 |
 |
|
Kirk Thompson is President and CEO of J.B. Hunt, one of the country's largest trucking and logistics companies. He started his career at Arkansas-based J.B. Hunt and after a brief interlude at the accounting firm of Peat Marwick, returned to the company in 1979. He started as CFO and helped oversee the company's explosive growth to over $2 billion in annual revenue today. Thompson has a degree from the University of Arkansas.
|
PH: Do you remember the background on my project, or should I give you a quick overview?
KT: You're writing about, what was it, again? Tell me.
PH: Basically, leaders across a society. So it's a research project where we're talking to people in a variety of fields. In business, we're talking to CEOs of billion-dollar revenue companies; in science, we're talking to Nobel Prize winners; in politics, we're talking to politicians at the governor, senator level.
KT: From nobodies to somebodies?
PH: Exactly.
KT: Well, I qualify as the nobody. (chuckles)
PH: Well, I'm sure you're being a little modest there. But I really appreciate your time. The pivot point of what I'd like to ask you about is really the early stages of your career, what you did as a young man to prepare yourself for the responsibility that you're carrying today. So if you don't have any other questions, I can just dive right in.
KT: Okay.
PH: So first off -
KT: I read your email, and I - got pulled back up just now - but I remember when I read it, I'm not exactly sure that my experience is going to fit your questions. But go ahead, and we'll see how it goes.
PH: The first question is, if you could just start to describe the first full-time job you held after college or graduate school, what that was like?
KT: Well, that's part of the issue. When I - (sighs) Ancient history. Okay. When I was in college at the University of Arkansas, I was a sophomore and my dad got really sick, like February of that year, and died. Here I am, 19 years old, your dad just died, so it's kind of a traumatic time. I dropped out of school, got married in May of that year, was looking for a job, and was going through a plumbing agency, and they said, "Well, there's an accounting job at JB Hunt." I of course didn't know who JB Hunt was. It was a teeny-weeny little company then - this was 1973. So I came and interviewed, and they said, "When can you start?" and I said, "Tomorrow."
I started at the very bottom, in the accounting department, making minimum wage, and after about - oh, I guess maybe a year of that - I decided this was not going to cut it. I needed to go back to school. So I talked to the people here, and they said, "Well, don't quit. Why don't you just go back to school, and work here full-time, and go to school part-time?" So that's what I did, but it took about - because I changed my major and the whole bit - so it took about 4 years more, or I guess 5 years more, because I graduated in '78, of working full-time, and doing correspondence, and taking 7:30 classes, and going all through the summer, and night classes that were available. There weren't all that many, and meanwhile, I worked here. So my first full-time job was before I got out of college. And it was here, and I - the basis for my experience, which was really good, was it was a very small company which then got on a fast growth track, and I did a little bit of everything in those 5 years.
PH: And what motivated you to do those 2 things at the same time? A lot of people would just say, "I can't handle - I don't have the capacity to do both school and the job".
KT: Well, I think, you know, the thing that motivates a lot of people is I was on my own, and if I was ever going to quote make something of myself, in terms of being able to support my new wife and then when we had a baby in '76, I had a family. So I had to support the family. So the motivation was to get a - Well, you know, I wanted to get a degree because I'd always been a good student, and I guess the great American dream, I don't know.
PH: Mmm-hmm. So then when you finished school, obviously, you were happy enough at JB Hunt to stay there -
KT: No, actually, I wasn't, which is another little interesting twist. When I graduated, I had majored in accounting, I'd decided that I wanted to get away from JB Hunt. I had done a bunch of stuff here, but I really wasn't interested in staying, and my degree was in accounting, and that's not what I was doing here at the time. So I interviewed with all the - with at the time the Big 8 accounting firms - and went to work for Peat Marwick, KPMG, in I guess May of '78.
I was only there about 16 months when - actually, they called me back before that, and asked me would I come back?
PH: This was JB Hunt?
KT: Mmm-hmm. Would I come back? "No, I'm doing fine at KPMG, you know." But then about 16 months, they called and said, "We really want you to consider coming back," and we'd had another child, and I was traveling a lot, and I said, "You know, I might just be interested in that. Travelling's getting a little old, especially with two little kids, and a brand-new baby." So then I came back in the fall of '79.
PH: And what were you thinking about? What were the - you mentioned the travel and the lifestyle being important to you at JB Hunt versus KPMG. From a career perspective -
KT: That was another thing. It was the founders, the Hunts, and their son-in-law who was trying to get me to come back to work. They wanted me to do a certain job, and I said, "No, my degree's in accounting. I want to stay in the financial area." So they said, "Well, okay. How about -" The son-in-law at the time was the CFO, and he said, "Well, why don't you just take my job?" Now I'm - let's see at the time, '79, I'm 26 - This is a relatively small company, keep in mind. In 1979, it was about - oh, I don't know - maybe $10-15 mm company. But still, to be CFO, it was higher pay, and to get to stay home - So it was a career advancement in the direction I had wanted to go.
PH: That's pretty remarkable. What do you think it was that made these people see the potential in you? If you're 26 years old -
KT: I'd been there since I was 19. Now you had firsthand knowledge of - you know, I don't want to sound, ah, like I'm bragging on myself, or anything - but they'd seen my performance and work ethic and that kind of thing, and I guess they felt like they could depend on me.
PH: Interesting. Okay. So once you went back and took that job - So you came back as the CFO?
KT: Right.
PH: So you were 26 years old -
KT: Of a very small company, keep in mind.
PH: It was $10-15 mm in revenue?
KT: $10 mm, yeah, probably, at the time.
PH: And so, can you help me understand what happened from that point on?
KT: Well, then we were on a really fast growth track, because the trucking industry was deregulated in 1980 - this was in '79, keep in mind - so we were in the beginning stages of a new era for truckload transportation.
PH: When you made the switch, did you know that dereg was coming?
KT: You know, at the time, I'm 26, I've 2 kids, I'm staying away from home too much. I'd like to make more money so my wife can stay home from work - You know, it was less strategic and more the here and now, frankly.
PH: Right, right. Okay, so you came over, but then the deregulation happened and opened up a whole new -
KT: Opened up a whole new world and things just flourished from there. We went public in 1983. We were $40 mm by then, and now we're $2.4 bb to kind of bring you up to speed.
PH: Wow, that's been quite a ride. (chuckles)
KT: (laughs) It has, it has. It really has been quite a, quite a ride.
PH: During that ride, what about mentors? It sounded like you had some good relationships with the founding family. Was there a really consistent relationship there, or did you feel like just any other guy, just kind of moving forward?
KT: No, I'd say there was more than - a deeper relationship than just being one of the...As it turns out, the son-in-law that I referred to became an ex-son-in-law, which is kind of an interesting twist. But he's the CEO of the company, basically. After the divorce is when he became the CEO, to add a little more amazement into the deal. That was before we went public. Actually, he and I, which happen to be almost the same age - he's 6 months older than me - so he's probably, as mentors go, he'd probably be more a mentor than Mr. Hunt, who was more of an entrepreneur, dealaoholic, shoot from the hip, ah, typical for an entrepreneur.
PH: Mmm-hmm. So what do you feel like you picked up from each of those guys, for example?
KT: Well, I wouldn't want this to be in the book, but I probably learned what not to do from Mr. Hunt. (laughs) You know, he's just that kind of a - shoot, name later. You know, if it moves, kill it, then you can decide whether you can eat it. (chuckles) "Woops, it's a skunk - well, let someone else worry about that." It's just that kind of a guy - He's a unique person.
In terms of Wayne, I think how to treat people. There's just so many things, that I've picked up from him, but a big one is that an organization that's growing and has aspirations is one that requires a team effort. I think that is probably one of the basic tenets that anybody has to know. I've seen companies, large companies, that are pretty autocratic, and when that autocratic CEO or founder leaves, in a lot of cases, they've surrounded themselves with people who are not afraid to be around autocratic leaders, and they tend to be dependent on that autocratic style. When the kingpin's gone, there's nobody left to -
PH: It just collapses?
KT: Yeah, it just kind of collapses. I know of a company right now that I think that's in that mold, and it's a large, Fortune 100 company that just looks to me like, the guy that was there, the previous CEO, was very autocratic and crack-the-whip kind of guy, and they tend to surround themselves with weaker people, and that's just my own personal opinion, as opposed to a collaborative, participatory style of management, where you really need a lot of people to - If you're going to reach for the stars, you got to have a bunch of people.
My favorite Yogi Berra saying - and of course, you know, he slaughters the English language - but he's got such great philosophy, and one of them's a saying I've used over the years: "If you ain't got no animals, you ain't hardly got no circus." It's so true. You can have the best gameplan in the world, good products or services, but if you don't have people that can execute and carry it out, then you're just, you're lacking. You want - You may succeed, but you won't get to the pinnacle unless you involve lots of people, particularly in a large organization.
PH: And how did you practice that philosophy early on?
KT: I think part of the way we've done it is making people owners. The management team, we have a bonus plan we've had only slight variations of, since the early '80s - It's almost the same bonus plan. The numbers have changed, but the concept is the same, and it's really a one-for-all, all-for-one kind of mentality. We don't pay bonuses on your own little area, or subjective - It's all based on trying to tie the performance to shareholders' needs: earnings-per-share improvements, year-over-year. And then, a percentage of your salary - and in those early years, when we were really knocking it dead, in terms of performance, people could make 100% of their salary in some years. It was a lucrative plan that really drove momentum and morale and loyalty, you know, sharing the wealth, is a good way to think about it. And sharing the success. And being generous with that. High expectations, and high goals, and a strong work ethic, and a very, a firm but fair environment. No-nonsense kind of - but you get rewarded for it along the way.
PH: One thing I'm curious about is, did you ever encounter any kind of resistance, or reluctance from people because you got up to a position of responsibility at a relatively young age?
KT: You know, I never did. I think part of the reason - You know, when you're trying to draw conclusions, sometimes you draw them erroneously, because you're trying to put everything in its own little bucket. The other thing I've observed is that companies have their own personality, their own culture, their own set of values, and set of circumstances. At the time, just about everybody in a position of power, or a position of authority, in this company was in the same boat. They were fairly young. We were a young company, other than the Hunts. So, you know, I was just another one - It wasn't that I was the youngster, and everybody else was 50 years old. Now, we're 50. (chuckles) We've grown up in it.
In fact, it's something you also have to adjust to, the changing age of the company, the maturity level, you know - the needs of people who are at least - I don't want to say the downhill side, but past the midpoint of their career, maybe. So retirement is out here somewhere. In the early stage of our company, retirement was like, "Huh? Who worries about that?" But you change as you move along, as well.
PH: One thing that's interesting to me as you talk about all these themes - A lot of it is focused as you said on people management and people motivation, sort of the softer-side factors of running a business. Can you give me some sense of the relative weighting - how much you thought about those things as you progressed as an executive, versus the harder things?
KT: Yeah, the blocking and tackling?
PH: Yeah.
KT: Oh, I'd say it's almost equal footing. Maybe not quite that much, maybe it's more like 60/40 - 60% of the nuts-and-bolts of the business. But people have always played a very strong component in our philosophy and strategy.
PH: Interesting, okay. What about personal balance? You mentioned your wife and kids as a big motivator in your thinking early on. How did you find the ability to navigate, to balance those two?
KT: Well, I have two more kids, after that. So I've had four. You just have to make time. You've got to set priorities and leave time - I never took up golf, for example. "Do you play golf?" "No - How do you do that? It takes up too much time!" (chuckles) I probably should do that one of these days. You know, doing things as a family together - always made time for vacations, and weekends, and that kind of stuff. And went to their things at school, and tried to be a participant, not just an absentee father and husband.
You know, sometimes - We worked a lot of hours in those early years. It's a chore - not a chore, that's a bad word, sounds negative - it's a challenge to maintain that balance. You know, there's other balances - there's spiritual balance, and physical balance, which I have not done a very good job at. There's more to life than just work. The interesting thing is that the new generation seems to put a higher value on that than the last generation did.
PH: Yeah, that's kind of what I'm curious about. Did you feel like you were par for the course, did you feel normal, or were you less than normal, or more than normal, in terms of how much you valued balance?
KT: Ah, I would say I was pretty normal, for then. Now, I think people would look at it and say I was abnormal - you know, overbalanced towards work. But that's just because I think attitudes have changed, changed for the better, I think, frankly. Now I don't think I was - if you looked at the generation prior to me, they'd probably say it was the other way around.
PH: That you guys were the softies?
KT: Yeah, we were the softies. I just think we've had this progression of value system that has put more value on, you know, call it personal time, and less value on, I don't know, capitalism maybe?
PH: Okay. Speaking about those kind of tradeoffs, or conflicts, not necessarily in terms of values, but more generally - have you had any forks in the road, situations where you had difficult decisions?
KT: Many of those.
PH: I'm curious how you - not so much about the specifics of any one decision, but how you dealt with difficult decisions.
KT: Well, people who don't have a spiritual - and I'm not trying to overspiritualize things for you - but if you don't have a spiritual side, I don't know how you get through lots of things. That sense that there's something in charge greater than you. And that things work out for the best, and you've got to have faith in something other than just your own abilities. That's my view of things, and that's gotten me through many a tussle.
PH: You think just a calmness and a -
KT: Yeah, faith in God, that He's in control, and all of my striving is after the wind, as the Bible says. You know? I think it's a very important part of life, and of course not everybody shares that.
PH: Right. So that gives you a kind of assurance.
KT: Yeah.
PH: Once you make decisions, you can live with them.
KT: Or that even if I screw up, it's not the end of the world. And it's not all there is, that's the other thing.
PH: So there's a definite perspective there.
KT: Oh yeah, I think you definitely got to keep things in perspective. You know, you also have to know that not everything's going to be smooth.
PH: Were there specific times of hardship or real trial that you can recall?
KT: Mmm-hmmm. Yeah, where things weren't going well in the business and you know, it's kind of like when the team's not winning, and you're the coach. Who do they always look to? "Ah, fire the bum. Throw the bum out. We need somebody who can do a better job." I never got quite, you know, had that kind of thing come my way, but there's probably more pressure I put on my own self. But still, when things aren't - Particularly when you've been really successful, like we were in '80s, and then the decade of the '90s was a tough decade for us, because we were in a maturation process as a company trying to figure out where we go from where we were to where we wanted to be, how we hold onto that zoom-zoom decade of the '80s and bad choices, and [some other factors were] conflict, and difference of opinions with people that were also a big part of the company - all those kind of things, and [they were] really tough times.
PH: Interesting. Can you think of anything else besides that faith in God and perspective that kept you centered and driving forward?
KT: Ah, yeah, there's that, and I think this is true for most people who end up being CEO or coach or upper management of any kind - You've got that competitive drive. When you were in school - and obviously, you fit this, or you wouldn't have gone to Harvard - but it wasn't always okay for me to make an A. I wanted to make the highest grade in the class. That kind of idea. I think there's that drive, that ambition, that competitive nature, whatever you want to call it. The will to succeed. I hate to lose.
PH: Now where did that come from?
KT: I don't know.
PH: Have you had that your whole life?
KT: Yeah.
PH: So even when you were a young guy?
KT: A little kid, yeah. I just hate to lose, so you just keep putting out the effort, because be-danged if I'm going to lose. I think that's inherent and instilled in a lot of people who're quote succeeding, however you want to define that, which sometimes is defined in the wrong way, in my opinion.
PH: So that's one thing I'm definitely curious about. In doing this series of interviews with leaders like you, a lot of people do mention that will. I'm curious -
KT: Where it comes from? Is it learned? Is it inbred? Were you born with it?
PH: And that's a tough question. I understand it's tough to answer that directly. But another thing I'm curious about it is what - If you could break it down at a high level, your ability to spot and understand opportunities, versus, whatever situation you're in, you just drive to that success point, with that will - If you could attribute your success to one of those two rough buckets, either spotting and understanding opportunity, or just whatever the opportunity is, just winning out, optimizing your situation or possible outcomes within that situation, where do you feel like your strengths are?
KT: That's a really good question. (pauses) And tough to answer. You can do a lot with with will. But if you don't - If you're headed down the wrong way - I was watching for the umpteenth time - You've seen the movie the "Count of Monte Cristo"? I was just flipping channels last night, and I love that movie. And I was sitting there watching it, and you know, the "Priest", the guy he calls the "Priest" that was in prison with him, and tunneled through? But he pops up in the guy's cell, as opposed to the outside wall. Well, his will carried him through on that tunneling effort, but it still didn't end in success, I guess - well, he died, but I mean, he was successful in that his will was carrying him through, but when he got there, he was in the wrong place. So you've got to be on the right road, and on the right track. There are more elements to success than just will. You've got to have the right formula, so to speak.
PH: So you think it's a necessary ingredient, but by no means the whole recipe?
KT: Oh, absolutely. I think it's a combination recipe. But I also think you can have a mediocre gameplan and still succeed. It's why - you're probably too young, but we can't think of another example, well, yeah, we can think of one just recently - it's why the Marlins beat the Yankees in the World Series. Is that who they beat? Yeah. It's why the Marlins beat the Yankees. I'm not sure the Marlins have better talent than the Yankees - I'm not sure anybody has better talent than the Yankees - You're probably a Red Sox fan - but you know, it's why sometimes less talented teams beat more talented teams, is because of execution and will. It's all wrapped up in there together. Sometimes you can out-execute people even if they've got a better deal going. And even better people, and you just out-execute them, and part of that is that will. So it's a very big part of it. But I don't think you can overcome a poor plan, or a poor product, or a poor formula completely. But will definitely plays a big part of it.
PH: So just to start wrapping up the interview here - In terms of that strategy or setting that plan - The will, you said, was something you had on a lifelong basis. Something that was just kind of inherent to you as a person -
KT: Mmm-hmmm. Now an interesting thing, let me add just a little note here. When you were talking about mentors, I learned the power of will, I think, from him.
PH: From Mr. Hunt?
KT: No, from the other guy, the son-in-law. His idea is you can do about anything. And always set the goal higher. You look at it, and [say], "Gosh, I don't think we can do that," and I've learned that if you set the goal high, sometimes you surprise yourself. You do end up hitting it, and people think that, "I think that the guy's smoking something here. Drinking the Cool-Aid." By golly, you end up doing it! If you set the target low, you're probably going to hit it with great accuracy. I think a part of that will, or that ability to achieve great endeavors can be learned, but I do think you have to have that competitive nature and the desire to want to win or want to be successful in there. But what were you going to ask?
PH: Yeah, the other question I was going to ask - and I appreciate that insight - so, the will you saw as a lifelong trait, something you saw embedded within you. But the ability to formulate a good strategy or plan to have the insight - where did that come from?
KT: Oh, I think that comes over time. One thing that I've learned - you see, you get to say this when you're 50 - when you're 26, 28, 24, you say, "Nah, it's not that big a deal," but it really is. There's no substitute for experience. The things you learn - "I've tried that, didn't work," "Been down that road, don't recommend it" - A lot of it is just by. One thing you learn a whole lot more by failure than you do by success. You don't learn a lot of stuff on the mountaintop. Where you learn it is in the valley.
PH: Sounds like a platitude, but I'm sure it's true.
KT: It may sound like a platitude, I guess it is a platitude, but it is so true. You learn so much more in the valley about yourself, about life, about where you went wrong, or what you need to do to get out of it. When you're on peak, everything's hunks and chunks and life's wonderful. What's to learn? You just do - you learn more in the trenches than you do riding the horse.
PH: Great. Well, this has been very helpful, I really appreciate your time...
(Wrap-up conversation about FedEx commercial - MBAs need more help)
KT: By the way, the fact that I'd done so many different things [in growing the company] broadened my perspective and allowed me to be, I think, more ready and prepared for the CEO job, as opposed to somebody who was in a single-line trajectory. Had I come in as CFO, say, when we were $250 mm, it would've been different than being in the trenches, doing the job - You understand what makes money, and how the business operates, and what's out there, what the environment's like, and what makes things tick. Until you do that, you're going to be less successful, I think.
PH: So, I'm sorry, could you go over that? That's a pretty interesting thought.
KT: Yeah. I'm saying, if you come in, let's say you either come in through finance - You graduate with an MBA from Harvard and you come in as a financial analyst, and then you're a controller, division controller, and then you're CFO. You will be prepared, you will have learned a lot along the way. But if you have been in a variety of positions, in operations, in sales -
PH: Different functions.
KT: Yeah, different functions. Cross-pollinized, you're going to be much more effective and much more prepared. I've seen it happy many times. It's true in spades in my case. Getting to know the business from the ground up and how it operates. Now I would say too though that if you've got to pick one or the other, you need to understand economics and how money's made, if you're going to be in a for-profit organization. A lot of times you get somebody who's come into the sales organization and all they want to do is sell, sell, sell. Well, that's wonderful, but you've got to make a profit on it. Someone who can analyze and understand - maybe that's my bias, but an industrial engineer, or an accountant, or somebody who's got that kind of training and discipline, is a valuable individual. Now, it'd be nice to have some social skills (chuckles). Somebody defined an actuary one time as an accountant that stared at your shoes instead of his own. It was an actuary that was defining it for me, but you've got to be broad, is what I'm saying. It's good to have a base of economic understanding and analytical skills, but you need to be more broad than that as you go through life and your career. It'll pay off big-time for you if you are.
PH: Wow, that's really helpful. Again, I really appreciate.
KT: Well, stay in touch. I want to know how it turns out. Good luck.
|
|
