Judy McReynolds:talking about here, is he received the Donald W. Reynolds
Judy McReynolds:Governor Cup Award, which is for entrepreneurship. And I know
Judy McReynolds:that when he first started with you all he started as something
Judy McReynolds:to do with emerging technologies. I think it was
Judy McReynolds:emerging technology, something along those lines, which I
Judy McReynolds:remember, you know, I didn't know him very well, then. But I
Judy McReynolds:thought that's kind of a neat title.
Judy McReynolds:Yeah. Well, as you you know, Michael, so this
Judy McReynolds:won't surprise you, but I'm gonna say is, you know, whatever
Judy McReynolds:role Michael has, is develops around him, you know, because he
Judy McReynolds:just has such a unique skill set. But, you know, when, what's
Judy McReynolds:interesting about Michael's area, as we are looking at the
Judy McReynolds:history of time, or the period of time, I guess is a way to say
Judy McReynolds:that is, since I've been in my role, you know, I'll share some
Judy McReynolds:things with you about that. In 2015, so kind of midway in my
Judy McReynolds:time in my role, you know, we restructured our best, some
Judy McReynolds:areas, our technology team, what we call economic analysis, which
Judy McReynolds:is one of the areas that Michael worked in, in addition to what
Judy McReynolds:we've mentioned already, and our innovations team into what we
Judy McReynolds:call today ArcBest Technologies. We did that kind of in sync with
Judy McReynolds:the rest of what we talked about to better align our business
Judy McReynolds:initiatives. And we wanted to just, you know, just disrupt
Judy McReynolds:ourselves because we could see that we would be disrupted if we
Judy McReynolds:didn't do it ourselves. And we wanted to generate those
Judy McReynolds:thoughts and ideas. And it was very helpful to do this
Judy McReynolds:reorganization. So we introduced also in 2015, advanced analytics
Judy McReynolds:as a discipline. And we began doing a work with predictive and
Judy McReynolds:prescriptive analytics. The next year, we launched the the
Judy McReynolds:project and portfolio management office. And that was really to
Judy McReynolds:help us advance these initiatives, make sure that we
Judy McReynolds:were prioritizing well and optimizing our resources,
Judy McReynolds:because we knew we had to get a return on these dollars that we
Judy McReynolds:were spending so that PMO, that project management office was
Judy McReynolds:just a very important thing, as well as what we did in 2015.
Judy McReynolds:And, and then, since then, we've, we've launched an
Judy McReynolds:innovations accelerator, that you're also familiar with. And
Judy McReynolds:in 2019, we put in a cognitive engagement team. And so all of
Judy McReynolds:that is kind of working, you know, again, to help us invest
Judy McReynolds:well, get a return, but also in throughout all of that, you
Judy McReynolds:know, you're disrupting yourself. And that's been really
Judy McReynolds:critically important to us, we, you know, one of the risks that
Judy McReynolds:we faced as a company, when I first took my role was, if you
Judy McReynolds:just stood still, if you just kind of cut costs, and just
Judy McReynolds:stayed in the same place, there's no way that we would be
Judy McReynolds:the company that we are today, we might, you know, might not
Judy McReynolds:have had success at all. And so you're actually taking a risk by
Judy McReynolds:not doing anything, the way I see it. And so you need, you
Judy McReynolds:need to take calculated risk, and really put yourself in the
Judy McReynolds:best position. And these changes that I described in the, the we
Judy McReynolds:call it AB Tech, it's really ArcBest Technologies, but in
Judy McReynolds:that group, really helped us in the business accelerate our
Judy McReynolds:success, the visibility that we have of emerging, you know,
Judy McReynolds:either opportunities or technologies that can be used in
Judy McReynolds:the business. And I'm just really proud of what we've done
Judy McReynolds:there. Because it helps us to, again, you know, see ourselves
Judy McReynolds:in a different way, perhaps more outside in is a way to think
Judy McReynolds:about it than just, you know, working with the existing
Judy McReynolds:business the existing way.
Matt Waller:I'm gonna mention this, I don't, you don't need to
Matt Waller:comment on it necessarily. You're welcome to, but I have to
Matt Waller:say, you know, coming from your accounting and finance
Matt Waller:background, the strategies you've rolled out, surprised me
Matt Waller:a little bit. Now not to say, I mean, you know, accounting and
Matt Waller:finance are extremely valuable. And there are lots of innovative
Matt Waller:people that go into it. But the degree to which you've
Matt Waller:emphasized this was noteworthy, and I agree with you, you know,
Matt Waller:there's a risk of not doing anything. And you mentioned
Matt Waller:calculated risks. I think that's where the financial kind of
Matt Waller:perspective does help a lot when it comes to innovation, because
Matt Waller:you don't want to take uncalculated risks,
Judy McReynolds:Right.
Matt Waller:And, of course, as I've been, you know, there's,
Matt Waller:there's some risks that, you know, it's hard to see where the
Matt Waller:IOA ROI is gonna come from. They're more like an option, you
Matt Waller:know, value, but there's some that you've got to have more of
Matt Waller:them that have clear ROIs, or at least you're thinking through
Matt Waller:the ROIs. And I think that's where understanding or thinking
Matt Waller:from a micro economic and financial kind of perspective
Matt Waller:really can help. You know, one thing Thomas Sol is famous for
Matt Waller:saying was, you know, there, there aren't any solutions.
Matt Waller:There's just trade offs. And, you know, when you were talking
Matt Waller:about this, this function that you created with the ArcBest to
Matt Waller:prioritize all of these things, the portfolio of innovations.
Matt Waller:I've not seen that a lot.
Judy McReynolds:It is fairly unique, it is. You know, what's
Judy McReynolds:interesting about what you just said, is, you know, the, the
Judy McReynolds:ROI, I think what where you were you were going with that is that
Judy McReynolds:the ROI can sometimes be something that is in an Excel
Judy McReynolds:spreadsheet, or it's on paper, but is it real? And I think
Judy McReynolds:that's one of the things that I learned from doing those
Judy McReynolds:calculations on the one hand for people when I was CFO, for
Judy McReynolds:instance, and then being in my role, now, there's a discipline,
Judy McReynolds:in some ways, it's a change management discipline that you
Judy McReynolds:have to put your energy into, and the people that are
Judy McReynolds:executing these strategies have to get behind, because you've
Judy McReynolds:got to be able to track it and look back. And people have to be
Judy McReynolds:enabled to to execute, whatever the change was, that was going
Judy McReynolds:to result in the return. Okay, so maybe it's the technology
Judy McReynolds:that you're making more visible, the pipeline of customer
Judy McReynolds:opportunities, and you're creating leads, and you're
Judy McReynolds:allowing them to, you know, see that lead and then go execute,
Judy McReynolds:well you've got to track whether, you know, they actually
Judy McReynolds:produced revenue from that, right? You know, or if it's a
Judy McReynolds:cost efficiency you gave, you know, you put together a system
Judy McReynolds:that enabled, you know, a a change. One of the things I was
Judy McReynolds:thinking about just this morning was city route optimization, you
Judy McReynolds:know, as, as an efficiency example, so you're trying to
Judy McReynolds:optimize the route that a truck is going on to either pick up or
Judy McReynolds:deliver freight. Well, you know, if you've got a city route
Judy McReynolds:driver, that stays on course, and does that, even though maybe
Judy McReynolds:their institutional knowledge tells them to do something
Judy McReynolds:different, you know, you're you're going to have success, if
Judy McReynolds:the if the return model told you to do it, based on the optimized
Judy McReynolds:route, right. But if that person chooses not to, then you, you
Judy McReynolds:know, then then perhaps you don't ever get the benefit of
Judy McReynolds:that investment that you've just made, we understand that you in
Judy McReynolds:addition to having the model, or again, the calculation, you have
Judy McReynolds:to go and execute and you have to track, you know, what was any
Judy McReynolds:a part of that calculation, a key metric, so that you can test
Judy McReynolds:yourself to see whether you're getting the benefit or not. And
Judy McReynolds:that's that, that's, that's one of the things that I come back
Judy McReynolds:to with our people, I started talking about our people when we
Judy McReynolds:began our discussion. And if you don't have good people that are
Judy McReynolds:willing to embrace change, and opportunity, and really get
Judy McReynolds:involved in understanding what you're trying to accomplish, is
Judy McReynolds:very, very difficult to transform the company to gain
Judy McReynolds:either growth or efficiency without it.
Matt Waller:We, you know, in our conversation this morning,
Matt Waller:you've mentioned growth several times in the current environment
Matt Waller:over the last two plus years, this isn't an easy feat. Can you
Matt Waller:talk about how you've been able to continue to grow at ArcBest?
Judy McReynolds:Well, I think it starts with positioning
Judy McReynolds:ourselves in large markets, you know, we operate in markets that
Judy McReynolds:are $500 billion dollars, where if we were just in the LTL
Judy McReynolds:market, it would be about 50. And so what we've done is
Judy McReynolds:positioned ourselves where we've had, you know, real ability to
Judy McReynolds:grow based on the markets that we're in. And then, because
Judy McReynolds:we've done this work to understand the opportunity
Judy McReynolds:that's in our customers, we know that we have customer
Judy McReynolds:opportunity that could allow us to double the size of the
Judy McReynolds:company, we're a $5 billion company, but we can see 5
Judy McReynolds:billion more of opportunity within our loyal customer base.
Judy McReynolds:And you know, so like I was saying, if you create visibility
Judy McReynolds:for people to understand whether it's in a territory, you know,
Judy McReynolds:what those best accounts are, that they can go pursue, or it's
Judy McReynolds:just additional solutions that could be of interest to a
Judy McReynolds:customer that you're already doing business with in one area.
Judy McReynolds:That's what we want to do. And that's what we've we've done is
Judy McReynolds:to try to, you know, make visible these opportunities that
Judy McReynolds:we know are there. And then of course, be willing to invest in
Judy McReynolds:the solutions that allow you to go and be successful, you know,
Judy McReynolds:with that business, but you know, it really is exciting when
Judy McReynolds:I think about the business and the information that we have
Judy McReynolds:today versus what we had, you know, 10 or 12 years ago, it is
Judy McReynolds:amazing. But it could just be a lot of information. You got to
Judy McReynolds:make it live. You have to put it in front of people. And you
Judy McReynolds:know, that's what many of our investments are around But you
Judy McReynolds:know, and customers continuously have challenges that are new. It
Judy McReynolds:always amazes me, you know what we can help with. And so being
Judy McReynolds:in those conversations, visiting their sides, having them visit
Judy McReynolds:here, taking them over to the innovations lab, letting them
Judy McReynolds:see some of the things that we're working on. It just really
Judy McReynolds:is a successful formula, you know, for growth, when you can
Judy McReynolds:see the opportunity, you know where it is, you got great
Judy McReynolds:resources to go get it, and you're willing to put dollars
Judy McReynolds:behind enabling those people to be successful.
Matt Waller:This is such a great case study in innovation
Matt Waller:in general, and strategy and structure. And it's clear from
Matt Waller:talking to you that you have very well structured thoughts
Matt Waller:about how to achieve and succeed with an innovation strategy. So
Matt Waller:congratulations on that. And it's awesome that, you know, you
Matt Waller:have been able to really transform the company in so many
Matt Waller:ways. And congratulations, once again, on your induction into
Matt Waller:the Arkansas Business Hall of Fame coming up in February.
Matt Waller:That'll be a wonderful event. Well deserved. And thank you for
Matt Waller:taking time to visit with me today, Judy.
Judy McReynolds:Oh, thank you. And again, it's a blessing and
Judy McReynolds:an honor to be in inducted into the Hall of Fame. I'm just very
Judy McReynolds:excited about that. I'm excited for all of our employees as
Judy McReynolds:well. It's an honor.
Matt Waller:On behalf of the Sam M. Walton College of
Matt Waller:Business I want to thank everyone for spending time with
Matt Waller:us for another engaging conversation. You can subscribe
Matt Waller:by going to your favorite podcast service and searching.
