Episode summary
UPS CEO on People-First Leadership and the Future of Logistics | WSJ Leadership Institute
The Journal
· · Hosts: Lane Florsheim · Guests: Carol Tome
Summary
UPS CEO Carol Tome describes how she came out of retirement after the board concluded the existing leadership team was not ready for the job. She says she entered with a values-based lens, then quickly discovered major gaps in building maintenance, worker policies, and customer profitability that were not fully visible from the boardroom. Those findings pushed her toward a “better not bigger” strategy focused on pruning unprofitable business, especially Amazon volume, and resetting the network around returns and other lanes that actually fit UPS’s economics.
Tome argues that people and performance are not in tension. She says UPS raised its internal “likelihood to recommend” score from 51% to 61% by changing policies, pushing decisions closer to customers, and putting human capital on the board agenda. She also says the company is using layoffs and buyouts with “grace and dignity,” including a $150,000 offer for departing drivers, while still investing heavily in promotions and training for those who remain.
She frames resilience as a core operating skill after the pandemic, labor strife, trade shocks, two wars, and a fatal plane crash. Looking ahead, Tome says UPS is leaning into healthcare logistics, cold chain, AI-driven routing, and automation inside facilities, while using technology to eliminate “toll work” rather than simply shrink the workforce.
Key takeaways
- Tome says UPS chose to be “better not bigger,” cutting low-margin or capital-intensive business to restore revenue, profit, and operating-margin growth.
- She says Amazon once represented over 13% of UPS revenue but was not profitable, and UPS cut that volume by 50% over 18 months.
- Tome says UPS improved its employee recommendation score from 51% to 61% by changing policies and moving decisions closer to customers.
- She says UPS has promoted 90,000 part-time workers into full-time jobs over the past eight years, including 13,000 in the last two years.
- Tome says healthcare logistics is a major growth area because UPS is the number one player in the space and cold-chain demand is expanding.
Notable quotes
“we sold several businesses that were either not making money or were capital intensive with very low margins”
“our largest customer is a customer you all know. They're headquartered in Seattle and probably all are members of their prime program”
“In the second quarter of this year, we returned to revenue, profit, and operating margin growth”
“I think about it in two camps. First are the buildings that we operate. Inside of the buildings, we're going to continue to put automation inside of those buildings”
How the episode opens
So the CEO and the leadership team are at the bottom of the pyramid. At the bottom of the pyramid to bear the weight for the decisions they make, for the actions that they take, you bear that weight so you can actually free up your people to take care of their customers.
You were uh happily I think happily retired. — I was happily retired — Sitting on the board of UPS. — Yes. six years ago. — Yeah. — Why did you do it? — Well, you know, I had the incredible uh pleasure of working for Home Depot for most of my career and after that I did retire, went out to my farm and started a family foundation with my husband and was on a couple of boards. So, I thought life was good.
But UPS when they were going through succession planning um put together the the the skills and the attributes of the CEO of the future. And when they took those skills and attributes and matched them up against the existing leadership team, they said, "Well, this team is awesome, but they're not quite ready. And so the board decided to go to the outside.
And when they made that decision, they came to me and they said, "Well, Carol, we think you have those skills and attributes. And I'm like, "Really? So, so I'm like, "Okay, well, if you do, let me reflect on why I might throw my hat in the ring.
Because they were doing a search. I'm like, well, first of all, I'm a values-based person and my values are aligned with UPS, so check. Um, second, you know, I know what happens when succession planning doesn't go well and I love to develop people and if I got into the company, I think I could develop the next CEO of the future.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- people-first leadership
- logistics industry
- global disruptions
- profitability strategy
- workforce transformation
Companies and tickers mentioned
- UPS
- UPS
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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