The $25B CEO: Most Leaders Are Setting Goals Way Too Small

0:00In my mind, what ego is, you think that you're so good at something that you stop learning.

0:10How does a software engineer end up as the CEO of one of the largest trucking companies in the world? Well, I think engineering gives you a very good roadmap and a very good framework of solving problems. I have young kids and I always tell them whenever we have something that gets broken or something we want to build, I always tell them, what do engineers do? We say they build things and they fix things. And I think in the world of business, you're dealing every day with either problems or

0:42goals you want to accomplish. And an engineering mindset gives you a framework of how to solve for these problems. If you think of the engineering design process, it's based on one identifying a problem or a goal. Then it's about collecting a lot of data around that particular problem or goal, then defining your requirements, then designing and building a solution, and then eventually testing it for what the outcome would look like. And that discipline and rational thinking and data-driven analysis actually helps you in being able to run a company.

1:12Now, the other side of that, though, is around people skills, because when you're on a company, you're effectively, you have teams of people and your goal is to make sure that they are the best versions of themselves. And applying engineering principles to that also helps a lot. So then your team becomes very data-driven. Your team becomes problem solvers in terms of how being able to go from point A to point B of whatever, again, whether it's a goal, whether it's a problem you want to solve as well. So I think these are some of the early innings in terms of, as I grew in my career, engineering

1:43gave me that framework to be able to solve problems and achieve goals. Couple that with people skills. This is what has enabled me to effectively run a trucking company. But wait a second. How does that engineering mindset help you as the CEO? As the CEO, your first goal is to actually figure out what is your overall strategy? How are you going to be able to create a lot of shareholder value? Are you going to be able to create a company that can grow earnings, that can, and ultimately deliver a lot of shareholder value?

2:14To be able to deliver that, as you define your strategy, you have to have a framework by which you define a strategy. Now, once you have your strategy, you have certain elements associated with that, where you have certain KPIs that you are monitoring on a daily, weekly, monthly basis of whether you are achieving the levers of the strategy. Then from that, for every KPI, in terms of being able to define how you go from one value to another value, you need an action plan. You need a solution for that. So that engineering mindset is a problem-solving mindset.

2:46And whether it's defining strategy, whether it's executing on levers of your strategy, an engineering mindset is going to enable you to deliver on those outcomes over a period of time. So I think that discipline and grounding your decisions in data does help make you an effective CEO. Now, that on its own goes at odds with being able to manage people. Because as an engineer, you're thinking perfection. You're thinking the process has to work just right. But the reality is people don't operate that way. So I think engineering on its own gives you a framework.

3:19However, how you can transform or translate that framework and how you manage people and love people and believe in them and believe what's best in them is the other ingredient to be able to then enable you to deliver good outcomes. What surprised you the most about people coming from an engineering background where things are sort of predictable? Well, first, I'll start by introspecting, looking at myself as a person. As I was growing up, I remember I always used to think that perfection is a good thing.

3:51So every time I was set to work on a certain project, on a certain task, that the outcome has to be perfect, that the outcome. And you tell yourself in your own mind these things that, you know, like this is not good enough. It can be better than that. Or you're building a piece of software. This piece of software has to be just exactly right. The code has to be simple. It should not have any bugs in it. And I think the human mind typically doesn't operate in perfection. We all have our own idiosyncrasies. We all have our own biases.

4:22We all have our own way of doing things. So for me, in terms of managing people, a lot of it goes back to looking at how they view solving a problem, how they look at the world, how they look at being able to deliver value, how they look at being able to treat others with respect. And I think what surprised me the most is that every person is different and every person in their own way, they are beautiful. Their mind works in a beautiful way. And being able to take their own methods, their own way of thinking, believing in what's

4:56best in them is what creates the most amount of outcome. And it's also a pleasure because then you're effectively working with a group of smart people who are finding their own way to be the best version of themselves. And I think not applying one framework or one method to solving a problem is important. You're employee three at XPO and you get to work with one of the greatest capital allocators and entrepreneurs of our generation within Brad Jacobs. I'm curious what you learned from him.

5:26Well, Brad is one of a kind. He's somebody who started eight multi-billion dollar companies from scratch and in different industries. And a lot of it goes back to having a framework, a method, and he actually wrote two books where he outlines that framework in terms of how to build great companies, companies that endure the test of time. And ultimately, the goal of a company is to create shareholder value. And these companies have created a tremendous amount of shareholder value.

5:58So I learned from him. Now, everything you read in the book is actually part of the framework in terms of how you think about, one, setting very big goals for business, thinking outside of the box of how you can deliver a large amount of value. And number two is actually, now, in our case and the case of the companies he has built, a lot of it, the early innings was around M&A and M&A integration and how you allocate capital in a very effective way where you buy a company at a lower multiple than what your company is trading at, but a company that has a good strategic outcome for what you are

6:30trying to build as well. But if I go back to what I learned from him, I mean, I learned a tremendous amount in more than a decade, but probably number one, I would say is to always think big. Don't set small goals. Life is short. Set big goals, whether it's how much value you're creating, whether how much profits you're growing, whether a certain project that you think needs three years to get done and how you can get it done in three months. Set big goals and do that at work. Do that in your personal life, because when you set big goals, you achieve great things.

7:00If you set small goals, you achieve small things. And that's probably the number one thing I learned from him. What would be number two? What would be the second thing that comes to mind that maybe not is in any of his books? Number two, I would say is actually how you manage people, how you actually, who you surround yourself with and to have a very disciplined approach to look at the people who are around you, that you have a team, because ultimately in business, you don't go at it alone. You have a group of people and you want them to work collegially as a team, as a group of people

7:32who support each other, who want to, following a certain strategy, a certain framework, want to go achieve great things, want to beat the competition, want to win. And effectively, how you surround yourself with people, how you actually create a team environment that is very constructive, how you get feedback loops. So you're always looking at whether it's the plan or the strategy, you're always adjusting in some cases in small areas, in some cases in big areas to be able to get to better outcomes. But I would say the team dynamic and how you capture feedback loop is number two.

8:05Talk to me about that a little more, because it seems like everybody hears this, you know, who you surround yourself with matters in life and matters in work. And I would love for you to just riff on that more for a minute in terms of the quality of people. If you look at who we hire for as an organization, but how we think about the team, the team as well. Generally, we break it down into three broad categories, and this is the work side. But some of these carry over to the personal side and who you have personal relationships with. But number one at work would be, are they good at what they do?

8:38Or do they have a high intellect? Do they have a passion for whatever area of expertise that they have developed in? Are they really good at what they do? Number two is, are they serious about work? Are they hard workers? Either somebody who, and it doesn't mean that you have to, you know, work 90 hour weeks, but it means that when you wake up in the morning, do you take the mission of the company, the mission of your role to heart, where you want to actually maximize the outposts of what you do every single day?

9:08And the third one is, are you collegial? Are you somebody who gets along with the rest of the team, who try to look for what's best in the team? And along with that come things like kindness and humility and being able to always thrive to learn and effectively always better yourself and better people who are around you. And when you have a combination of these attributes in a person, now it's not every person in different environments could behave or could have different, different, you could have different outputs as well. But when you put that together and you create alignment on what the mission is, it's really

9:43remarkable what you can deliver. If you look at sports team, sports team that have one star player only, but they don't have a good, strong, cohesive team, they don't deliver a lot of value. Business is exactly the same way. It's about having a team of people who are working well with each other, who are aligned on the goals, who respect each other, but at the same time, who push each other as well. It's okay to have some friction. It's okay that somebody's telling you, hey, I think in your area, you can do X, Y, or Z in

10:14a better way. That's all good. But this is the framework of people from a business perspective. In your personal life, I think some of the things around kindness and humility and being collegial, all of that translates as well. If you surround yourself with people who are actually, who bring the vibe of the party up, who are loving people, who are affectionate people, that's going to add, that's going to enrich your own life as you think about it. So often people assume that means consensus.

10:44What does gets along mean? The third aspect of what you just talked about, what does that mean in practice? What it means in practice, by the way, it's not necessarily consensus from the onset. Because in business, as in life, whenever you are trying to solve for something big or something small, whenever you have something that as a team you want to address, I usually worry if I'm in a team meeting and everybody is aligned on a solution. And the reason why, because the first question I ask myself, did we look at that problem or

11:16that solution in 10 different ways to then have different perspectives of how to solve that problem? Because if you want to create alpha, it's not about only settling for a local maximum. It's about looking at a problem from different angles and being able to get different voices around how to solve that problem, analyzing each one of them, having data behind each one of these perspectives, and then being able to land the plane on what is the right outcome to get to the right place.

11:46So getting along, however, is that we can disagree. We can disagree on, you might think that this solution is better than my solution or vice versa. However, it's a very respectful disagreement. It's a disagreement where when we leave that room, after debating, after looking at the numbers, after looking at the data, we all agree that this is the go forward path that would lead to the best solution to whatever problem or whatever thing that you're trying to solve for. Where would you say that you and Brad are different?

12:17First, it's very tough to compare yourself to somebody who, I mean, he is one of a kind. He's somebody who started eight multi-billion dollar companies. I think it's more around every person is also different in how they were brought up and how they think about problem solving. So I think it's more that a lot of the methods that I learned from him, you always have slightly different ways in how you apply them based on who you are as a person. One of the changes you've made since you took over is to have a service first philosophy. So it seems like a bit of a strategy change.

12:48Talk to me about that. Well, we've always had a service focused culture. The way we think about it in business, your customers are everything. Ultimately, a customer has a choice. A customer can either decide to use you or use one of your competitors for the service that you are providing. But what was different is that we actually split the company into three pieces. And now the entire management team was focused effectively on our less than truckload business. And part of our strategy was to make sure that we are delivering the best service possible

13:19for the customer. Because ultimately in business, you have to make a very conscious choice about what is your product that you are selling to the customer. In our business, a higher service level enables you to sell supplemental services to the customer. And these typically come at a higher margin. It also enables you to gain more profitable market share because your customers want to do business with you. And what we have done effectively was meaningfully improve our service product through the years. And this has led to effectively us being able to either gain market share or expand margin

13:54with customers as well. Now, these things in business are easier said than done because especially in trucking, we have 40,000 people in the company. Here in North America, we have about 23,000 people. So you are influencing the behavior of tens of thousands of people in terms of every time they touch a customer, they touch a customer's freight, that they want to handle it as if it's our own, as if it's going to our own house. And that has a cultural component, has compensation components, has systems components, how we track

14:25it, how we hold people accountable to it, has investments that we have made in multiple tools along the way as well. And we've improved our service product tremendously through the years. You're in meetings all day. You're trying to stay present, but you're also worried you'll forget the decision, the action item, the important next step. That's where Granola comes in. Granola is an AI-powered notepad for meetings. You jot down rough notes like you always do. And in the background, Granola transcribes and turns them into clear, useful notes when the meeting ends. There are no bots joining your calls, no distractions, just a clean notepad that helps you focus.

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15:57Coinshares. The adults have arrived. Learn more at Coinshares.com. This is not investment advice. Let's dive into a little bit about how you run the business. Last time we chatted, you mentioned you sort of had this operating system behind the scenes where you could dial into any of your 40,000 employees and see how productive they were up to the minute. Tell me about how you run the company and more about that. So I think high level, if you break it down, as a business, we have a plan, we have a strategy. And by the way, your plan cannot be very rigid.

16:28You have to be open to change that over time as new information comes up as you execute on it. But that plan has high or big levers of how you're going to improve the profitability of the company ultimately, and how you're going to create shareholder value subsequently as a result of that. Now, for each one of these big levers, then you have a number of KPIs that you are driving to be able to deliver on that particular level. So number one is actually defining what is it that you want to achieve.

16:59And for each one of these levers, what are the KPIs that would lead to that particular outcome? So number one is having a set of systems where actually it's daily. We obsess over them. I mean, every single day, there's approximately 10 KPIs that we monitor. And for each one of those KPIs, not only we look at the first derivative change of that KPI, the first derivative is it's up 5%, it's up 2%, it's down 2%. But also what the second derivative looks like, which is what's the slope?

17:31What's the rate of change? Is that KPI accelerating in the direction you want it to, or is it decelerating in the direction of the opposite direction? And then for each one of those, you have an action plan, a list of projects or initiatives or actions that you are taking to take that particular KPI from point A, where you are today, to point B, where you want it to be. So part of running the business on a daily basis is being able to, again, identify the goals, have the key performance indicators that you are watching every single day, obsess

18:06over them on a daily, weekly, monthly basis. And we have different set of, whether it's meetings or processes to manage through that. And then eventually looking at the action plans, the inputs, what are you doing differently to be able to get that KPI from that point to that point? Now, to do this effectively, you need great systems change, because without the ability to get real-time information, you're not going to be able to make a change quickly enough in some cases to address whether it's shortcomings or whether something accelerating beyond what

18:37you expected and being able to control that. But I think it's one, having a platform where you can get that data in real time. Number two is having a very clear view of what is it that you are monitoring every day that aligns with your big strategic goals that would enable you to create a ton of shareholder value over time. And then managing the inputs from an action plan perspective of who's responsible for each one of these actions to be able to actually improve how we move the business forward in the right direction. So that's the framework. That's effectively on that portion. The second portion of it, though, goes back to the people.

19:10So I spend a lot of time in the field. I actually like to go to our docks, to our terminals, where I get to sit with our drivers and dock workers. And usually I go there early in the morning and I sit in the break room and I sit with our drivers and I tell them, tell me what's going on in the business, tell me what's working well, what's not working well. So there's a people component of it, of how you can keep on getting that feedback loop of how to do things in a more effective way and a more structured framework of how you can actually get to the best outcomes based on what I just mentioned. What do you learn in the break rooms that you don't see in the KPIs?

19:41It's truly remarkable. So when you look at our, say, our workforce here in North America, we have about 23,000 people. 18,000 out of the 23,000 are either truck drivers or dock workers. They are people who are, they are the folks who are the closest to the customer. So each one of our city drivers or pickup and delivery drivers is interacting with half a dozen to a dozen customers per day. And if you think about their feedback, you get real-time feedback on decisions we are making and how to make them better.

20:13But to give you an example, it could be small things. It could be things like the type of tires we're using, the type of parts we are putting in our trucks, what kind of trucks we are buying and what makes a difference versus not, to having issues at the local service center, all the way to our compensation programs, our benefit programs, how we compare to the peer group, how are we doing from a service perspective? What are some of the tweaks we can be doing in our processes and procedures to improve the business? We get feedback on technology, the handhelds that they use, how we can make them better,

20:45how we can make them more efficient. It's really remarkable. What I typically do is actually have a notebook with me. And every time I hear all these ideas, I write them down. And then when I get back to the office, we actually put them in an email that I send to the top 100 people in the organization and say, these are the things that I learned from the people who matter most in our company. They are the ones who are actually moving the freight for the customer. And that leads to better action plans. And in some cases, we change the action plans that can impact the output metrics. And in some cases, we actually change strategy or we add a lever to the strategy or we do things

21:20a bit differently there as well. Is there an example that comes to mind of something you've heard in a break room and you were like, oh, we need to pivot. Like, it's not working. I'll give you a couple of examples. The first one was around when we were on a very strong journey of improving our service product. One of the first things that we did was change compensation plans. So effectively, as opposed to compensation be driven only by growing, say, revenue and profits to have a portion of the compensation plan to be driven by improving our service product

21:50to the customer. And you can think of that as being the carrot. By improving service, you as a supervisor on the dock can effectively bring home more pay. But when we talked to our drivers, a lot of it went back to accountability. What they were telling us, well, you know, listen, I take care of the freight of the customer, but so on and so on. The dock is actually, they're not taking care of the freight for the customer. So then we built systems where we can actually track back our service performance to the person level. And then we actually created coaching so that if you cause a damage as a person on our

22:23docks, then you can actually go into a specific training program and get coached to make sure that that doesn't happen in the future, as an example. Wait a second. How does the system detect my performance? Every time we move a palette across our network, you have people who are interacting with that. By the way, you need a really good systemic platform. You need a platform that is modern, that can actually get data directly from a handheld device a user can using into a system that you can then aggregate and take action on.

22:56The way it works usually, if let's say I'm a dock worker and I see that a palette is damaged, I take a photo of that palette and I say, I saw that this palette is damaged. Now, in some cases, it could be a small shrink wrap having a small scratch on it as an example. But then we know who the last person that handled that palette was. When the customer gets that palette, if the customer says, you know, this is a scratch, it's fine, then effectively no harm, no foul. If the customer gets that palette and the customer says, my freight is damaged, now we

23:29can track it back to the last person who reported that damage and who was the person before them who handled that freight. That's historically how we did that. But now moving forward, what we're also doing, we're actually using AI for that purpose. So every time we close a trailer door, a supervisor takes a photo of the trailer and we're using AI to inform the quality of loading, to be able to say that this palette was not strapped to the wall of the trailer, which means it could tip over and it could cause a damage as

24:00an example. So we're also using technology to be able to have a much better identification on what shift something happened, but also tying it back to the person that could have caused that particular damage in that case. Is that real time? So like when I take that photo, it reminds me of something or is it sort of post when we aggregate the data the next day, you're like, hey, this truck went out yesterday, you didn't see this, just a reminder to strap it down better? Historically, we've done it where you are looking at it after the fact.

24:30So historically, we manage all that data through the shift. You are still getting it in the system in real time, but the person taking the photo was not getting immediate feedback. So let's say I'm a supervisor. As I close the trailer door of a given trailer, I would take a photo and then I would actually rank the quality of loading of that particular photo. So in that case, it's not AI doing it and then the next day, we can tell which supervisor because then the next person in line in our terminal network, when they open up your

25:02trailer, they take a photo and they rank your quality of loading. So you're effectively getting somebody, if you think about software development, it's almost like doing a code review, but you're doing a trailer review for the next person who's actually opening up that trailer. But now with AI, with the new versions we are launching, we actually are intended, it's not live yet, it's going to go live over the next few months. But effectively as a supervisor, whenever I take the photo, AI automatically tells you what it found wrong in your trailer. And now you can actually fix that before you actually send that trailer over the road.

25:34And just for context, how many trailer openings and closings are we talking a day in the company? Looking tens of thousands. And the reason that this matters is to reduce the damage. That's one of your biggest costs. Do I understand that correctly? So the reason, if you think about our service in a trucking company, one is making sure, because as a less than truckload carrier, what we do is a customer could be shipping one or two pallets, but then we get it to one of our terminals where we consolidate that freight with other people's pallets effectively.

26:06So you, and then you're moving that freight across a network of 300 locations across North America. So part, one of the KPIs would be, we call it service quality, which is not damaging the freight because when you are consolidating and deconsolidating freight, that could lead to quality issues as people handle that freight over a longer distance. So that's one measure. The second measure is providing on-time service that when the, if the customer is expecting a pickup today, that you pick up that freight when it is intended to be picked up. And then if they are expecting it to be a destination in three days from now, that you're getting

26:38it three days from now as well. But these are the two primary measure of how we measure the service quality or the service for a given customer. And less than truckload is sort of a hundred pounds to 15,000 pounds, is that? Somewhere. So our average weight per shipment is approximately, call it 1,400 pounds. And it varies in the range that you mentioned. So a couple of hundred pounds all the way to 10,000 plus pounds. But usually once you start getting to 15,000, it makes sense to send that on a full truckload where you are booking an entire truck effectively to go from point A to point B.

27:11And if I was an employee and I'm working there and I'm on the dock and I want to see my specific performance or a driver, can I do that? A hundred percent. So the way we make it work and we implemented those tools as well. And there's one thing, everybody goes to work every day wanting to do a good job. And when you get feedback and possibly enforcement, obviously you're going to do it in a more effective way. But every time one of our drivers or dock workers scans a pallet on the dock, they automatically see two dials on their handheld.

27:42The first one tells them what their productivity is versus their peers. So they can see effectively if you had 10 people working the dock, are they number one or are they number five? And if you're number one, there's a lot of bragging rights that go along with that. But that's more on the productivity side. And then the second dial shows them how many damages they could have caused by either not strapping the pallets or not. So every time you scan a pallet to move it across our docks from one trailer to another trailer, we actually show folks what their numbers would look like.

28:12And similarly, the supervisors, they have a system as well, very modern platform, all proprietary, our own engineers build these solutions where effectively they can see then the performance across the entire workforce or a certain shift and how they can actually manage that more effectively. That is so cool. I can see how some people wouldn't like it though. What has the response been like? Overall, the response is very good, but there's a reason for that. It all depends what you do with the information.

28:43It all depends what you do with it. If let's say somebody causes a damage and you're coaching them and telling them where they went wrong and how they can do better, that's a very uplifting experience. Let's say I've been on the job for three months or six months. I've been trained. But at the same time, it still takes that muscle memory to be better that enables us to coach and train that person how they can be better at what they do. And usually people, when they get better, they actually see that very, very positively as well. So I think it all depends how you use the information. If you use it just to hold people accountable and have a very strict set of rules, then of course,

29:17you're not going to have a lot of satisfaction with that. If you're using it as a way to elevate your team, to coach them, to teach them how to do things in a better way, that can be very uplifting. How do you run meetings internally? It depends on the meeting. Different meetings have different structures. But generally, every meeting starts with, obviously, every meeting has a certain set of goals. Usually, a lot of our meetings starts by being very grounded in data, where we send all the materials ahead of time to the meeting attendees.

29:49Now, not every meeting is that way. But if you think about monthly operating reviews or weekly staff meetings, all of these are effectively the material is sent ahead of time, which has a lot of information going back to what I mentioned about the KPIs, about every KPI, how it's trending, and then reviewing the action plans associating with making that KPI get to a better outcome for the company as a whole. And we also source, depending on the meeting, in some cases, we source questions ahead of time from all the attendees of the meeting. And they actually get to rank those questions in terms of importance.

30:23And there are two things that we do. So questions is one. And then the other one is takeaways, based on the material that we sent out. What were your key takeaways from what you read? And similarly, every attendee of the meeting would rank those takeaways. So the first part of the meeting, we actually walk through the fully ranked takeaways. What were the biggest takeaways that people had from the material that we sent out? And then we go through a list of questions where effectively it could be around how we can make things better or getting more information about how to improve said area. So these are how we run typically our operating reviews.

30:53And it ends up becoming a very good, effective use of time because everybody's engaged in contributing the agenda of the meeting. What are the key topics? What are the biggest levers that we can be driving to make said area that is covered in the meeting be a better area over time? For other meetings where we effectively don't have the time to send the information ahead of time or it's a brainstorming meeting, as an example, it's typically whoever, again, is responsible for a given area.

31:25They start by reviewing predominantly data, information. In some cases, it's an Excel spreadsheet. In some cases, about the thing that we're trying to solve for. And then everybody contributes to it. And there are a few things that usually I do in meetings. One, there's a rule of not using devices and being focused on the person speaking. Number two, only one person speaks at a time. So there is something very powerful of giving somebody your full attention and listening to what they are saying, because that leads to a much more constructive conversation. And the third area is to be, it's okay to disagree.

31:57And actually, this agreement is encouraged, but you have to do it respectfully. You have to do it in a way focusing on the problem, on the information, not on the person, not on the subjective. And I find these kind of create a framework of really constructive meetings where at the end of them, we're solving real problems of how we can make the numbers better and how we can improve service and how we can improve employee satisfaction. And it leads to a much better outcome there as well. You said ranked takeaways. I want to come back to this for a second. How do you rank them? What's the process?

32:28It sounds like there's a lot going on pre-meeting in order to make the meeting as effective as possible. So in that particular case for our operating reviews, typically we schedule those on a monthly basis and a week ahead of the meeting, we send all the material out. And then we send a survey that has in it where every person can submit what their top takeaways were, and they can submit what their top questions to ask during the meeting as well. And then we send another survey once we get all this information back, where every attendee

33:01of the meeting gets to rank from a scale of one to 10, what they believe is the most important takeaway and what they believe is the most important question. Now, I'll tell you, Shane, what's fascinating, because think about it this way. Let's say I run pricing at our company. The people attending and operating reviews are not necessarily only pricing people. You have salespeople, you have operators, you have technology folks, finance folks, HR folks. So they're looking at all of your data and all of your content, and they're all giving

33:32you feedback on whether it's a takeaway that they saw from what you are, all the information you sent out, or what a question that they want to ask. Then when these takeaways and questions are ranked, this is where the magic happens, because now automatically every person in the senior leadership team understands what are the good things and the bad things in that particular subject matter. They also understand, based on the questions that they saw, well, that's interesting. I saw that a person asked about this and this and this. I didn't see that in the information.

34:03I didn't see that in the data. So now the group of people who are in that meeting can contribute in a much more effective way because they're getting the wisdom of the team, the wisdom of the crowd, and how they are actually doing it. This is going to sound crazy, but could you use that system to identify talent? In the sense that this person's very junior, but they're actually recognizing patterns that would be expected of like a senior person? You definitely can use it for identifying talent, but I do think generally to identify

34:33talent, you need much more touch points than just a takeaway or a question. But the way we think about talent development is a lot of touch points. So for example, a lot of companies do performance reviews once a year or maybe twice a year. I don't believe in that. I think performance reviews should be done on a daily and weekly basis. You've got to give a person feedback that what you're doing here is fantastic and what you're doing here needs improvement. But at the same time, doing it on a constant basis, you can identify also who is trending

35:04in the right direction, what their core skills are, where they need to improve, how they're improving, and you can identify talent that way. But also we have leadership team discussions about talent that goes beyond the first few layers of the company about who is up and coming talent. So then members of the leadership team can give their feedback on this manager or that director level person or maybe individual contributor who have a long runway and they're impressed by them and how this is what they are seeing in the performance of that particular person. And I think this is a more effective way because you get a wider perspective from a group

35:38of people specifically about talent development as opposed to the small window by which you're evaluating content, you're evaluating takeaways, and you're evaluating questions. By the way, also Shane, one other thing that you mentioned that I do in those meetings is I have this, for me personally, I call it round robins, but where people either give a question or a takeaway. If let's say it was a meeting where we didn't submit those ahead of time, I always subscribe to the fact that the senior folks, including myself, I will speak last. I always ask, give my takeaways or my questions at the end of the meeting to make sure that

36:12there's no biased thinking. I think Jeff Bezos had a similar perspective where always you speak at the end as a leader because what you don't want by giving your perspective, somebody who's junior on the team who might have fantastic insights is going to be biased to think as part of the group. So usually the more junior people get to speak first, they can actually, we can hear their perspective there as well. That's fascinating. I want to stick on the meeting thing for a second here. Do you use AI to record the meetings? Depending on the meetings, not all of them, we use AI, but any type of structured meeting

36:46where we are discussing effectively, say, an operating review, we do use AI to both take notes and summarize the meetings. And in many cases, we send back out the takeaways to the team so they actually get to see what was discussed and what were the key things that we focused on as a team. But I would say for any meeting where it's more structured, where you have more attendees, et cetera, then I'd say it's consistent how we use AI. If it's a small get together to figure out something that we get a status update or a

37:16progress update, then we might not use AI for that. So it doesn't sort of like mail me here your actions from this specific meeting that you're supposed to be doing or mail other people in the organization who might not have been at the meeting and inform them of something that was decided in the meeting that affects them. Or how does that, how do you think of that evolving, I guess? I think overall, so if you look, you look at late last year, typically on a once a year basis, we get together the team and then we walk through the strategic levers that we have as an organization.

37:47And we give ourselves a score, an assessment, how did we do in this area, that area, that area. But then we think about how should we evolve the strategy? Should we do something different when it comes to that particular lever in the company? So for those kind of much more elaborate or involved type sessions where you're spending two, three days with the team to change your strategy, in that particular case, we use AI and then we send back out the action items. And then we effectively use that to inform or change the levers of our strategy.

38:19But then you still have to summarize them and come up with the key themes in terms of how we address that. So depending for something that elaborate where you're spending a lot of brainpower over a few days to potentially change the direction we're going in as a company, we use AI extensively for those kind of sessions. If we're having a weekly staff meeting where we are actually going through the key KPIs, how they perform for the prior week, how they are performing month to date, how they are performing quarter to date, obviously AI becomes a bit less important because even the actions that come out of those meetings typically are a handful where it's very easily

38:53understood that, okay, I'm going to take this and do something about it. How do you end the meetings? Typically, the last part of the meeting that I personally like to do is actually have everybody give their takeaways. And what I find fascinating is that everybody then as they walk through it, you can see how they interpreted everything that they heard. And I always find it very fascinating to see what every person took away. And I usually do it in two ways. One, what are your broader takeaways? But then what are you going to do differently as a person coming out of this?

39:26But this is again for the larger type meetings. But usually for smaller meetings, it could be just walking through the action items we discussed, or it could be at the end of the discussion, we got to where we needed to get to. I want to come back to talent for a second. So we sort of talked about identifying talent within the organization. When you're interviewing somebody, how do you specifically identify talent? That's a great question because in business, one of the most important levers that you have is who's part of the team, who are the individuals who ultimately are working together to deliver

40:02a great amount of value. And as a public company, your number one goal is to creating shareholder value. But going back to how you interview, for every person on the team, there are certain levers based on their skill set on their role. But one would be what is their technical ability? And technical ability, in my mind, has a components of their actual core skill set or their core job. Number two could be their intellect, how smart they are. Number three could be the passion that they have for said area that they are responsible

40:36for. But there's an area around the technical know-how, skill set, experience. Number two is, are they hard workers? Are they somebody who, when they go to work, do they take it very seriously? Do they put in the hours? Do they wake up every day thinking about, how can I do my job in a more effective way? And then number three would be, are they a kind person? Are they somebody who's going to raise the vibe of the team? Are they a loving person? Are they somebody who would love their employees and their teammates and the company and the

41:08customers and the shareholders? Are they somebody who has, again, who's going to raise the vibe of the team or somebody is going to take away from that? And usually, whether it's being collegial, whether it's being humble and having a thirst for knowledge, all of these fall in that category of the personal side and how they will fit with the rest of the team. So when I interview people, I test for all of these pieces. So let's say you're interviewing somebody who oversees sales. I usually go very deep in my interviews. So I don't just ask them, well, how have you grown revenue at your last company?

41:39I ask them questions of how did you structure your sales force? How did you manage leads? How did you manage your pipeline? How do you convert your pipeline? How did you manage revenue realization? So I go deeper, much deeper. How did you manage account plans? And if somebody is not doing it, what were your targets for face-to-face meetings for your sellers per day? A lot of these, when you start double and triple clicking, you get a much different perspective about how all in was a person in their subject matter. And the deeper you go, the more you actually get a really good perspective, not only asking

42:14the headline question, but double clicking and triple clicking and quadruple clicking, because now you can actually get, yep, this person was fully in command and had that area locked tight in terms of that understanding of it. In terms of testing for seriousness or dedication or hard work, that's a bit harder to do. But I also ask a lot of questions around how they looked at their work and how they think about their personal life versus their work life. I find the best professionals, you don't have a distinction between the two to a certain extent. Work is part of life the same way that life is part of work.

42:44So effectively, it's a circle. You do these things in a very interchangeable way, whether you're spending your time with your family or you're spending time at work. All of these are very intertwined in how a person lives that life. So I get to see how they perceive work, how they look at actually work as a part of life. And then I always apply the airport test after spending an hour or a few hours with a person. If I get stuck with that person in an airport, am I going to enjoy that time? Are they, do they bring the vibe up that I felt uplifted after that interview or that I felt emotionally down?

43:16But that's the structure of the interview. And for some of the roles, by the way, I go also around intellectual questions to be able to test their intellect, how smart they are. But then after all of that is done, I also get, before I actually do my interviews, about a 50-page document on a person based on the notes of every single person who interviewed them. And I usually take subjectivity out of it. And I look at every area that somebody has identified as potentially being an issue.

43:46And I very objectively assess it. And a lot of times what people have identified as potential areas of issues end up being the reason why somebody fails at work. So I look at these and then in my interviews, I try to double click on those areas as well to make sure that they don't have a, that person has a shortcoming that could detract from being able to create value or raise the vibe of the team. Wait a second, what would be an example of that? For example, they don't go deep enough into their area of expertise. An example could be how they manage their team members.

44:18An example could be that they were effectively being very critical of the people that they worked with over a long period of time. An example can be how they switch jobs and why they switch jobs. So many of these could be examples of things that people identify. Part of it could be also that they are, that they have an ego. They're not a kind person. They're not going to treat their teammates or people who work for them with respect. All of these would come up in that feedback if they are obviously on the negative side. And I think it's very important to be in tune, not to try to brush these things under a rug.

44:51At the contrary, to actually take them out and test for them and figure out, is this going to be a deal breaker? Is this going to be the reason why somebody is going to fail after you hire them? How do you think about ego? I'm going to give you a personal experience. So I started coding in the early 90s. I was a young kid and I built a passion for it. And over time, I started with BASIC on a Commodore 64. And then over time, I had an older brother who studied computer engineering. So then in my, you know, call it early to mid-teens, I used to read all of his books.

45:24So I became so passionate about programming that I used to spend the lion's share of my time outside of school actually coding. So when I got to college and I went for my undergrad degree in Lebanon, in the country of Lebanon, at the American University of Beirut, where I thought I was the best programmer that has ever existed because I was doing it. I was training on it. I was, and I used to love writing beautiful code, efficient code. And I used to think I'm really good at it. So naturally, in my mind, what ego is, you think that you're so good at something that

46:00you stop learning. And when that happens in business as in life, it creates a ceiling that then doesn't allow you to create more value to get to better outcomes. So I remember at the time, if, you know, a few years later, I came, I came to MIT in Boston to do my graduate studies in engineering. And I met programmers that were 50 times better, that were just had beautiful minds, how they thought about things, how they problem solved. And that taught me that I'm actually, I'm a good programmer, but I'm no way close to being

46:36a great programmer. And that taught me humility. It actually enabled me that then suddenly it opens up many, many doors because suddenly you're saying, well, I might be good at this. However, wow, like look at these other people, how they're approaching that problem in a very different way. And that humility enables you to then learn more and be able to break through ceilings and always get better and not be able to be stuck in a local maximum and whatever area of expertise it is. So when I think about ego, I think it's a shortcoming in somebody's framework of thinking

47:07where they think effectively that their knowledge, their skills are the best they can be, and that prevents them from being able to break through and wanting to learn more and ask more questions as opposed to tell more about a certain area of expertise. Your time in Lebanon was one of the craziest and your escape was one of the craziest stories I've heard. Can you share that with us? I grew up in Lebanon in the 80s. During that time, the country was at war. And it's remarkable to look back at those times because I remember many, many, many

47:39nights where at night we wouldn't sleep at home. We would actually be sleeping in a shelter, in a bomb shelter. And it was a period of time for the country that was a very, very dark period of time. Now, my brothers and I were very lucky because we had parents who were unbelievable. They provided us a beautiful childhood that was surrounded with love. Although the world around us was crazy, we were not impacted to a certain extent, but you're still obviously dealing with the trauma of war around you. So it teaches you a lot about how when you're under pressure, it's one thing to be in a bomb

48:14shelter and your neighborhood is getting bombed versus any other type of pressure you're seeing in business or in life. But we were lucky that our parents created, again, a cocoon to a certain extent of safety and gave us what every child wants to have in their childhood, which is love, which is a lot of support and a very, very loving environment. But also we had to flee the country because of the war. We lived in multiple countries. We lived in Egypt for a while. We lived here in Canada for a while. So it's good to be back in Ottawa. I haven't been back in almost 35 years to Ottawa, but I spent a portion of my childhood

48:48here as well. But all of these experiences, at least what they gave me, is a different perspective. When you interact with different cultures and different people, it really teaches you how to look at things from different perspectives. Everybody's going to have a different lens, how to look at a certain solution, at a certain problem, at a certain, you know, whatever it is that you're dealing with. And I find a lot of entrenchment in that. I seek other points of view. And part of it was because I grew up in this environment and I got to see multiple cultures along the way as we lived in different countries during the wartime in Lebanon as well.

49:23How do you think that shaped your approach to taking risks? Now, keep in mind, I was very young at the time. So when you're very young, you're still, your brain is developing and forming. But it's really when you get to your teens is when you start thinking differently about different levers and risk. I think overall, I would probably put myself in the more risk-averse category, but I think that's more of my engineering type education, where as an engineer, you're always assessing

49:54risk or you're trying to quantify everything that you are dealing with. So when you look at risk, you're looking at all the information, all the data behind that risk, and you're assigning a probability of what's the probability of that risk materializing. Now, if you're only looking at the downside, it's very easy to say, I'm not going to go there because that's too risky. However, if you look at the upside and your probability adjust the upside of whatever area you're looking at and the risk that is involved with it, it changes your perspective of how to deal

50:28with risk. But I'd say I have a very analytical view of risk, but I lean towards being more risk-averse than risk-taking. And I do think part of the upbringing, but more importantly, my engineering education is what kind of governs some of that approach. On the notion of risk-taking, how did you navigate the yellow bankruptcy? Somebody reached out to me, a mutual friend of ours, and told me it was pure genius. Can you tell us that story? Yes. So one of our large competitors went bankrupt in 2023.

50:59Very sad, obviously, for the company and for the folks involved. But at the same time, as a less-than-truckload network, one of the most important forms of capacity to grow and serve as the customer is the terminal network that you have. So how large are your buildings? And some of these buildings, Shane, are a mile-long dock, effectively. So very, very large facilities. And having enough capacity in key market is incredibly important. And it's very hard to be able to permit and build a large trucking terminal.

51:34So effectively, when yellow went bankrupt, all of that real estate came up for sale. And we had to figure out, well, how much we want to buy. And in what markets we want to buy. So in that particular case, and I was a new CEO going in there, the question is, well, how much do you buy? And what markets do you buy them in? How do you justify the return you're going to get on the capital that you are deploying? One of the things I learned from Brad very early on, as a CEO, one of your most important

52:05part of the job is to make sure that you are allocating capital in a way that can create the most amount of shareholder value over time. Now, when yellow went bankrupt, we started looking at, well, okay, if we look, what is the data telling us? Based on different markets, where are we falling short on capacity? Which market is growing that we have X amount of doors, X amount of physical space? And if we look at the growth trajectory of that market, we're going to run out of capacity. And we analyzed that in all the markets that we operate in.

52:36And we knew that the larger the terminals we buy, the better it is because you can get higher efficiency in those markets if you have a much larger terminal or much more space than much less space. So we effectively use data to identify all of these markets. And then we mapped their network onto our network, and we found 28 properties that would have the largest impact. And for each one of them, then, we created a business plan. We created a business plan that says, how much efficiency are we going to get in that

53:09market? If we are capacity constrained today, and we have a 5% market share in that market, and our company's market share in the industry is about 10%, how can we grow from 5% beyond that, and what would be the financial flow through the income effectively associated with growing in that particular market? And we were able to effectively identify 28 properties that were the ones that we wanted to buy. And we ended up spending nearly a billion dollars on that real estate. And it was a remarkable acquisition because effectively, it's now giving us the runway.

53:43So one, it made us much more efficient. They won in those markets. We were able to improve operating margins dramatically. That's not the only reason why, but that was part of the reason. But more importantly, that capacity now is enabling us to capitalize on what could be an industrial recovery over the years to come here in North America. And these terminals will pay big, big roles in enabling us to deliver on that. That was a big decision as a new CEO. That's a lot of money involved. How did you make that decision? Well, overall, you start off by looking at what are the units of, how do the financials

54:18add up effectively? So what's the overall return you're going to get on that deployed capital? And what I learned from Brad is, it doesn't matter what the size of the check is. That's the only thing that matters, which is the return you're going to get on the size of the check. But a lot of it is, obviously, our board was very much involved in the process, giving feedback and perspective based on the numbers that we were showing. Initially, we started off with a much smaller purchase price and a much smaller set of terminals. Then we kind of grew that over time. Brad's feedback in the process, he was our chairman at the time, was fantastic.

54:51The team working together and brainstorming and figuring out what, again, what would give us the highest amount of return associated with that. So a lot of it is, again, looking at the data, looking at the returns very importantly, but then having a lot of feedback loops on, are we doing the right thing here? Is that deployment of capital something that's going to create a lot of alpha for shareholders? And the answer was yes. So we effectively, you feel much more comfortable making that decision because you see what the roadmap is going to look like to be able to deliver those returns.

55:23But it's one thing to see those returns in a spreadsheet, and it's another thing to actually enable those returns. Talk to me about that. Well, by the way, in business, that's always the case. I mean, when you think about creating a ton of shareholder value, there is always, I mean, we're a large company, we're a multinational company, we have 40,000 people. Every decision you make has big ripple effects into what kind of outcomes you can drive. But this is also part of it would be the financial processes that we have in being able to track

55:54any initiative that we are driving. So high level, I mentioned earlier on that in business, you have big strategic levers, then you have a certain set of KPI of metrics that ultimately grow your earnings, that ultimately enable you to create shareholder value. And then you have action plans of how you can drive those levers to get to the right place. But this is where also proper financial planning and analysis comes into play. For each one of the projects that you have, including buying a billion dollars of real estate, you have a project plan. You have a project plan that says, over what period of time are we going to launch these

56:28terminals? We're going to renovate them and make them look like an XPO terminal effectively. Over what period of time you're going to launch them? Once we launch each one of them, we have a certain assumption. There's how much we expect to improve productivity. There's how much we expect to improve efficiency. There's how much market share we expect to gain. And our FP&A team tracks all of these things. And now you can see the trajectory of how you are delivering on what you expected to deliver. And when you see something deviating, then the team's getting together to say, well, okay, did we have the wrong action plan?

56:59Or what should we be doing differently to then get back this initiative or this project back on track to make sure it's delivering to the right outcomes we expect? What's your FPA team and what do they do? So our FP&A team's financial planning and analysis. Effectively, it's the team that looks at all of the financial metrics, financial KPIs of how is your top line trending? Effectively, what is your top line doing? What is your cost structure doing? And ultimately, what are the profits that you are generating? But then when you double click, they look at first for any period, they are looking at

57:33a list of what we call risk and opportunities. So effectively, what are the opportunities based on initiatives that we are driving that can deliver a better financial outcome? And what are the risks that we see in the environment that can take away from the financial outcome? And then for each one of those levers, we assign a probability. So now we can probability adjust what is the projected financial performance of the company for the week, for the month, for the quarter, for the year, as we think it through. But then if you go down through the ranks in the FP&A team, for every operators that owns

58:07a P&L, a profit and loss statement, they actually have an FP&A resource that is telling them what are the levers? So where are your metrics trending? And what are the levers that you can pull to drive the outcomes? And are these levers performing at the level as a business leader that you expect to deliver on the outcome? And that's incredibly important in business because ultimately, the scorecard of a operating company is how much are you growing your top line? How much are you growing your profits? How much are you growing your operating margin?

58:38And the FP&A team is what instruments all of that and give you forecasts. And they also, I mentioned earlier on, when we look at KPIs, we look both at first derivative and second derivatives of the KPI. Again, the first derivative tells you your revenue is up 5% on a year-on-year basis. Many companies stop there. What our FP&A team does, then they say, well, okay, the second derivative shows that although you're up 5%, that's a decelerating trend. So next month, that could be 3%. The following one could be 1%. And that's a problem that we got to solve for as a team and figure out how we can course

59:10correct that. I love that. I want to come back to talent for a second. One of the stories that you had told me when we spoke last was about ABC. Can you tell us that and how it's useful for you? So generally, when you assess talent, you want to be able to assess who are the top performers on your team. That you either not only want to make sure you retain them, but you also want to invest in them. You want to grow them. You want to see them do amazing things over time because they have a lot of untapped potential.

59:41You also want to look at who's not performing on the team, who's somebody on the team who, for whatever reason, whatever circumstances happen, that they are not adding value. They are not being able to contribute to the best outcome for the company overall. But if you think about ranking folks as A, B, or C, typically an A player is somebody that they are, again, a top performer. They are somebody that you're proud of them. You're proud of their work. You think the world of them. And I learned this actually test from Brad as well.

1:00:12If an A player walks into your office and say, Mario, you know what? I don't try to talk me out of it. Maybe my wife is moving to a different state and I, you know, I took a job with another company and, you know, don't try to talk me out of it.