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Driving Innovation in a 100 Year Old Company with Judy McReynolds
Episode 2121st February 2023 • Be EPIC Podcast • Brent Williams
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This week on the Be Epic podcast we are kicking off a short series of conversations with the 2023 Arkansas Business Hall of Fame Inductees. We begin the series with Judy McReynolds, Chairman, President and CEO at ArcBest. ArcBest is an integrated logistics provider based in Fort Smith, Arkansas. They are celebrating their 100 year anniversary of being in business in 2023. We begin the episode with Judy providing an overview of ArcBest, where they are today and their growth strategy along with how they approach acquisitions, challenges in the market and innovation. Judy then goes into more detail about the innovations that are currently taking place at ArcBest to better serve their customers. They finish the conversation with a look at how ArcBest has continued to grow and plan for the future.

Transcripts

Judy McReynolds:

What we did was we put ourselves in their shoes.

Judy McReynolds:

And we, we approach these conversations in a way that was

Judy McReynolds:

mode agnostic is what I'd say.

Matt Waller:

Excellence, professionalism, innovation, and

Matt Waller:

collegiality. These are the values. The Sam M. Walton

Matt Waller:

College of Business explores an education business, and the

Matt Waller:

lives of people we meet every day, I'm Matt Waller, Dean of

Matt Waller:

the Walton College, and welcome to the be epic podcast. I have

Matt Waller:

with me today, Judy McReynolds, who is chairman, president and

Matt Waller:

CEO of ArcBest, which is headquartered in Fort Smith,

Matt Waller:

Arkansas. Thank you, Judy, so much for for joining me today. I

Matt Waller:

really appreciate it.

Judy McReynolds:

Oh, it's a pleasure to be with you today,

Judy McReynolds:

Matt. It really is.

Matt Waller:

Well, Judy, during your career at ArcBest, you've,

Matt Waller:

you've been in a lot of different positions. But a lot

Matt Waller:

of your experience in life, professionally, and at ArcBest

Matt Waller:

earlier was in the area of accounting and finance. But, you

Matt Waller:

know, you've transitioned and I want to talk about the journey a

Matt Waller:

little bit in a moment. But one of the things that is really

Matt Waller:

stood out to me and I want to make sure we get to this in the

Matt Waller:

moment, at some point in our talk is innovation, because I

Matt Waller:

think that's been a theme of your leadership. And it's really

Matt Waller:

clearly paid off. But, but before we really get into any of

Matt Waller:

that, I want to mention to all the listeners that we have

Matt Waller:

something called the Arkansas Business Hall of Fame. And

Matt Waller:

Walton College established this back in 1999, to really

Matt Waller:

recognize Arkansans, whether they're Arkansans by birth or by

Matt Waller:

choice, who've been really successful leaders. And so the

Matt Waller:

Arkansas Business Hall of Fame is designed to honor, preserve

Matt Waller:

and perpetuate the names and the outstanding accomplishments of

Matt Waller:

these business leaders. It's a way of celebrating the people

Matt Waller:

who are behind the achievements and business. And we pick

Matt Waller:

people, the committee picks people who are, you know of

Matt Waller:

significant not only achievement, but also

Matt Waller:

significant integrity. And, and so, Judy, is being inducted in

Matt Waller:

February at the so it'll be set for Friday, February 17 at the

Matt Waller:

Statehouse Convention Center in Little Rock. And if you can come

Matt Waller:

you can go to if you if you Google Arkansas Business Hall of

Matt Waller:

Fame there's you can buy tickets on our website. But

Matt Waller:

congratulations, Judy, on this honor. Well deserved,

Judy McReynolds:

Thank you so much. I mean, I just I just feel

Judy McReynolds:

so blessed and honored to be recognized. It's It really is

Judy McReynolds:

amazing and exciting. You know, I've I've actually served on the

Judy McReynolds:

selection committee years ago, so I know the process and and

Judy McReynolds:

then being in attendance at some of the the events, just really

Judy McReynolds:

very special. And just the association with the University

Judy McReynolds:

of Arkansas business school, Walton College, is also an honor

Judy McReynolds:

in itself.

Matt Waller:

You know, I love I'm ex officio on the committee.

Matt Waller:

But I really love reading through all of the nominations.

Matt Waller:

I've learned so much over the years about business in

Matt Waller:

Arkansas, and people by reading them. And it's tough because

Matt Waller:

every nomination is held for five years. And you know, we've

Matt Waller:

got so many now, just want lots of nominations of people that

Matt Waller:

are worthy, it does get challenging. But usually the

Matt Waller:

people that are selected came up real early in the conversation,

Matt Waller:

as you know, from your experience, but for the

Matt Waller:

listeners who might not be as familiar with it. On our

Matt Waller:

website, we also have videos of every person who's been inducted

Matt Waller:

since 1999. And I actually taught a course a while back

Matt Waller:

called Arkansas business where we we looked through some of

Matt Waller:

these and studied some of the people and actually had them as

Matt Waller:

guests. It was a fun course to teach. But if you look back at

Matt Waller:

the very, very first cohort was William T. Dillard, the founder

Matt Waller:

of Dillards, Charles Murphy, of Murphy Oil, Jack Stephens of

Matt Waller:

Stephens, Inc. Sam Walton, of course of Walmart. And but each

Matt Waller:

year we've inducted pretty amazing people. And, and the

Matt Waller:

other thing is kind of interesting, Judy, and you'll

Matt Waller:

appreciate this. Joe Ford was in the second cohort.

Judy McReynolds:

Oh Wow.

Matt Waller:

Many of the people are not alive now going way up

Matt Waller:

in the cohorts, many years, Joe is still alive and strong. In

Matt Waller:

fact, I heard him speak recently, and it was pretty

Matt Waller:

amazing. But at any rate, if you if you go and you look at the

Matt Waller:

website, you'll see it's an amazing list of people. And I

Matt Waller:

think Judy, well deserves to be on this list. And we're proud of

Matt Waller:

you.

Judy McReynolds:

Well, I wanted to add one thing, which is

Judy McReynolds:

really exciting, I think for for me and for our company is in

Judy McReynolds:

2023, when this event will occur, it's our 100th year of

Judy McReynolds:

being in business as a company. So that's, that is just really

Matt Waller:

It is it's it's exciting. 100 years, for those

Matt Waller:

special.

Matt Waller:

of you listening that don't know the history of transfer of you

Matt Waller:

know, trucking, it's worth looking into this. But back in

Matt Waller:

about 1980, there was something passed called the motor carrier

Matt Waller:

act of 1980. And it deregulated the trucking industry and 1000s

Matt Waller:

of companies went out of business, only the strong

Matt Waller:

survive, but to be around for 100 years, that was certainly a

Matt Waller:

key milestone in transportation for our country. Actually a

Matt Waller:

miracle that that was passed and it was so good for our country,

Matt Waller:

that you all made it through that.

Judy McReynolds:

We did. And that was a significant point in

Judy McReynolds:

history for the company. And, you know, I have the benefit of

Judy McReynolds:

getting to hear you know about that transition from previous

Judy McReynolds:

leaders that, you know, I had the the experience of working

Judy McReynolds:

with, but yes, very unusual time. And if you operate it in a

Judy McReynolds:

regulated environment, just thinking about the transition

Judy McReynolds:

to, you know, that world of deregulation, there were some

Judy McReynolds:

pretty significant leadership changes at our company that

Judy McReynolds:

helped enable our ability to navigate through that and

Judy McReynolds:

navigate well through it. And many of those principles around

Judy McReynolds:

pricing that we use today, were key to our ability to

Judy McReynolds:

successfully endure that time and, you know, come out in the

Judy McReynolds:

place that we are so interesting.

Matt Waller:

Well, you know, you think about it. I mean, the

Matt Waller:

company's been around through the Great Depression. You know,

Matt Waller:

World War Two, the Korean War, the Vietnam War, the oil crisis

Matt Waller:

in the early 70s, runaway inflation and interest rates in

Matt Waller:

the late 70s. The 9/11, the great recession and many, many

Matt Waller:

other big challenges,

Judy McReynolds:

and most recently, the pandemic, right,

Matt Waller:

Yeah. Yeah.

Judy McReynolds:

Yes. Yeah, when we get sometimes we'll be asked

Judy McReynolds:

questions about different changes in the economy, major

Judy McReynolds:

shifts, you know, things that are we're faced with, or our

Judy McReynolds:

industry is faced with. And we can almost always say, we've

Judy McReynolds:

been through that. We've been through something like that.

Judy McReynolds:

That's, that's amazing.

Matt Waller:

Yeah. It's reassuring too for employees, I think

Judy McReynolds:

It is.

Matt Waller:

So Judy, I'd love for you to take a moment to talk

Matt Waller:

about who is ArcBest? And then also make sure in the process to

Matt Waller:

talk about your role and your background, some of the

Matt Waller:

challenges you've faced, you know, when you started as CEO,

Matt Waller:

and where ArcBest is today, just some of those topics. And then

Matt Waller:

I've got some other questions as well.

Judy McReynolds:

Sure. Well, today ArcBest is is an

Judy McReynolds:

integrated logistics provider. And we're based right here in

Judy McReynolds:

Arkansas. In the Fort Smith area, we have close to 2000

Judy McReynolds:

people, and our company has 15,000 overall. So that gives

Judy McReynolds:

you some perspective about what we have here in Arkansas, and

Judy McReynolds:

then how that impacts the rest of what we do. But, you know, we

Judy McReynolds:

really see ourselves as keeping the global supply chain moving.

Judy McReynolds:

And, you know, we have an integrated and full suite of

Judy McReynolds:

solutions that really work well for our customers, especially

Judy McReynolds:

whenever they're faced with supply chain challenges, it just

Judy McReynolds:

comes across so well for them. But you know, what is remarkable

Judy McReynolds:

in that 100 years that I mentioned is really our people.

Judy McReynolds:

We have endured a lot of different circumstances, but

Judy McReynolds:

that really has been a constant you know throughout. I remember,

Judy McReynolds:

you know, when I first took my role, just recognizing that

Judy McReynolds:

after going out and shaking hands and being with people

Judy McReynolds:

across our company, just the longevity of people, and the

Judy McReynolds:

care and concern that our people have for our customers, we also

Judy McReynolds:

have great customer relationships, and, you know,

Judy McReynolds:

many of those have been around for a long time, 80% of our

Judy McReynolds:

customers have done business with us for 10 years or so. And,

Judy McReynolds:

you know, so that's, that's a really good solid, what I like

Judy McReynolds:

to think of as foundation, you know, for success. And, you

Judy McReynolds:

know, the the interesting thing for me coming into my role as

Judy McReynolds:

CEO in 2010, as you mentioned, you know, some of the challenges

Judy McReynolds:

that that that we have faced. Well, one specific one was the

Judy McReynolds:

Great Recession, as I was taking my role. So, in 2009, the year

Judy McReynolds:

before I was asked to be CEO, or actually the year, I was asked

Judy McReynolds:

to be CEO of the company, we lost $100 million as a company,

Judy McReynolds:

and there were just certain circumstances that, that arose

Judy McReynolds:

that cause that, you know, we were facing the great recession,

Judy McReynolds:

the impact of the 2008 financial crisis. And then also, there was

Judy McReynolds:

a bit of a price war in our in our competitive group. And the

Judy McReynolds:

reason for that was, you know, there was one company that was

Judy McReynolds:

close to being out of business, which is still in business

Judy McReynolds:

today. So whatever they were trying to do didn't work. But it

Judy McReynolds:

put us a company that really had those solid relationships and

Judy McReynolds:

wanted to defend them, you know, in a difficult spot. But, you

Judy McReynolds:

know, when I was looking at the situation, thinking about what

Judy McReynolds:

was good, and what needed to continue, and then what needed

Judy McReynolds:

to adapt and change, you know, I really was able to stand on

Judy McReynolds:

those people and relationships. And you know, what, what's

Judy McReynolds:

interesting was the knowledge that we gained through that,

Judy McReynolds:

just looking at ourselves, trying to look at ourselves

Judy McReynolds:

through the lens of a customer thinking about those green

Judy McReynolds:

shoots, those things that we saw that were going well, you know,

Judy McReynolds:

we really had a lot to think about. But it centered around

Judy McReynolds:

our customers and our opportunity that honestly, we

Judy McReynolds:

had already invested in. So we just pursued, change in the

Judy McReynolds:

company that really was to position ourselves to better

Judy McReynolds:

address the opportunities that we had in those customers we

Judy McReynolds:

knew well, and that we knew we could execute with the people

Judy McReynolds:

that we have at the company. And we find ourselves today a $5

Judy McReynolds:

billion integrated company with many logistics solutions. When I

Judy McReynolds:

first took my role. We were 93% an LTL, a less than truckload

Judy McReynolds:

carrier. And so there's really been great transformation in the

Judy McReynolds:

company. You know, since I've been in my role, which is now

Judy McReynolds:

it's kind of hard to believe, but 13 years.

Matt Waller:

So it is. It's been an amazing journey, indeed. And

Matt Waller:

congratulations on that. Yeah. And I have to say, even though I

Matt Waller:

know you're an integrated logistics company, I have known,

Matt Waller:

ABF Freight for so long.

Judy McReynolds:

Yeah,

Matt Waller:

that still sticks in my mind.

Judy McReynolds:

Sure.

Matt Waller:

Right.

Judy McReynolds:

And it should, it's good.

Matt Waller:

Yeah. And I, I'm aware of your acquisitions and

Matt Waller:

the new things you've you've done, which is pretty amazing.

Matt Waller:

But as you said, ArcBest looks like a different company today

Matt Waller:

than when you took your role and as CEO, would you tell me a

Matt Waller:

little bit about the journey and what this growth growth strategy

Matt Waller:

entails?

Judy McReynolds:

Well, when I look at us now, you know, it

Judy McReynolds:

really is somewhat satisfying, although we still have so much

Judy McReynolds:

more to go. But, you know, we, we really looked at, through

Judy McReynolds:

market research, data gathering insights that we had from our

Judy McReynolds:

customers at what they were spending their dollars on how

Judy McReynolds:

they were approaching, you know, success in their own business.

Judy McReynolds:

We looked at ourselves, and we said, we want to better match

Judy McReynolds:

what our customers are spending their dollars, on what matters

Judy McReynolds:

to them. And one of the more significant decisions I'd say,

Judy McReynolds:

was to say, okay, if I'm the shipper, I'm the customer and

Judy McReynolds:

I'm trying to develop a successful strategy for my

Judy McReynolds:

business. I might not necessarily choose just LTL as

Judy McReynolds:

my solution. So, you know, what we did was we put ourselves in

Judy McReynolds:

their shoes. And we, we approach these conversations in a way

Judy McReynolds:

that was mode agnostic, is what I'd say. And, and that was

Judy McReynolds:

really, really important. Because if you think about the

Judy McReynolds:

risk involved in that, it might not result in you having the

Judy McReynolds:

same business that you had before. And we had to get to a

Judy McReynolds:

place where that was okay with us that that was our path

Judy McReynolds:

forward. And customers really appreciated it. And, and so that

Judy McReynolds:

another thing that we did that really was it synchronized well,

Judy McReynolds:

with some training that we had been doing for years, was an

Judy McReynolds:

approach that was really more about the solutions that a

Judy McReynolds:

customer needed, rather than it being just a service

Judy McReynolds:

conversation about one solution. So, you know, we were we were

Judy McReynolds:

training our people to understand a customer's

Judy McReynolds:

business, know what was important to them, understand

Judy McReynolds:

where their challenges were, and what could make them successful.

Judy McReynolds:

And, and we saw we had very experienced people doing that.

Judy McReynolds:

And as a result, you know, we learned that that close to 80%

Judy McReynolds:

of our accounts were comfortable buying logistics services. In

Judy McReynolds:

many cases, they were spending a lot of their dollars on

Judy McReynolds:

truckload solutions or some consolidation of shipments into

Judy McReynolds:

truckload. We learned that we had some specific expertise that

Judy McReynolds:

was valuable in premium logistics and time definite type

Judy McReynolds:

solutions. And so one of the things that we did in 2012 was

Judy McReynolds:

we bought a company in Ohio called Panther Premium

Judy McReynolds:

Logistics. And it folded in really well with those interests

Judy McReynolds:

and needs that customers had at the time. You know, sometimes

Judy McReynolds:

they want a shipment moved exclusively on a vehicle. And

Judy McReynolds:

it's not to be combined with other shipments like you do in

Judy McReynolds:

an LTL operation. And so that worked out well, was successful.

Judy McReynolds:

And then a more recent acquisition we made was MoLo.

Judy McReynolds:

And that stands for Modern Logistics. It's, it's a company

Judy McReynolds:

that's based in Chicago, a true truckload broker. The great

Judy McReynolds:

thing about Molo was, you know, that just the success that they

Judy McReynolds:

had already had, you know, with their customers, larger

Judy McReynolds:

customers, but that that gave us even a more solid truckload

Judy McReynolds:

solution. So we had our LTL network, ground expedite and

Judy McReynolds:

premium logistics through this Panther acquisition, and then we

Judy McReynolds:

in a more fulsome way, we're able to offer, you know,

Judy McReynolds:

truckload based solutions, as well. So, put that together, and

Judy McReynolds:

we're facing the customer as of 2017, you know, as ArcBest with

Judy McReynolds:

this set of solutions. And it really has worked well for our

Judy McReynolds:

customers. And, you know, today, we have solutions that are

Judy McReynolds:

unique to each customer, it might be a supply chain

Judy McReynolds:

optimization, they might want us to manage their order

Judy McReynolds:

fulfillment, they might want us to find carriers for them to do

Judy McReynolds:

business with. And so it is truly a logistics company that

Judy McReynolds:

works on behalf of that customer. And, you know, that's

Judy McReynolds:

very different than just executing in one solution. But,

Judy McReynolds:

you know, I mentioned all of that because it really did take

Judy McReynolds:

courage and great listening skills, willingness to look at

Judy McReynolds:

ourselves and be disrupted or transformed. And I think the

Judy McReynolds:

pandemic has shown us the agility that's really necessary

Judy McReynolds:

in the business. You know, there are many customers that might

Judy McReynolds:

have approached their business very differently pre pandemic

Judy McReynolds:

than they do today, for instance, and we have to be

Judy McReynolds:

willing to be adaptable with them so that we're doing the

Judy McReynolds:

right thing.

Matt Waller:

You know, I I've really enjoyed watching your

Matt Waller:

strategy change over that timeframe since you've been CEO,

Matt Waller:

and I remember, I don't remember what year it was, when it was

Matt Waller:

really clear to me you were making a big change

Matt Waller:

strategically, you invited me to your rebranding event called,

Judy McReynolds:

yeah,

Matt Waller:

I don't even remember what year it was,

Judy McReynolds:

well, 2014, we rebranded the company ArcBest.

Judy McReynolds:

But in 2017, we did that what I would call a an enhanced market

Judy McReynolds:

approach where we were facing customers, you know, with

Judy McReynolds:

ArcBest as the company with the solutions that we've been

Judy McReynolds:

talking about.

Matt Waller:

Yeah, that's the event I was thinking of. And I

Matt Waller:

thank you for allowing me to participate in that because it

Matt Waller:

really gave me clear insights into you, as I was watching the

Matt Waller:

news and seeing press releases that helped me understand what

Matt Waller:

you were doing. But and so it's clearly been an effective

Matt Waller:

strategy. But one challenge you always have when you create new

Matt Waller:

strategies like this is putting a structure in

Matt Waller:

Oh, yeah,

Matt Waller:

to manage that strategy. How have you done that?

Judy McReynolds:

Well, first, it starts with the the knowledge or

Judy McReynolds:

the idea that you have to be collaborative, as a group of

Judy McReynolds:

leaders. There are many cross functional efforts, or teams

Judy McReynolds:

that just have conversations constantly in this in this

Judy McReynolds:

approach that we use, it actually is harder to execute

Judy McReynolds:

inside the company, then, because you're trying to make it

Judy McReynolds:

easier for the customer, if that makes sense to you. And so when

Judy McReynolds:

we did this enhanced market approach, we combined our

Judy McReynolds:

customer facing groups into one. So Field Sales, for instance,

Judy McReynolds:

you had before you had LTL salespeople, or you might have

Judy McReynolds:

you know, truckload salespeople, but we put that together, and

Judy McReynolds:

we're approaching, you know, sales in a combined way, and

Judy McReynolds:

then marketing, our training and development, which is a huge

Judy McReynolds:

part of who we are, and what we do is a combined effort. And our

Judy McReynolds:

pricing philosophies, you know, had to come together as one. And

Judy McReynolds:

so whenever you do that, you're you've got leaders, in my direct

Judy McReynolds:

reports that really work across solutions. You know, for

Judy McReynolds:

instance, you know, the person that's the chief yield officer

Judy McReynolds:

has responsibility for pricing, in ABF, the LTL network, but

Judy McReynolds:

also, you know, with our, our truckload offerings, and then

Judy McReynolds:

when those kind of work across for instance, as a customer

Judy McReynolds:

might utilize both, or even, you know, in those managed solutions

Judy McReynolds:

that I was talking about, so, you know, I've my direct

Judy McReynolds:

reports, have to work across the organization, they're in a

Judy McReynolds:

functional areas. So, you know, customer, I have a chief

Judy McReynolds:

customer officer, that has responsibility for those

Judy McReynolds:

customers that we've been talking about, and, but you

Judy McReynolds:

know, has to really not look at the business just through one

Judy McReynolds:

silo of a service offering. And, you know, we have a training and

Judy McReynolds:

development team that has to be nimble across that, we might

Judy McReynolds:

have some initiative or something going on, and one of

Judy McReynolds:

those solutions to better serve our customers that has to be

Judy McReynolds:

addressed. And our people need to really embrace the thought or

Judy McReynolds:

the idea, which I believe most of them do, that we're doing the

Judy McReynolds:

best thing, you know, for the future success of the company,

Judy McReynolds:

as we're executing the business. But, you know, I never

Judy McReynolds:

underestimate the difficulty that we can have in some

Judy McReynolds:

instances, because these decisions, you know, have to be

Judy McReynolds:

reviewed, as, you know, what maybe is good in the short term

Judy McReynolds:

or long term, for instance, for, you know, a specific account or

Judy McReynolds:

a decision. And, you know, so so there are those difficulties,

Judy McReynolds:

you know, that that we have at times, but you know, when we

Judy McReynolds:

when we're doing an integration of a of a new company, like we

Judy McReynolds:

bought MoLo, when, basically a year ago, when you bring that

Judy McReynolds:

together, you have accounts that were their accounts, you have

Judy McReynolds:

accounts that are ArcBest accounts, how are you going to

Judy McReynolds:

deal with that? You know, so we've had to navigate through

Judy McReynolds:

that and do the best thing for the customer. But, you know, it

Judy McReynolds:

takes people with integrity, character, willingness to both

Judy McReynolds:

listen and share, raise their hand when there is a challenge.

Judy McReynolds:

And we have to kind of come together and address these

Judy McReynolds:

things, we don't always agree. And that's healthy. I, you know,

Judy McReynolds:

my leadership style is one where, you know, I feel like

Judy McReynolds:

it's not all about something I want to do just one person, but

Judy McReynolds:

you know, we have to listen, collaborate, develop those best

Judy McReynolds:

thoughts and strategies and action plans and, and go

Judy McReynolds:

execute. But we have different ways we do that our strategy

Judy McReynolds:

team meets once a quarter. And then we develop what those

Judy McReynolds:

initiatives or action plans are to achieve that strategy. And we

Judy McReynolds:

meet on those monthly and behind them is an allocation of

Judy McReynolds:

resources, that has to match up, it has to make sense. And as you

Judy McReynolds:

know, the world changes so quickly, those priorities can

Judy McReynolds:

change. So we really have to stay in sync and, and not get

Judy McReynolds:

too far from, you know, the issues because you'll look up

Judy McReynolds:

and you won't be in the right place.

Matt Waller:

Well, I mean, of course, I'm very familiar with

Matt Waller:

ArcBest. And I'm aware of some really cool things that are

Matt Waller:

going on at ArcBest. And but I'd like to hear how you think about

Matt Waller:

innovation?

Judy McReynolds:

Well, we have the benefit of this history that

Judy McReynolds:

we were talking about earlier, you know, being a business 100

Judy McReynolds:

years. And just being able to say that is is just pretty

Judy McReynolds:

exciting. When you think about the word innovation, it's like,

Judy McReynolds:

well, you wouldn't be here today, if you weren't willing to

Judy McReynolds:

disrupt yourself, be innovative and transform your business. So

Judy McReynolds:

we really do believe in the power of that. And we believe

Judy McReynolds:

that we have a lot of expertise and experience with it. But we

Judy McReynolds:

we spend about $150 million dollars annually that's

Judy McReynolds:

dedicated really to innovation, it can it can be spent in

Judy McReynolds:

running the business, which, you know, is good and necessary, but

Judy McReynolds:

can also be spent on doing something transformative for the

Judy McReynolds:

business. And I think, you know, Michael Newcity, who was he

Judy McReynolds:

graduated from the Walton College, the MBA program, I

Judy McReynolds:

think, too, and he, he is the leader, he's our Chief

Judy McReynolds:

Innovation Officer at the company, and very, very capable.

Judy McReynolds:

And just always, he's a lifelong learner. And that, you know,

Judy McReynolds:

that's something that's really important in this area, but

Judy McReynolds:

something he reminds us of, is that we need to spend more of

Judy McReynolds:

our dollars transforming than we do on running the business if we

Judy McReynolds:

can do that. And that's what he tries to achieve. And I've

Judy McReynolds:

thoroughly embraced that.

Matt Waller:

Well, I I have a question about that. Because I

Matt Waller:

know Michael Newcity well, he he graduated undergraduate with

Matt Waller:

information Information Systems degree from the Walton College

Matt Waller:

And he was summa cum laude, which is not easy to

Judy McReynolds:

He did, uh huh

Judy McReynolds:

accomplish, but also in his MBA. He was summa cum laude. But the

Judy McReynolds:

other thing that's noteworthy, especially given what you're

Judy McReynolds:

talking about here, is he received the Donald W. Reynolds

Judy McReynolds:

Governor Cup Award, which is for entrepreneurship. And I know

Judy McReynolds:

that when he first started with you all he started as something

Judy McReynolds:

to do with emerging technologies. I think it was

Judy McReynolds:

emerging technology, something along those lines, which I

Judy McReynolds:

remember, you know, I didn't know him very well, then. But I

Judy McReynolds:

thought that's kind of a neat title.

Judy McReynolds:

Yeah. Well, as you you know, Michael, so this

Judy McReynolds:

won't surprise you, but I'm gonna say is, you know, whatever

Judy McReynolds:

role Michael has, is develops around him, you know, because he

Judy McReynolds:

just has such a unique skill set. But, you know, when, what's

Judy McReynolds:

interesting about Michael's area, as we are looking at the

Judy McReynolds:

history of time, or the period of time, I guess is a way to say

Judy McReynolds:

that is, since I've been in my role, you know, I'll share some

Judy McReynolds:

things with you about that. In 2015, so kind of midway in my

Judy McReynolds:

time in my role, you know, we restructured our best, some

Judy McReynolds:

areas, our technology team, what we call economic analysis, which

Judy McReynolds:

is one of the areas that Michael worked in, in addition to what

Judy McReynolds:

we've mentioned already, and our innovations team into what we

Judy McReynolds:

call today ArcBest Technologies. We did that kind of in sync with

Judy McReynolds:

the rest of what we talked about to better align our business

Judy McReynolds:

initiatives. And we wanted to just, you know, just disrupt

Judy McReynolds:

ourselves because we could see that we would be disrupted if we

Judy McReynolds:

didn't do it ourselves. And we wanted to generate those

Judy McReynolds:

thoughts and ideas. And it was very helpful to do this

Judy McReynolds:

reorganization. So we introduced also in 2015, advanced analytics

Judy McReynolds:

as a discipline. And we began doing a work with predictive and

Judy McReynolds:

prescriptive analytics. The next year, we launched the the

Judy McReynolds:

project and portfolio management office. And that was really to

Judy McReynolds:

help us advance these initiatives, make sure that we

Judy McReynolds:

were prioritizing well and optimizing our resources,

Judy McReynolds:

because we knew we had to get a return on these dollars that we

Judy McReynolds:

were spending so that PMO, that project management office was

Judy McReynolds:

just a very important thing, as well as what we did in 2015.

Judy McReynolds:

And, and then, since then, we've, we've launched an

Judy McReynolds:

innovations accelerator, that you're also familiar with. And

Judy McReynolds:

in 2019, we put in a cognitive engagement team. And so all of

Judy McReynolds:

that is kind of working, you know, again, to help us invest

Judy McReynolds:

well, get a return, but also in throughout all of that, you

Judy McReynolds:

know, you're disrupting yourself. And that's been really

Judy McReynolds:

critically important to us, we, you know, one of the risks that

Judy McReynolds:

we faced as a company, when I first took my role was, if you

Judy McReynolds:

just stood still, if you just kind of cut costs, and just

Judy McReynolds:

stayed in the same place, there's no way that we would be

Judy McReynolds:

the company that we are today, we might, you know, might not

Judy McReynolds:

have had success at all. And so you're actually taking a risk by

Judy McReynolds:

not doing anything, the way I see it. And so you need, you

Judy McReynolds:

need to take calculated risk, and really put yourself in the

Judy McReynolds:

best position. And these changes that I described in the, the we

Judy McReynolds:

call it AB Tech, it's really ArcBest Technologies, but in

Judy McReynolds:

that group, really helped us in the business accelerate our

Judy McReynolds:

success, the visibility that we have of emerging, you know,

Judy McReynolds:

either opportunities or technologies that can be used in

Judy McReynolds:

the business. And I'm just really proud of what we've done

Judy McReynolds:

there. Because it helps us to, again, you know, see ourselves

Judy McReynolds:

in a different way, perhaps more outside in is a way to think

Judy McReynolds:

about it than just, you know, working with the existing

Judy McReynolds:

business the existing way.

Matt Waller:

I'm gonna mention this, I don't, you don't need to

Matt Waller:

comment on it necessarily. You're welcome to, but I have to

Matt Waller:

say, you know, coming from your accounting and finance

Matt Waller:

background, the strategies you've rolled out, surprised me

Matt Waller:

a little bit. Now not to say, I mean, you know, accounting and

Matt Waller:

finance are extremely valuable. And there are lots of innovative

Matt Waller:

people that go into it. But the degree to which you've

Matt Waller:

emphasized this was noteworthy, and I agree with you, you know,

Matt Waller:

there's a risk of not doing anything. And you mentioned

Matt Waller:

calculated risks. I think that's where the financial kind of

Matt Waller:

perspective does help a lot when it comes to innovation, because

Matt Waller:

you don't want to take uncalculated risks,

Judy McReynolds:

Right.

Matt Waller:

And, of course, as I've been, you know, there's,

Matt Waller:

there's some risks that, you know, it's hard to see where the

Matt Waller:

IOA ROI is gonna come from. They're more like an option, you

Matt Waller:

know, value, but there's some that you've got to have more of

Matt Waller:

them that have clear ROIs, or at least you're thinking through

Matt Waller:

the ROIs. And I think that's where understanding or thinking

Matt Waller:

from a micro economic and financial kind of perspective

Matt Waller:

really can help. You know, one thing Thomas Sol is famous for

Matt Waller:

saying was, you know, there, there aren't any solutions.

Matt Waller:

There's just trade offs. And, you know, when you were talking

Matt Waller:

about this, this function that you created with the ArcBest to

Matt Waller:

prioritize all of these things, the portfolio of innovations.

Matt Waller:

I've not seen that a lot.

Judy McReynolds:

It is fairly unique, it is. You know, what's

Judy McReynolds:

interesting about what you just said, is, you know, the, the

Judy McReynolds:

ROI, I think what where you were you were going with that is that

Judy McReynolds:

the ROI can sometimes be something that is in an Excel

Judy McReynolds:

spreadsheet, or it's on paper, but is it real? And I think

Judy McReynolds:

that's one of the things that I learned from doing those

Judy McReynolds:

calculations on the one hand for people when I was CFO, for

Judy McReynolds:

instance, and then being in my role, now, there's a discipline,

Judy McReynolds:

in some ways, it's a change management discipline that you

Judy McReynolds:

have to put your energy into, and the people that are

Judy McReynolds:

executing these strategies have to get behind, because you've

Judy McReynolds:

got to be able to track it and look back. And people have to be

Judy McReynolds:

enabled to to execute, whatever the change was, that was going

Judy McReynolds:

to result in the return. Okay, so maybe it's the technology

Judy McReynolds:

that you're making more visible, the pipeline of customer

Judy McReynolds:

opportunities, and you're creating leads, and you're

Judy McReynolds:

allowing them to, you know, see that lead and then go execute,

Judy McReynolds:

well you've got to track whether, you know, they actually

Judy McReynolds:

produced revenue from that, right? You know, or if it's a

Judy McReynolds:

cost efficiency you gave, you know, you put together a system

Judy McReynolds:

that enabled, you know, a a change. One of the things I was

Judy McReynolds:

thinking about just this morning was city route optimization, you

Judy McReynolds:

know, as, as an efficiency example, so you're trying to

Judy McReynolds:

optimize the route that a truck is going on to either pick up or

Judy McReynolds:

deliver freight. Well, you know, if you've got a city route

Judy McReynolds:

driver, that stays on course, and does that, even though maybe

Judy McReynolds:

their institutional knowledge tells them to do something

Judy McReynolds:

different, you know, you're you're going to have success, if

Judy McReynolds:

the if the return model told you to do it, based on the optimized

Judy McReynolds:

route, right. But if that person chooses not to, then you, you

Judy McReynolds:

know, then then perhaps you don't ever get the benefit of

Judy McReynolds:

that investment that you've just made, we understand that you in

Judy McReynolds:

addition to having the model, or again, the calculation, you have

Judy McReynolds:

to go and execute and you have to track, you know, what was any

Judy McReynolds:

a part of that calculation, a key metric, so that you can test

Judy McReynolds:

yourself to see whether you're getting the benefit or not. And

Judy McReynolds:

that's that, that's, that's one of the things that I come back

Judy McReynolds:

to with our people, I started talking about our people when we

Judy McReynolds:

began our discussion. And if you don't have good people that are

Judy McReynolds:

willing to embrace change, and opportunity, and really get

Judy McReynolds:

involved in understanding what you're trying to accomplish, is

Judy McReynolds:

very, very difficult to transform the company to gain

Judy McReynolds:

either growth or efficiency without it.

Matt Waller:

We, you know, in our conversation this morning,

Matt Waller:

you've mentioned growth several times in the current environment

Matt Waller:

over the last two plus years, this isn't an easy feat. Can you

Matt Waller:

talk about how you've been able to continue to grow at ArcBest?

Judy McReynolds:

Well, I think it starts with positioning

Judy McReynolds:

ourselves in large markets, you know, we operate in markets that

Judy McReynolds:

are $500 billion dollars, where if we were just in the LTL

Judy McReynolds:

market, it would be about 50. And so what we've done is

Judy McReynolds:

positioned ourselves where we've had, you know, real ability to

Judy McReynolds:

grow based on the markets that we're in. And then, because

Judy McReynolds:

we've done this work to understand the opportunity

Judy McReynolds:

that's in our customers, we know that we have customer

Judy McReynolds:

opportunity that could allow us to double the size of the

Judy McReynolds:

company, we're a $5 billion company, but we can see 5

Judy McReynolds:

billion more of opportunity within our loyal customer base.

Judy McReynolds:

And you know, so like I was saying, if you create visibility

Judy McReynolds:

for people to understand whether it's in a territory, you know,

Judy McReynolds:

what those best accounts are, that they can go pursue, or it's

Judy McReynolds:

just additional solutions that could be of interest to a

Judy McReynolds:

customer that you're already doing business with in one area.

Judy McReynolds:

That's what we want to do. And that's what we've we've done is

Judy McReynolds:

to try to, you know, make visible these opportunities that

Judy McReynolds:

we know are there. And then of course, be willing to invest in

Judy McReynolds:

the solutions that allow you to go and be successful, you know,

Judy McReynolds:

with that business, but you know, it really is exciting when

Judy McReynolds:

I think about the business and the information that we have

Judy McReynolds:

today versus what we had, you know, 10 or 12 years ago, it is

Judy McReynolds:

amazing. But it could just be a lot of information. You got to

Judy McReynolds:

make it live. You have to put it in front of people. And you

Judy McReynolds:

know, that's what many of our investments are around But you

Judy McReynolds:

know, and customers continuously have challenges that are new. It

Judy McReynolds:

always amazes me, you know what we can help with. And so being

Judy McReynolds:

in those conversations, visiting their sides, having them visit

Judy McReynolds:

here, taking them over to the innovations lab, letting them

Judy McReynolds:

see some of the things that we're working on. It just really

Judy McReynolds:

is a successful formula, you know, for growth, when you can

Judy McReynolds:

see the opportunity, you know where it is, you got great

Judy McReynolds:

resources to go get it, and you're willing to put dollars

Judy McReynolds:

behind enabling those people to be successful.

Matt Waller:

This is such a great case study in innovation

Matt Waller:

in general, and strategy and structure. And it's clear from

Matt Waller:

talking to you that you have very well structured thoughts

Matt Waller:

about how to achieve and succeed with an innovation strategy. So

Matt Waller:

congratulations on that. And it's awesome that, you know, you

Matt Waller:

have been able to really transform the company in so many

Matt Waller:

ways. And congratulations, once again, on your induction into

Matt Waller:

the Arkansas Business Hall of Fame coming up in February.

Matt Waller:

That'll be a wonderful event. Well deserved. And thank you for

Matt Waller:

taking time to visit with me today, Judy.

Judy McReynolds:

Oh, thank you. And again, it's a blessing and

Judy McReynolds:

an honor to be in inducted into the Hall of Fame. I'm just very

Judy McReynolds:

excited about that. I'm excited for all of our employees as

Judy McReynolds:

well. It's an honor.

Matt Waller:

On behalf of the Sam M. Walton College of

Matt Waller:

Business I want to thank everyone for spending time with

Matt Waller:

us for another engaging conversation. You can subscribe

Matt Waller:

by going to your favorite podcast service and searching.

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