Make Your Goals Bigger!

KEYPOINTS

• 01

  Running a company is the engineering design process applied to strategy, plus people skills an engineer has to learn.

  Harik tells his kids that engineers 'build things and fix things'. At XPO that means identifying a goal, gathering data, defining requirements, building a solution and testing the outcome: strategy, then KPIs, then an action plan for each KPI. The catch is that engineers chase perfection and people don't work that way. What surprised him most was that every person's mind works differently, 'in its own beautiful way'.

• 02

  His main lesson from Brad Jacobs: set very big goals, because small goals produce small results.

  Jacobs founded eight multibillion-dollar companies. Harik joined XPO as employee number three and worked under him for more than a decade. His version of the lesson is to take a project you think needs three years and ask how to do it in three months, at work and in life. He calls ultra-big goals 'the cure for complacency', because hitting a modest target invites a pat on the back and then coasting, while winning against big targets breeds more ambition.

• 03

  Hire for three things: very good at the job, serious about the work, and collegial.

  Serious doesn't mean 90-hour weeks. It means taking the mission of the company and the role to heart every morning. Collegial includes kindness, humility and a thirst to learn, but not consensus. Harik worries when everyone in a meeting agrees, because it suggests the problem hasn't been looked at from ten angles and the team may settle for a local maximum. Disagree respectfully, focus on data rather than the person, then commit to one path.

• 04

  XPO is run on about 10 daily KPIs, tracking both their change and the rate at which that change is changing.

  Each strategic lever has KPIs, and each KPI has an action plan with owners. Being up 5% year on year is a first derivative. FP&A also looks at the second derivative, whether the trend is speeding up or slowing (5% sliding to 3% then 1%), and probability-weights risks and opportunities for weekly, monthly and quarterly forecasts. Every P&L owner has an FP&A partner showing which levers they can pull.

• 05

  Service is the product: in less-than-truckload freight, better service earns market share and premium pricing.

  XPO has about 40,000 employees, roughly 23,000 in North America, and 18,000 of those are drivers or dock workers. The average shipment is about 1,400 lb, consolidated across roughly 300 terminals. The two service measures are no damage and on-time delivery. Better service lets XPO sell higher-margin add-on services and gain profitable share.

• 06

  Data used for coaching gets buy-in; data used only to police people breeds resentment.

  Every handheld scan shows a worker two dials: productivity ranked against peers on the dock, and potential damages, such as unstrapped pallets. Damage is traced back to the last person who handled a pallet, and that person gets targeted training. Harik says the response has been good because the information is used to help people improve, not just to enforce strict rules.

• 07

  Give feedback by starting with what makes someone great, and ground criticism in data rather than opinion.

  Early in his career he handed people his own solution, which he says caused the team's thinking to 'atrophy' and capped results at his own expertise. Now he teaches people a process for analyzing the data, and often their designs beat what he would have come up with. 'You dropped the ball' makes people defensive. 'Here's what the data said we could reach, and where we landed' doesn't.

• 08

  Ego is thinking you're so good that you stop learning.

  He started coding in BASIC on a Commodore 64, read his older brother's computer-engineering books as a young teen, and arrived at the American University of Beirut sure he was the best programmer alive. At MIT he met programmers '50 times better'. The humility that followed is what let him keep learning instead of getting stuck.

• 09

  A CEO has three value levers: the team, capital allocation and time allocation.

  For capital, the question is the return on each dollar, not the size of the check: does $1 million deployed return $100,000 a year or $3 million? Options include internal projects, M&A where '1 + 1 > 2', paying down debt, or buying back shares while they're cheap. For time, he goes where action plans aren't working and focuses on inputs, not outputs.