Jim Young and culture change

Posted by Fred Frailey
on Tuesday, March 6, 2012

I met the man who became Union Pacific's chief executive officer at a political convention in 2004 in New York. He was with Dick Davidson, then the CEO, and I was with my wife. Young was already the heir apparent. We exchanged introductions. The first thing I noticed was that Jim Young has the most amazing eyes. They are pale blue surrounded by translucent skin and stare right into your soul.

Don’t take what I am about to say as a slam against Dick Davidson. We were friends once, and I still have a lot of affection for that big bear of a man, as a person. But I wrote stories he didn’t like, and I did some stuff that was not right, and unfortunately our friendship fell apart. Dick did many wonderful things for Union Pacific. But after a certain point, it was clear to me that what the company needed was a change in its culture, and this was the last thing Davidson was capable of delivering.

To put it bluntly, UP’s culture in that era was what can I get for myself and to heck with everyone else. It was exemplified by the 2004 mini-meltdown that cost Union Pacific shareholders hundreds upon hundreds of millions of dollars. At the core of that meltdown was penny-pinching by the top corporate executives to give themselves cheap or even free shares of stock if they pinched enough pennies, which of course they did. Down went the railroad.

Into this moral void stepped Jim Young. I felt at the time that if he made changing the culture of Union Pacific his top priority, he might succeed, but probably not. I am pleased to report that Jim did succeed. Becoming CEO in 2006, he did move the corporate culture in the right direction, and we are all the better for it.

What I cannot say, because I do not know, is exactly what he did to move the needle and exactly what has changed. But I sense more transparency in the company, more “us” and less “me.” I sense that the people who work for Union Pacific today, the leaders and the worker bees, share more of the same values than they did a few years ago. I feel confident that what happened in 2004 will not happen again under Young’s watch, because he is not the type of person to get his priorities mixed up. And that he is someone who learns from mistakes, those he makes and those of others.

I have seen Jim only once since that political convention. I had vowed never to write another feature story for Trains Magazine about Union Pacific because the blowback had gotten so bitter. But little did I know I still had so many friends in top jobs there. They convinced Young I could be trusted if they opened up about the railroad’s ambitious plans to expand the Sunset Route’s capacity. He said the railroad would cooperate in a cover story.

Jim and I met for half an hour in Union Pacific’s Washington, D.C ., offices. In a conference room we sat across a narrow table from one another, and those pale blue eyes bored, unblinking, into mine. “I’ve had a lot of contradictory advice about you, Fred,” he began, staring at me. “A lot of people say not to get near you because you’re nothing but trouble.” Then he grinned. “I decided to be an optimist.” We had a cordial interview about the need for expanding capacity across the Southwest. I left thinking that the nondescript man who had replaced the bigger-than-life Davidson was a pretty big man in his own right. And again those eyes: I imagined being a UP vice president trying to feed Young a line of BS while looking him in the face. The eyes demand that you be honest.

Everyone I know who knows Jim Young is devastated by the news that he has pancreatic cancer and has taken a leave of absence. My heart goes out to him, because the five-year odds of survival are abysmal. Anyway, Union Pacific’s handling of this corporate tragedy has been exemplary. Young’s stand-in, Jack Koraleski, the chief marketing officer, says being acting CEO will be his last posting at UP before retiring; his own successor in marketing will soon be named. Jack is class act in his own right.

Jim Young has done wonders for Union Pacific without ever seeming to raise his voice. He has never tried to be something he is not. But he sensed that what his company needed was a new style of leadership, one attuned to everyone working for UP and not just its top and middle managers. Jim has my admiration, my best wishes, and my prayers. — Fred W. Frailey

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