The Magic of Thinking Big | XPO CEO Mario Harik

Mario Harik is the CEO of XPO, one of the largest trucking companies in the world, and leads a team of 40,000 people across a multi‑billion‑dollar operation. He started as employee #3, trained under Brad Jacobs (who’s built eight multibillion‑dollar companies from scratch), and has spent the last two decades turning engineering discipline, frontline feedback, and a deep belief in human potential into a repeatable leadership system. In this conversation, Mario breaks down how he makes decisions in real time using data and “second‑derivative” thinking, how he hires and develops A players (and the gut test that quietly tells you who isn’t one), how he runs meetings so the most junior person in the room often delivers the best idea, and why ego, complacency, and small goals are the silent cap on most leaders and most companies. You’ll learn: how an engineer thinks about strategy and execution, what Mario learned from Brad Jacobs about thinking big and moving fast, the A/B/C player framework he uses to assess talent, how he turned the Yellow bankruptcy into a capital‑allocation win, and the three core levers—people, capital, and time—he believes drive every great business result. Enjoy. Timestamps: (00:00:00) Why Ego and Complacency Quietly Cap Great Leaders (00:00:19) How an Engineer’s Mind Changes the Way You Lead (00:01:58) Using Engineering Frameworks to Run a Multi‑Billion‑Dollar Business (00:03:38) Letting Go of Perfection: How People Actually Operate (00:05:14) Lessons from Brad Jacobs: Thinking Bigger (00:07:13) Building Strong Teams and the Feedback Loops That Keep Them Going (00:08:18) Evaluating Talent: Skill, Work Ethic, and the Collegiality Test (00:10:51) Disagree, Then Commit: Making Better Decisions as a Team (00:12:50) The Service‑First Strategy Behind XPO’s Customer Edge (00:16:21) Running a Giant Business in Real Time with KPIs and Data (00:19:41) Why the Best Ideas Come from Frontline Employees (00:22:35) Using AI and Tech to Track Performance and Cut Errors (00:28:35) Coaching People with Data Instead of Opinions (00:29:30) How to Run Effective Meetings (00:32:36) Pre‑Meeting Prep: Getting the Most Out of Your Team (00:34:29) Spotting and Developing Future Leaders Inside Your Company (00:39:48) Mario’s Hiring Framework: How He Really Assesses Candidates (00:47:30) Early Life Lessons That Still Shape How He Leads Today (00:49:27) Thinking Analytically About Risk and Big Decisions (00:50:56) Inside the Yellow Bankruptcy Acquisition: A Case Study (00:55:31) Turning Strategy Into Execution Through Financial Tracking (00:59:23) The A/B/C Player Framework for Evaluating Talent (01:02:12) Creating a High‑Performance Culture Through Belief and Feedback (01:04:18) How Mario’s Leadership Style (and Feedback) Has Evolved (01:07:33) People, Capital, and Time: The Three Levers of Value Creation ------ Newsletter: The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠fs.blog/newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ------ Follow Shane Parrish: X: ⁠⁠⁠⁠⁠⁠https://x.com/shaneparrish⁠ Insta: ⁠https://www.instagram.com/farnamstreet/⁠ LinkedIn: ⁠https://www.linkedin.com/in/shane-parrish-050a2183/⁠ Follow Mario Harik: LinkedIn: https://www.linkedin.com/in/marioharik/ XPO: https://investors.xpo.com/board-member/mario-harik/ ------ Thank you to the sponsors for this episode: +Granola AI, The AI notepad for people in back-to-back meetings: https://www.granola.ai/shane Check out the Granola Notes. +CoinShares: Delivering Reason to Digital Asset Investing. https://coinshares.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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

• 0:10Shane Parrish?

  How does a software engineer end up as the CEO of one of the largest trucking companies in the world?

• 0:19Speaker 00

  Well, I think engineering gives you a very good roadmap and a very good framework of solving problems. I have young kids and I always tell them, whenever we have a something that gets broken or something we want to build, I always tell them, what do engineers do? We say they build things and they fix things. And I think in the world of business, you're dealing every day with with either problems or goals you want to accomplish. And a engineering mindset gives you a framework of how to solve for these problems. If you think of the engineering design process, it's based on one identifying a problem or a goal. Then it's about collecting a lot of data around that particular problem or goal. Then defining your requirements, then designing and building a solution,

• 1:03Speaker 00

  and then eventually testing it for what the outcome would look like. And that discipline and rational thinking and data-driven analysis actually helps you in being able to run a company. Now, the other side of that, though, is around people skills. Because when you run a company, you're effectively, you have teams of people, and your goal is to make sure that they are the best versions of themselves. And applying engineering principles to that also helps a lot. So then your team becomes very data-driven. Your team becomes problem solvers in terms of how being able to go from point A to point B. Again, whether it's a goal, whether it's a problem you want to solve as well. So I think these are some of the early innings in terms of, as I grew in my career, engineering gave me that that framework to be able to solve problems and achieve goals.

• 1:48Speaker 00

  Couple that with people skills, this is what has enabled me to effectively run a trucking company.

• 1:53Shane Parrish?

  Wait a second. How does that engineering mindset help you as the CEO?

• 1:58Speaker 00

  As the CEO, your first goal is to actually figure out what is your overall strategy? How are you going to be able to create a lot of shareholder value? Are you going to be able to create a company that can grow earnings? That can, and ultimately, deliver a lot of shareholder value? To be able to deliver that, as you define your strategy, you have to have a framework by which you define a strategy. Now, once you have your strategy, you have certain elements associated with that, where you have certain KPIs that you are monitoring on a daily, weekly, monthly basis of whether you are achieving the levels of the strategy. Then from that, for every KPI, in terms of being able to define how you go from one value to another value, you need an action plan, you need a solution for that.

• 2:42Speaker 00

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

• 3:26Speaker 00

  and believe what's in best in them, is the other ingredient to be able to then enable you to deliver good outcomes.

• 3:33Shane Parrish?

  What surprised you the most about people? Coming from an engineering background, where things are sort of predictable?

• 3:38Speaker 00

  Well, first, I'll start by introspecting, looking at myself as a person. As I was growing up, I remember I always used to think that perfection is a good thing. So every time I was set to work on a certain project, on a certain task, that the outcome has to be perfect, that the outcome. And you tell yourself in your own mind these things that, you know, like, this is not good enough. Be better than that. Or you're building a piece of software. This piece of software has to be just exactly right. The code has to be simple. It should not have any bugs in it. And I think the human mind typically doesn't operate in perfection. We all have our own idiosyncrasies. We all have our own biases.

• 4:22Speaker 00

  We all have our own way of doing things. So for me, in terms of managing people, a lot of it goes back to looking at how they view solving a problem. How they look at the world? How they look at being able to deliver value? How they look at being able to treat others with respect? And I think what surprised me the most is that you have every person is different. And every person in their own way, they are beautiful. Their mind works in a beautiful way. And being able to take their own methods, their own way of thinking, believing in what's best in them is what creates the most amount of outcome. And it's also a pleasure because then you're effectively working with a group of smart people who are finding their own way to be the best version of themselves.

• 5:08Speaker 00

  And I think not applying one framework or one method to solving a problem is important.

• 5:14Shane Parrish?

  You're employee three at XPO and you get to work with one of the greatest capital allocators and entrepreneurs of our generation, Brad Jacobs. I'm curious what you learned from him.

• 5:26Speaker 00

  Well, Brad is one of a kind. He's somebody who started eight multi-billion dollar companies from scratch and in different industries. And a lot of it goes back to having a framework and method. And he actually wrote two books where he outlines that framework in terms of how to build great companies, companies that endure the tests of time. And ultimately, the goal of a company is to create shareholder value. And these companies have created a tremendous amount of shareholder value. So I learned from him now, everything you read in the book is actually part of the framework in terms of how you think about one, setting very big goals for the business, thinking outside of the box of how you can deliver a large amount of value.

• 6:11Speaker 00

  And number two is actually now in our case and the case of the companies he has built, a lot of it, the early innings was around M and A and M and A integration and how you allocate capital in a very effective way where you buy a company at a lower multiple than what your company is trading at, but a company that has a good strategic outcome for what you are trying to build to build as well. But if I go back to what I learned from him, I mean, I learned a tremendous amount in more than a than a decade. But probably number one, I would say is to always think big. Don't set small goals. Life is short. Set big goals, whether it's how much value you're creating, whether how much profits you're growing, whether a certain project that you think needs three years to get done and how you can get it done in three months. Set big goals and do that

• 6:56Speaker 00

  at work, do that in your personal life. Because when you set big goals, you achieve great things. If you set small goals, you achieve small things. And that's probably the number one thing I learned I learned from him.

• 7:06Shane Parrish?

  What would be number two? What would be the second thing that comes to mind that maybe not is in any of his books?

• 7:12Speaker 00

  Number two, I would say is actually how you manage people, how you actually, who you surround yourself with and to have a very disciplined approach to look at the people who are around you, that you have a team, because ultimately in business, you don't go at it alone. You have a group of people and you want them to work collegi- collegially as a team, as a group of people who support each other, who want to, following a certain strategy, a certain framework, want to go achieve great things, want to beat the competition, want to win. And effectively, how you surround yourself with people, how you actually create a team environment that is very constructive, how you get feedback loops. So you're always looking at whether it's the plan or the strategy, you're always adjusting in some cases in small areas, in some cases in

• 7:57Speaker 00

  big areas, to be able to get to better outcomes. But I would say the team dynamic and how you capture feedback loop is is number two.

• 8:05Shane Parrish?

  Talk to me about that a little more because it seems like everybody hears this, you know, who you surround yourself with matters in life and matters in work. And I would love for you to just riff on that more for a minute in terms of the quality of people.

• 8:18Speaker 00

  If you look at at this, who we hire for as an organization, but how we think about the team, the team as well. Generally, we break it down into three broad categories. And this is the work side, but some of these carry over to the personal side and who you have personal relationships with. But number one at work would be, are they good at what they do? Or do they have a high intellect? Do they have a passion for whatever area of expertise that they have developed in? Are they really good at what they do? Number two is, are they serious about work? Are they hard workers? Either somebody who, and it doesn't mean that you have to, you know, work 90-hour weeks, but it means that when you wake up in the morning,

• 8:59Speaker 00

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

• 9:43Speaker 00

  it's truly remarkable what you can deliver. If you look at sports team, sports team that have one star player only, but they don't have a good, strong, cohesive team, they don't deliver a lot of value. Business is exactly the same way. It's about having a team of people who are working well with each other, who are aligned on the goals, who respect each other, but at the same time, who push each other as well. It's okay to have some friction. It's okay that somebody's telling you, "Hey, I think in your area you can do X, Y, or Z in a better way." That's all good. But this is the framework of people from a business perspective. In your personal life, I think some of the things around kindness, and humility, and being collegial,

• 10:27Speaker 00

  all of that translates as well. If you surround yourself with people who are actually, who bring the vibe of the party up, who are loving people, who are affectionate people, that's gonna add, that's gonna enrich your own life, as you think about it.

• 10:42Shane Parrish?

  So often, people assume that means consensus. What does gets along, the third aspect of what you just talked about, what does that mean in practice?

• 10:51Speaker 00

  What it means in practice, by the way, it's not necessarily consensus from the onset. Because in business, as in life, whenever you are trying to solve for something big or something small, whenever you have something that as a team, you want to address. I usually worry if I'm in a team meeting and everybody is aligned on a solution. And the reason why, because the first question I ask myself, did we look at that problem or that solution in 10 different ways to then have different perspectives of how to solve that problem? Because if you want to create alpha, it's not about only settling for a local maximum. It's about looking at a problem from different angles and being able to get different voices around how to solve that problem,

• 11:35Speaker 00

  analyzing each one of them, having data behind each one of these perspectives, and then being able to land the plane on what is the right outcome to get to the right place. So getting along, however, is that we can disagree. We can disagree on, you might think that this solution is better than my solution or vice versa. However, it's a very respectful disagreement. It's a disagreement where when we leave that room, after debating, after looking at the numbers, after looking at the data, we all agree that this is the go-forward path that would lead to the best solution to whatever problem or whatever thing that you're trying to solve for.

• 12:14Shane Parrish?

  Where would you say that you and Brad are different?

• 12:17Speaker 00

  First, it's very tough to compare yourself to somebody who, because I mean, he is one of a kind. I mean, he is somebody who started eight multi-billion dollar companies. I think it's more around every person is also different in how they were brought up and how they think about problem solving. So I think it's more that a lot of the methods that I learned from him, you always have slightly different ways in how you apply them based on who you are as a person.

• 12:40Shane Parrish?

  One of the changes you've made since you took over is to have a service-first philosophy. So it seems like a bit of a strategy change. Talk to me about that.

• 12:49Speaker 00

  Well, we've always had a service-focused culture, the way we think about it in business. Your customers are everything. Ultimately, a customer has a choice. A customer can either decide to use you or use one of your competitors for the service that you are providing. But what's was different is that we actually split the company into three pieces. And now the entire management team was focused effectively on our less-than-truckload business. And part of our strategy was to make sure that we are delivering the best service possible for the customer. Because ultimately in business, you have to make a very conscious choice about what is your product that you are selling to the customer. In our business, a higher service level.

• 13:31Speaker 00

  Enables you to sell supplemental services to the customer, and these typically come at a higher margin. It also enables you to gain more profitable market share because your customers want to do business with you. And what we have done effectively was meaningfully improve our service product through the years. And this has led to effectively us being able to either gain market share or expand margin with customers as well. Now, these things in business are easier said than done because especially in trucking, we have 40,000 people in the company. Here in North America, we have about 23,000 people. So you are influencing the behavior of tens of thousands of people in terms of every time they touch a customer, they touch a customer's freight,

• 14:16Speaker 00

  that they want to handle it as if it's our own, as if it's going to our own house. And that has a cultural component, has compensation components, has systems components, how we track it, how we hold people accountable to it, has investments that we have made in multiple tools along the way as well. And we've improved our service product tremendously through the years.

• 14:36Shane Parrish?

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• 15:27Shane Parrish?

  The sponsor of this show is CoinShares. While most of the industry was still arguing about whether digital assets were legitimate, CoinShares was quietly building the infrastructure to invest in them properly. They now manage over 6 billion in assets and have stayed profitable through every market cycle, fully regulated with the kind of transparency and governance that serious investors actually expect. Whether it's crypto ETFs, active strategies, or Bitcoin mining ETF exposure, you can access all of it through your existing brokerage account. CoinShares, the adults have arrived. Learn more at coinshares.com. This is not investment advice. Let's dive into a little bit about how you run the business. Last time we chatted, you mentioned you sort of had this operating system behind the scenes

• 16:11Shane Parrish?

  where you could dial in any of your 40,000 employees and see how productive they were up to the minute. Tell me about how you run the company and more about that.

• 16:21Speaker 00

  So I think high level, if you break it down, as a business, we have a plan, we have a strategy. And by the way, your plan cannot be very rigid. You have to be open to change that over time as new information comes up, as you execute on it. But that plan has high or big levers of how you're going to improve the profitability of the company ultimately, and how you're going to create shareholder value subsequently as a result of that. Now, for each one of these big levers, then you have a number of KPIs that you are driving to be able to deliver on that particular lever. So number one is actually defining what is it that you want to achieve? And for each one of these levers, what are the KPIs that would lead to that particular outcome?

• 17:05Speaker 00

  So number one is having a set of systems where, actually, it's daily. We obsess over them. I mean, every single day, there's approximately 10 KPIs that we monitor. And for each one of those KPIs, not only we look at the first derivative change of that KPI, if first derivative is it's up 5%, it's up 2%, it's down 2%, but also what the secondary derivative looks like, which is what's the slope? What's the rate of change? Is that KPI accelerating in the direction you want it to? Or is it decelerating in the opposite direction? And then for each one of those, you have an action plan, a list of projects or initiatives

• 17:46Speaker 00

  or actions that you are taking to take that particular KPI from point A, where you are today, to point B, where you want it to be. So part of running the business on a daily basis is being able to, again, identify the goals, have the key performance indicators that you are watching every single day, obsess over them on a daily, weekly, monthly basis. And we have different set of whether smearings or processes to manage through that. And then eventually looking at the action plans, the inputs, what are you doing differently to be able to get that KPI from that point to that point. Now, to do this effectively, you need great systems, Shane, because without the ability to get the real time information, you're

• 18:29Speaker 00

  not going to be able to make a change quickly enough in some cases to address whether it's shortcomings or whether something accelerating beyond what you expected and being able to control that. But I think it's one, having a platform where you can get that data in real time. Number two is having a very clear view of what is it that you are monitoring every day that aligns with your big strategic goals that would enable you to create a ton of shareholder value over time. And then managing the inputs from an action plan perspective of who's responsible for each one of these actions to be able to actually improve how we move the business forward in the right direction. So that's the framework that's effectively on that portion. The second portion of it, though, goes back to the people. So I spend a lot of time in the field. I actually like

• 19:12Speaker 00

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

• 19:38Shane Parrish?

  What do you learn in the break rooms that you don't see in the KPIs?

• 19:41Speaker 00

  It's truly remarkable. So when you look at our, say, our workforce here in North America, we have about 23,000 people, 18,000 out of the 23,000 are either truck drivers or dock workers. They are people who are, they are the folks who are the closest to the customer. So each one of our city drivers or pickup and delivery drivers is interacting with half a dozen to a dozen customers per day. And if you think about their feedback, you get real time feedback on decisions we are making and how to make them better. But to give you an example, it could be small things. It could be things like the type of tires we're using, the type of parts we are putting in our trucks, what kind of trucks we are buying and what makes a difference versus not,

• 20:25Speaker 00

  to having issues at the local service center, all the way to our compensation programs, our benefit programs, how we compare to the peer group, how are we doing from a service perspective? What are some of the tweaks we can be doing in our processes and procedures to improve the business? We get feedback on technology, the handhelds that they use, how we can make them better, how we can make them more efficient. It's really remarkable. What I typically do is actually have a notebook with me and every time I hear all these ideas, I write them down. And then when I get back to the office, we actually put them in an email that I sent to the top hundred people in the organization and say, these are the things that I learned from the people who matter most in our company. They are the ones who are actually moving the freight for the customer. And that leads to better action plans.

• 21:10Speaker 00

  And in some cases, we change the action plans that can impact the output metrics. And in some cases, we actually change strategy or we add a lever to the strategy or we do things a bit differently there as well.

• 21:21Shane Parrish?

  Is there an example that comes to mind of something you've heard in a break room and you were like, oh, we need to pivot, like it's not working?

• 21:28Speaker 00

  I'll give you a couple of examples. The first one was around when we were on a very strong journey of improving our service product. One of the first things that we did was change compensation plans. So effectively, as opposed to compensation be driven only by growing, say, revenue and profits, to have a portion of the compensation plan to be driven by improving our service product to the customer. And you can think of that as being the carrot. By improving service, you as a supervisor on the dock can effectively bring home more pay. But when we talked to our drivers, a lot of it went back to accountability. What they were telling us, well, you know, listen, I take care of the freight of the customer, but so on, so on, the dock is actually, they're not taking care of the freight for the customer.

• 22:12Speaker 00

  So then we build systems where we can actually track back our service performance to the person level. And then we actually created coaching so that if you cause a damage as a person on our docks, then you can actually go into a specific training program and get coached to make sure that that doesn't happen in the future, as an example.

• 22:30Shane Parrish?

  Wait a second, how does the system detect my performance?

• 22:35Speaker 00

  Every time we move a pallet across our network, you have people who are interacting with that. By the way, you need a really good systemic platform. You need a platform that is modern, that can actually get data directly from a handheld device a user can using into a system that you can then aggregate and take action on. The way it works usually, if let's say I'm a dock worker and I see that a pallet is damaged, I take a photo of that pallet and I say I saw that this pallet is damaged. Now, in some cases, it could be a smallish wrinkle, having a small scratch on it, as an example. But then we know who the last person that handled that pallet was.

• 23:17Speaker 00

  When the customer gets that pallet, if the customer says, you know, this is a scratch, it's fine, then effectively, no harm or foul. If the customer gets that pallet and the customer says, my freight is damaged, now we can track it back to the last person who reported that damage and who was the person before them who handled that freight. That's historically how we did that. But now, moving forward, what we're also doing, we're actually using AI for that purpose. So every time we close a trailer door, a supervisor takes a photo of the trailer and we're using AI to inform the quality of loading, to be able to say that this pallet was not strapped to the wall of the trailer, which means it could tip over and it could cause a damage, as an example.

• 24:01Speaker 00

  So we're also using technology to be able to have a much better identification on what shift something happened, but also tying it back to the person that could have caused that that particular damage in that case.

• 24:11Shane Parrish?

  Is that real time? So like when I take that photo, it reminds me of something? Or is it sort of post, when we aggregate the data, the next day, you're like, hey, this truck went out yesterday, you didn't see this, just a reminder to strap it down better?

• 24:27Speaker 00

  Historically, we've done it where you are looking at it after the fact. So historically, we managed all that data through the shift. You are still getting it in the system in real time, but the person taking the photo was not getting immediate feedback, so. Let's say I'm a supervisor. As I close the trailer door of a given trailer, I would take a photo and then I would actually rank the quality of loading of that particular photo. So in that case, it's not AI doing it. And then the next day, we can tell which supervisor, because then the next person in line in our terminal network, when they open up your trailer, they take a photo and they rank your quality of loading. So you're effectively getting somebody, if you think about software development, it's almost like doing a code review, but you're doing a trailer review

• 25:12Speaker 00

  for the next person who's actually opening up, opening up that trailer. But now with AI, with the new versions we are launching, we actually are intended, it's not, it's not live yet. It's going to go live over the next few months. But effectively, as a supervisor, whenever I take the photo, AI automatically tells you what it found wrong in your trailer. And now we can actually fix that before you actually send that trailer on the, over the road.

• 25:34Shane Parrish?

  And just for context, how many trailer openings and closings are we talking a day in the company?

• 25:39Speaker 00

  Looking tens of thousands.

• 25:40Shane Parrish?

  And the reason that this matters is to reduce the damages. That's one of your biggest costs. Is I, do I understand that correctly?

• 25:47Speaker 00

  So the reason, if you think about our service in a, in a trucking company, one is making sure, because as a less than truckload carrier, what we do is a customer could be shipping one or two pallets, but then we get it to one of our terminals where we consolidate that freight with other people's pallets effectively. So you, and then you're moving that freight across a network of 300 locations across North America. So part, one of the KPIs would be, we call it service quality, which is not damaging the freight. Because when you are consolidating and deconsolidating freight, that could lead to quality issues as people handle that freight over a longer distance. So that's one measure. The second measure is providing on-time service, that when the, if the customer is expecting a pickup today,

• 26:32Speaker 00

  that you pick up that freight when it is intended to be picked up. And then if they're expecting it to be a destination in three days from now, that you're getting it three days from now as well. But these are the two primary measure of how we measure the service quality or the service for, for a given customer.

• 26:45Shane Parrish?

  And less than truckload is sort of 100 pounds to 15,000 pounds, is that?

• 26:51Speaker 00

  Somewhere. So our average weight per shipment is approximately, call it 1,400 pounds. And it varies in the range that you mentioned. So a couple hundred pounds all the way to 10,000 plus pounds. But usually, once you start getting to 15,000, it makes sense to send that on a full truckload where you are booking an entire truck effectively to go from point A to point B.

• 27:11Shane Parrish?

  And if I was an employee and I'm working there and I'm on the dock and I want to see my specific performance or a driver, can I do that?

• 27:18Speaker 00

  Hundred percent. So the way we make it work and we implemented those tools as well. And there is one thing, everybody goes to work every day wanting to do a good job. And when you get feedback and positive reinforcement, obviously, you're gonna do it in a more effective way. But every time one of our drivers or dock workers scans a pallet on the dock, they automatically see two dials on their handheld. The first one tells them what their productivity is versus their peers. So they can see effectively, if you had 10 people working the dock, are they number one or are they number five? And if you're number one, there's a lot of bragging rights that go along with that, but that's more on the productivity side.

• 27:56Speaker 00

  And then the second dial shows them how many damages they could have caused by either not strapping the pallets or not. So every time you scan a pallet to move it across our docks from one trailer to another trailer, we actually show folks what their numbers would look like. And similarly, the supervisors, they have a system as well, very modern platform, all proprietary, our own engineers build these solutions where effectively they can see then the performance across the entire workforce or a certain shift and how they can actually manage that more effectively.

• 28:29Shane Parrish?

  That is so cool. I can see how some people wouldn't like it, though. What has the response been like?

• 28:35Speaker 00

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

• 29:17Speaker 00

  then of course, you're not going to have a lot of satisfaction with that. If you're using it as a way to elevate your team, to coach them, to teach them how to do things in a better way, that can be very uplifting.

• 29:27Shane Parrish?

  How do you run meetings internally?

• 29:29Speaker 00

  It depends on the meeting. Different meetings have different structures. But generally, every meeting starts with, obviously, every meeting has a certain set of goals. Usually, a lot of our meetings starts by being very grounded in data, where we send all the materials ahead of time to the meeting attendees. Now, not every meeting is that way, but if you think about monthly operating reviews or weekly staff meetings, all of these are effectively, the material is sent ahead of time, which has a lot of information, going back to what I mentioned about the KPIs, about every KPI, how it's trending, and then reviewing the action plans associating with making that KPI get to a better outcome for the company as a whole.

• 30:12Speaker 00

  And we also source, depending on the meeting, in some cases, we source questions ahead of time from all the attendees of the meeting, and they actually get to rank those questions in terms of importance. And there are two things that we do. Questions is one, and then the other one is takeaways, based on the material that we sent out. What were your key takeaways from what you read? And similarly, every attendee of the meeting would rank those takeaways. So the first part of the meeting, we actually walk through the fully ranked takeaways, what were the biggest takeaways that people had from the material that we sent out. And then we go through a list of questions where effectively it could be around how we can make things better or getting more information about how to improve a set area. So these are how we run typically our operating reviews. And it's a, it ends up becoming a very...

• 30:57Speaker 00

  Good, effective use of time because everybody's engaged in contributing the agenda of the meeting. What are the key topics? What are the biggest levers that we can be driving to make said area that is covered in the meeting be a better area over time? For other meetings where we effectively don't have the time to send the information ahead of time, or it's a brainstorming meeting as an example, it's typically whoever again is responsible for a given area, they start by reviewing predominantly data, information. In some cases, it's an Excel spreadsheet. In some cases, about the thing that we're trying to solve for, and then everybody contributes to it. And there are a few things that usually I do in meetings. One, there's a rule of not using devices and being focused on the person speaking.

• 31:42Speaker 00

  Number two, only one person speaks at a time. So there is something very powerful of giving somebody your full attention and listening to what they are saying because that leads to a much more constructive conversation. And the third area is to be, it's okay to disagree. And actually, disagreement is encouraged, but you have to do it respectfully. You have to do it in a way focusing on the problem, on the information, not on the person, not on the subjective. And I find these kind of create a framework of really constructive meetings where at the end of them, we're solving real problems of how we can make the numbers better and how we can improve service and how we can improve employee satisfaction. And it leads to a much better outcome there as well.

• 32:22Shane Parrish?

  You said ranked takeaways. I want to come back to this for a second. How do you rank them? What's the process? It sounds like there's a lot going on pre-meeting in order to make the meeting as effective as possible.

• 32:35Speaker 00

  So in that particular case for our operating reviews, typically we schedule those on a monthly basis. And a week ahead of the meeting, we send all the material out. And then we send a survey that has in it where every person can submit what their top takeaways were, and they can submit what their top questions to ask during the meeting as well. And then we send another survey, once we get all this information back, where every attendee of the meeting gets to rank from a scale of one to 10 what they believe is the most important takeaway and what they believe is the most important question. Now, I'll tell you, Shane, what's fascinating, because think about it this way. Let's say I run pricing at our company.

• 33:17Speaker 00

  The people attending and operating reviews are not necessarily only pricing people. You have salespeople, you have operators, you have technology folks, finance folks, HR folks. So they're looking at all of your data and all of your content. And they're all giving you feedback on whether it's a takeaway that they saw from what you are, all the information you sent out, or what a question that they want to ask. Then when these takeaways and questions are ranked, this is where the magic happens. Because now automatically, every person in the senior leadership team understands what are the good things and the bad things in that particular subject matter. They also understand, based on the questions that they saw, well, that's interesting. I saw that a person asked about this and this and this.

• 34:01Speaker 00

  I didn't see that in the information. I didn't see that in the data. So now the group of people who are in that meeting can contribute in a much more effective way because they're getting the wisdom of the team, the wisdom of the crowd, and how they are actually doing it.

• 34:14Shane Parrish?

  This is going to sound crazy, but could you use that system to identify talent? In the sense that this person's very junior, but they're actually recognizing patterns that would be expected of like a senior person?

• 34:28Speaker 00

  You definitely can use it for identifying talent, but I do think generally to identify talent, you need much more touchpoints than just a takeaway or a question. But the way we think about talent development is a lot of touchpoints. So for example, a lot of companies do performance reviews once a year, or maybe twice a year. I don't believe in that. I think performance reviews should be done on a daily and weekly basis. You've got to give a person feedback that what you're doing here is fantastic and what you're doing here needs improvement. But at the same time, doing it on a constant basis, you can identify also who's trending in the right direction, what their core skills are, where they need to improve, how they're improving, and you can identify talent that way.

• 35:11Speaker 00

  But also, we have leadership team discussions about talent that goes beyond, you know, the first few layers of the company, about who is up and coming talent. So then, members of the leadership team can give their feedback on this manager or that director level person, or maybe an individual contributor. Have a long runway and they're impressed by them and how this is what they are seeing in the performance of that particular person. And I think this is this is a more effective way because you get a wider perspective from a group of people specifically about talent development as opposed to the small window by which you're evaluating content, you're evaluating the takeaways and you're evaluating questions. By the way, also Shane, one other thing that you mentioned that I do in those meetings is I have this, for me personally, I call it round

• 35:54Speaker 00

  Robbins, but where people either give a question or a takeaway, if let's say it was a meeting but we didn't submit those ahead of time, I always subscribe to the fact that the senior folks, including myself, I will speak last. I always ask, give my takeaways or my questions at the end of the meeting to make sure that there's no biased thinking. I think Jeff Bezos had a similar perspective where always you speak at the end as a leader because what you don't want by giving your perspective, somebody who's junior on the team who might have fantastic insights is going to be biased to to think as part of the group. So usually the more junior people get to speak first so they can actually, we can hear their perspective there as well.

• 36:33Shane Parrish?

  That's fascinating. I want to stick on the meeting thing for a second here. Do you use AI to record the meetings?

• 36:40Speaker 00

  Depending on the meetings, not all of them we use AI, but any type of structured meeting where we are discussing effectively, say, an operating review, we do use AI to both take notes and summarize the meetings. And in many cases, we send back out the takeaways to the team so they actually get to see what was discussed and what were the key things that we focused on as a as a team. But I would say for any meeting where it's more structured, where you have more attendees, et cetera, then I'd say it's consistent how we use AI. If it's a small get together to figure out something that we get a status update or a progress update, then we might not use AI for that.

• 37:18Shane Parrish?

  So it doesn't sort of like mail me, here are your actions from this specific meeting that you're supposed to be doing, or mail other people in the organization who might not have been at the meeting and inform them of something that was decided in the meeting that affects them? Or how does that, how do you think of that evolving, I guess?

• 37:36Speaker 00

  I think overall, so if you look at late last year, typically on a once a year basis, we get together the team and then we walk through the strategic levers that we have as an organization. And we give ourselves a score, an assessment. How did we do in this area, that area, that area? But then we think about how should we evolve the strategy? Should we do something different when it comes to that particular lever in the company? So for those kind of much more elaborate or involved type sessions, where you're spending two, three days with the team to change your strategy. In that particular case, we use AI and then we send back out the action items. And then we effectively use that to inform or change the levers of our strategy. But then you still have to summarize them

• 38:20Speaker 00

  and come up with the key themes in terms of how we address that. So depending for something that elaborate, where you're spending a lot of brain power over a few days to potentially change the direction we're going in as a company, we use AI extensively for those kind of sessions. If we're having a weekly staff meeting where we are actually going through the key KPIs, how they performed for the prior week, how they are performing month to date, how they are performing quarter to date, obviously, AI becomes a bit less important because even the actions that come out of those meetings typically are a handful, where it's very easily understood that, okay, I'm gonna take this and do something about it.

• 38:56Shane Parrish?

  How do you end the meetings?

• 38:58Speaker 00

  Typically, the last part of a meeting that I personally like to do is actually have everybody give their takeaways. And what I find fascinating is that everybody, then as they walk through it, you can see how they interpreted everything that they heard. And I always find it very fascinating to see what every person took away. And I usually do it in two ways. One, what are your broader takeaways? But then what are you gonna do differently as a person coming out of this? But this is again for the larger type meetings. But usually for smaller meetings, it could be just walking through the action items we discussed, or it could be at the end of the discussion, we got to where we needed to get to.

• 39:37Shane Parrish?

  I want to come back to talent for a second. So we sort of talked about identifying talent within the organization. When you're interviewing somebody, how do you specifically identify talent?

• 39:47Speaker 00

  That's a great question because in business, one of the most important levers that you have is who's part of the team. Who are the individuals who ultimately are working together to deliver a great amount of value? And as a public company, your number one goal is to creating shareholder value. But going back to how you interview, for every person on the team, there are certain levers based on their skill set, on their role. But one would be what is their technical ability? And technical ability, in my mind, has a components of their actual core skill set or their core job. Number two could be their intellect, how smart they are.

• 40:32Speaker 00

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

• 41:14Speaker 00

  And usually, whether it's being collegial, whether it's being humble and having a thirst for knowledge, all of these fall in that category of the personal side and how they will fit with the rest of the team. So when I interview people, I test for all of these pieces. So let's say you're interviewing somebody who oversees sales. I usually go very deep in my, in my interviews. So I don't just ask them, well, how have you grown revenue at your last company? I ask them questions of, how did you structure your sales force? How did you manage leads? How did you manage your pipeline? How did you convert your pipeline? How did you manage revenue realization? So I go deeper, much deeper. How did you manage account plans? And if somebody's not doing it? What were your targets for face-to-face meetings for your sellers per day?

• 41:58Speaker 00

  A lot of these, when you start double and triple clicking, you get a much different perspective about how all-in was a person in their subject matter. And the deeper you go, the more you actually get a really good perspective, not only asking the headline question, but double clicking and triple clicking and quadruple clicking, because now you can actually get, yep, this person was fully in command and had that area locked tight in terms of that understanding of it. In terms of testing for seriousness or dedication or hard work, that's a bit harder to do. But I also ask a lot of questions around how they looked at that work and how they think about their personal life versus their work life. I find the best professionals, you don't have a distinction between the two to a certain extent.

• 42:41Speaker 00

  Work is part of life, the same way that life is part of work. So effectively, it's a circle. You do these things in a very interchangeable way, whether you're spending your time with your family or you're spending time at work. All of these are very intertwined in how a person lives that life. So I tend to see how they perceive work, how they look at actually work as a part of life. And then I always apply the airport test after spending an hour or a few hours with a person. If I get stuck with that person in an airport, am I gonna enjoy that time? Or do they bring the vibe up that I felt uplifted after that interview? Or that I felt emotionally down? But that's the structure of the interview. And for some of the roles, by the way, I go also around intellectual questions to be able to test their intellect, how smart they are.

• 43:25Speaker 00

  But then after all of that is done, I also get, before I actually do my interviews, about a 50-page document on a person based on the notes of every single person who interviewed them. And I usually take subjectivity out of it and I look at every area that somebody has identified as potentially being an issue. And I very objectively assess it. And a lot of times, what people have identified as potential areas of issues end up being the reason why somebody fails at work. So I look at these and then in my interviews, I try to double-click on those areas as well to make sure that they don't have a, that person has a shortcoming that could detract from being able to create value or raise the vibe of the team.

• 44:08Speaker 00

  Wait a second, and what would be an example of that? For example, they don't go deep enough into their area of expertise. An example could be how they manage their team members. An example could be that they were effectively being very critical of the people that they worked with over a long period of time. An example can be how they switched jobs and why they switched jobs. So many of these could be examples of things that people identify. Part of it could be also that they are That they have an ego, they're not a kind person, they're not gonna treat their teammates or people who work for them with respect. All of these would would come up in that feedback if they are obviously on the on the negative side. And I think it's very important to be in tune, not to try to brush these things under a rug.

• 44:51Speaker 00

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

• 45:33Speaker 00

  So when I got to college and I went for my undergrad degree in Lebanon, in the country of Lebanon, at the at the American University of Beirut, where I thought I was the best programmer that has ever existed, because I was doing it, I was training on it, I was, and I used to love writing beautiful code, efficient code, and I used to think I'm really good at it. So naturally, in my mind, what ego is, you think that you're so good at something that you stop learning. And when that happens in business as in life, it creates a ceiling that then doesn't allow you to create more value, to get to better outcomes. So I remember at the time, if you know, a few years later, I came, I came to MIT in

• 46:16Speaker 00

  Boston to do my graduate studies in engineering, and I met programmers that were 50 times better, that were just had beautiful minds, how they thought about things, how they problem solved. And that taught me that I'm actually, I'm a good programmer, but I'm no way close to being a great programmer. And that taught me humility. It actually enabled me that then suddenly it opens up many, many doors. Because suddenly you're saying, well, I might be good at this. However, wow, like, look at these other people, how they're approaching that problem in a very different way. And that humility enables you to then learn more and be able to break through ceilings and always get better and not be able to be stuck in a local maximum

• 46:59Speaker 00

  in whatever area of expertise it is. So when I think about ego, I think it's a shortcoming in somebody's framework of thinking, where they think effectively that their knowledge, their skills are the best they can be. And that prevents them from being able to break through and wanting to learn more and ask more questions as opposed to tell more about a certain area of expertise.

• 47:23Shane Parrish?

  Your time in Lebanon was one of the craziest, and your escape was one of the craziest stories I've heard. Can you share that with us?

• 47:30Speaker 00

  I grew up in Lebanon in the eighties. During that time, the country was at war. And it's remarkable to look back at those times because I remember many, many, many nights where at night we wouldn't sleep at home. We would actually be sleeping in a shelter, in a bomb shelter. And it was a period of time for the country. That was a very, very dark period of time. Now, my brothers and I were very lucky because we had parents who were unbelievable. They provided us a beautiful childhood that was surrounded with love. And although the world around us was crazy, we actually could, we were not impacted to a certain extent. But you're still obviously dealing with the trauma of war around you. So it teaches you a lot about how, you know, when you're under pressure, it's one thing to be in a bomb shelter

• 48:14Speaker 00

  and your neighborhood is getting bombed versus any other type of pressure you're seeing in business or in life. But we were lucky that our parents created again a cocoon to a certain extent of safety and gave us what every child want to have in their childhood, which is love, which is a lot of support and a very, very loving environment. But also, we had to flee the country because of the war. We lived in multiple countries. We lived in Egypt for a while. We lived here in Kenya. Canada for a while, so it's good to be back in Ottawa. I haven't been back in almost thirty five years to Ottawa, but I spent a portion of my childhood here as well. But all of these experiences, at least what they gave me, is a different perspective. When you interact with different cultures and different people,

• 48:58Speaker 00

  it really teaches you how to look at things from different perspectives. Everybody's gonna have a different lens, how to look at a certain solution, at a certain problem, at a certain, you know, whatever it is that you're dealing with. And I find a lot of enrichment in that. I seek other points of view. And part of it was because I grew up in this environment and I got to see multiple cultures along the way as we live in different countries during the wartime in Lebanon as well.

• 49:23Shane Parrish?

  How do you think that shaped your approach to taking risks?

• 49:27Speaker 00

  Now, keep in mind, I was very young at the time. So when you're very young, you're still, your brain is developing and forming. But it's really when you get to your teens is when you start thinking differently about different levers and risk. I think overall, I would probably put myself in the more risk averse category. But I think that's more of my engineering type education, where as an engineer, you're always assessing risk or you're trying to quantify everything that you are dealing with. So when you look at risk, you're looking at all the information, all the data behind that risk and you're assigning a probability of what's the probability of that risk materializing.

• 50:11Speaker 00

  Now, if you're only looking at the downside, it's very easy to say, I'm not gonna, you know, I'm not gonna go there because that's too risky. However, if you look at the upside and your probability adjusts the upside of whatever area you're looking at and the risk that is involved with it, it changes your perspective of how to deal with risk. But I'd say I have a very analytical view of risk, but I lean towards being more risk averse than risk taking. And I do think part of the upbringing, but more importantly, my engineering education is what kind of governs some of that approach.

• 50:43Shane Parrish?

  The notion of risk-taking. How did you navigate the yellow bankruptcy? Somebody reached out to me, a mutual friend of ours, and told me it was pure genius. Can you tell us that story?

• 50:55Speaker 00

  Yeah, so one of our large competitors went bankrupt in 2023. Very sad, obviously, for the company and for the folks, for the folks involved. But at the same time, as a less-than-truck-load network, one of the most important forms of capacity to grow and service the customer is the terminal network that you have. So how large are your buildings? And some of these buildings here are a mile-long dock, effectively. So very, very large facilities. And having enough capacity in key market is incredibly important. And it's very hard to be able to permit and build a large trucking terminal. So effectively, when Yellow went bankrupt, all of that real estate came up for sale.

• 51:39Speaker 00

  And we had to figure out, well, how much we want to buy and in what markets we want to buy. So in that particular case, and now as a new CEO going in there, the question is, one, how much do you buy? And what markets do you buy them in? How do you justify the return you're going to get on the capital that you are deploying? One of the things I learned from Brad very early on, as a CEO, one of your most important part of the job is to make sure that you are allocating capital in a way that can create the most amount of shareholder value over time. Now, when Yellow went bankrupt, we started looking at, well, okay, if we look, what is the data telling us? Based on different markets, where are we falling short on capacity?

• 52:23Speaker 00

  Which market is growing that we have X amount of doors, X amount of physical space? And if we look at the growth trajectory of that market, we're going to run out of capacity. And we analyzed that in all the markets that we operate in. And we knew that the larger the terminals we buy, the better it is because you can get higher efficiency in those markets if you have a much larger terminal or much more space than much less space. So we effectively used data to identify all of these markets. And then we mapped their network onto our network. And we found 28 properties that would have the largest impact. And for each one of them, then, we created a business plan.

• 53:05Speaker 00

  We created a business plan that says, how much efficiency are we going to get in that market? If we are capacity constrained today and we have a 5% market share in that market and our company's market share in the industry is about 10%, how can we grow from 5% beyond that? And what would be the financial flow through? The income effectively associated with growing in that particular market? And we were able to effectively identify 28 properties that were the ones that we wanted to buy. And we ended up spending nearly a billion dollars on that real estate. And it was a remarkable acquisition because effectively it's now giving us the runway. So one, it made us much more efficient. They won in those markets. We were able to improve operating margins dramatically.

• 53:49Speaker 00

  That's not the only reason why, but that was part of the reason. But more importantly, that capacity now is enabling us to capitalize on what could be an industrial recovery over the years to come here in North America. And these terminals will pay a big, big roles in enabling us to deliver on that.

• 54:06Shane Parrish?

  That was a big decision as a new CEO. That's a lot of money involved. How did you make that decision?

• 54:11Speaker 00

  Well, overall, you start off by looking at what are the units of how do the financials add up effectively? So what's the overall return you're going to get on that deployed capital? And what I learned from Brad is it doesn't matter what the size of the check is. That's the only thing that matters, which is the return you're going to get on the size of the check. But a lot of it is, you know, obviously our board was very much involved in the process, giving feedback and perspective based on the numbers that we were showing. Initially, we started off with a much smaller purchase price and a much smaller set of terminals than we can agree that over time. Brad's feedback in the process, he was our chairman at the time, was fantastic. The team working together and brainstorming and figuring out what, again, what would

• 54:56Speaker 00

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

• 55:23Shane Parrish?

  But it's one thing to see those returns in a spreadsheet and it's another thing to actually enable those returns. Talk to me about that.

• 55:31Speaker 00

  Well, by the way, in business, that's always the case. I mean, when you think about creating a ton of shareholder value, there is always, I mean, we're a large company. We're a multinational company. We have 40,000 people. Every decision you make has big ripple effects into what kind of outcomes you can drive. But this is also part of it would be the financial processes that we have in being able to track any initiative that we are driving. So, so high level, I mentioned earlier on that in business you have big strategic levers. Then you have a certain set of KPI of metrics that ultimately grow your earnings, that ultimately enable you to create shareholder value. And then you have action plans of how you can drive those levers to get to the right place.

• 56:12Speaker 00

  But this is where also proper financial planning and analysis comes into play. For each one of the projects that you have, including buying a billion dollars of real estate, you have a project plan. You have a project plan that says over what period of time are we going to launch these terminals? We're going to renovate them and make them look like an XPO terminal effectively. Over what period of time you're going to launch them? Once we launch each one of them, we have a certain assumption. This is how much we expect to improve productivity. This is how much we expect to improve efficiency. This is how much market share we expect to gain. And our FPNA team tracks all of these things. And now you can see the trajectory of how you are delivering on what you expected to deliver. And when you see something deviating,

• 56:56Speaker 00

  then the team is getting together to say, well, okay, did we have the wrong action plan? Or what should be doing differently to then get back, get back this initiative or this project back on track to make sure it's delivering to the right outcomes you expect?

• 57:07Shane Parrish?

  What's your FPA team and what do they do?

• 57:09Speaker 00

  So our FPNA team is financial planning and analysis. Effectively, it's the team that looks at all of the financial metrics, financial KPIs of how is your top line trending effectively? What is your top line doing? What is your cost structure doing? And ultimately, what are the profits that you are generating? But then when you double click, they look at first for any period, they are looking, we list to what we call risk and opportunities. So effectively, what are the opportunities based on initiatives that we are driving? That can deliver a better financial outcome. And what are the risks that we see in the environment that can take away from the financial outcome? And then for each one of those levers, we assign a probability.

• 57:51Speaker 00

  So now we can probability adjust what is the projected financial performance of the company for the week, for the month, for the quarter, for the year, as we think it through. But then, if you go down through the ranks in the FPNA team, for every operators that owns a P and L, a profit and loss statement, they actually have an FPNA resource that is telling them what are the levers? So where is, where are your metrics trending? And what are the levers that you can pull to drive the outcomes? And are these levers performing at the level as a business leader that you expect to deliver on the, on the outcome? And that's incredibly important in business because ultimately the scorecard of a operating company is how much are you growing your top line? How much are you growing your profits?

• 58:36Speaker 00

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

• 59:11Shane Parrish?

  I love that. I want to come back to talent for a second. One of the stories that you had told me when we spoke last was about ABC. Can you tell us that and how it's useful for you?

• 59:23Speaker 00

  So generally, when you, when you assess talent, you want to be able to assess who are the top performers on your team? That you either not only want to make sure you retain them, but you also want to invest in them. You want to grow them. You want to see them do amazing things over time because they have a lot of untapped potential.

• 59:43Speaker 00

  You also want to look at who's not performing on the team. Who is somebody on the team who, for whatever reason, whatever circumstances happen, that they are not adding value, they are not being able to contribute to the best outcome for the company overall. But if you think about ranking folks as A, B, or C, typically an A player is somebody that they are, again, a top performer. They are somebody that you're proud of them, you're proud of their work, you think the world of them. And I learned this actually test from Brad as well. If an A player walks into your office and say, "Mario, you know what, don't try to talk me out of it. Maybe my wife is moving to a different state and I took a job with another company and, you know, don't try to talk me out of it, this is done."

• 1:00:27Speaker 00

  If the outcome out of that is feeling that you have a pit in your stomach, that you go back home, you're talking to your wife and say, "I don't know what I'm gonna do. I just heard the most horrible news today." And if it's a feeling of angst, it's a feeling of, "I'm sure we're gonna replace that person." That's an A player. If somebody walks into your office and they say, "Hey Mario, don't try to talk me out of it. I'm actually, I find another role in another company and I'm gonna move on to a different industry maybe." And your feeling is, "Whew, that's good news. Actually, we're gonna be able to upgrade talent, we're gonna be able to, this is gonna be great, we'll figure out the transition plan." That's a C player. So effectively, it's how you think about the people that are working on your team and who are working for them, who are, again, the top performing people that you want

• 1:01:11Speaker 00

  to retain, that's an A player. And who are the people that if they move on, it's not a big deal actually, you can potentially get to a better, to a better outcome as well. And we take that very, very, very seriously. I personally think the biggest lever in creating a lot of alpha in business is who you have on the team and how they work with each other. If that is rock solid, if people who work for you are all A players, it's a beautiful thing because they push each other in a beautiful way and ultimately they deliver alpha, ultimately they deliver better results, ultimately they deliver a better environment for employees where employees are much happier to come to work because part of them being an A player is how they manage their teams. So that's why we think, we think of that talent evaluation process being very important

• 1:01:56Speaker 00

  and making sure we have the most amount of A players on the team, especially the higher up you go in the company is very, very important.

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• 1:03:02Shane Parrish?

  Part of your job as a leader, then, is to take those talented people and create a high-performance environment. How do you think about that? How do you do that?

• 1:03:11Speaker 00

  Well, high level, I think you have to look at every person in a very customized way, based on what makes them great. I always start, for every person who works for me, I look for the things that makes them a beautiful professional. What makes their brain beautiful? What makes them actually a great team member? And I believe in them. I believe in their ability to do amazing things. And I think, if you look at the human psyche, people want to be appreciated. And when you show someone that you believe in them, that you truly believe in their ability to be great, they have a much, much higher odd to actually be great

• 1:03:56Speaker 00

  than if you're only focusing on where they are falling short. Now, once you have that, it doesn't mean that where they're falling short should be, you know, should not be discussed. However, from my perspective, when I give constructive feedback to my team, I never make it subjective. I always grounded on data. I'll tell them, well, OK, look at this situation. We could have gotten to this outcome based on what the data is telling us. But we got over here. We've got to figure out how to do it in a better way. Suddenly, that person is thinking, yeah, I fell short in this area. But they're not thinking, they're not getting, becoming defensive. Because I'm not telling them, hey, I think you dropped the ball on this. I think you're not working hard enough. I think you're, because then suddenly it's a very subjective set of feedback that causes people to retract from it as opposed to it being,

• 1:04:40Speaker 00

  you know, let me tell you objectively where things didn't work well. But then after you have that, so after you believe in that, it's also about creating an environment where it's safe for them to try things and it's safe for them to sometimes fail at them. Because that's part of life. For every five great things you're going to do, you're going to fail at one or two of them. But also creating a safe environment where they can spread their wings, where they can figure out a way to get from, again, best outcome from point A to point B.

• 1:05:08Shane Parrish?

  How did you learn to give feedback like this? That seems atypical of somebody with a computer engineering background.

• 1:05:17Speaker 00

  That's a great question, Shane, because if I go back earlier in my career, that was a big shortcoming of mine. But the way I led teams was based on, let's say I'm looking at a certain goal, certain solution we wanted to build. I would analyze it and I would come up with a, going back to the engineering design process, I would say, well, OK, this is a goal we want to achieve, what a problem we want to solve. Then I would think through the requirements. I would think through the highlights of the solution. Then I would go to my team member and say, well, you know, listen, this is where we are here. This is where we want to get to. I personally believe that's the best way to go from here to here. Naturally, when you do that, you automatically atrophied that person's brain

• 1:06:01Speaker 00

  from them being able to find the best, the best outcome. So over time, what I realized is that then if I didn't have the time, or I wasn't a subject matter expert in a certain area, we just don't get to the optimal solution in a given area. We just shortcutted that quite a bit. So then I started learning more and more with time as opposed to give somebody what I think the solution is. What I need to do is actually teach them a process where they are analyzing the data and they are coming back to me with insights of the data telling them. Similarly, they are designing a solution. And in many, many cases, I look at that solution and say,

• 1:06:44Speaker 00

  whoa, that's something I didn't even come close to thinking about. So going back to your question on giving constructive feedback, what I noticed is whenever you give somebody only constructive feedback and you're only telling them where they are falling short, you are missing out on them potentially being great. And that feedback is now rooted in molding them into your own perspective, into your own solution to go from point A to point B as opposed to them potentially being much better than you. And that's why when I give feedback, I usually always start by the things that makes them great. What are the things that they are doing that they should keep on doing? That they should amplify? That they should find new ways of actually using those skills,

• 1:07:26Speaker 00

  those attributes to create even better things? And then when it comes to the constructive thesis, I remove the subjective. I tell them, well, okay, objectively, if I look at this, this is what the data said, this is what the situation is, this is kind of how we look at it. And now they are seeing a different perspective, how they can get better without feeling that they are falling short or getting defensive or building up a wall and then not potentially getting to a better place.

• 1:07:49Shane Parrish?

  Did somebody give you feedback like this? And that's how you learned this?

• 1:07:53Speaker 00

  I think through my career, it was multiple. I mean, obviously, you work for different people. You learn from different people. And I had different mentors and different leaders where some gave very critical feedback on the onset and some were much more constructive and believing in you. But I think it was more iterative over time in terms of learning that. And with Brad being my mentor for more than a decade, his approach to this is very similar, where he's always looking at how do you actually give constructive, not constructive, how you give somebody what they're doing well and how they can actually amplify that as well, which was a very, very similar method as well.

• 1:08:30Shane Parrish?

  How do you think about capital allocation?

• 1:08:32Speaker 00

  So, high level capital, I mentioned earlier on, as a CEO, you have only a few levers of how you can create a lot of value over time. I personally believe, number one, is who you surround yourself with, who's on the team, how does the team work with you together? Number two is capital allocation, where you have a finite amount of resources as a company, doesn't matter how big you are as a company, where do you deploy that capital so that you are getting the highest return back on the capital that you are deploying? And in many, many cases, especially as a public company, that capital is actually shareholders who publicly have given you money to invest for them so they can actually make more money at the end of that. And the third area is where you allocate time,

• 1:09:18Speaker 00

  not only your time, but the team's time, to be able to create the most amount of alpha. So when I think about capital allocation, it's what's going to generate the most amount of returns? And the different forms of capital allocation, one is how much capital you deploy into the company. And it's a very simple equation. For every project that we have where we are deploying capital, we look at what is the return associated with that capital deploy? For a million bucks you deployed in a project, are you going to get a million a year? Are you going to get 2 million a year? Are you going to get 3 million a year? Are you going to 100,000 a year? So that's a very important measure of, for every initiative where we are deploying capital within the company, is it going to give you a higher return? When you think M&A and how you deploy capital in M&A, the key is there are multiple levers for that.

• 1:10:03Speaker 00

  One is how does a company fit to the overall strategic vision of the company? How can you, does it give you a new set of customers? Does it give you a new product, a new capability? Does it help you build scale, as an example? But in M&A, when you acquire that company and you apply your systems and know-how and process and you get where one plus one equals some more than two, what would be the return you're going to get on that particular M&A investment that you have done? Is it accretive? Is it going to create shareholder value? Or detract from shareholder value? Would be the second lever of how you deploy capital. Then you get into the uses of cash in a company, where does it make sense to what kind of leverage you want to keep? Does it make sense to pay down debt? Or does it make sense to buy back your shares? If you believe where you are today, your profitability is at this level

• 1:10:48Speaker 00

  and it's going to get to that particular level in a few years. Well, ultimately, if you buy back your shares today, you are buying them for cheap. And then effectively, it's going to create more alpha and more return for shareholders. So ultimately, capital allocation, I personally think is very structured, should be very objective. And ultimately, what's going to create the highest return for your shareholders? And whatever that answer is, is where you've got to deploy your capital.

• 1:11:13Shane Parrish?

  How do you fend off complacency?

• 1:11:16Speaker 00

  I think complacency overall comes from feeling comfortable and feeling content. The best way to fight complacency is by setting ultra, ultra big goals. By the way, ultra big goals in business, in life, in relationships. Because ultimately, let's say you're setting a goal for your company to grow X amount. And you achieve that X amount. And you're giving yourself a good pat on the back that you achieved that particular set of growth. Then you're going to become complacent. You're going to feel that it's okay to actually have. But I believe that life is short. You've got to set big, big goals. If you set big goals, that alone is a cure for complacency

• 1:11:58Speaker 00

  because you're always striving to achieve something much bigger. And as a team, when you start achieving those goals, winning breeds winning to a certain extent. And then what ends up happening is that the team then gets more excited and more confident and more motivated to then set even bigger goals. So I think part of fighting complacency is by thinking big and not thinking small and striving to achieve great things in life. Life's short. Life, it just goes in a snap of a finger. You don't want to live a easy, kind of a complacent life. You don't want to set small goals and not... You want to achieve big things in life. And big things doesn't necessarily have to be in business. It can be that if you're a musician, you want to be the best musician possible. You want to play this piece that you never thought you're even capable of.

• 1:12:43Speaker 00

  If you're a business person, you want to create shareholder value. If you're a family person, you want to have a great family, a loving family, where you see your kids do amazing things, that your friends do amazing things. And I think what fights complacency is always striving to do something bigger in life. And that enables you to always be pushing for that next step, for that next level, and be able to drive for that.

• 1:13:04Shane Parrish?

  What's your personal ambition for the next 20 or 30 years?

• 1:13:07Speaker 00

  I think I break it down between between business and between the personal life. In terms, I'll start with the personal life. I think having a family and friends, I like to have an enriching life when it comes to the people you surround yourself with. And spending a lot of time with my family, with my kids, seeing my kids grow into beautiful adults and beautiful human beings is a is a big ambition for me and I see them just be good people is is is big. From a work perspective, I think doing meaningful work is actually building companies, seeing people succeed. It's seeing effectively folks do things they they didn't think were possible, be able to provide for their families and have constructives and happy and happy lives as well.

• 1:13:52Speaker 00

  And that could be in in business, could be different type of companies could be, but something that truly has an impact, something something that meaningfully impact people's lives for the better.

• 1:14:02Shane Parrish?

  I want to come back to the family part there for a second. So you have a wife, you have three kids who are all young. How do you run a business and have time to be a part of the family?

• 1:14:12Speaker 00

  So I mentioned earlier on that one of the the most important things that as a CEO you have is where you spend time. Where spend your personal time and then where you have your organization spend their time. And I think I once got a very good piece of advice that when you're trying to do a lot of things, naturally you have less time. But you also have to simplify the goals and the targets and the things that you are driving to what is the most important. So when it comes to family, you know, obviously, when you have, when you're doing a lot of things at work, you have a limited amount of time. But I try to make it the most amount of meaningful time that I can. So when I'm with my kids, for example, I don't use my phone, I put it away.

• 1:14:55Speaker 00

  I do meaningful activities with them as a engineer. Last summer, we actually built a robotic arm that we programmed. And we actually tried to make it solve a ruby cube. It didn't work as expected, but we kind of give it a fighting shot there. Or whether it's taking my kids fishing and spending time with them, actually doing activities that are outdoors. So I think when you are limited on time, what you can focus on is making the quality of that time be the highest possible. And also figuring out where you want to spend your time. So for example, I don't watch TV, I don't play golf. I don't, you know, have, for me, I'm either working with my team and the company that I love and being able to drive better outcomes. Or spending time with my family, with my kids and do amazing things with them.

• 1:15:40Speaker 00

  They make you young, by the way, along the way.

• 1:15:42Shane Parrish?

  I remember the first time we met, you said, I have no hobbies, zero.

• 1:15:46Speaker 00

  Yeah, that's true. Actually, my hobbies are my work and my kids.

• 1:15:50Shane Parrish?

  I love that. Go deeper on the time allocation a little bit. Spend a few beats on that and how you think about time allocation, not only as a CEO, but as a parent. Actually, let's do the CEO part. So go deeper on time allocation and how you think of that from the work perspective.

• 1:16:09Speaker 00

  I think from a work perspective, there are levers that you are spending. So there are subjects that you are spending time on and there are ways that you are spending your time. And I'll come back to that in a second. But in terms of to have a successful execution over a long period of time, you need to have a strategy. You need to have levers that you are focused on as an organization to be able to drive better outcomes. As an example for us, these are things like service, investing in capacity, gaining profitable market share, growing pricing, and then improving cost efficiency predominantly in three categories and how we operate our network. When you have clarity of what's important to drive the right business outcomes,

• 1:16:54Speaker 00

  then it's much easier for you to organize where you spend your time. But naturally, I gravitate to where I spend my time based on where the action plan is not leading to the intended results. So let's say a certain area in our plan is working swimmingly well. My contributions won't add a lot of value because I already have somebody or a team of people who are all in, who have a strong action plan, who are executing on it. And now my job is to make sure that I'm giving them what they need. I'm spending enough time with them to keep the guardrails and make sure that we're holding them accountable to deliver to set outcomes. However, if there is an area that is not performing well, that is falling short,

• 1:17:35Speaker 00

  that is effectively not delivering to what we as a team believe the best outcome can be, I gravitate towards spending my time there. And then usually what I spend my time is first I help the team analyze the data behind said area, give them my perspective, make available people on the team who are incredibly bright, who can do the same, to give them different perspective of then changing the action plan from what it was to what it ought to be to deliver the best amount of value. So in terms of the subjects where I spend my time, this is typically how I do it. In terms of where I spend my time, I think you always look at your team, you have stakeholders within the company.

• 1:18:18Speaker 00

  You have your employees, you have your customers, you have your shareholders, and you have to figure out where you organize spending your time to be able to again deliver to the best, to the best outcome. On the employee's side, I like to spend a lot of time in the field. Even my team tells me if I haven't been out to a terminal for a few weeks, I say, "Mario, you're gonna get out there because you're getting in our hair, you're becoming a micromanager here." But I think it gives you perspective because when you're spending time with the people who are moving the freight. It's suddenly, you can then elevate, you can zoom out and say, well, okay, what we're working on over here makes a lot of sense because now I can see how it's gonna have an impact on ultimately the people who are actually moving the goods and how it's gonna

• 1:19:00Speaker 00

  impact their lives for the better. So I like to spend a lot of time in the field. I spend a lot of time with my team on initiatives, on programs, on action plans and how they're gonna get to a certain output. I do find that a lot of leaders spend time on what's the output. But ultimately, you gotta spend time on the inputs. You gotta spend time on the action plan that changes the output. These are the things that you can control to change a certain outcome. So I find myself spending a lot of time in data, in action plans that influence a certain outcome. I do love spending a lot of time with customers. Every quarter, I meet with dozens and dozens of customers where I get to see, to hear from them what their problems are, or whether it's a sales meeting, whether it's a quarterly business review. I think you also get a different perspective ultimately of the people who make

• 1:19:44Speaker 00

  a choice between using your company or another company to buy the service. And having that voice of the customer, I think permeates for the entire organization as well. But these are some of the different areas where I think about the lion's share of the time gets spent. And of course, you have earnings, you have spending time with shareholders, but all of these are a lower magnitude of time than the other things I had just mentioned.

• 1:20:04Shane Parrish?

  You're an extreme learner and a voracious consumer of information. I remember the first time we met, you said you had printed out 25 transcripts from podcast episodes and sort of went through them. Where does that come from? And how do you separate signal from noise when you're consuming information?

• 1:20:21Speaker 00

  Both of these are great questions. First, in terms of how you get information, I think it's a conscious choice. Every morning, you have a choice to make. That choice can be that today I'm gonna go do my job the way I always do it, or you can make a choice that I wanna learn new things. I think in terms of within the company, I learn a lot through asking questions. So usually, if you're in a meeting with me and our company, I'd be asking 50 questions. And however, before I even ask the questions, I actually would have reviewed, literally, Excel spreadsheets of data if I have to, to be able to look at the information and what the data is saying. So now your questions are informed by data behind it. But going back to how I consume information.

• 1:21:06Speaker 00

  One, we do a lot of research as a company. So we have a small team of analysts that every weekend actually pulls together research reports from the industry, from all of our competitors, from what we're hearing about ourselves in the media, from customers, kind of research on their companies and what they are hearing. And every weekend, effectively, I get from the team, both for ourselves, for our competitors, for our industry, for side businesses and for customers, hundreds of pages of content that are all highlighted, what are some of the key points, what they are, with a summary created for each one of them. And usually, on the weekend, either Saturday or Sunday,

• 1:21:48Speaker 00

  I actually read those couple hundred pages of content. Now, as I read them effectively, I highlight the pieces that I thought were important. In some cases, I could share them with the team and say, hey, when I was reading this, this is what I saw. What do you think of this outcome? Or what do you think of this, whatever new technology or something that we read in there? So I think that's more of a process-based approach to be able to read more and learn more. From people I meet, I usually can ask a lot of questions if they are inside industries, whether it's a CEO you meet at a conference or an investor, you effectively get to pick their brain on what they are seeing, how they are doing things, how they are doing things differently. And you effectively, that helps inform kind of what you're doing.

• 1:22:31Speaker 00

  So I think step number one is having a very conscious view of being able to go get information and consume information to get a more holistic view, a more holistic picture of whatever it is a topic that you're looking at. In terms of how you filter signal from noise, I don't know if there's a specific method to do that. I think while you are consuming information, I think you have to be very honest about the information you're consuming. And one of the techniques I use is how many times do I see something appearing in a certain set of information that I'm consuming? So for example, let's say, not to pick AI, but let's say in AI, you're seeing that the new reasoning models are getting better.

• 1:23:16Speaker 00

  But then you're hearing it from customers who are using them in certain ways. You're hearing it from research on tech companies that you're looking in a certain way. Now you know that this could be shaping up to be a trend over time. You look at industrial demand in the country and you're reading the research reports from twenty different analysts who have spoken to hundreds of people to get to these analyst reports and you start seeing the same theme or trend that is going on in the information, then you actually start thinking about it a bit differently in terms of that that becomes a signal as opposed to you heard it once where it might not be as as big of a of a impactful area. And the other thing I do is also I do every morning, I spend about fifteen minutes to thirty minutes as I usually get myself in a calm

• 1:24:01Speaker 00

  place and I think about every decision or every aspect of things I'm gonna do for the day and I inform it based on what I read over the weeks over the weeks prior with this within the company or outside of the company and I just let my mind race through all the plausible outcomes. So it's almost like a decision tree. If you play chess, you can look at about when you when you play chess, you're always thinking about if I move this piece, what are the next three pieces or next move, next move, next move, and then how deep you go effectively is the more you train your brain to do it, you can actually do it in a more effective way. So then I use that information where now you're synthesizing all of it and you're looking at what you're doing and you're trying to figure out what is that from a three perspective, decision spanning three perspective, what each path, what does it lead to and how you're now using that information

• 1:24:45Speaker 00

  to somehow apply it to a problem you're trying to solve or a or something that you're seeing in your day to day life.

• 1:24:50Shane Parrish?

  Where did you learn that?

• 1:24:51Speaker 00

  Not a specific place. I think it was more over over the years as something I started doing and I found it helped me solve problems early on and I think it's just became something I do every every single morning.

• 1:25:04Shane Parrish?

  So I want to make sure I get this right. So you sort of like, it's almost like a meditation. You take fifteen minutes and you sort of think through the big decisions that day or the big things or the things that you want to focus on. Walk me through that.

• 1:25:18Speaker 00

  So it's all of the above. So usually I start by thinking through as a company, what are the things that we are dealing with? What are the things I'm worried about? What are the things that are effectively could somehow impact our business? Number two, I think about all the material I read the prior day or the prior week, and what are some of the key takeaways that I'm seeing in that trend of data. But then it's something fascinating, Shane, a lot of time when people think, they use speech to think. So you effectively are limiting yourself at the speed at which you speak to be able to find or solve a problem. However, you can train your mind to go much faster than that. And the way you do it is effectively, you start with an idea, and then you just, you

• 1:26:03Speaker 00

  almost let it roll forward with, well, okay, let's say, we want to grow a top line, we want to grow sales, we want to gain market share, we want to close a certain account, we are having a cost efficiency issue in that particular part of the business. And then you start thinking through what are the different levels you can move. You can say, well, okay, if volume grows, based on what I'm seeing in that research, where you are seeing the industrial demand pick up in the country, and I know we have these three accounts we are actually onboarding, that means that we, if we push further the cost efficiency, we might have an issue if that volume is going to grow faster. But you do these type of decisions, I just let my brain effectively think through all of them, and then it kind of builds this. And at the end of the process, what I usually find is that I have three or four things

• 1:26:45Speaker 00

  that builds clarity, that these are the three or four things that we got to focus, that I have to focus on, to be able to get to a better outcome, as an example. I do the same thing in my personal relationship with my kids, with their schooling, with their activities, where you let you just, you let, it's key to go into a very calm state when you do it. So this way, you're removing the environmental noise around you as you are doing it as well. But I find it is a very effective technique, is a mental model, to be able to solve problems and find different alternatives to solve a problem.

• 1:27:13Shane Parrish?

  I love that. It's like beyond the internal monologue.

• 1:27:15Speaker 00

  Yep.

• 1:27:17Shane Parrish?

  How do you personally use AI?

• 1:27:20Speaker 00

  At the personal level, I use AI predominantly for research, or fact check, or whenever I have an idea or thought process, I usually, my bias is to always go to one of the AI platform. I have all of them on my phone, where effectively... I would use it as a way to either go deeper in a certain topic or get more information about a certain topic. I also use it whenever I have large documents that I would have read. It's a good way to get a summary in AI's perspective on what it found in them and what are the key takeaways it's actually finding out of that data, out of that information.

• 1:27:59Shane Parrish?

  But you're not using it to sort of like, here's a 500-page document, summarize this for me. The way that you mentioned this specifically was, I've read the 500 pages, give me the summary, almost like a spaced repetition.

• 1:28:11Speaker 00

  Correct, and I usually do it with more than one platform because each one of them will have slightly different takeaways than what the takeaways that I had. And I think the variability between them can make you spot things that you didn't see or that you, you know, you were skimmed over or you thought were not important. But suddenly these two AI platforms tell you, well, this is the point you actually is, it's very important. And in the end, you can get more information and more actionable stuff that you can do, that you can do with it as well.

• 1:28:39Shane Parrish?

  How do you think about robotics in the next sort of like 10 years, specifically as it affects trucking, warehousing, storage, anything?

• 1:28:47Speaker 00

  It's tough to tell what the world would look like from a physical robust perspective because the speed at which AI is developing is very, very, very fast. So it's tough to tell. If I look today at the, how effective robots are, there's still a lot of room for things to improve. So today, when you think about robotics, the robots have predominantly evolved, or effective robots that can be used in business, to have a very specific application in how they work. So for example, part of our company, we used to be one of the largest warehousing operators in the world. And you think about robots in that space, you could have an autonomous robot that looks effectively like a square

• 1:29:31Speaker 00

  that is just kind of going on the floor of a warehouse. And then it has a panel that can hold shelves of goods and it brings the right shelf of goods to a human picker, sitting stationary now as opposed to having a human having to walk through a picking area to pick the products, to ship to a customer when you buy something online, as an example. So a lot of the robotic applications have been very specific in scope. To solve a specific problem is what has been effective so far. If you think, however, about humanoid robots, I think humanoid robots are effectively trained to do what humans do. How we move our hands, how we perceive the world through vision, how we perceive the world through hearing.

• 1:30:15Speaker 00

  And that's a much tougher task to solve for, because you're trying to fit an AI model that typically works great in a digital setting, deals with content, and now you're trying to making it perceive the world the same way a human does. There's another component of it would be, for a humanoid robot to be effective, we as humans have emotions, have effectively things that, you know, we perceive the world with, whether it's empathy, whether it's compassion, whether it's anxiety, whether it's effectively, we have emotions that shape our behavior. And I think currently where AI is and where robots are, it's, they're still not there in terms of being able to perceive what human consciousness is to a certain extent.

• 1:30:56Speaker 00

  So going back to your question, it's tough for me to tell, is it going to be 10 years before we have effective humanoid robots? Is it going to be two? Or is it going to be 20? Because the rate of change is very fast, but at the same time, the problem to solve is very, very hard as well. Now, if you, more broadly, though, if you look at AI, it's truly remarkable what has happened over the last two, three decades. I remember I built my first AI neural network back in the late 90s. At the time, it was running on a Pentium CPU that was, from a capacity perspective, was capable of, at the peak, of one, maybe one giga flop in terms of compute power.

• 1:31:37Speaker 00

  You look at today, where the latest Google TPUs and where the Nvidia chipsets are at, we're talking five peta flops. That effectively is five million times more powerful from a compute perspective what existed two to three decades ago. So when you think about the how large the AI models were at the time, if you have something that has 10 billion parameters, you're pushing the envelope. Today, you're dealing with two, three, four, five trillion parameters in terms of how these large language models operate. So I think if I roll that forward, the trajectory has been effectively very, very fast or very steep. And if that continues, we will see how that materializes into robotics. But I think in the near term, I think it's more purpose-built robots

• 1:32:23Speaker 00

  that are using AI to try to automate a certain task and make effectively the outcomes more efficient accordingly.

• 1:32:30Shane Parrish?

  I want to come back to a couple of things that we talked about earlier before we wrap this up. One, where does your work ethic come from?

• 1:32:37Speaker 00

  I think it started with my with my parents. My dad has been, was an entrepreneur and he's also an engineer and was also an amazing business person as well, very wise person. If you if you meet him, you just spend 15 minutes with him, you say, OK, that person is very, very, very wise. And I saw since we were kids, the work ethic that he had in being able to deliver, you know, to effectively build great things, but also be able to provide for our family as well. And that was rooted in me at a very young age that working hard has to be part of the equation, has to be part of. If you want to build big things in life,

• 1:33:18Speaker 00

  you cannot do it by not being 100% in, 100% dedicated on what it is that you're doing, which means when you wake up in the morning, you're thinking about it. When you go to bed, you're thinking about it. Now, you couple that with being the leader of an organization, you're responsible for 40,000 people. I take this responsibility very seriously. If I work an extra hour and I can actually somehow improve the lives of 40,000 people, I'm going to work this extra hour. And I think that's the reason why, when I think about work ethic, it's part of the ingredient of being all in, to be obsessed by every KPI, by every lever, by every team interaction, and to give all of yourself for the team and the company you're working for.

• 1:34:03Speaker 00

  Because when you do that, you deliver better outcomes. And the people who are working for you, they deliver amazing things and they'd be proud of themselves. You'd be proud of them. And I think that's rooted in part with having a very strong work ethic. But for me, if I go back to my childhood, it was from seeing my dad build companies. And he had a fantastic work ethic and I learned from that.

• 1:34:23Shane Parrish?

  Are you driven by clean fuel or dirty fuel?

• 1:34:26Speaker 00

  Tell me more about that.

• 1:34:28Shane Parrish?

  Well, dirty fuel would be like Michael Jordan. You know, he sort of like makes up slights from competitors. He's angry, he's got a chip on his shoulder. And that is the fire inside him. That, you know, Tom Brady would be another example of, you know, somebody who at least started being driven by dirty fuel. He's got a chip on his shoulder, 199th draft pick, six quarterbacks taken before him. You know, at Michigan, he sort of was seventh on the depth chart when he got there, always fighting for his job. He always just felt like nothing was given to him. Circumstances were conspiring again. This, his attitude at Michigan was fascinating, just to brief his side here. So when he was, when he went to Michigan, he's seventh on the depth chart.

• 1:35:11Shane Parrish?

  And he's, you know, he's coming from being a high school star, going to a big time D1 school. And then all of a sudden, he's seventh, he's fighting, and he's about to like transfer out of Michigan. And he goes to talk to the athletic director. And I want to make sure, I don't know if I'm going to get all the exact details right, but it was Greg Harden. And Harden was like, I don't give a shit what you think is fair, what's not fair. You have a chance to control certain circumstances. You're getting one rep in practice. And he was getting one rep at the time. And he's like, you have 100% control over that one rep. Treat it, you know, like you would the Super Bowl. And it changed Brady's approach, but he was always driven. The fire inside him always came from people doubting him, not believing in him, wanting to prove them wrong.

• 1:35:57Shane Parrish?

  And then, you know, clean fuel, an example of that would be Brad. Brad's a perfect example of somebody who's driven by. I want to create success for everybody else. I'm driven by this goal. I'm not motivated by a chip on my shoulder.

• 1:36:11Speaker 00

  I think it's definitely clean fuel is the way I think about the world. I personally think that humans can create amazing things. And I believe in that. When I work with team members, when I work with people around me, I always believe that they are capable more than what they believe they are capable of. And twice that earlier on, we live short lives. And effectively, if you think about it, you want them to be meaningful. You want them to be impactful. You want to be able to see somebody grow and do amazing things over time. So for me, winning is about being smart. It's about being able to understand how you can take a team, a group of people,

• 1:36:56Speaker 00

  create a very good plan, but then fight every single day to win. Because then you're seeing somebody in a team realize their full potential. And for me, I live on that. And when I look back through my career, I always think about winning, not in the way that, you know, I want to go just crush the competition or that's not the bar. For me, the bar is, are we achieving the best that we can achieve? For me, that's what was important because then if you're achieving what you can achieve, you are not comparing yourself to your competition. Of course, you have to study your competition to understand what are the levers that they are pushing and what's working for them. Because in some cases, you might not need to reinvent the wheel. In some cases, you might look at it and say, great idea.

• 1:37:40Speaker 00

  Like, let's actually, let's actually use that idea to make our company a better company. But I always, the bar I use is always, it's not about winning at the expense of somebody else. It's the opposite. It's actually winning because we are doing things right for the long term.

• 1:37:54Shane Parrish?

  So like growing the pie instead of dividing the pie.

• 1:37:57Speaker 00

  Hundred percent is how I think about it overall.

• 1:38:00Shane Parrish?

  I love that. We always end these interviews with the same question, which is, what is success for you?

• 1:38:05Speaker 00

  Success for me is someone, including myself, realizing their full potential. Is being able to achieve what they can achieve with the tools, education, background that they have been given and to be the best version of themselves. While doing so, also being happy and emotionally fulfilled. Because ultimately, you can achieve great business success at the expense of your family life, as an example. But is that success? Because now you effectively are not emotionally fulfilled. You're not happy. But I think it's not only just for me achieving that personally, but also playing a part in people around me achieving that. Whether it's my kids, seeing kids, seeing them become great professionals one day and great human beings

• 1:38:47Speaker 00

  and having fulfilled lives and achieving therefore potential to people I work with, whether it's my team or colleagues or people I work for, for them to achieve, again, their best potential and doing it while they are emotionally fulfilled as well.

• 1:39:01Shane Parrish?

  That's beautiful. Thank you for such an amazing conversation.

• 1:39:05Speaker 00

  Thanks, Shane. Thanks for having me.