Alan Shaw 0:01 

He goes my biggest pet peeve. Arrogance breeds complacency. It keeps you from learning and it keeps you from getting better. And you better lead with humility.

David Novak 0:12 

Welcome to how leaders lead where every week you get to listen. And while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple that you can apply as you develop into a better leader. That's what this podcast is all about. My guest today is Alan Shaw. He's the president, CEO of Norfolk, Southern, a railroad company with a network that serves half the United States population. He spent nearly three decades there. So he's been working on a railroad for a long, long time. And he's been doing everything from coal operations, to chemicals to marketing. So let me tell you, if anybody could walk into the room and have all the answers, it's Alan, he knows this business cold, but he does the opposite. For him. Leadership is about supporting other people as they discover the answers. And as you'll hear today, that emphasis on humility is helping him launch a bold new strategy, and is helping him navigate a really tough crisis. This conversation with Alan shows you the power of showing up and doing it with humility, and what that really looks like when you put it into action. So let's dive in. Here's my conversation with my good friend, and soon to be yours, Alan Shaw.

I'd like to start by just having you give us a snapshot of Norfolk Southern and the business that you lead. today.

Alan Shaw 1:43 

We're a freight railroad that operates in the eastern half of the United States. To us, that creates a lot of a lot of benefit for us. You know, we serve about 60% of the consumption in the United States, over 50% of the manufacturing in the United States, we serve over half of all US light vehicle production, our powerful franchise, it's really designed to serve the manufacturing base and the consumer, we feel like there's there's an incredible amount of opportunity for growth. And within about seven months of becoming CEO, I launched a new vision for Norfolk Southern which pivots away from that just intense near term focus on operating margin to one that's more focused on the long term with a balance between service productivity and growth and leveraging our unique franchise strengths.

David Novak 2:33 

Well, I want to really get into that a little bit later. You know, it's interesting is I've done my research, you spent nearly three decades with this company. Tell us about the most fun day you've had on the job in those nearly 30 years,

Alan Shaw 2:47 

I really get my energy from being out in the field and engaging with my craft colleagues and the field supervisors. And so I'd probably the most fun day was the day that I was announced as CEO. I went out into the field. And I spent some time in the crew rooms. And I spent some time in the locomotive cabs. And I remember walking up to some of our engineers and conductors, they were sitting at a picnic table, they're getting ready to get on their train and start moving our customers business. And I walked up, they probably thought I was like a local supervisory train master. And they were looking at me and they I introduced myself and they said, Well, what do you do? And I said, Well, I'm the president of Norfolk Southern and, and they kind of looked at me, and they're like, oh, yeah, I just saw that press release. So that we had, we had a really good conversation on what we can do to make Norfolk Southern safer and provide better service and help our customers grow. And that's, that's one of the things that I do when I get out in the fields is, I asked questions. I don't have the answers. But I know that all 20,000 Norfolk Southern employees do and, and I'm also reminded that this time of year was about a year ago, I was out in one of our yards, it was late afternoon, and I see our crew members sitting around talking to a local supervisor about ideas on how to enhance service for our customers. And I was blown away. Here it is the day before Christmas Eve. They've already finished their work, it would have been really easy for them to get home that evening to their families, but they wanted to sit and talk to their supervisor about how we can enhance our service. And that made me feel really good.

David Novak 4:32 

Absolutely. And, you know, being in a company for the time that you've been, you have to grow up as a leader. And when you look back, Alan, you know, what was the biggest thing you had to work on to get to the point where you could actually run a company of this size and stature. You

Alan Shaw 4:49 

know this I'm sure as as you move up, you're used to being the one who solves all the problems. And you're used to being the one who has all the details and can answer Other questions, but what got you to that leadership level won't make you an effective leader, right. And so as you become a leader, and you move into areas of more and more responsibility, you really are working to pull that information and pull that engagement out of your, your teammates, right? Because I don't have the answers. That goes back to humility, right. But I know how to ask a lot of questions. And I know how to get my teammates to provide solutions and workout solutions, because I don't have, but my job is to give them the resources and the space in order to solve problems themselves.

David Novak 5:39 

You obviously had a great track record, no question about that. But what was the accomplishment that made it pretty clear to everybody in the board that you were the person for the top job,

Alan Shaw 5:50 

I wouldn't say it was a single accomplishment, David, what it was, as it was moving around, into uncomfortable positions. I started at Norfolk, Southern, and finance. I've got an aerospace engineering degree. I earned my CFA when I was at Norfolk Southern. So really left brain type of person, and figured I'd just move up through finance. And for my careers, I was really happy being a finance person, the Senior Vice President of coal at the time, Bill Fox, came to me, and he wanted me to move into marketing. And I told him, I said, I don't know anything about Mark and an engineer, and I'm a finance person. He's like, Well, look, you're smart, and you know how to ask questions. And so I moved into marketing, and he put me in charge of our coal operations team, completely out of my comfort zone, had to learn a complete new skill set had to really push my own envelope and challenge myself. But it also gave me an opportunity to build a much broader network within Norfolk Southern, I've been very fortunate throughout my career at Norfolk Southern that people kept an eye out for me. And they would typically move me into different roles that required a completely different skill set. And that takes a lot of courage. I didn't necessarily want to do it at the time. But ultimately, it was the right thing for me to do. So I moved from coal operations into chemicals, marketing, and then someone tapped me on the shoulder and told me to go into intermodal operations, all completely different skill sets, all built in a much better network internally at in an SN and externally to with, you know, our, our customers and the communities that we serve and our business partners. And so that really helped round me out. And I think that gave me a much better enterprise perspective of Norfolk Southern as well.

David Novak 7:46 

You know, I want to go deep into how you're, you're leading Norfolk Southern. But first, I want to take you back, what's the story from your childhood that shaped the kind of leader you are today?

Alan Shaw 7:55 

When I was growing up for a couple years, my father was a lieutenant in the Marine Corps, and he did a couple tours, and Vietnam. And so my mom and I, and I was four or five, six at the time, we moved in with my grandmother, and she was raising four kids on her own. She worked as a basically an assistant secretary at the Financial Aid Office at the College of William and Mary. So she raised four kids put him through college, on the Secretary's salary. My aunt, who was also in high school lived with us at the time. So I was I was surrounded by like three really strong women. But what I saw my grandmother do is in the financial aid office, people would come in and they had some expenses that wouldn't qualify for financial aid, my grandmother would give them money out of her own pocket. Here's somebody who figured out how to raise three kids or four kids put us through college, on a secretary salary, and still give money to kids at William and Mary, who needed it. And that really kind of taught me, you know, to do the right thing over the long term, and to pay it forward.

David Novak 9:08 

When did you have this aha moment, when you knew that you personally had it within you to actually run a company like Norfolk Southern.

Alan Shaw 9:17 

When I became chief marketing officer, I felt like I would be in the running for the position. And, you know, this, you know, the couple years that you have this up to that transition, you know, you're thinking about what you would do, you're thinking about your vision, you're thinking about your strategy, and how do you build your team? And that's all great, right? That's really important. Boy, David, on day one, when you sit in that seat, you realize it's all about accountability. And it's about accountability to your shareholders, and your board and your employees and your customers. And that's, that was eye opening for me and frankly, that has really informed how I've approached the position over the last 18 to 20 months.

David Novak 10:05 

You know, people always say it's really lonely at the top. Do you find it that way? Alan? Do you think it's lonely at the top? I mean, you do have the ultimate accountability. But how do you think about that lonely question?

Alan Shaw 10:17 

I really don't find it. That lonely at the top, because I got 20,000 Ns employees who are out there willing to help. Just yesterday, I was at our crew training facility outside of Atlanta, and we held a town hall. And I got to meet some of the conductor trainees that we had just hired and got to talk to them. And so I get all kinds of interaction with my colleagues, you know, one of the things that I've really tried to be as CEO is authentic, and transparent, and accessible. And, you know, anytime I want, I can get out there into the field, and talk to people I can get to talk to customers, and I certainly got a really good team here in Atlanta, that's helping as well. So no, I don't find it lonely at the top, I find there's an incredible amount of responsibility, and accountability. But I've got a whole organization that's designed to help.

David Novak 11:10 

You took over as CEO in December of 2021. And then a year in and you just mentioned at the top of our conversation, you made a big change in strategy. I'd like to go a little bit deeper on that, you know, tell us why you felt that was important to change the strategy. And I'd like to hear that.

Alan Shaw 11:31 

Yeah. So I had about 25 years of customer facing roles at Norfolk Southern after I moved out of finance. And obviously, with a finance background, the numbers matter, right for me. So what I've seen us do is a rail industry over the last 25 years, David, as we've we've seen and shared a truck. Now rail is less expensive than truck, rail is safer than truck. Rail is much more sustainable from a carbon footprint advantage that truck and rail offers more capacity. The one thing that we haven't been able to compete with truck on is service. And that's because historically, what rails have traditionally done is at the first sign of economic weakness, we've really dial back on our resources, crews, locomotives, rail cars, and then when the US economy recovers, and it always does, it's the best economy in the world. Rails don't have the resources in place to properly serve our customers. And I know that no company is going to be a growth organization, if it gets provides us customers with lousy service every three years. And so we did the numbers, right? Historically, if we were to furlough, say, 1000 employees during an economic downturn. Now, that might save us $90 million that year. But David, when the economy recovers, and we need to recall those employees, only 50% of them come back. And I also know that it costs about $50,000 to recruit, hire, and train and employ. So all of a sudden, that $90 million becomes a $65 million savings, because we've got to spend $25 million to go out there and hire 500 people. And I also know from my time as chief marketing officer that in any given year, when we don't have a good service product, we're leaving about 600 to $800 million in revenue on the table that we can't handle because of our our service product. And I also know that a slower railroad is a more expensive railroad, faster we run the less locomotives we use REST rail cars, we use less crews we use. So there's a really compelling economic reason to invest in service now just like every investment, the investment comes before the benefits. But what I'm doing is we're transforming Norfolk Southern, from a railroad that basically handles commodities, and to one in which can really operate and compete. And that consumer oriented truck competitive service sensitive market that's out there that is just so vast and so huge. And as a fastest growing market that's out there.

David Novak 14:24 

So you have to invest in more customer service. You got to do it first. For it to happen that money's got to go in. You know, how did you get your team to buy into this dramatic change? Because I'm sure you had some naysayers saying, Hey, listen, pal. You know, you're gonna take us down the road here, you know, we're not going to be able to pull this off. Yeah,

Alan Shaw 14:44 

you're right. You know, we've been around 197 years. So in some cases, they will get pretty comfortable with the status quo. But again, I think it's to me, it comes back to numbers, right? The numbers have gotta work. The numbers have got to matter. And if you're transparent, you show people Well, your work and you show, show them how the numbers work out, then you get a lot of buy in. And that's what we're getting now is a lot of buy in throughout the organization and other key stakeholders as well. Certainly customers love this deal, right? They love our approach. And, you know, building trust with customers is a key component, I'll tell you this, when I moved into our chemicals team, in about 2009, I replaced somebody who really wasn't all that focused on growth, he didn't have a growth mindset. And so he was, when treating the customers as if they were a growth opportunity, it was more of really, let's just work on price. And I walked into some pretty difficult meetings with customers, and they were really frustrated with me. And I knew that I had to rebuild that trust. So I did it day by day, little things by little things. And I ultimately got to the point where about three years later, I ended up doing a deal with one of the more vocal customers on the back of a bar napkin in which we got a lot more business and it's still referred to at Norfolk Southern as the bar napkin deal. And in our archives, where we keep all of our old contracts, that bar napkins still there.

David Novak 16:16 

I love it, you know, how late you stay up for that one?

Alan Shaw 16:19 

I'm not gonna tell you that.

David Novak 16:24 

I don't know if any CEO, this probably had a more challenging beginning than you. I was thinking about it. Because, you know, unfortunately, something that has required a lot of your attention this year, because you're a relatively new CEO, you've only been at it for a couple years. It all started on February 3 2023, you had a derailment, which resulted in a major chemical spill in East Palestine, Ohio. And you had to immediately go into a huge crisis mode. When that happens, what do you think is the most important job of the leader? You know, I

Alan Shaw 17:02 

was CEO for seven months when that happened. And I was very, very fortunate that two months before I had laid out this new strategy at Norfolk Southern Right. And so I knew what our Northstar was, you have to know what your Northstar is, and predefine it and have the organization understand it. So as soon as this happened, I pulled my team together and I said, Look, we're going to do what's right here, we're going to make it right, we're going to take a long term view just like we do with our strategy. And I want a response. So that five years from now, 10 years from now, we can be proud of that response. And more importantly, the citizens of East Palace thing can be proud of that response. So I immediately went to East Palace and I wore my s gear. I've been asked to go on I went to the Red Cross shelter. I went to Norfolk Southern as Family Assistance Center, I introduced myself, told them who I was who I was representing and made sure they're getting the citizens are getting everything they needed. And then I just kept going back. And I kept going back and I still go back, I go back a couple times a month. And what I do David is I sit down and I have listening sessions I visit the schools, I visit businesses, the churches, and family rooms. And I sit down with a group about eight to 10 people, I say, what can we do to help? You know, our goal throughout the whole process was the environmental remediation. And we're done with the most intensive phase there. It's investing in real community recovery, and then investing in the community over the long term to help the community thrive. And that's, that's what we're doing. And one of the things that I see is that the first couple of months, those conversations, as you can imagine, were really, really difficult, you know, but I know we're a safe railroad. I also know that we can be safer. You got to approach this thing with humility, you got to listen, you got to ask questions. How can we help folks were very vocal, understandably, they were very concerned, very nervous about the situation. But we started keeping our promises. And what I saw is that, you know, there would be about 300 and S people or contractors up there in a given day, working on helping the community and environmental remediation. And David when those folks would come home because they don't live there. We got 15 Ns employees up there, but most of those folks didn't live there. They would want to go back. And in some cases, I heard of NSF boys cutting their vacation short to go back. And what that told me was that the NSF employees knew that we were having a positive impact on the community. But also the community was having a positive impact on the NSF voice and so really is about being visible, being humble, being accountable and keeping your promises. You know, you

David Novak 19:58 

showed up and there was Have a lot of emotion, a lot of emotions. I mean, you were on national television every day, it seemed like and so you have a lot of, you know, very upset citizens there. What was the toughest thing you can tell us a story about the toughest thing that someone might have said to you or that you had to respond to and in a way that you knew was the right way to do it.

Alan Shaw 20:21 

The toughest thing was one of my first meetings I was in, in someone's family room, and he had invited it was an actual is an S employee. So when this immediately happened, I sent out an email to, to the 15 DNS employees who live there. And I knew it'd be tough for them, right? Because their NS employees are living in his palace. And but I promised them that we would do the right thing. So one of them wrote back, he was worked in our mechanical department. He's a union member, wrote back with a really heartfelt emails said he trusted that we would do the right thing because he knew Norfolk sellers values, he invited me to his home. So I met with him on a Saturday. He had eight of his neighbors in there, and they just had a lot of concerns, right, like a small kids, right, there was a lot of misinformation going on. That was really, really difficult, right? Because I want to solve their problems for us. And so as this gentleman, Jeremy Vernazza, vich was walking me to his car, or to my car, pardon me, from his front door. I told him, I said, I want to hire you out of the Union ranks, and I want you to report directly to me. And I want to give you a mediate budget of a million dollars. And I just want you to be in this community and figure out how we can best put it to work. And so this was right before Valentine's Day, which obviously is like a big day for florists. Well, no one was buying flowers in the aftermath of the derailment. So Jeremy came up with this great idea where he went to a floral shop, with a couple NS employees, they bought 100 floral arrangements, and then delivered those to residents, retirement communities in the area. That's one of the things that I did, you got to stay in there, you got to take the heat, you got to listen. And then you figure out what you can do to help it's the folks in the community will guide you as to what we can do to invest in their future.

David Novak 22:26 

We'll be back with the rest of my conversation with Alan straw in just a moment. You know, the 2024 Olympics kick off this week in Paris, can you believe it? So it's a perfect excuse to listen to my conversation with a Olympic gold medalist Scott Hamilton. I love his insights about failure and how it can show you a path towards excellence.

Scott Hamilton 22:48 

failure isn't scarring or disfiguring or anything else, I think we put such a an identity on failure that we avoid it, we think it's going to be something that we have to carry with us for the rest of our life. And I try to encourage people that failure is 100% information, only information if we can break it down to information. Instead of this horrible toxic scarring disfiguring entity that we have to carry around with us for the rest of our life, I think we can move forward towards excellence or towards the best version of ourselves that we can be in. And so I'm a big fan of failure. I've fallen on the ice minimum 41,600 times. But it's it's getting up 41,600 times that allows you to understand the process of learning the process of growing and the process of getting to where you want to be. Go

David Novak 23:38 

back and listen to my entire conversation with Scott, Episode 69 here on how leaders lead and find out what he did with his gold medal.

I really like to get into the minds of leaders and how they make really tough decisions. And three days after this incident, a decision was made to have a controlled burn of the toxic materials. Take me through how you made that decision?

Alan Shaw 24:10 

Well, I was I was part of unified command that was under the leadership of the incident commander, which was the Fire Chief Chief drybeck. And, you know, as you know, the firefighters, the first responders, they're the heroes here. They're the ones who rushed to the scene. They're the ones who devote their entire careers to protecting the communities in which we live. We were all together in a unified command. We had federal, state and local leaders, I was part of it. And there was a lot of concern about the potential for an uncontrolled explosion which could shoot VCM at shrapnel throughout the area and unified command made the decision to execute the vent and burn. It worked. There were an air monitoring up by the EPA and Ohio EPA Throughout the process and outside of the evacuation zone, it always showed that the air was safe. And the water was safe. Another visual was It was tragic and terrifying. I was there. But ultimately it was the right decision. And I'm kind of happy that Governor dewine 's office has said that it was the right decision. And the fire chief has said it was the right decision. Go back to how you make decisions. I've become pretty close with General Stanley McChrystal, you remember him as 40? Absolutely. Yeah, with JSOC. And he and I were having breakfast the other day, we started talking about how you make decisions, when you don't know what the right answer is. Because you know, that is going to upset somebody. But what we decided is really, how you get through something like this is you got to follow your Northstar. Take that long term view of what's going to be in the community's best interest your employees best interests, your shareholders best interests, your company's best interest over the long term, right, follow that Northstar, make sure you've got your Northstar defined for yourself and your company, before you get into a crisis. And then just follow that have the courage to follow that even if you know, you're going to take on some near term criticism.

David Novak 26:18 

You know, I was fascinated when I learned that you had hired General McChrystal to create a leadership model for your organization. What's something from a leadership perspective, a lesson that you really believe is key that you want everyone on your team to have?

Alan Shaw 26:37 

Humility. So when I was in, when I was in Norfolk, I was close to a couple folks in the Navy SEAL community. As you know, the East Coast seals are a little creek amphibious base there in Virginia Beach. During COVID, I read McChrystal 's book team of teams, and I asked one of my buddies in the SEAL team, I said, Is this right? I mean, do you guys really do this? And he said, Yeah, and it's all about trust. It's about collaboration. It's about humility. And frankly, if you spend any time around a Navy Seal, you're gonna see how humble they are. Those guys have got every reason in the world to be arrogant. But boy, ego gets washed out of that program, really, really quick. And so I hired the crystals team, to come in to Norfolk Southern to really kind of tear down internal silos, and work on that trust, and that internal communication and that collaboration, and that humility, right. Arrogance breeds complacency. Humility allows you to learn as you to innovate, it allows you to walk into a family room and East Palestine and say, I don't have the answers. I've got the resources, who helped me figure out please, how we can make this better how we can make it right.

David Novak 27:56 

And now you're you're trying to be become the gold standard for safety in the rail industry? And what are you doing as a leader to make that more than just an aspiration but a real reality? How are you really going about this different? Recall

Alan Shaw 28:11 

that my first job, I worked in the nuclear department at Newport News, shipbuilding, installing nuclear reactors and aircraft carriers. So effectively, I was a contractor for the Navy, I wasn't in the Navy. But I got a real good exposure to Admiral Rickover, nuclear, navy, and just the DNA of that safety culture. And earlier this year, actually, even before the derailment, the spouse thing, I knew that I wanted to hire a safety consultant. And look, I could have easily hired any number of the safety consultants that have done just fantastic work in the rail industry, right. There's a reason we're the safest form of transporting goods across land. But I wanted to be next level. I wanted to be inspired, I wanted to look outside of Norfolk Southern and in the rail industry. And through a mutual contact Kevin shear, who you'll know, I was introduced to Admiral Kirk Donald, a former four star admiral who used to run the Navy nuclear propulsion system. And I asked him if he could put together a team act as an independent consultant reporting directly to me of folks with Navy nuke experience. And he's done that. And so I've got this, David, I've got this awesome team of like three former Navy admirals and a bunch of other folks who are career Navy in the nuclear program, who are going to be on our property for two to three years, helping us enhance our safety culture. So that's one of the ways that we've approached is we've looked for the gold standard of safety in the entire world and brought some of that DNA in a Norfolk Southern. How

David Novak 29:50 

hard is it for a Allen to really get your company to open up to these outsiders coming in trying to tell you how to do the job. You know, that's Gotta be a challenge. I mean, I can just imagine it

Alan Shaw 30:03 

is, you know, historically Norfolk Southern has been somewhat insular. However, we got to evolve. You know, our top line is transforming very quickly. 1015 years ago, 35% of our revenue came from coal. Now it's about eight or nine. And the opportunities for us are completely different. It's not commodities, it's more truck competitive. Our customers, their expectations are evolving our competition, whether it's other rail or truck, they're evolving, they're getting better each and every day. So I knew that we had to transform and I knew we had to get better. And I knew we needed outside perspective. And I think when you bring those folks in, you want to make sure that they're humble, right? They're not coming in to kick trash cans and talk about how terrible we are, what they're doing is they're coming in, they're bringing a fresh, a new perspective. And those are to be embraced because you can't innovate without being humble and looking outside for inspiration.

David Novak 31:04 

You know, I understand that even after six months from the east Palestine incident, you were making trips there every week or two. And you're you mentioned earlier, you're still going there. You know, what's your thinking behind that? I mean, I mean, you're running this huge organization, I'm an East Palestine is important to you. I know. But I'm at a very small portion of your business, the people you impact, you spent a lot of time, how do you rationalize that?

Alan Shaw 31:33 

I think about in terms of personal about, look, that financial commitment. That's important, right? And that's a big component of it. It's your personal involvement too, right. And so I go up there periodic, they're gonna be there next week, that check on our progress, I gauge with the community, ask them how what we can do to help, I want to make it really clear. We're doing both right. I'm intently focused on this transformation at Norfolk Southern, the pivot us to a customer centric, operations driven service organization, because that's where our future lies. And, frankly, our response and my personal involvement, and he's passing is just a continuation of that strategy, where we've got this long term vision for acting in the best interest of our employees and our customers and our shareholders and the communities that we serve. It

David Novak 32:25 

makes a lot of sense. And you know, I admire what you've done. I admire the fact that you've shown up and you continue to show up and, and I'm sure you're using this situation as a way to gain learnings that you can spread across your entire organization. So makes a lot of sense to me, in spite of everything that you've done, you didn't have to do what I never had to do it. And I'm so thankful for it. You had to go testify before Congress, and you received a lot, a lot of criticism, in spite of doing all the things that you did, and stuff does happen every now and then. And you got to deal with it. You dealt with it. Well, how did you handle the criticism?

Alan Shaw 33:02 

That was tough, too. I talked to wick Mormon, who is one of our former CEOs in the early days of this thing. And he and I talked about it, he made a point. He's like, you know, what, just each and every day, do the next right thing. Look, I know, we're safer, we're, I know, we can get safer. I know we're doing the right things, and a spouse thing I know, we've got a great strategy. So I've got a lot of confidence in that. And really, that, that allowed me to really block out the noise and just focus on each and every day doing the next right thing. Because if you focus on that, ultimately, you're going to come out on the other side, we're taking a long term approach, we're following that Northstar that we had established, and we're just going to follow that. And yeah, there's gonna be a lot of criticism. I understand it. You know, I've got a certain level of responsibility and accountability, but I got to do the right things. And follow that Northstar, and follow that strategy that we laid out. Whether you

David Novak 34:04 

liked it or not, you're now a crisis expert. Okay, because you've lived through one. And if you were going to really summarize, you know, the top three things that you know, a leader needs to do in a crisis, what would it be? You

Alan Shaw 34:17 

got to be visible? You absolutely got to be visible. You got to be transparent, right? I mean, one of the things I did is I read a book about how Mary Barra handled the crisis that she encountered, right when she took over, transparent, visible and accountable and keep your promises. And so that's, that's how you get through this thing.

David Novak 34:39 

And now you have 300 team members who are dedicated to everything that's happening in East Palestine for the other 19,700 team members that you have. How do you keep a pulse on what's happening in the business day to day? Well, I

Alan Shaw 34:54 

walk around a lot. I'm pretty visible we've got in our building, we've got what we call network operations center. David is effectively it's our mission control, it's on the fourth floor. It's like where all of our train dispatchers are 24/7 365. And the days that I'm in the building, even before coming to my office, I go into the network operations center with a cup of coffee, I just make my rounds. And I talked about five or six different people last week to keep my finger on the pulse of our operations and how we're doing. And then when I'm tired of being in the office, and I tend to get pretty cranky, if I'm in the office for more than a couple of days, then I get out into the field. And I have conversations with my craft colleagues, crews, engineers, and conductors and local supervisors. And they're gonna really tell you about, you know, what's going on in your franchise and in your network. And then I also try to spend a lot of time with our customers. Look, I, I know two things, right? I know that customers, give us 100% of our revenue, and our operations team delivers 100% of our revenue. So that's where I really focus my time.

David Novak 36:05 

You've said and I agree with this, the crisis is an opportunity to accelerate change and innovation. What are you working on besides safety, to put this philosophy to work? What are you really excited about in terms of what's coming down the path?

Alan Shaw 36:19 

What I'm excited about is how the macro trends and the US economy match up with our strategy. Right? So you know, you think about e commerce and how that's been accelerated by the pandemic. And you look at ecommerce and most people think of ecommerce is that UPS van or that FedEx van coming to your neighborhood on the final mile to deliver the package to your front door. What most people don't realize is that package probably moved from a warehouse in Chicago to a fulfillment center in Atlanta on a Norfolk Southern train. Right. And so we're part of that, and ecommerce is like four times more intermodal intensive than traditional brick and mortar retail. I'm excited about the trend towards sustainability. Rail is three to four times more carbon efficient than truck. You know, I'm excited about the manufacturing supercycle that we see right now, right, there's a lot of factory construction in the United States, and particularly in the east and our service region. Now there's about $650 billion of manufacturing bill going on this year across the world. And about 200 billion of that is just in the United States. And we have what we call the battery belt, which is associated with EVs that kind of runs from Michigan and Indiana, down through Kentucky and Tennessee, and then to Georgia. And that's our service region. Right. And so, we've got this phenomenal franchise operate in the East that's built, actually built for growth and those built for growth by my predecessors. And all these macro forces are pushing more and more business towards rail. That's why I'm very confident in our strategy going forward because of the strength of our franchise, the strength of the US economy, and the strength of our employees. Alan,

David Novak 38:12 

this has been a lot of fun, and I want to have some more with what I call my lightning round of questions. Are you ready for this?

Alan Shaw 38:18 

Oh, yes, sir. I've

David Novak 38:18 

heard about this. All right. What's one word others would use to best describe you?

Alan Shaw 38:23 

Authentic? And I when I'm engaged, approachable. I'm out there with my craft colleagues and our customers. And I'm wearing boots and I'm wearing jeans and I'm hanging out and locomotive cabs and I'm hanging out in crew rooms.

David Novak 38:35 

Who would play you in a movie? Kevin Costner

Alan Shaw 38:39 

and I really liked him and bold Durham. He seems like an authentic guy. And I've got a real love for the Rockies in the West as well. And he's seems to spend a lot of time out there.

David Novak 38:50 

You can be on Star Yellowstone with him. If you could be one person for a day besides yourself. Who would it be?

Alan Shaw 38:57 

Doris Kearns Goodwin. I love her right? She is my favorite author. And she does some amazing profiles of leadership, and how people overcome challenges including Team of Rivals and leadership in turbulent times where she profiles Lincoln and Teddy Roosevelt and FDR and LBJ. I find her stuff fascinating. Your biggest pet peeve, because my biggest pet peeve arrogance breeds complacency keeps you from learning and it keeps you from getting better. And you better lead with humility.

David Novak 39:30 

What's something you'd only know about railroads if you're in the industry, that we're service organization?

Alan Shaw 39:36 

I remind people this. There's one product that we make, and that service and there's one product that we sell and that service.

David Novak 39:46 

What's one of your daily rituals, something that you never ever miss?

Alan Shaw 39:49 

I get up about 430 in the morning, I go swim a couple miles, grab a cup of coffee and then come in to the Network Operation Center.

David Novak 39:59 

If I turned on the radio in your car, what would I hear? Well,

Alan Shaw 40:03 

you would probably hear some Inex assets, some Red Hot Chili Peppers, a mix of that. And then basically anything that my kids have been listening to lately, I think one of the cool things is by I got a couple of college aged kids, I got a senior in high school and a seventh grade daughter, and they're getting into my music as well. So that's pretty good.

David Novak 40:24 

All right, that's the end of the lightning round. And I got a few more questions. We'll wrap this up here. I understand that your father was exposed to Agent Orange and Vietnam, and eventually leading to a seven year battle with cancer. How has that impacted your approach and belief in doing the right thing and how you've handled the situation in Ohio? Well, because

Alan Shaw 40:46 

I can understand why people would be scared of chemical releases. I understand that completely. Right. And so for me, I can't reassure them. But I encourage people to listen to the experts, right? The US EPA, and the Ohio EPA, all have like the highest standards. And they're doing the test, right. And there's been 1000s and 1000s of tests and millions and millions of data points, and they've all come back into the air safe, and the water safe. I have a lot of empathy for people who are scared. And you know, one of the things that we've been working on is setting up a long term health care fund for people in case something does happen. You

David Novak 41:30 

know, speak in a family, and you obviously, read a lot about leaders and like the topic, how do you take all that you know about leadership, and apply it at home.

Alan Shaw 41:41 

So it's really interesting. As I noted, I've got a couple of kids who I'm fortunate to still live with me and I got a couple in college, you're paying attention. And I'm accountable to them, too. They want to make sure particularly as visible as I've been in the media, they want to make sure that I'm doing the right things. I gotta make them proud of me as well. Right. And so I think it just continues to go back to that Northstar, just do what you think is going to be right over the long term. And when you're in a CEO job, it's all about accountability. And doing the right thing and keeping your promises. You

David Novak 42:19 

know, you relocated your headquarters from Norfolk, Virginia to Atlanta. And as I understand it, you moved your family, right, right before your son's senior year in high school, you know, how do you balance decisions like that where, you know, you got to do something at work that, you know, it could really impact the family. How did you think through that?

Alan Shaw 42:36 

That was tough. It really was tough for me. And candidly, David, I, I wasn't going to be that guy. I was gonna let my son graduate from his school in Norfolk, which he really loved. It was over Christmas break his junior year. And I remember sitting downstairs watching a bowl game, and my son grant came downstairs. And he said, Dad, I want to move to Atlanta for my senior year. So why, right? You're like, a captain of the football team. You were the most popular kids school, your you love your friends. And they said, Yeah, that's all true. But I don't want the family to be a part. And I was like, wow, well go convince your mom. Right? So, you know, basically, it was their decision. And Atlanta is a fantastic community and the entire Innes Corporation has been welcomed with open arms. And I haven't gotten a day a static from any for my kids, or, or my wife about the move to Atlanta just because it's been so accommodating. Yeah, well,

David Novak 43:40 

that's a great tribute to you and your wife that, you know, your your son wants to be with you. That's just a great, great compliment. And a last question, what's the best piece of advice you would give an aspiring leader,

Alan Shaw 43:52 

challenge yourself, go outside what you think your boundaries are, and expand your network. You know, that's, that's how I came up through the DNS organizations, I got a bunch of different experiences and in areas out well outside of my comfort zone, and I built a network, and I knew who I could call that helped solve problems. And I knew people knew that they could turn to me to help them solve problems as well. So get outside of your comfort zone and push yourself. People can generally push themselves a lot further than they think they can. Well, Alan,

David Novak 44:27 

you obviously cast a wide shadow in your organization with your customers. And it's great to have a reputation for, you know, wanting and doing the right thing. And I want to thank you so much for taking the time to be on this show with me. Appreciate it.

Alan Shaw 44:43 

As my pleasure David, I look forward to talking to you again.

Unknown Speaker 44:56 

Well,

David Novak 44:56 

it's no great leadership secret that the best leaders are how More. But this conversation with Alan shows you what he built, he really looks like in action. It looks like showing up with support, not answers, spending time on the frontlines asking questions. And of course, keeping your promises when you mess up. And that happens to us all. I love how Elon said it. Arrogance breeds complacency. So if you set the standard of humility on your team, you'll help everyone and I mean everyone, be more driven and collaborative. Now, here's how you can apply this idea this week, spend some time walking around and asking questions. Listen to your customers and the employees who serve them. That's a fantastic way to stay connected. stay grounded, and be humble. So do you want to know how leaders lead what we learned today is that great leaders show up in difficult circumstances and do it with humility. Coming up next on how leaders lead is Tom Baltimore chairman and CEO of park Hotels and Resorts.

Tom Baltimore 46:00 

I don't think you really grow until you push yourself out of your comfort zone. And also push your team out of their comfort zone is how I think you really can achieve no extraordinary success or, or certainly outsized success. So

David Novak 46:15 

be sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader that you can be