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Redefiners
Waste In, Shareholder Value Out: A Conversation with WM President and CEO Jim Fish
00:30:56
Not many CEOs would roll up their sleeves and ride on the back of a waste truck at 2am once a week for seven years. But for today’s guest, it was the best way to get to know his employees and learn first-hand what impacts their productivity in the ...
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- [00:00]
Hoda Tahun
Call them change makers, call them rule breakers. We call them redefiners.
- [00:05]
Simon Kingston
Join us in conversation with daring leaders who are creating extraordinary impact and driving.
- [00:10]
Clark Murphy
Change from around the globe.
- [00:12]
Hoda Tahun
Each episode gives you a fresh perspective on your leadership and career journey. I'm Hoda Tahun, a leadership advisor at Russell Reynolds.
- [00:20]
Clark Murphy
I'm Clark Murphy, the former Chief Executive.
- [00:22]
Simon Kingston
Officer and a leadership advisor.
- [00:24]
Clark Murphy
And this is Redefiners.
- [00:28]
Simon Kingston
Well, hello everyone and welcome back to Redefiners. I'm. I'm Simon Kingston, the leadership advisor at Russell Reynolds Associates. Hoda is off this week, so very excitingly I'm joined by my colleague Emma Coombe, who many of our listeners will know as the host of our sister podcast, Leadership Lounge.
- [00:46]
Hoda Tahun
Hello Simon, Great to be with you.
- [00:49]
Simon Kingston
And before we get started, just a very quick reminder to our listeners that you can find all the episodes of both Redefiners and the Leadership Lounge on YouTube. If you're currently watching Redefiners on YouTube, just hit that subscribe button below so you don't miss an episode. And for our audio listeners, don't forget to rate redefiners whenever you get your podcasts. We love to hear your feedback. Emma. We talk a lot on Redefiners with leaders about the economy and about sustainability. And today we get to talk to someone who leads a $20 billion organization that serves both as a great bellwether of the economy, but also as serving on the front lines of our sustainability efforts.
- [01:31]
Hoda Tahun
We do indeed, Simon. I'm really looking forward to talking with our guest today. He's someone who's been known to take a hands on approach to leadership, literally rolling up his sleeves and jumping on the back of a truck with his employees who do the dirty work we often take for granted. And he's delivering phenomenal returns to his shareholders.
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Simon Kingston
So Emma, tell our listeners who our guest is today.
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Hoda Tahun
Our guest today is Jim Fish Jr. President and CEO of Waste Management. WM is the United States top waste and recycling operator, managing about 30% of all US landfill volume and going through a massive transformation to achieve its sustainability objectives. Over the course of Jim's 23 year career at WM, he he's held a variety of key positions including President, cfo, Senior Vice President for the company's Eastern Group and Vice President of Price Management. Prior to wm, Jim held finance and Revenue management positions at Westex transworld Airlines and America West Airlines.
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Simon Kingston
Jim, welcome to Redefiners.
- [02:37]
Jim Fish Jr.
Thank you. Great to be here.
- [02:39]
Simon Kingston
Let's dive right in. You started your career as a finance and accounting person.
- [02:46]
Jim Fish Jr.
I did.
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Simon Kingston
And for all our finance and CFO listeners looking to make the transition to the CEO position, talk to us a bit about the path to that for you. How did it take place and what did you find on arrival at that CEO post that you needed to add?
- [03:02]
Jim Fish Jr.
One of the things that I thought was maybe important, most important in my career was not so much that I was on the finance and accounting side, because I do think that's a, a great entry point into any company Having an understanding of the income statement, the balance sheet, those things is very important. But I got some very good advice from a guy who was CEO two CEOs ago here at WM. His name is Maury Myers. And Maury said, look, if you want to move within the company, you should also understand the core function of that company. And so if you're working for, you know, a Procter and Gamble, you want to be on the marketing side at some point. And if you're working for a Goldman Sachs, you want to be on the finance side. And he said, Waste Management is truly at its core an operating company. And so, Emma, you mentioned that I'd been on the back of trucks. I haven't done it in the last couple of years, but I did do that as a practice when I was out in our field operations for about seven years. And going out to the field operations was on the advice of Maury Myers, because Waste Management is truly an operating company. The money that we make doesn't happen without any of our 48,000, but in particular our operating team out in the field. So while having a finance background is important and I use it every day, I use my accounting degree every day in this current job. Also understanding the core of the business and what our field is doing and how valuable what they're doing is to not only our financial results but also to our sustainability efforts is critical.
- [04:37]
Simon Kingston
And we're going to pick up a set of those themes in a moment. But first, that question of definition. You talk about trash trucks on this side of the Atlantic, they're known as bin lorries. But what did you learn? Tell us about that 2am start and what it told you both about the operating business but the people in it.
- [04:55]
Jim Fish Jr.
That'S a new term for me. I have to tell you, Simon, I've never heard of that term. So we definitely don't use that over here. But I think understanding what they go through every day, maybe the one story I'll tell you is about riding on the back of a truck outside of Pittsburgh at 2:00 in the morning when it was 10 degrees below zero. To help me understand, for example, why productivity might suffer in the middle of January because you've got three feet of snow, and when you're picking up a street that has bins on the street, they might put that bin on top of the mountain of snow, they might put it behind it. And so I pretty quickly understood, gosh, now I understand why productivity is a bit lower in January than it is in July. So you learn those kinds of things. But maybe most importantly gave me an opportunity to meet people. And that's just something I enjoy doing. I really like meeting people. I go out to our districts all the time. Just going out and meeting some of our 48 to 50,000 people is probably where I see the most benefit in going out to the field operations.
- [05:55]
Hoda Tahun
And, Jim, just to build on that, you lead a very large workforce and you've got a clear set of values that the organization stands for. But how do you set those values? How does it cut across an organization with a very decentralized workforce? As you say, kind of out on the street doing something very operational. What's your advice, maybe for our listeners on that?
- [06:17]
Jim Fish Jr.
When I first became CEO, one of the things that kind of a phrase that I coined was people first. I kind of stole a little bit from Herb Kelleher. I never met Herb, but he was the founder of Southwest Airlines. And he always talked about how you have to have your constituents in a certain order. And that order for him, at least in his book, was his own Southwest Airlines, People first. And then if they feel valued, if they feel like they're making a contribution, if they feel like they're appreciated, then they will take care of your customers. And if your customers are happy, then your shareholders will ultimately be happy. And I thought that was. And he said it really has to be in that order. I would add two other constituents to our. To those three. I would add the environment, and I would add our communities, I think. So we really have five constituents. I always say the environment is kind of the voiceless constituent because it speaks to you in longer terms. And it doesn't call you or text you or email you, but when it's upset, it does speak to you over the long term. I do feel like, though people first is something that I've tried to really make. My legacy, if I have a good legacy when I finish. I was asked a few years ago what I wanted my legacy to be. And in front of a group of investors, I think they thought I was going to say double digit returns or top 5% stock price appreciation or something like that. I said, I know I'm not going to be 100% successful. I'll be happy if I'm 75% successful on making this a place where they really want to make a long term career. But I would say a lot of companies aren't even 50% successful with that. If I'm 75, then I'm ahead of most. The idea is that not only will we pay compensation that we think is a fair wage, but it's so much more than just compensation. I always say with respect to compensation, if somebody comes to me and says I love working for, for the company, but I have another offer and it's more money and I just can't not at least look at that, that's a pretty easy fix. But if somebody comes to me and says I don't feel valued here or I don't like who I work with, or I don't like who I work for, I'm not getting the right level of training, that's not as easy a fix. And so building that culture takes a long time. I would argue it takes, it's not measured in, certainly not measured in weeks or months. It's probably measured in, it's certainly measured in years and it might be measured in decades. Building a culture where people really say they enjoy working there.
- [08:56]
Hoda Tahun
And maybe just to build on this topic, the organization has this clear culture that you're constantly working on by the sounds of things. At the same time, the business is going through this massive transformation, if I understand correctly, Jim, because of the whole sustainability agenda. How do you build that transformation and agility muscle, we might call it across the workforce that maybe in prior decades weren't required to go through such a level of change.
- [09:28]
Jim Fish Jr.
Well, one of the things we do as a leadership team is really try and look to the future. Not just the next couple of quarters, but truly look out five, 10 years. And that's not something, I think that comes naturally in our personal lives. I mean, you think about it, do you really, other than maybe your kids going to college or whatever, do you really look that far out typically? I mean, you're probably thinking, what am I going to do next weekend? Maybe you're thinking about Christmas or Thanksgiving, but you're not saying what am I going to do in 2032? So it's not something that comes naturally to us, but we've really tried to kind of build that muscle a little bit, which is, I'm looking Forward to the next 5, 10, 15 years, and what are the trends going to be? And one of the things that we saw as a pretty obvious trend that was certainly a natural for us was sustainability. You know, it's a big part of our business. It's a big money making part of our business today. It's not that we just have a director of sustainability who makes sure that the plastic goes into the recycle bin in the office. We actually have a very big percentage of our business that's tied to sustainability, and it's a big percentage of our earnings as well. So making investments in sustainability felt like a natural for us. And then when we looked at our renewable natural gas business, that's a byproduct of these landfills that we have, they naturally decompose and they produce gas. And so for many, many decades, we've been collecting that gas, doing something with it, We've been turning it into electricity or whatever. We made this commitment a couple of years ago to spend somewhere between 2.5 and $3 billion on sustainability investments. And not only do our customers like it, but our employees really like it. They like being part of a company that has sustainability as one of our primary objectives. Our communities, of course, like it, and that voiceless constituent likes it, and then our shareholders like it. So we feel like we're serving all of our constituents. And at the same time, it's the biggest investment, organic growth investment we've made in the history of the company. Tara Hemmer is our senior VP that runs it and she's doing a fantastic job. She's got all these plants under some form of construction, so I hardly walk by her office because I know she's so busy. But it is something that I think our employees can really be proud of. And they are. When I go out in the field, they're so proud of what we're doing on the sustainability front.
- [12:03]
Simon Kingston
And that is clearly a deep passion for you and a central characteristic, in a way, of the company. But how did you strike the balance between leadership and followership there when setting targets? How far do you go in stretching what the business can do profitably while leading for that silent constituency?
- [12:25]
Jim Fish Jr.
Well, I do say that sustainability has to be both environmentally and economically green to be viable. I mean, we're not doing it for practice. And so sustainability has to strike that balance, as you say. And I think we do a really good job of making sure that that happens. I was asked an interesting question on the recycling side about just a plastic water bottle. And I was asked Would you rather this go to a landfill or would you rather go to recycle center? And I think her, when she asked the question, I think she assumed that my answer was going to be, I'd rather go to a landfill. We're a big landfill company, everybody recognizes that. And I think there's this view out there that we are always biased to the landfill. We want everything to go to the landfill. And yeah, we do, we recycle, but it's just because we have to. First of all, I do think these big investments that we're making in sustainability have kind of blown up that misnomer bit. But, but my answer to her question was, look, I would, even if I was completely agnostic about the environment, which I'm not, but let's just say I didn't care about the environment at all. All I cared about was earning a buck, I would want that plastic bottle to go to a recycle center because we make like, you know, 10 times as much on the bottle going to a recycle center as we do sending it to a landfill. And by the way, since I'm not agnostic about the environment, it doesn't really decompose. I think it does, but it's not going to decompose in our lifetimes. I think it takes 500 years for a, for a pet bottle to decompose. And we don't get paid a lot for it. It's very light. We typically get paid by weight. So there certainly is a higher and better use for it outside of a landfill. And it's more economically beneficial to shareholders if it goes to recycle centers. So that one truly is kind of a win win for the environment and for the economic side. And we've really made sure that we strike that balance.
- [14:19]
Simon Kingston
And on that, how do you link WM's undoubted success, both for profit and sustainability, to the wider picture? I mean, how is the world doing on the silent constituency? And where do you locate WM in that bigger effort?
- [14:37]
Jim Fish Jr.
It's hard to say how the world's doing, you know, I mean, because some countries are doing better than others. You know, Europe seems to do better on recycling than we do in the us. But I think the US has done a decent job overall. I mean, it's a pretty clean country and I think as a society we do fairly well. I mean, if I remember the old ads back in the, I don't know whether they played overseas, but in the 1970s there was a Native American chief and he was standing there and he had a tear running down his face and they were showing kind of pictures of, I think it was like Lake Erie or something with with just the horrible pollution in the lake. And having spent five years in Pittsburgh pretty close to Lake Erie, I can tell you Lake Erie is pretty clean now compared to the way it was. And cars are so much cleaner. Burning and landfills used to be just garbage dumps, for example, and now we line those landfills. Nothing escapes them. So I would tell you we're doing pretty darn well as a society, but we can always aspire to do better. And that's, I think, whether it's taking care of the environment, whether it's running a company and taking care of shareholders, whether it's raising your kids. I mean, there's, I think it's natural to aspire to do better in everything we do. So I would tell you that we can aspire to do better at taking care of the Earth.
- [16:02]
Simon Kingston
We'll be right back with Jim Fish, but first we'll hear from Justice O'Brien, a managing director and Art Stamford office. Justice will outline what it takes to make the transition from the CFO role to the top seat.
- [16:14]
Clark Murphy
The key to effective CEO succession planning is optionality. But when boards are looking to identify a potential candidate, there's one role that's often overlooked, the CFO. Our research has found that while CFOs possess many of the same necessary competencies to succeed as the CEO, such as executing for results and pragmatic thinking, only about 20% of CEOs in the S&P 500 previously held a CFO role. So why are there so few CFO to CEO transitions? In our latest article, we interviewed a group of successful CEOs who had previously held the CFO role, and during these interviews they shared the the performance gaps they needed to overcome to become CEO, the biggest surprises and challenges they faced during that transition, and the advice they had for CFOs who are eyeing the corner office. To learn more about what it takes to transition from CFO to CEO, you can find the full paper via our show notes or by visiting russellreynolds.com now.
- [17:17]
Simon Kingston
Back to our conversation with Jim and just a final point on sustainability. One of the things that's really striking reading the WM description of sustainability is it doesn't stop at the environment. That point you make about communities and the social component of this is there that commitment to spending equivalent of 2% of your net income on social impact, as you call it. Where did that come from? Where did the motivation to do that.
- [17:46]
Jim Fish Jr.
Come from Big companies are such kind of a powerful force in the world for doing good things if they choose to be. And so we choose to be. We choose to be a powerful force. Sustainability, of course, is maybe the place where we flex our muscles the most in that respect. But we also donate quite a bit to charities. We donate to a lot of kind of underserved communities in multiple ways. And by the way, that also benefits shareholders, too. It's not just benefiting the recipient of those funds. A lot of times it's dollars. But. But shareholders end up benefiting from that because in those examples, the community might end up signing a contract with us. And so it ends up benefiting us in terms of our business or other companies that we do business with, like doing business with companies that are doing good things for their communities. So it does end up ultimately benefiting shareholders. And so I believe they're all interrelated.
- [18:51]
Hoda Tahun
And Jim, just to build a bit on this point around communities and broaden the point around social issues, we talk a lot on this podcast around leadership and when CEOs should and shouldn't weigh in on social topics. And there's been so many big events in recent times and sometimes the US has led the rest of the world, frankly. What's your view on when it is appropriate for you as a CEO to give WM a voice on a topic and when actually it's better? Better just to step back.
- [19:19]
Jim Fish Jr.
I talked to a friend of mine. This was during the there were three or four pretty tumultuous years there around Covid. And so I talked to a friend of mine from school who's a CEO of a much bigger company than wm. And he said, jim, I have a personal view of those issues, but I'm not the fourth branch of government. And I thought that was an interesting way of putting it. I. I'm not the fourth branch of government. Milton Friedman said, look, companies have a He was probably more singularly focused than most are today, but his view was companies have a responsibility to their shareholders. And so I guess maybe in his view, you have kind of one constituent. I don't necessarily agree with that, but I do agree that it's not my place to use our brand to further my own opinions. And I think you've seen companies do that and do it not very well. So what I try to do is it is a little bit of a tightrope walk, and I don't feel like it's my responsibility to say something. And some people might Say, well, that was pretty wimpy of Jim, to not take a stance on that. I'm okay with that. I'm okay with that criticism. And as opposed to having to losing this customer if I happen to take the wrong side of that issue, I have chosen or I've chosen to not take a stance on a lot of those issues.
- [20:48]
Hoda Tahun
Is there a defining moment, Jim, from your upbringing or your career that you would highlight that shaped how you lead today?
- [20:57]
Jim Fish Jr.
I've told this story before, but my parents were great parents. I think having great parents is so important in our upbringing and our development. They're both gone now, but I always look back fondly on my upbringing. And so I'll tell you a quick story about my mom. She used to take us to these little. They used to be called nursing homes. Now they're called retirement homes. They're a little nicer now than they used to be, but they were kind of miserable places. And it's almost where old people went to die, and they were sad places. And so mom would take us to these little nursing homes. I grew up in Austin, Texas. And she would take us there, and she would ask at the front desk, is there anybody that doesn't have any visitors? And then we would go and, oh, my gosh, we hated it as kids. Mom's dragging us. We always called it her little old ladies, because it was always these little old ladies we'd go see, and we didn't know them, and they'd give us these hugs and everything. But in retrospect, they loved having kids come. They loved my mom. She would bring them birthday cards or a Christmas gift or whatever, and she didn't know these folks. And so I remember when my mom was passing, she passed away 10 years ago, and she was kind of in her final days. There was a little old lady. Her name was Magdalene Mays. And she was somebody that. It's even hard for me to tell this story. So I asked my mom if whatever happened to Magdalene Mays, and she was one of the little old ladies that we went to see. And she said, oh, she passed away. And I said, did you go to the funeral? And she said, I did. And I said, was there anybody there? And she said, yep, there was two of us, Magdalene and me.
- [22:43]
Hoda Tahun
Oh, I can't bear it.
- [22:45]
Jim Fish Jr.
I think what that taught me was that people are important. You know, this little old lady. I would guess that my mom lengthened her life by five years by Magdalene had no visitors. I don't know whether she had a family, but mom Helped her, you know, at least the last few years of her life live a, you know, a life that she enjoyed.
- [23:15]
Hoda Tahun
I'm taking my nine year old Jim, who's my youngest, to visit two 97 year olds who have been very kind to me in my life on Saturday morning.
- [23:24]
Jim Fish Jr.
That's great.
- [23:25]
Hoda Tahun
Could I ask you a couple of questions around talent? So one is what advice would you have for young people starting out today with their career? Maybe one or two bits of advice that you would share with the younger generation and then follow on. Question is, what do you look for when you're spotting talent in senior leaders?
- [23:47]
Jim Fish Jr.
Well, one of the pieces of advice that I give, we have a 19 year old and a 21 year old. So they're kind of in that range where they're, they're in college, but they're getting ready to go out into the real world. And I just tell them, you know, it's kind of an old statement, but patience is a virtue. And I think that today's generation, you know, I've heard people say, well, Gen Z doesn't work as hard. I don't agree with that at all. I think Gen Z works just as hard as my generation or as your generation. I do think they're more impatient. I think Gen Z can, and part of it is kind of this digital world we live in. Everything's immediate. My advice typically is around that. It's around, look, be patient with your careers. You know, things, good things will happen. You're in a great position to, you know, there's so many people in this kind of retirement age and you're in a position to really be able to move fairly quickly, probably move through your career more quickly than I did. But don't expect to be senior vice president all on day four. If you're coming into your new job, give it time, work hard at the tasks that you're given and I think you will. The fruits of your labor will be born over a shorter period of time than you might think, but don't expect it overnight.
- [25:05]
Hoda Tahun
Well, we end each podcast with some rapid fire questions to get to know you even better, Jim. So we will ask a series of questions and you respond as quickly as possible.
- [25:15]
Jim Fish Jr.
I'm nervous now.
- [25:17]
Hoda Tahun
So which leader, living or dead, do you admire most?
- [25:21]
Jim Fish Jr.
It might be, well, I would say Abraham Lincoln.
- [25:24]
Simon Kingston
What are the top three traits that every CEO should have?
- [25:28]
Jim Fish Jr.
I think empathy is important. I think kind of ability to think more long term. We talked about the fact that that's not something that's natural and I Think, look, you have to have. You can't be dumb as a rock. I'm not the world's smartest guy, but I think you have to have a little bit of intellect to be a good leader. So I would say those three.
- [25:50]
Hoda Tahun
What is your favorite way to decompress, Jim after a long day at work?
- [25:54]
Jim Fish Jr.
Well, okay, so after a long day at work, if you're just talking about going home for the day, then I do enjoy reading, I enjoy watching sports on television. If you're talking about kind of vacation, I go back to going to the mountains. I enjoy going to the mountains. I enjoy doing a little fishing or hiking or whatever. So it depends on whether you're talking about just at the end of the day or actually on vacation.
- [26:16]
Simon Kingston
What's the best piece of advice you've received that's stuck with you?
- [26:21]
Jim Fish Jr.
So my father in law, who he passed away about 15 years ago, and Union Guy, pipe fitter from St. Louis, Missouri, when I was moving out to our field operations and I mentioned I spent seven years out in our field operations and he said, when you go out there, don't just sit at your desk, he said, go out and really spend time with the operations folks. But he said, by the way, if you do it just once, then you're actually better off to never do it. Because if you only go out there once, then they're going to say, yeah, Jim came out here one time, we saw him two years ago, but we haven't seen him since. That's actually worse than never going out at all. So he said, if you're going to do it, then go out and do it on a regular basis. And if you do that, A, you'll learn something, and B, they'll really appreciate the fact that you're coming out and kind of seeing what they do every day. So that was probably the best piece of advice I think I've been given in my career.
- [27:24]
Hoda Tahun
Would you rather have regrets about actions or inactions?
- [27:29]
Jim Fish Jr.
I would definitely rather have regrets about action. Then I would much rather say that I misstep there, then look back and say, gosh, I wish I had done this and I didn't do it. I would much rather be in the other court.
- [27:45]
Simon Kingston
What is one item on your bucket list?
- [27:49]
Jim Fish Jr.
So I've been fortunate to kind of be able to tick off a few of those bucket list items. I'm a golfer, so I've gotten to play Augusta, which was cool. One thing, and I'm not sure my wife agrees with me on this, but I think it'd be cool to. I don't want to climb Mount Everest. I don't want to go to the top. But I do think it'd be very cool to go to base Camp.
- [28:08]
Hoda Tahun
And finally, Jim, what's the most unusual item that you've collected in the garbage?
- [28:13]
Jim Fish Jr.
I know that one of our team one time, I can speak for them, they picked up a house one time and there was a. The lady, her husband was a World War II vet, and somehow he had brought back a hand grenade from World War II and had it in the house. And it was a live hand grenade. So they emptied the trash bin into the back of the truck. And fortunately, this thing kind of rolled around on the bottom. It wasn't buried in the trash somehow because had they run it through the compactor, it might have actually exploded. But they emptied it and they thought for a second, gosh, is this thing. Is this like a kid's toy or is that a real hand grenade? And they called out a bomb squad. And it was definitely a real World War II vintage hand grenade. Now, I wasn't on that truck that day, but I can't say there was anything super interesting that I've collected, but we have collected a few interesting things.
- [29:07]
Simon Kingston
Jim, it's been a real pleasure talking to you and a privilege you've set out how you get to the core of a business, even if that involves going out in minus 10 degrees Fahrenheit, how people matter to the way in which you think about leadership, talked about that hierarchy of people, customers, shareholders, the environment and communities. And that's run as a seam through all of the answers you gave, both to how you're transforming wm, but also how you think about your role as a leader of the business and as a leader in the wider societies that WM serves. You're not the fourth branch of government. The business of business is indeed business. But when you think about your personal judgments on these matters, it's clear that the values that animate you are important and lead you to make decisions about what it is you say and do not. And we'll all hope that Gen Z and the generations that follow them have some of the patience that you've advised them on. Thank you.
- [30:10]
Hoda Tahun
Thank you, Jim.
- [30:11]
Jim Fish Jr.
Thank you very much for giving me the opportunity to speak to you and really enjoyed it. Maybe, maybe we'll grab lunch next time I'm in London.
- [30:21]
Simon Kingston
We'll show you a bin lorry.
- [30:22]
Jim Fish Jr.
Perfect. Perfect.
- [30:24]
Simon Kingston
Jim, thanks for joining us on Redefiners.
- [30:26]
Jim Fish Jr.
You bet. Take care.
- [30:27]
Hoda Tahun
Thanks for joining us on this episode of Redefiners. For more compelling insights from leaders across industries and around the world, listen to Redefiners wherever you get your podcasts.
- [30:37]
Simon Kingston
To learn more or get in contact.
- [30:39]
Clark Murphy
With us, follow Redefinerspodcast on Instagram, find Russell Reynolds Associates on LinkedIn X and YouTube, and visit our website at russellreynolds.com.