Green Howard - Railroader: the unfiltered genius and controversy of four-time CEO Hunter Harrison

H unter Harrison lived for telling stories. Not only did he love to entertain and charm, which he could do for hours, but as a CEO he was purposely sending a message with his tales. He seemed to have an endless supply of fables, and few people could string one out better than he could. With a Tennessee drawl that oozed from his very pores and the timing of a cranky comedian, Harrison knew how to play for maximum effect, often finding a way to weave in one of his trademark expressions, like Im gonna ring his head like a church bell.

One story that he liked to retell was about Robert Crandall, the former CEO of American Airlines. Crandall was traveling around the airlines network, checking station expenses. Four times he went back to the same station, cutting costs each time. On one visit, he noticed a dog.

Whats that for? Crandall asked.

Security, an employee said. He barks.

Get a recording, the CEO said.

Its easy to see why that one made Harrison chuckle. He was an unsentimental efficiency wizard whod risen to the top by lopping expenses, maximizing the use of assets, and creating enormous value for shareholders. He reshaped an industry by literally making the trains run on time. While Sir Richard Branson advised executives to focus on employees first, customers second, and investors third, Harrison reversed the priorities: investors came first. For him the game was capitalism, pure and simple. You either played it or you didnt.

Individuals like Hunter Harrison are rare. They are singular in their talents, possessing laser-like focus and an atomic-level understanding of their businesses. By dint of starting at the bottom, questioning the status quo, and enduring backbreaking effort, they can slide into a niche that few others occupy. As a result, they represent extraordinary value to their companies and are compensated handsomely, while making tens of billions for shareholders. But theyre never satisfied. Even though Harrison had won the game for decades, contentment was elusive for him, as it often is for elite performers. Competitive to the core, they live by scorecards such as higher stock prices and one more championship ring. They also love it. Its who they are and what they know. Try telling Mick Jagger not to perform.

The term legend is tossed around freely these days, but in Hunter Harrisons case, it fits. Starting out as a laborer in a Memphis rail yard when he was nineteen in the early 1960s, Harrison rocketed upward to CEO . He held that position four times over an almost twenty-five-year span, turning around three major railroads: Illinois Central ( IC ), Canadian National ( CN ), and Canadian Pacific ( CP ). In the last year of his life, while his shelves groaned with awards and his bank account bulged, he was hell bent on fixing a fourth railroad, CSX Corp. Only nine months into that last assignment as CEO , he died, but he had already increased the value of the American railroad by billions of dollars. In the view of many, the fourth turnaround was well underway, in record time.

Its hard to over-emphasize the impact railroads have had in the United States and Canada. In the US , they opened up the west and connected the huge population centers of the east, providing a transportation network to service the worlds largest economy. Canadian Pacific Railway helped forge a nation, not only tying it together but encouraging settlement in the western provinces, the burgeoning population creating a protective barrier against invaders from the south. Without the railroad, British Columbia would not be part of Canada, since the construction of the CPR to the Pacific was a condition of the province joining Confederation. Its completion meant people could travel coast to coast in a matter of days. Goods, particularly grain, could be shipped along the CPR and what became CN . Telegraph lines would span the nation, running alongside tracks and, in CN s case, ultimately leading to the creation of the Canadian Broadcasting Corporation. CN would also spawn a national airline, Air Canada. The construction of the CPR led to the discovery of base metalscopper and nickelin northern Ontario. The original surveyor of the Canadian Pacific route, Sir Sandford Fleming, invented Standard Time. Prior to Flemings invention, there was no regulation of time zones. The US had one hundred of them, with twenty-seven time zones in Michigan alone. The impact of the railroad boom of the late 1800s was akin to the internet blossoming in the 2000s.