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Andy Stanley - Corporate Purpose with Carol Tomé · Andy Stanley Sermons

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Hey, everybody, Welcome to the Andy Stanley Leadership Podcast, a conversation designed
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to help leaders go further faster. I'm Andy Stanley, and I, along
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with our entire team, are so excited about this month's podcast episode as well
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as next month's episode, because Carol Tomey is in the studio with me to
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talk about corporate purpose. Carol, thank you so much for being here.
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Andy, it's just a delight. Thank you for inviting me to join you
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today. Well, this is going to be a lot of fun for the
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handful of you who don't know who Carol is. She is the chief executive
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officer of UPS. The UPS, that's right, she's actually the twelfth CEO
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in their one hundred and fourteen year history. So I averaged this out,
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so that's about a nine and a half year tenure. I guess that's about
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all anybody can take at that level of leadership. I don't know, it's
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probably right, yeah. Anyway. Before joining UPS, Carol served as executive
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vice president and chief financial officer the Home Depot, one of the world's largest
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retailers and another Atlanta based company. She joined Home Depot in nineteen ninety five
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as a vice president and treasurer. And honestly, Carol, when I was
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reading through all your accomplishments, I thought we might have to do an intermission
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in the middle of your resume. It is so amazing, and I know
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you don't care about any of this anyway. Carole began her career as a
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commercial lender with the United Bank of Denver, which is actually now Wells Fargo,
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and then spent several years as director of Banking for John's Mansfield Corporation,
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and then, prior to coming to Home Depot, she was the vice president
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and treasurer of Riverwood International Corporation. And in case you're wondering, she's not
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one hundred and fourteen years old, although you might think she is, because
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how in the world did you accomplish all that unless you started it twelve years
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old. Oh, it was about twelve that twelve years old when you began
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on your corporate journey. Now, the primary reason I wanted to have Carol
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on the podcast, and we're going to get to this a little bit later,
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is that Carol, when you got to Ups, I'm right out of
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the choot. From what I understand, you decided to do the unthinkable and
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to begin messing with corporate documents and specifically to change the corporate mission statement or
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purpose statement of ups. So I can't imagine a more bold decision coming in.
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So I'm looking forward to us talking about that. But all of that
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related basically to your passion and really conviction as it relates to corporate purpose.
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So that's where I'd love for us to jump into this conversation. So how
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have your views, because you've been in multiple corporate environments, how have your
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views on the role of corporation and purpose evolved over time? Because, like
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I need to tell you that traditionally shareholders are the primary focus. Clearly that
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has changed in multiple industries. And what do you make of this shift towards
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purpose and what in terms of your journey kind of focused your attention on that
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is corporation's shift in that direction but away from some of the more traditional things.
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Yeah, Andy, it's really been a journey for me. I went
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to college in the late seventies and early eighties, and I was a student
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of Milton Friedman. If you know him. You won a Nobel Peace Prize
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in nineteen seventy six for Economics and the Purpose of the Corporation and he was
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convinced that the purpose of the corporation is to create value for shareowners. And
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so that's what I studied, and that's what I believed, and early in
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my career that's what I did. It was all about deals and making money
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and creating value for share owners. And as you mentioned in the introduction,
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I've done lots of different things in my career, but when I landed at
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Home Depot, things started to change for me because I was extraordinarily fortunate to
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work for the founders of Home Depot, Bernie Marcus and Arthur Blank. And
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Bernie said something early days in my career there that really hit home. He
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said, you know, Carol, if we take care of the associates,
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they'll take care of the customers and the stock price will take care of itself.
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So flip script a little the script and I'm like, huh, do
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you know. I'm like, I don't know if I'm buying that yet or
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not. Little squishy, ye, little squishy. But as time progressed,
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I started to believe. And then fast forward to the financial crisis of the
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mid two thousands, when I was now CFO of Home Depot working for Frank
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Blake. Someone I know, you know, I think he's been on this
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podcast, one of our favorites one. He's such a wonderful leader. And
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it was a terrible time for us. It was not only a financial crisis,
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but it was a housing crisis, and Home Depot felt it. They
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lost thirteen billion dollars of revenue in one year, twenty five percent of their
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top line. That's like wiping off a company like bed Bath and beyond off
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the face of the planet. And we had to make some really hard decisions,
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exit businesses, close stores. But we also decided that even though it
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was the depth of the recession, we were going to invest in our people.
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We were going to continue to pay merit increases to the hourly associates who
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were working in our stores, pay four on one K contributions, success sharing
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bonus programs to these associates, because we thought if we invested in them,
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when the economy turned around, and we knew it would one day, they
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would be there to take care of the customers. And was that an easy
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I mean, I mean, you know, you're compressing a lot of conversations
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at multiple levels. But because of the culture at Home Depot did already lean
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in that direction. We doubled down. We doubled down because we had to
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make some really hard decisions. We were closing stores at the same time we
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were investing in our people. But we knew it was the right thing to
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do, and when the economy turned around, well, it proved to be
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true. We saw ourselves gaining share, producing unbelievable financial results. And in
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my tenure as CFO, we did a lot of other things. But in
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my you know, we gave back to the communities through volunteer hours. We
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purchased a timber from Sustainable for us. We did a lot of things to
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take care of the needs of the stakeholders, and in my tenure as CFO,
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we saw a four hundred and fifty percent increase in share on our value.
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So I'm like, this is sort of proof positive to me. This
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works. You take care of your people, you take care of your communities,
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you do right by the earth, and the shareowners are paid. Wow.
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So in terms of confirming your suspicions, to see that actually play out
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in an actual company where there was so much at stake at a very difficult
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time, not only in the history of the company, the life of the
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company, but in the economy overall. I mean, that's sort of the
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proof of the theory, right, it's proof. So you stepped into your
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current role in June of twenty twenty. Yes, a wonderful time to step
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in. In fact, when I first heard this, I thought, does
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she lose a bet? I mean, listen, just for our podcast audience,
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could we pause for just a moment and think about June of twenty twenty.
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Okay, pandemic, worldwide pandemic, economic shut down and meltdown, not
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just in this country but all over the world. In a year we're about
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to elect a new president. It was the worst possible time to step into
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this role. So again, I think that's so important for audience as we
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move forward with this story, to just remember the context that you stepped into.
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Again, I just thought she must have lost a bet. So anyway,
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immediately you began thinking in terms of purpose. I mean, there were
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so many other things to be thinking about, and yet you carry this value
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so near and dear. It was still top line for you, even with
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all that turmoil. Talk just a little bit about that. Yeah, Well,
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maybe I'll just take you to that June first day when I took the
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role as CEO. I had put together a video that we were going to
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show around the world. You know, we deliver packages in two hundred and
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twenty countries and territories around the world, and we have five hundred and forty
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three thousand people around the world. So I wanted to talk to them,
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and I didn't know how I could do it in the midst of a pandemic.
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I thought, well, I can do it through a video. So
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I'd put together a video and it was a pumped up positive you know,
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this is what we're gonna do. We're gonna have some fun. June twenty
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twenty. Yeah, this, you know. I was really really positive.
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And then the weekend before that video was to roll, there was the George
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Floyd killing and I'm like, oh my gosh, I can't run this video.
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I can't run this video. I was so saddened, and I was
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just ashamed, and I was heartbroken, and I was mad, you know,
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every emotion was flowing through my body. So I sat down on my
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kitchen table and I wrote a note about how I felt, and I said,
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run this note before we run the video. So we ran the note
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and it was really about turning my anger into action by living our values and
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creating an environment at UPS where people could feel safe in a world where you
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don't feel so safe, you know, safe from COVID, So to make
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sure that you had all the protective gear that you needed, be it masks
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and sanitizers and gloves and that sort of thing, safe from what's happening outside.
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You know, with all the social unrest come into our family, you
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can feel safe here. So that started this purpose discussion because I wanted our
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people to be safe and to set an example for the rest of the world
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that there was no place for hate in the world. And then it moved
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into well, what's our real purpose? You know, I wanted our people
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to feel safe, but what's our real purpose? As a company? We
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knew what we did. We delivered two percent of the world's GDP every day,
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six percent of the GDP here in the United States. It's rolling across
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a UPS vehicle every day. We knew what we did, but we hadn't
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declared why why we did it. And this eventually led to you or a
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team. I'd love to know how that work crafting this what I think is
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an extraordinary purpose statement. And I told you that for in fact, one
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of the things I skipped over is that we actually met. We did at
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a zoom meeting on steroids. There, I don't know what two hundred and
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fifty people from all over the world at this conference. It was a bit
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intimidating, honestly for me to walk into. But this was essentially where you
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unveiled this new purpose statement. I'd love to know a little bit how it
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happened. Whenever you began messing with corporate language and corporate documents. It's messy,
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it's a little bit scary. The people have been there for a while,
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or like, wait a minute, this is not only how we've always
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done it, this is our language. And yet you felt this was the
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time to do this. Can you talk just a little bit about the process,
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and can I go ahead and just read this statement? Yeah? Please?
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Did didn't ask your permission. I just do moving our world forward by
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delivering what matters, moving our world forward by delivering what matters. I thought,
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it's simple, and it's beautiful, it's it's just perfect. How did
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you get to that? Well, you know, Andy, I'm the first
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outside CEO that UPS has had. Now, I had been on the board
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for a long time, so maybe I was an outside, inside person,
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but I was still the first outside. So I'm like, boy, the
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only way this is going to work is to hold on to our values,
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the values that we're instilled in our company by Jim Casey, who was the
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founder of ups Now one hundred and fourteen years ago. So we started with
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that as the base, and then we put together a cross functional team of
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ups rus and we said, we challenge you, We challenge you to come
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back and define our purpose. So they did a masterful job of talking to
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ups ors, retirees, customers, communities, suppliers. They went around the
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world talking to people, and they iterated and iterated and iterated until we landed
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on this. And when they unveiled it, we were all like, yes,
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you just know, don't you. You just know, you just know.
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And it's been a real rallying cry for our team ever since we unveiled
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it now over a year ago. Well, Carol, one of the we've
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talked about this on our podcast before. One of the dangerous things about purpose,
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as opposed to just mission, the endgame for the purpose of a thing
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is never the thing. In other words, the purpose of the drill isn't
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the drill. It's the whole purpose of the broom. Isn't the broom,
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it's the clean floor. Could go on and on. So when a company
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begins talking about purpose, there's a sense in which the company takes a back
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seat to something bigger and greater than the company. That's the nature of purpose.
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A purpose insinuates that something is going to become a means to an end
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rather than the end. In fact, that's what being meaningful means. I'm
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going to be a means to an end. So before I jump into some
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specifics, apparently you were fine with positioning UPS as a means to an end
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that was not UPS. For many organizational leaders, this scares them to death
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because of the bottom line, and as we talked about earlier, because of
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shareholders. I mean, shareholders don't care if you have a purpose. They're
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not right. They just look at spreadsheets and numbers. So talk a little
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bit about positioning a company with an end that's greater than the company. Yeah.
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Again, because of my experience at home Depot, I was convinced that
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if you take care of the needs of the stakeholders, this shareholder will be
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taken care of at the end of the day. And I can make that
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real for you with a couple of examples. And you talked to us about
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this when you addressed our leadership a year ago. You said it's going to
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come with a cost. Purpose comes with a cost. And at the time,
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I'm like, yeah, but I don't know how I can make that
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really real for us. Well, shortly after we unveiled our purpose meant we
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were looking at a product that we deliver. We were delivering vapes. You
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know, those cigarettes that are not good. We were delivering them, and
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we were making about two hundred million dollars a year on the revenue line by
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delivering those vapes. We looked at ourselves and said, this isn't aligned with
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our purpose, so we stopped delivering. That's two hundred million dollars or revenue.
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They said, we're not going to take it. Was still the right
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thing to do for the shore owner, right because people who are dying because
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they're going to see vapes, they'll be alive and get Was that an easy
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decision? You know, it turned out to be a super easy decision.
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We made it as a team, but it turned out to be a super
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easy decision. Another example of this is from a sustainability perspective. You know,
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we fly almost six hundred aircraft to every day. We have one hundred
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and twenty five thousand vehicles on the road. In fact, in the United
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States we travel three point four billion miles a year. That's billion with the
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beep, So, as you can appreciate, we emit a lot of greenhouse
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gas. We are greenhouse gas hogs over thirty five million metric tons. From
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a Shoholder perspective, it might have been easy to say, well, we'll
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just wait for someone to figure that out. We know it's for somebody else
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to go first. Yeah, exactly. We don't want to lead on this
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aircraft. We don't want to know. But as a team we said,
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nope, the right thing to do for the world is to actually declare that
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by twenty fifty we will be carbon neutral. So we made that declaration this
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year. That's going to come with the cost, but it's part of our
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purpose, right, moving our world forward by delivering what matters, Delivering a
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sustainable delivery solution matters. Yeah. One of the things again that regardless of
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the size of the organization, you don't really know if you're on purpose until
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it costs you, right, wouldn't you say that. I mean, if
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the vape decision was the first one was like, oh, are we really
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on purpose? Or was that just a really great statement to unveil and in
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that moment you discovered and your leadership team discovered, oh we're on purpose.
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Wow, that's incredible. Well, again, because of the scope of UPS,
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you're about to take away a lot of excuses for a lot of organizations
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when you answer this next question, because one of the things that we all
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wrestle with, or should wrestle with, is the alignment between company culture and
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purpose. If the culture and the purpose aren't in alignment, generally the culture
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wins out in the end, and the purpose was just something we talk about.
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So how did defining purpose at UPS affect the culture? Because it has
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to affect the culture and again, more than five hundred and forty thousand employees
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and associates around the world. Of course, there wasn't immediate change just because
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you unveiled a new purpose statement. But how has that been communicated out and
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how is that beginning? I guess is the fair question to impact the actual
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culture of UPS, because again, if there's not alignment between purpose and culture,
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then ultimately we're not as purposeful as we set out to be. So
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when I joined the company, I said, do we measure associate satisfaction?
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Yes? Yes we do. I said, how well, we have an
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associate satisfaction survey that we take every so often, and we roll up the
16:06
results into a likelihood to recommend score. I'm like, okay, great,
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what's our score? And I was told it's fifty one percent. I'm like,
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fifty one percent. Fifty one percent of our ups rs would recommend us
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as a place to work to their friends, our family. That means that
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forty nine percent of our UPS's would not. What's the root cause? You
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seem to be the only one concerned with was on fire? I'm like,
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what's the root cause? So they gave me. I'm early, early in
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the company. They gave me one hundred and sixty page document to take home
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to read. So I took it home. I sat down on my kitchen
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table, and the way I like to read things is I opened it up
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in the middle, and if it's interesting in the middle, then I'll go
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back to the beginning. So I opened it up to the middle and I'm
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reading out loud, and I'm reading out loud, verbatim comments from ups ors
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that were showing how our behaviors were not aligned with our values. And my
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husband, I'm reading a loud He's like, what are you reading? Like?
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This is what I just now. We have an opportunity here because our
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behaviors are not aligned with our values, So what do we do about it?
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Defining purpose was part of that, to say, this is what we
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stand for, and these are the values that the company was started with.
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We've got to align our behaviors against both values and purpose. So we started
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by training everybody. Hello. You know, we said, let's go train
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our management teams. So we went out and trained everybody, and then we
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started holding people accountable. How about that? So if the behaviors didn't match
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the values, even if the performance, even if the numbers were being delivered.
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You know, if you look at a scorecard and the scorecard is all
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green, but if the behaviors didn't match the values, we started to move.
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And I will tell you we just took another associate satisfaction survey and the
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score is now sixty one percent. Now that's not where we want to be.
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Yeah, but when you think about how large IPS is that that's extraordinary.
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We're moving it. We want we declared we want to get it to
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eighty eighty percent would be best in class. So we're on a journey.
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We've got of ways to go. But I was I'm pleased that we're moving
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in the room. This is a really really important piece of this conversation.
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You interjected a new word in your answer, and that was the word behaviors,
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because again it's you know, every company has values. Values irrelevant,
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it's what people do. It's the behaviors that matter. So did you create
18:22
or was there a list of or how did you talk about behaviors in terms
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of making sure there was consistency. Yeah. Through the training, we actually
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role modeled behaviors, behaviors that were in line with our values and behaviors that
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weren't, and then we talked about it. And it wasn't just the UPS
18:41
leadership team, I mean the executives went through the training. This was five
18:45
hour training. I'm like, we're not giving this training to anybody until I
18:48
go through it, so I want to participate in it, right. And
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it was really really helpful actually, because you understand some unconscious biases that you
18:55
don't even know about. Behaviors, right, you just don't even know you
18:57
have them. So I think it was really helpful. And you know,
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there's no endgame here. We have to constantly, constantly invest in this and
19:06
talk about it and get comfortable having uncomfortable conversations. So in a relatively short
19:11
amount of time, then the purpose statement measured against internal satisfaction or internal perception
19:17
of consistency. That's significant change in a pretty short amount of time. Especially
19:22
again when we go back and think about when did this begin. Oh yeah,
19:25
summer of twenty twenty. I mean, how in the world, as
19:27
a organizational leader, did you give yourself permission in the middle of a triple
19:33
crisis to even focus on these issues. This is the kind of thing.
19:37
It's like, Hey, once we get through this, then we'll deal with
19:40
the squishy stuff. Then we'll talk about purpose. But you just knew intuitively,
19:44
know this is where we need to begin in spite of where we are.
19:48
You know, before I took the job at UPS, I had retired.
19:52
I have a farm in North Georgia. I was at my farm doing
19:53
a lot of gardening, doing a lot of reading, some a number of
19:56
corporate boards, and my husband and I had created a foundation, and so
20:00
when I was called back, I'm like, well, why would I even
20:02
come Why would I come back? I'm retired, I'm almost sixty five years
20:06
old. I'm like, why would I come back? And I'm like,
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okay, there are a few reasons why I would come back, And one
20:11
was to make a difference with the people. You know, I love to
20:14
develop people. I'm like, this is this is an opportunity of a lifetime
20:18
to make a difference on the people. One was to really look into I
20:21
knew there was a purpose opportunity at UPS. It was missing. I'd been
20:23
on the board for a while. I'm like I could grab it. Another
20:26
one was to actually make the stock price move candidly because I'm like, if
20:30
we do this, this and that, the share price can move. Because
20:33
I hadn't moved for six years. So all those reasons for coming back to
20:37
pull me out of retirement back into the company. Then I was like,
20:41
I'm going I didn't come back just to sit. I came back to move.
20:45
That's fantastic. Well, next month, we're actually going to talk about
20:48
your passion around leadership development. Yeah. But to wrap this up, I
20:51
just think this is fascinating and if you can talk about this. Obviously UPS
20:55
is on the front lines of vaccine deliveries. Yes. In fact, from
20:57
what I understand, is on pace to deliver a bill Is this true?
21:03
A billion, one billion COVID nineteen vaccines by the end of this year.
21:07
Yeah, a billion. Yes. Can you take us behind the scenes a
21:10
little bit. I mean I think people just, you know, assume all
21:12
this stuff gets moved around. I mean, I know, you know,
21:15
everybody has to make money at eat and live indoors. We talk about that.
21:18
But jumping into or taking a significant role in the role out of the
21:23
vaccine, I mean, that's historic, that's epic. That's for such a
21:26
time as this talk a little bit about that, that's amazing. Well,
21:30
thank you. We're so proud to be part of this moment delivering vaccines.
21:36
But we've been in the healthcare logistics business for fifteen years, so we've been
21:40
delivering vaccines for a long time. Think about smallpox vaccines or flu vaccines,
21:45
but the COVID vaccines are very different, aren't they Because many of them have
21:49
to be refrigerating, especially early on, early on, and it's a complicated
21:53
supply chain. So I'll take you through how the products flow, because I
21:57
think it's pretty cool. We all back a year ago when Pfizer received the
22:02
FDA approval. We were so excited because we were going to deliver that forro
22:04
Pfiser. So we pulled up one of those tractor trailers, those eighteen wheeler
22:08
tractor trailers up to their manufacturing plant in the Midwest, and the vaccines were
22:14
loaded on to that tractor trailer. We drove the tractor trailer to a local
22:18
airport and the vaccines were loaded onto a brown tail one of our aircraft.
22:23
We flew that aircraft to Louisville, Kentucky, which is our largest air hub
22:27
in our network. The vaccines were unloaded off of aircraft. They were processed
22:33
with the dry ice and special labels that have batteries inside the label so that
22:38
we never ever lose track of that package because we have control towers that we
22:44
stand up to watch the package. From worldport. The vaccines were now loaded
22:48
onto feeder aircraft and flown to their final destination. Let's say it was Dallas.
22:53
They got off the plane in Dallas, they were loaded onto a brown
22:57
package car, just like the package car that comes to your house. I
23:00
hope to deliver packages to you and they were delivered to the dosing organization.
23:06
We do this every day within twenty hour window at ninety nine point nine percent
23:11
effectiveness. Wow. Yeah, I'm so proud of our team. Now,
23:15
the special label with the chip, Yes, was this part of something that
23:18
UPS developed? Oh? Yes, it's a product we call UPS Premiere.
23:23
So it's a special label that we created. And I'm really excited because we're
23:27
going to take that technology and it won't be as specialized as what we use
23:32
vaccines, but we're going to put RFID chips on all of our packages so
23:36
that we will never lose a package in our network. How cool is that?
23:38
Wow? I know I'm excited about that. We call it smart Package.
23:41
Wow. We're going to wrap up the first part of this conversation,
23:44
but I'd love to close with this. I mean, your business experience is
23:48
broad that the people you've met are amazing, and that would be an interesting
23:52
conversation. The most fascinating people you've met, the most obnoxious people. Anyway,
23:56
you've been there and done that, and then you're retired and you're on
24:00
the farm and you get the call up. Anyway, so as you reflect
24:03
on all of that, global challenges again. You know, folks like me
24:07
we watch the news. You have been on the front line at so many
24:11
levels, especially again June twenty twenty forward, challenges with environment and COVID,
24:17
social justice, all the sort of things. What do you anticipate from the
24:21
business community in general in the months ahead? I mean, how do you
24:26
see business as being you know, uniquely suited to address some of these enormous
24:30
challenges we face. And the reason I would love for you to take a
24:33
shot at this question is because the average person like me, we feel like
24:37
the answer unfortunately sits with politicians. It's like, when are they going to
24:44
figure this out for us? And you know, which way do we lean
24:47
so things will go well? But in reality, business has so much not
24:53
only to do, but to say in terms of addressing some of these global
24:57
issues. So from where you said, how does business intersect and what are
25:03
the opportunities and how again do you just see that melding of both political influence
25:07
and the influence of international businesses like ups. Yeah, I think what you're
25:12
seeing is that more and more business leaders are filling the void that we thought
25:18
government would fill. And perhaps that's the right thing, because we're pretty good
25:22
at process. You know, I can make this real for you. When
25:26
COVID exploded in India earlier this year, we needed to get ventilators into India,
25:32
and you know who did that, the business community. We just came
25:34
together. There are a number of CEOs who said, we can do this.
25:37
I can fly ventilators in can you make them for me? We just
25:41
came together. We didn't wait for governments to come together to solve that problem.
25:44
We just solved it. And we understand process. We can mobilize.
25:48
We have people, and we have resources, and we don't have to go
25:51
through all the bureaucratic red tape. So I think we're going to feel more
25:55
and more of the void and we've got to be comfortable doing that. I
25:57
didn't think that's the role we were going to play, but now I do,
26:00
and I'm okay with it. That's amazing. Well, unfortunately that's all
26:03
we have time for this month. But fortunately you said you'll come back for
26:07
next month's episode, So I'm super excited about all that. And to all
26:11
of our listeners who want to thank you for joining us, and make sure
26:14
you check out the Andy Stanley dot com website where you can download the Leadership
26:17
Podcast application guide that includes a summary of this discussion along with questions and reflection
26:23
for your entire leadership team, and be sure to join us next month as
26:26
we will continue our conversation about a topic that Carol is so passionate about leadership
26:33
development. We'll be right here and we will see you next time on the
26:36
Andy Stanley Leadership Podcast