This week on the podcast Matt sits down with Shelley Simpson, President of J.B. Hunt Transport Services, Inc. The episode centers around Shelley’s 28 year career journey at JB Hunt where she started as a customer service representative directly out of college. They discuss her early success in the pricing team just 5 years into joining JB Hunt, then segue into her opportunity just 10 years after college to build a new billion dollar segment of JB Hunt (ICS). Since then she has championed JB Hunt’s transformation to be mode indifferent and helped the organization to grow to a $15 billion company with 37,000 people located across North America.
Episode Transcript
Shelley Simpson 0:01
Though we are very large in our space, the market is much larger. So we're actually
tiny when you look at the market, in what we serve.
Matt Waller 0:11
Excellence, professionalism, innovation and collegiality. These are the values the
Sam M. Walton College of Business explores in education, business and the lives of
people we meet every day. I'm Matt Waller, Dean of the Walton College and welcome
to the Be Epic Podcast. I have with me today, Shelley Simpson, President JB Hunt Transport
Services, Inc. She has been with JB Hunt for 20 years, over 28 years. And so you must
have started with JB Hunt when you were like three years old, right?
Shelley Simpson 0:48
I knew this was gonna go great.
Matt Waller 0:51
And, and she, she graduated from the Walton College back in 1994, and went right to
work at JB Hunt. And she's now been president for about a month. But she started as
a customer service representative back in May of 1994. So you didn't take a gap year,
did you?
Shelley Simpson 1:15
Oh, did people even do that back then?
Matt Waller 1:18
I doubt it. I doubt it.
Shelley Simpson 1:20
Oh, backpacking in Europe. I'm like, No. I have to work. That's, that's how it worked
back then.
Matt Waller 1:27
Well, thank you, Shelley, so much for taking time to share with us. I think our students,
faculty, and staff and other people who listen to these externally are really going
to appreciate hearing about this. I happen to know a decent amount about your background,
mainly because of my co-authoring Purple on the Inside with Kirk Thompson. And I and
don't feel like you're repeating the story, because I know when you were the commencement
speaker for the Walton College a few years ago, you told some stories that I think
are worth telling. If you wouldn't mind talk a little bit about when you first started
at JB Hunt, and kind of what you were thinking about it?
Shelley Simpson 2:13
Sure. So and you know, I was it was March of 1994, I was getting ready to graduate and I was going to be your local insurance agent. I wanted to be an entrepreneur and I wanted to own my own business. And while I was interviewing that took a little bit of time I had a friend in college in a class tell me he got a job at JB Hunt, and I said that, like the trucking company? I said what do you do, drive a truck? He said, No, I'm working in marketing. I said doing what he said, I'm talking to customers, and I did what any great college student would do and say, how much do you make? And he said, $15,000. Now that that might not sound like a lot. And that's because it was not a lot. And for times it changed. $15,000 was about $10,000 below the going rate. And I remember saying no, wait a minute, are you hourly? He said, well yeah, it was a little embarrassed. And I said, oh, there's no way I didn't get a degree to start in an hourly position. I'm gonna go, you know, pursue what I want to do. And he said well what are you doing in the meantime? How much do you make now and I thought, I teach preschool. I was making $5.25 an hour, this would give me a 40% raise. And I thought I'm going to interview. And so I did do one thing right in that interview process. In that interview process my dad did give me advice to treat this job as if it were my last. And I said dad, there's no way I'm staying at a trucking company. I'm gonna go be an entrepreneur, because that's the only way I could do that. He said, no, it's not that you'll stay with the company or not, but they could be your customer. And so you want to be professional and start on the job day one, in a professional environment. And that's what I did. I started in customer service, and talking with customers and you know, I will say day one on the job. I loved it. I love talking to customers. I can't say that I loved the company because it didn't know enough about the company. But I will say this, the first day on the job I sat by a gentleman that sat about three feet across from me. He was a manager trainee that was from Nebraska and I wondered why in the world he would move to Arkansas to work for JB Hunt as a manager trainee. He seemed to be sharp and like he had options. And he became my very first mentor. That was a relationship that was important to me. I was a learner. I've been a lifelong learner. But you know, he mentored me through the process and it didn't take long before I saw the culture inside the organization and listened to my my first great mentor outside of JB Hunt, which was my dad. And so when I got the opportunity to go work for an insurance company because I did what everyone does called in sick I went on my real job interview and when I did that dad said, you know, Shelley have you ever been to Monroe, Louisiana? I said well, dad, the jobs in Jonesboro, Arkansas. And he said, no, I'm asking if you've ever been to Monroe and I said, why is that? He said, because you don't want to just be an insurance agent, you want to be president and CEO of the company.
Matt Waller 5:20
Wow
Shelley Simpson 5:22
And, you know, I didn't want to disappoint him. And he said, you have all the time
in the world, you're in Northwest Arkansas, and you're at one of the big three. And
I tell you you could be the first vice president, as a female. And at the time, I
didn't even know if there was one. And you could be the president Shell. And so I
just stayed really, mostly because he told me to, and I'm sure glad I stayed.
Matt Waller 5:46
Wow that was good advice. You know, after you were a customer service representative,
you broadly speaking, and this is I'm putting my own words, were in pricing for about
10 years in different. You went from pricing manager to Director of pricing and yield
management, Director of Economic Analysis, Vice President of Economic Analysis, and
that was clearly something that you built a strengthen in. What, what how did that
happen? How did you get involved in pricing?
Shelley Simpson 6:20
Well, I wanted to go into sales and one way to get to sales was to move into pricing.
And that would give you a good perspective of how to talk to our customers. But I've
always loved numbers, I love finance. If I had only known more in college, I would
have majored in that, although I love marketing. And I really love numbers. That's
what speaks to me. And so when I moved into that area, it wasn't just that I got to
work in numbers, I actually got to set strategy. And it was fascinating to me, when
I very first started in pricing, that I got the opportunity to determine why do we
price our freight the way we price our freight? And why do we price customers differently?
And so I started digging into profitability and what that meant to our business and
was able to start helping articulate what strategy means or shouldn't mean and for
us, Dean, early on in my career, I got asked to come and do a profitability meeting.
And it really was like, being the referee between our operations teams and our sales
teams. At the time, I didn't realize that. But we were doing things that I don't know
made the best sense. Our operations teams knew that and our sales teams knew that
but they needed a neutral party. And so when I came to do profitability meetings for
me, I brought the data with me, and I let data do the talking. And so I really didn't
have a dog in the fight. I just did what I thought was best in from a financial and
strategy perspective. And that really launched a whole different thought process,
organizationally of how we could be thinking about our business, what business we
should be doing, what business we shouldn't be doing. And that allowed us to model
a really efficient network, if you will. And that gave me my first real chance to
work closely with some of our senior management. It was really the first time that
I got the opportunity to be around someone like Kirk Thompson, who was our CEO, really
be underneath that tutoring, if you will, for a length of time that I didn't realize
that's not what CEOs did. Sit down and pricing. But you know, Kirk was fabulous at
it. He was a great strategist, he was clearly a he's a CPA, and he was a great CFO
before he became our president CEO. And now he's our chairman. But that was just something
I really fell in love with. And I spent more time there because when I got the opportunity
to move to sales, I thought, well, I feel like I can impact the company more. And
I can focus more on my strengths. And that's why I stayed in the area for as long
as it did.
Matt Waller 8:55
Well, you know, pricing so critical in this business, and all areas of logistics and
supply chain management and really all areas of business in general. And I can imagine
being able to price while you've got to really understand your cost. To understand
your costs, you've got to understand your operations and your business and your customers
sensitivity to it and the and the trends in the in the market. So I just, you know,
I look at your background, I think that probably was really a great place to be learning
so much about the industry and the customers and your business in general. But I remember
Kirk when we were writing the book together he told me several times, stories about
when you two I think the company was going through a difficult time. And you all really
had to put extra effort into pricing. He knew it needed to be done but he realized
early on that you had a knack for that quantitative approach. So at what point in
your career were you actually doing this kind of pouring through all the numbers with
Kirk?
Shelley Simpson 10:12
Oh, very young. I actually. So I started at the company in 94. By 1999, I was the
director of pricing. And so it was about that time that I started spending time with
Kirk, Craig Harper was our Chief Operating Officer at the time as well. And so I spent
time with, with Craig and then Terry Matthews, who then became our president of intermodal.
I spent a lot of time with him. And so I would say from probably 1999, I was really
in the thick of it. When I moved into the trucking part of our company, Kirk had asked
me to move, we needed to keep of the checkbook, as he called it. Someone that could
really make good financial decisions and discipline over a trucking company. That's
a legacy part of our company, we were a billion dollar business unit losing money
in the year 2001 was when I moved over, we had just lost $7 million. I didn't know
it at the time. But when I moved over I realized what a monumental task it would be
not just in the financial performance met, that's the result of the hard work teams
put in. But in really setting strategy together was a big team effort and also getting
our people, our customers, shareholders to understand where we were headed. It was
a whole new strategy for the organization, understanding what did make sense for JB
Hunt, and how we could be sustainable over the long term. Our customers wanted us
to be profitable. And they wanted us to have a fair return, we just had to make sure
we articulated that story correctly. And by 2004, we were a billion dollar business
and made 116 million. So it was probably still to this day, some of the biggest memories
in my career. Obviously a lot of fun, a lot of hard work. But I'll tell you, we were
working just as hard losing 7 million, as we were making 116 million, but I'd say
my first time to get an executive view, you know, into thinking how to think about
business from a full perspective strategy, business planning. I've already worked
on the cost side. But what would really make sense from a customer commercialization
view, that was really my first opportunity.
Matt Waller 12:36
Well, that is a good segue to what I want to talk about because, you know, after you've
spent your 10 years and pricing, different roles in pricing, but you I know, Kirk,
I believe this is my understanding. Kirk asked you to run or develop this new segment.
And I know call it a segment because of Kirk. Because the first time I wrote it, I
said division he said we don't call them divisions, they're segments. It was funny,
you know, writing with him on this really helped me understand lot of subtleties about
the company, because you know when you are writing, you put things in your own terminology.
He goes oh, this is not how they talk about it. But as I understand it, he asked you
to step in and build this business called integrated capacity solutions, the brokerage
business. And he told me stories about, you know, a lot of the people in the company
weren't crazy about this idea, because they said, This is going to compete with our
business. That is the truckload business. It's going to be less profitable. I can't
remember all of the things. But this was not a minor issue. There were senior people
in the company that were against it, and all of a sudden you are put in this position
of having to build this company. And I know at some point he said to you, by the way,
this needs to be a billion dollar business. You were, there must have been a lot of
pressure on you. You'd only been out of college for you know, little over 10 years
and all of a sudden, you were told to build a billion dollar business. How did that
feel?
Shelley Simpson 14:38
Well, first of all, I trusted Kirk, I trusted Terry and Craig and I trust our management
team. And you have to think about it like this Dean. I came from that pricing background.
I came from the our trucking routes and at the time, trucking was doing very well.
We had three segments. We were making a fair return on our business, but I had spent
a lot of time with our customers on bids and bid strategy. And I knew we were not
solving for what our customers were asking us for. When you're confined to a set number
of assets, you can only solve for your customers based on the number of assets that
you have, unless you can offer alternative solutions. And at the time, we had more
and more customers asking us to do more business than what we could physically handle
from an asset perspective. And so I knew the percentage of solutions we were giving
our customers versus if we were able to work with contract carriers, that maybe that
didn't fit our network, but fit their network, we can start to solve for our customers
differently. So when I moved into this segment, you know, he did say we're gonna grow
it to a billion dollars. But let me just say, it was a little bit starting up ICS
was like cussing in Sunday school. It's like, starting in an asset based business,
a brokerage business is so difficult, because everyone believes that it's going to
be difficult, difficult to control service, how can we really tell a customer what
we can do when it's not our driver, you're going to take freight away from our own
drivers, there were all these preconceived ideas. So it's very important, coming into
a new part or a disruptive idea, very important to stay closely connected as a leadership
team, making sure that we are on one team, although we have different responsibilities,
that people understand that we're together. And how, what's the so what for our team?
What's the so what for our company drivers? What's the so what for our shareholders?
What is the so what to our people? If we can get our people to believe in this and
understand this, they'll start to articulate it better to our customers better to
our shareholders, better overall. And there was a lot of time that we spent, I will
tell you, I'm not sure if it was more difficult to convince customers that we were
in the brokerage business, or our own people that it was good for our business. But
it was probably the most difficult task I've taken on as an executive inside our organization.
But it was also the most rewarding because I saw how much we solved for customers.
And even more importantly, we were able to say yes to more freight, which meant more
freight for our company drivers as well. And that's exciting that in the past, we
would have to say no, because on that one day, we never wanted to over promise. We
always wanted to deliver we are a say do company if we say we're going to do it, even
if it hurts. And so that means we would never book two shipments for one truck. Well,
when you have brokerage as an option, you can now book two shipments for the one truck.
And if another truck came back early, you'd actually have two shipments for two trucks
instead of going to look for another shipment. I think that's really important in
understanding the big picture and helping really all of our people see that.
Matt Waller 18:07
Kirk told me may get this phrase wrong. You came up with this concept of modal
Shelley Simpson 18:14
modal indifferent
Matt Waller 18:15
indifference. Yes. Tell me about that little bit.
Shelley Simpson 18:19
Well and so you'll hear us talk about being mode agnostic. We want to make sure that
we have answers for our customers in North America. So whether it's one pallet that
needs to ship or their entire supply chain that needs to be transported across North
America, we built out our products and services to be able to handle that for a customer.
And if we can focus, Matt on making sure that we are cost competitive and best in
class, and each component in the supply chain, then our ability to solve for customer,
we can be completely indifferent as to how we operate that so we no longer went to
customers and said, hey, I have a truck and a driver and a trailer that I need to
load and let me convince you why you should load my truck and trailer over someone
else's. Instead, we could flip it and sit in the customer seat and say what's the
best way for us to move this shipment? Whether that's through intermodal on the train,
or through our company driver or with another contract carrier. When you become modal
indifferent, you start to solve for what's best for the customer that ultimately solve
what was best for JB Hunt. And that could start our growth story that we are now well
known for while being fiscally responsible.
Matt Waller 19:34
There's an interesting leadership strategy that you used early on, if I remember correctly
when you became when you started ICS about how you staffed your leadership team. Would
you mind speaking to that?
Shelley Simpson 19:53
Yeah, we got you know, one thing that our foundation is people you trust and the one
thing I know is we definitely trust the people that are at JB Hunt. And like myself,
many of us have been asked to do different things, we might not have the exact experience
to do that. But we're good in leadership, or we're good people managers, or we're
good financially, or we have our expertise in our own areas. And what we realized
was, if we could bring over some of the people that culturally understood JB Hunt
our key leaders. They could come and be leaders with me. And that's really who I selected.
All of the leaders that went to start brokerage came from inside our organization,
they had never done brokerage either. And, but they were trusted, they were trusted
inside our organization. And they knew what could culturally disrupt our company,
to the point that it would not be healthy for our organization. So that was my direct
management team. But right underneath that, we did go and hire experienced brokers
or people with brokerage experience to help us lead inside ICS. And we did about 50/50.
There, we took 50% of our hires were from other backgrounds outside and that gave
us diversity in thought. And then the other 50% were other up and comers at JB Hunt
that we would teach. And we really ran everybody side by side. So while I was learning,
and my leadership team was learning, so were the people that had come from outside
the organization, they were learning from us as well our culture, why we are the way
we are. And they were really a culture add, that was important to us, that they could
add to who we were, we were proud of who we were. But we knew that we needed to think
differently. And that really started our cycle of innovation.
Matt Waller 21:52
When you eventually really got ICS to the level Kirk was interested in a billion dollars,
then they asked you to in addition to running ICS to go back to the asset based truckload
business segment and turn that around because I know it was not doing well. Was hard
to run both of those at the same time, especially given you were trying to turn around
the asset based one?
Shelley Simpson 22:28
Well, I mean, in fairness to our asset base part of our company, they were being completely
disrupted by not only brokerage, but also intermodal, remember us being modal indifferent
meant they were going to solve what was best for the customer. And that means no longer
was our asset part of the business necessarily the best answer for our customers.
So they were completely being disrupted while we were growing the other parts of our
business. And so it was it was important to understand that and me having roots and
a background in the trucking part of our company, I had a lot of passion that our
customers were asking us for this, the size of the market and truckload, Dean Waller,
is substantial, and so that the needs of our customers the problems that they have,
they need us to compete in the truckload space, but not just from a brokerage perspective.
I knew that we could do really great work for our customers, we just needed to retool
and come up with a new strategy based on being mode indifferent. And that's what we
worked on. And you know, there's never one individual in our company that that does
everything or solves for everything we were so team based and team focused. They just
needed a group that could help come in and say, okay, we're modal indifferent now,
we have brokerage, we have intermodal, where can truckload fit, and be the best answer
for our customer, grow as a result and be profitable? And so that's what we did. So
I had a lot of passion about that. Also, that was the first time I got the opportunity
to manage our professional drivers. And so, you know, that's at the heart of what
I love to do is impact our people. And so that was exciting, motivating for me, I
loved getting close to that part of our business, seeing their lives change and seeing
our model change and seeing people be reinvigorated about the work that we were doing.
That is the most motivating part of my work. Because you know, there are things that
happen in business that we can't control. You know, we can't control the economy.
We can't control certain things that might happen to us. But we can control other
aspects. And so as long as I can understand where we're headed, what the future will
look like, I can be very highly motivated by the progress we make towards the vision
that we have.
Matt Waller 24:52
You're president now. And so you're over all of the segments. And of course you've
been around all the segments, you're very familiar with them anyway. I remember there's
a professor here, Marc Scott, I was talking to him not too long ago. And we were talking
about ESG. He was saying to me, he said, you know, what JB Hunt's done in intermodal
dwarfs anything that could be done from a sustainability perspective, like, compared
to other things like say, electric or other types of approaches, because the carbon
footprint of intermodal is so much smaller than anything else. But now your your,
your modal indifference crosses the whole company. And of course, you've you've invested
a lot of money in information systems and but would you mind speaking to I know, you're
a month into this new role, but how are you getting your head around it? How is your
leadership? style? I mean, I know you're probably keeping the same leadership style,
but it's a lot more responsibility. Would you mind speaking to that a little bit?
Shelley Simpson 26:20
Sure. The best part about really leading in this space is we're such a healthy organization
with a tenured management team, the average tenure of our executive leadership with
the company is 25 years.
Matt Waller 26:37
Oh, my goodness,
Shelley Simpson 26:38
with JB Hunt. So this is like growing up with my, you know, brothers and sisters,
and dad, if you will, you know, my whole career. And so our knowledge base of not
just the business, but each other, we've all been together a really long time. You
know, we have operated in a very collaborative style, I think that's part of why we
have had so much success. And so we really believe our people are a differentiator,
and you can have all the technology in the world and all the capacity that's out there.
But without really great people, we really can't make it happen. The size of the company,
we're a $15 billion company now or there abouts sometime this year, 14 to 15 billion,
with about 37,000 people located all over North America. And so my job right now is
to do a lot of listening and a lot of learning and connecting. And so connection is
a huge component of what I'm focused on. But I want to learn through the process.
I have a lot of experience. I've served on our executive leadership team now for 15
years. But it's important that I understand all different components. So I've spent
time yesterday I was with our safety team. And that allowed me to say, you know, I'd
really like to go see the technology in our trucks. And so I'm going on a ride along
with just to focus on our technology, I'm going to go through our Smith system training
and safety overall. So that's what I'm going to be focused on. For the first, you
know, six months or so. But for me, we're going to continue to be focused on creating
more value for our customers that drives industry leading growth and profitability.
So we can reinvest back into our people and stakeholders will be focused with the
three foundations, people you trust, capacity to deliver and technology that empowers.
Matt Waller 28:24
Well, and you mentioned, you're a $15 billion company, but your market cap is about
20 billion right now. Congratulations. The stock is doing quite well, right now. Very
impressive.
Shelley Simpson 28:38
Yeah, it's very cheap right now.
Matt Waller 28:41
I like that. I like that. But those three C's going back to that the foundation of
people you trust, capacity to deliver and technology that empowers that piece technology
that empowers has become increasingly important, and transportation logistics and
supply chain management, all business really, right now. What's your outlook on that
in terms of the importance of it say going forward?
Shelley Simpson 29:20
Dean Waller for us in 2017. And I give a lot of credit to John Roberts and Stuart
Scott, our CEO. For our investment in technology in 2017, we actually unveiled our
new technology platform that we call JB Hunt 360, along with a $500 million commitment
over the next five years to spend on technology and nearly half of that was earmarked
towards innovation and disruption. We really wanted our customers to lead us in that
space. And here we are five years later. And if you looked over that period of time,
how how fast the company has grown. It is remarkable what's happened in the organization.
I think technology is part of that. But I will say this, although we are very large
in our space, the market is much larger. And so we're actually tiny when you look
at the market in what we serve. So we think technology will be a major accelerator.
For the company, we think it already has been. But our ability to connect, have visibility
across our businesses, for our customers and people we do business with, I think is
going to be critical, and that will help us reach our mission statement of creating
the most efficient transportation network in North America.
Matt Waller 30:36
In closing, Shelley, would you mind sharing a little bit about any advice you might
have for our current students in the Walton College?
Shelley Simpson 30:47
Well, one thing I would say, and I grew up hearing this is, you know, do something
that you love. I would say, where is your passion? But more important, how can you
find a company that you could fall in love with? And there's a couple of things that
you can do with that. First, look at what the company has done? Is it a growing company,
our CEO says growth is oxygen. And I do believe that for our students personally,
as well, if a company is growing, that means there'll be more opportunities. And that
means there's something special going on in that organization. And so I would say
look at a growth company. Number two, look at the the amount of time that people stay
in the company, how long has the executive team been there? People in a growing company
don't stay with a company just because they have no other options. They tend to have
plenty of options and opportunities. And they stay because they believe in the company
they believe of the people that they work with, that are the best people in the business.
And there's something more there going on. That's what you're really looking for.
In a career, you're looking for an organization where you can flourish, where you
can grow, and you can be around people that you enjoy. I think those are a couple
of the key points. And when you start in the right company, bloom where you're planted.
Don't worry about how fast you're going to get there or what opportunities will come
bloom be the best team player and make sure you are the strongest bloom in the bunch
of flowers. I think people will see that almost immediately and when you're a great
team player on top of that, it starts to set you up for new opportunities.
Matt Waller 32:29
Wow, that's so true. I've observed that with so many students over the years. It's
hard to be patient but it does pay off. Well, Shelley, thank you so much for sharing
with us and we're really proud of you and just celebrate your success with you. So
thanks again for taking time. I appreciate it.
Shelley Simpson 32:51
Thank you, Matt. Appreciate you.
Matt Waller 32:58
On behalf of the Sam M Walton College of Business I want to thank everyone for spending
time with us for another engaging conversation. You can subscribe by going to your
favorite podcast service and searching. Be epic be E P IC
Matthew A. Waller is dean emeritus of the Sam M. Walton College of Business and professor of supply
chain management. His work as a professor, researcher, and consultant is synergistic,
blending academic research with practical insights from industry experience. This
continuous cycle of learning and application makes his work more effective, relevant,
and impactful.His goals include contributing to academia through high-quality research and publications,
cultivating the next generation of professionals through excellent teaching, and creating
value for the organizations he consults by optimizing their strategy and investments.
