UPS CEO Carol Tomé has a proven knack for making growth happen. The numbers prove it and stock markets love her for it. But aside from numbers her career is also a remarkable story of personal growth, not only breaking down glass ceilings, but coming through the process a more humane leader.
“I learned early days about the importance of collaboration, the importance of teamwork, but also the importance of showing your own unique, individual talents, and your own unique, individual characteristics and personality,” said Tome in a recent interview. “Those things that you need to pull out of yourself, your superpowers, so people can see how you shine amongst your peers.”
The superpowers have been impressive. As Home Depot’s legendary CFO between 2001 and 2019 she contributed toward a more than 450% increase in value to its shareholders as the company grew from 400 stores to more than 2,200 From the moment she came out of retirement to lead stagnating delivery giant UPS in June 2020 share value more than doubled going from approximately $100 a share to over $200 a share early November 2021.
In the 3Q 2021, Tomé once more delivered with year-over-year adjusted operating profit up 23.4% and revenues up by almost 10%.
“Each of our segments delivered year-over-year operating profit improvement and double-digit operating margins,” Tomé told investors. “And for the first nine months of 2021, UPS has generated more operating profit than any full year in our history.”
The pandemic has been a mixed blessing for the company with the shipment of vaccines becoming an important new niche.
“When COVID-19 vaccines were rolled out late last year, the world turned to UPS, and we were ready with connected capabilities, technology, and expertise,” added Tomé. “Our brand relevance here is attracting new SMB healthcare customers and significantly driving profit growth in this sector. And just on COVID-19 vaccines, we are on track to deliver more than 1 billion vaccine doses by the end of this year with 99.9% on-time delivery.”
On the other hand the company is also entangled in the supply chain crisis which has incoming shipments delayed as container vessels wait at their moorings offshore from US ports such as Los Angeles and Long Beach.
“We receive containers from those ports through a dropped-ship arrangement with a third party,” explained Tomé. “So when people say there’s a supply shortage of truck drivers, it’s true because this third party is delivering those containers to our hubs. We have capacity, as an example, in one of our hubs for 70 containers today. We’re only getting about 50 of those containers. So it is slowing down the flow of packages. Now as soon as we get it, we get it delivered. But in terms of the end-to-end, the supply chain is jammed upstream.”
Problems such as these have been offset by productivity improvement on Tomé’s watch, such as in the sorting and delivery of products, with the number of pieces per hour rising by 2.5%. Another key metric for the logistics business – the utilization of space in moving containers – was up by 5.2% making possible the elimination of 10% of all trailer loads year-over-year in 3Q21.
Such productivity advances have allowed the company to overcome higher expenses driven primarily by spiking gasoline prices.
Tomé’s success at the top has been a long time coming.
She grew up in the backwoods of a small town in Wyoming where her father was an independent banker and where one of her primary joys in life was skiing. Early on she showed a tough streak, which would stand her in good stead as she moved up the corporate ladder.
“I was starting my MBA program at the University of Denver,” she reminisced. “When I got there, they were like, “We need some student teachers.” I thought, “I can teach.” I ended up teaching freshman students. I taught them basic computer programming, calculus. My job, as a GTA, or a graduate teaching assistant, was to flunk out the freshmen, so we had these huge classes, and I was supposed to get the classes down by half. I did. I had no problem with that.”
Her dream was to start working for her father’s bank and eventually take it over when he retired. Then one day she got a telephone call.
“I got a call from my dad,” remembers UPS first woman CEO. “He said, ‘Well, Carol, after 27 years of marriage, I’m divorcing your mother.’ I was horrified. I thought, ‘Oh, no. That’s awful. That’s just the worst news ever.’ He said, ‘And I’m selling the bank.”
My whole world came crashing down, because what I planned to do, go back, work for him, take over the bank, wasn’t happening anymore.”
After her father sold the bank she started working for the biggest bank in Colorado and later was in charge of underwriting the loans portfolio her father had left behind.
“Many of those loans were very poorly underwritten,” said Tomé to college students in 2019. “My dad was all about taking care of people. Taking care of the community. Turned out not to be a very good banker, in all candor. And it was so interesting for me to experience that, because I had idolized him. It was interesting for me to experience that because the way that people walked gingerly around me at the bank. I though, ‘No, we’re going to talk about this, because I’m going to be a good banker.’ We did. We talked about it at length, but I learned a lot through that process.”
She quickly moved up the ladder wherever she went, but found herself ill prepared for leadership.
“I really didn’t like to lead people,” remembers Tomé. “In fact, I thought that was just an unnecessary burden. But as you grow in your career, you start to actually have teams, because you can’t do it by yourself, so you do have to lead people, and you do have to give feedback to people. You do have to coach and mentor them, and grow them. I didn’t like that part.”
Tomé remembers a key moment in her career being in the 1990s the moment she phoned in an employee review and that employee resigned.
“She didn’t quit the company,” recalls Tomé. “She quit me. She quit me, because I was a bad boss. I was horrified. I was horrified, but I was now so grateful to have had that experience to learn, because it was a point of real transformation for me as a leader.”
At UPS her arrival seems to have been marked by a human touch. One notable change was that drivers were allowed to have tattoos and piercings. Afros, braids and beards became symbolic of an effort by the company to embrace diversity, as Tomé viscerally reacted to the George Floyd killing which took place just as she assumed the helm.
UPS has 458,000 employees in the United States and is the largest logistics company in the world, meaning such measures have a real social impact. Even this December the company is preparing to hire 100,000 seasonal workers for the Holiday Season.
“I thought about what I wanted my tombstone to read,” she recalls. “It didn’t say, ‘CEO.’ It said, ‘She made a difference in my life.’ “