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A.O. Smith Company Profile, News, Rankings | Fortune

legacy

A.O. Smith

a.o. smith

The founder of this outdoor gear and apparel brand believes business is the best way to change the world.

Leadership Next: Cotopaxi CEO, Davis Smith

Leadership

Anyone has read tomorrow's Capitalist from, you know, the Allen wrote it, isn't it? Is it many times it should be required reading. I quiz Ellen on it. Welcome to leadership. Next, the podcast about the changing rules of business leadership. I'm Alan Murray and I'm Ellen mcgirt. Why take on Patagonia, which is, which is one of the most focused companies you could compete with. So number one, it's a space I'm passionate about. You know, my, I grew up in a family, my dad was an adventurer. So from the time I was a child, we spent time in the outdoors. Uh We'd go survive on uninhabited islands. We made our own spears and spear fish and eat coconuts to survive. We made our own raft and floated the Amazon River fishing for piranha. I mean, my life as a kid was odd. Uh you know, I thought this was normal behavior to go do these kind of things and, but I loved the outdoors and so I felt a special connection to it. Also, I knew that if I wanted to go do something big, if I wanted to go help eradicate extreme poverty in my lifetime. I have needed to choose a category that was massive. Uh We needed to have a huge tama, total addressable market. I knew the outdoor industry had many billion dollar brands. The question was, could we break through if we could, we could go make a huge mark. I hired a chief impact officer before we hired a marketer. And I remember my board in the early days. Kind of like, wait Davis, are you sure about this? Like, why are you hiring someone to give away your money better before you've made money? And like, maybe we should focus on like marketing more. And my argument was like the only that that really sets us apart from everyone else is that we're going to do impact better than anyone else. And if we can do that from the very beginning, we have this great foundation of giving and we understand how to have the greatest impact. That's what's going to set us apart and create an opportunity to go build the next iconic outdoor brand. I believe the way that I could have the biggest impact on fighting and eradicating poverty was by not just being focused on my own brand, but by inspiring thousands of other businesses and millions of consumers to join in this movement of doing good in the world. And so yes, I feel like a big part of my responsibility as the founder of cotopaxi, which I am going to be forever. Uh And currently, the CEO uh is to evangelize this idea that business can be a force for good in the world. And that we have a responsibility to transform capitalism. We have to do capitalism much better than we have. Uh As you talked about in your book, there's a third way. And um you know, I hope that we can be an example to other businesses of how to do that.

Davis Smith, Founder and CEO, Cotopaxi 
Interviewer: Ruth Umoh, FORTUNE

Impact Initiative 2022 - The Uncommon Path

Conferences

Raj Subramaniam says that working with FedEx Founder Fred Smith is "one of the greatest things that happened to me"

FedEx's New CEO: "We have significant upside and great potential"

FedEx CEO: "We have significant upside and great potential"

thank you so much for joining us to talk about Fedex, it's almost two months now since you became Ceo. And already you're unveiling your plans to, to grow the company. In fact, you met with a large investor group recently and the first thing you told them, We are at a pivotal moment in our 50 year history. What's the message you want to get across to everyone as the new ceo? That's indeed exactly right. We have a built a very strong foundation over the last 50 years. Building networks is not easy at all and it takes a lot of time and patience to build these networks. And so now we are at a pivotal point where we can build on that foundation and create more value for all our stakeholders. The second part of the story is the fact that we have such a strong physical network, but it's also got a strong underpinning of digital network and going forward, we're going to create value not only from the physical aspects of our network, We're also on the digital aspects of our network. We're here to create the legacy of the next 25 years. And with that as the backdrop, you laid out your plan for 20, and what's going to happen over the next three years. And you told everyone that earnings are going to grow as much as 19% a year. Uh you're expecting double-digit operating margins and an adjusted dividend payout ratio of at least 25%. Sounds like you are setting a very high bar for yourself roger, we are in the middle of a fast growing aecom Merce market, we have a strong portfolio and uh, and then in the fact that we find ourselves in the center of the e commerce ecosystem there. In fact critical infrastructure for e commerce. So the question is, how do we balance our growth going forward? How do we improve our operating margins of our individual operating companies and then deliver the returns that that we talked about? We believe we have significant upside and great potential for Fedex going forward. Some people were kind of surprised that you took such a bold action so early in your tenure. Um, as Ceo, did you feel that you needed to be bold right away because of all the pressure that Fedex has been getting from the activist group D. E shaw and your agreement with them to add three new board members directors to the Fed export. Did you feel a sense of urgency that you have to show that as the new boss, you're really doing things to make a strong, even stronger company? Uh, the short answer that when, that's not that that's not, that was not the motivation. In fact, we've been planning for this event for almost a year and that these plans are already in place over the last several months, well before any conversation that we had with the show the message that I'm trying to get across here is that the networks that we have taken time to build over this time is very valuable. And you know, it's really that pivot that we're now doing is to make sure that we create value from the networks. What will it take for Fedex to reach your goals? I mean, what are the key things that the company needs to be doing? But it's not doing right now? It's about execution now. And um, and the fact that we have to make sure that we have a balanced growth in our portfolio. The fact that each of our operating companies have to improve their efficiency in their operations using technology and driving the operating margins. And you know, we also be very disciplined in the way we, you know, spend our capital and improve our return on invested capital when you put those three things together, it drives significant value uh, to to all our shareholders. You told investors that you don't think a recession would weigh down all the plans that you have talk us through that. Because just about every economist we talked to these days is warning about a long recession to be very clear. That's not exactly what I said. I said, what I said was what our plans did not assume a deep and prolonged recession. And if we have a deep and prolonged recession, then it's a different matter altogether. We are, you know, we have weathered different storms before and we are able to flex our networks and we are able to manage through this time period usually. So I'm not, you know, any particular quarter or any particular six month period, we're talking about three year time period where the economy might go down but also might come back up and so there are opportunities that you know, again, I don't manage this company for any particular quarter as much as I manage it for a period of time and this is this is a three year goal I'm very confident of. What about some of the other pain points to what extent are you factoring in a continuation of supply chain disruptions for example or are you figuring that the supply chain issues are going to go away and it's not much of a concern. Well, the supply chain factor the two issues one is the lack of semiconductors for example and the other one is the transportation bottlenecks. On the first point, I think we are a few maybe a year or two away from that getting sorted out because of the classic supply chain bullet effect on that on the transportation side of the equation, I expect that to get sorted out much sooner. But meanwhile, while you're planning this new growth trajectory for your company, what impact supply chain have on what you're trying to do? Well, you know, we have dialed in some of those impacts, but I think, you know, to the extent that the supply chain impacts manufacturing and that manufacturing impact, demand for our services obviously will be impacted. So we are we are we have been conservative in our volume growth levels in this next three year timeframe. Uh and uh and it dials and some of those things into into into into effect here. Consumer spending also has to be an important component in your success. I mean up until now people have been coping with price hikes, but now everybody's complaining about higher gas prices, higher food prices. Uh you know, what's your take on how the consumer is doing and how a belt tightening on their part could mean a slowdown in package volumes at Fedex when you're trying to do just the opposite increasing them, those things are again obviously way against us in the short term. So we have to deal with these issues in the short term. But again, over a three year period, if you think about the e commerce aecom worse represented about 16% of retail prior to the pandemic at the peak of the pandemic represent 22% and now it is 20%. So it's been, is being reset but still significantly higher than 16%. So we expect e commerce as on a secular basis to continue to grow. Once this research is over. So again, over three year period were very comfortable. Once again, we're dialing in pretty conservative volume growth in, in our forecast. Well, we can't talk about Fedex without talking about UPS, people are always making the comparisons as you know, and UPS has been making changes in the past few years and the results have been a strong performance. Whether you're talking about profits, operating margins, even the stock has gone way up. Are there any takeaway lessons for Fedex and all of this? Well, financially, every, you know, almost every company is trying to achieve those kind of goals. I think what we have doing is again, to make sure that to build on the foundation that we've created and that's very important. And we, you know, Fedex prides itself on entrepreneurship. We pride ourselves on uh, differentiation and those are the kind of things and, and customer experience and then the diversity of our customer base and that's what's driving us and that's ultimately sustainable for a much longer period of time. Let's turn Roger and talk about leadership and talking a little bit more about you personally, um, you've been working aesthetics for 30 years now, in fact, It was your first job out of college. Um, but at the time you thought you wouldn't be hired, it was a long, a long shot. Um, but you did, so tell us what happened? Well, that's, you know, one of those things where it was in the month of August in 1991, in the middle of the recession. And uh, I just finished my M. B. A from the University of texas. Austin, I was walking into my apartment, my apartment made was on the phone talking to Fedex and he basically said I'm leaving the country and not interested or not. He put the phone down and said who are you talking to? And he says Fedex and they're coming to campus said give me the number, let me call them. So I called him and said you just talked to my roommate, he's he's leaving the country but I'm still here. Can I send you back to my resume? Which I did? And then they said, okay, well we'll do the interview. Well the rest is history after that. And so it was almost, you know, it was a uh serendipitous event that that made it happen. But if someone had told me back in 1991 when I walked into Memphis at the lowest level possible in the staff role In Fedex that this is what I would be doing 30 years from then had a much better chance to play for the Memphis Grizzlies. Well, when you did walk into the Fedex headquarters and you took that new job, you didn't know anybody uh in Memphis. And I guess it was kind of lonely and you could have just as easily gone back to India gone back home, but you didn't what motivated you to tough it out? Well, I think the right away. You know what, you know what got me into the garden to Fedex is the job was very interesting. We were expanding into international and I was even though, was that the the the lowest level in that the marketing function, I was put in the middle of this incredible project of international expansion and it really was fascinating. And so I got to see it, you know, emerged from that level onwards, you know, Fedex was much smaller companies. International business is much smaller and to develop a new whole new business area and opportunity was so great and it just kept going from there. Well, exactly. And you, you know, it paid off and you worked your way to the top with a lot of leadership roles along the way. And for the past few years you've been working very closely with fred smith, the founder and Ceo of Fedex. And from what I hear, fred was treating you as sort of the last couple of years as an understudy grooming you to be his successor. What are the most important leadership lessons you learned from him at that time? Well, I'll tell you what I mean. Working with fred has been just one of the greatest things, you know, that that has happened to me. You know, you know, there's so many things and especially in the last two or three years after I was appointed C. E. O. And the succession plan was pretty clear, especially during the pandemic when the company did one of some of the most important work in the history of our company to be working really closely with him. So it's not just see your school, it was history school, it was geography school, it was humanity school. So you put everything in context and perspective. It was just amazing. And you know fred has got the unique ability to connect this grand vision to the strategy, to the execution to the tactics in a way that very very few people can. And uh you know, I've just learned a whole lot from him and you know, it's just a matter of great honor and pride for me that that that I that I get this opportunity but also that that I'm succeeding somebody like him. Well you're clearly the boss now, although fred is still the largest shareholder of Fedex and he stays on as executive chairman. How often are you updating him now or checking in with him or asking his opinion on something? What are the sorts of things that he tells you to do? I mean obviously he's available on the phone anytime I want him. And uh so we make it a point to at least sit down once a week uh and you know, just chat and it could be about anything. And uh and so it's it's a it's a it's a great relationship. And so you know, I look forward to those conversations because there's so much one can learn from him. Well the job description of any ceo running a Fortune 500 company has changed dramatically in the past few years. Um There are so many new demands and expectations of C. E. O. S. Whether it's from the employees or customers shareholders, even sometimes from the public knowing all of that. How would you describe the way that you want to leave Fedex? First of all, I want to be true to the core of Fedex and that's what attracted me to the Fedex in the first place is the whole people culture. And so for me, it is to make sure that that that culture continues going forward. That we have the people first culture that we, you know, that we have respect our folks and we make sure that we reward and recognize the right behavior and you know, and and and then give the right expectations and doesn't matter where you are and cuts across humanity. So for me, it's building on that bedrock and then creating uh, you know what we want to create in the digital front, on the networks and so on. But don't forget where we came from.

Ayse Birsel, Co-founder, Birsel + Seck; Author, Design the Life You Love 

Brainstorm Design 2022 - Design Talk: Designing the (Long) Life You Love

Brainstorm Design 2022 - Designing the (Long) Life You Love


Brainstorm Design 2022 - Design Talk: Designing the (Long) Life You Love


my talk is kind of like a bookend to john Maeda's talk yesterday. Did you listen to him and he was talking about how the things that people regret when they're dying? Well this is the other end of that where I'm going to talk about what you can or to design a long life so that you don't have regrets. So all right, are longer. Rita braver. Art is long life is short. But hold on 1/2. Art is long life is long, it's longer. You know, actually like that. And my daughter brought this home to me last year and when she burst into my room and she said, Mom, you have another 50 years to live. And I looked at her and I thought you know your math needs help. And then I realized I thought for a second and I realized it's true, I might have another 50 years to live and you know, you can trust your kids to tell you the truth as they see it. I was working on design the long life you love and I had never, I hadn't really put myself at the center of that and she did. So I'm going to do that for you now and say you're you're going to have a long life and what do you want to do with that life? Right. How are you going to use that extra time? That gift of time. So this 2030 years didn't exist before. You know if you think of your grandparents great grandparents, this is a new era were at the cusp of something big. This is as big in my mind as like the invention of moving pictures or automobiles or even space travel. And in fact these people who are now living really long, they're like long life astronauts going where no one has gone before. Right? So do you know any people like that long life astronauts? I see some heads nodding. So if you do you have these cards on the table, I'm going to ask you to note down one long life astronaut that comes to your mind in the moment, what's their name? Maybe knew a little emoji for them? And then right there qualities, What is it about them that inspires you? So this is my mom and she's my long life astronaut where she's going where few people have gone before. And my mom is, you know, she was always strong willed, but now she still has that strong will in Turkish. We say she's laughing in the face of her challenges and she uses her wit and humor and she adapts to challenges and situations. But you know, without losing or letting go of who she is. So she is my um, long life astronauts. So let's take a moment to note yours as you do that. Let me tell you a little bit more more about this exercise. Um, I developed design the life you love and wrote a book about it and this exercise that I'm sharing with you is at the heart of it. It's really about giving ordinary people and I call non designers, ordinary people with the, you know, with the biggest love for them um to teach them how to use design processes, tools to transform their lives. And these people are extraordinary. And this exercise come comes from um teaching people how to design their lives. And we used it with First Amazon to help older people 65 plus to design their life. And then with the scan foundation, we took it further where we went on the road from east to the west to the south of the United States, Urban, suburban and rural and asked 250 people to come and be a designer with us for a day. These were all people who were 65 all the way to 90 plus. And they joined us to co design their lives and you know, most aging research is very reductionist, You age and something breaks down. You know, it's either the family structure or your work structure or your financial structure or your social structure and it's very pessimistic and it's hard to design out of that um pessimism. But what we found co designing with older people, they don't see themselves as shrinking. They don't see their lives as shrinking. It's quite the opposite actually, its expansionist and they have this growth mindset and in a way they're great designers because they know how to turn challenges into opportunities just like we do and what we learned through this year long research, I can boil down to two words same difference. They basically told us if you want to understand what we want, think no further than what you want and what do we want? We all want love purpose, well being in friendship and they said so those are the things we want. It's the same but what's different is what we need to do to get to them. And so as designers, if we want to understand older people and what they need, we just need to think about what do we want and then mind the differences for insights and new ideas and solutions and these differences. I call them lessons that I've learned from older people and I wanted to share them with you today. So the first lesson of course I had to start with Love This lesson one is love is not only about loving others, it's also loving yourself. And I think this is the modern definition of love. It's accepting who you are. Self acceptance and compassion and empathy and this this is something that naturally happens as we age. But there is a lesson we can all learn earlier on, right. Um and then I interviewed Cindy gallop who's um ad exec I can hear somebody going, huh ad exec extraordinaire and he's the founder of make love not porn and she told me, I say I am the most proudly visible person of the most invisible segment of society, older women. And she told me lesson to live life on your own terms and don't give a damn what other people think. And Cindy then went on to tell me a bunch of dating advice which I've put in the book and it can make any 20 year old blush. So you have to, you have to check that out. Less than three is every breath is a new you. So this comes from Marshall Goldsmith who just wrote a book called The Earned Life and full disclosure, I am Marshall's coach. So he's designed and redesigned his life with me a couple of times and he said, you know there there is no permanent view, life is a constant restart. So every breath is a new you And a lot of the people that we designed and co designed with who were 65 and older, I mean even if they were 93, they were ready to redesign their lives. They didn't think that it's too late for them. So it is true. Every breath is a new use. So with that let's just take a deep breath will you? And when you release that, you're a new youth and then all of you here are high achievers. So I wanted to share this lesson with you. Um they told me happiness is not a function of achievement. We need to separate the two. So if you're in the game of I will be happy when you'll never win, right? So let's separate the two, but that doesn't mean that we can't Do what we love. So less than five do what makes you come alive and of all the lessons, this is the one that I want my kids to really um listen and hear and put into action and that's create time for what you love. Waste less time, share your knowledge and expertise with abundance with generosity and care less what people think again, what Cindy told me comes back And then less than six is about starting something new, even though you don't know how it will end. And my friend Michael Bengal Stayner just wrote a book about how to begin and he talks about the ambiguity of great projects and I think here you're all well well aware of that and you lean into that ambiguity of great project because there are no google maps of projects, right? And that's just the beauty of it. Because every project is a journey of discovery and that journey of discovery feeds our soul, which brings me to number lesson number seven, feeding our souls. So I have in fact have two teenagers and uh you know, living with them, I realize when we're young it's truly our body is over our minds, you know, they have hormones and mood swings and you know, growth spurts, But then as our logic start to kind of mature in our 20's And we move into like this our 30s and 50 our minds and our bodies balanced each other around And then in our 50s and 60s it's mind over body and in terms of the growth spurts when we're young it's the physical growth spurt and then we have an intellectual growth spurt and then we have a beautiful soul growth spurt and our souls grow and what grows our souls like nothing else friendship. Thank you. Um and love is found but friendships are made and if friendships are made we can have friendship factories and to have friendship factories you need warehouses of share time, shared spaces of production hubs of shared interests, trucks of reciprocal give and take all of that powered by turbines of trust. And if you're thinking and you just Spent two days in a friendship factory, you're right. I mean this fortunate conference, we've all been making friends, right? I've made many friends very fast in the space of two days. And these friendships I mean to keep so that's the nature of friendship, no matter our age, we can continue to make friends. And one of the key things in many speakers talked about Trust. The thing that feeds friendship trust is made through collaboration it and we are very good at this. It's about helping each other. That's reciprocity right? And older people are really knowledgeable about this, that's why our grandparents and uncles and aunts and mentors and teachers. They help us and they invest in us with their time and energy. And that Help actually helps them. So the lesson number nine, which is my final lesson is that helping you helps me most. Which brings me. If I were to take all of this, I would tell you, you know, the thrill is not gone. The thrill is on because first of all, I mean it's thrilling to be alive. Who doesn't want to live long, right? And these people are thrilled to be alive no matter what the challenges and then this will is on for us. All of us in this room. All our teams are companies as innovators, designers, business people. The thrill is on for us because this era didn't exist before. I mean, how lucky are we? I feel like we're people at the cusp of an incredible moment of innovation and we get to design products and businesses and services For this extra 2030 years. And so let's come back to our long life astronauts. This is my mom again, I drew her Picasso's style. Uh, if my mom who's very beautiful saw her drawing here that I was showing this drawing to. She would kill me. So don't tell her. But do tell me, I want to hear I want to have some volunteers who is your long life hero who would like to volunteer a long life astronaut. All right. Hi and Hi Girls again. Um so I actually picked two of my grandmother's um 173 and one passed away last year but made it to 98. And um when I think of kind of the characteristics, I love your statement of no, they know how to turn challenge into opportunities. So my family on my grandmother's side, we haven't had men make it past the age of 56. Yeah. And so that means they saw their husband passed, their grandchildren passed etcetera. And yet they were able to continue on through the idea of strength and they were very nurturing of everyone. Uh and also there was a lot of creativity in what they did and so they inspire me every day and I always say when people say who inspires, you I'm like my grandmother and I hope to just be like 10% of what they were even though they weren't on any magazine covers and usually they're the ones that you never hear about. But there's a reason why a lot of us are in these rooms today. Beautiful, thank you so much. Alright, one More Please. Oh great. Hi Angela Harris. Catapult design. Uh So my hero is my grandmother also um grandma Helen. So Shia she didn't sweat the small stuff. You know she really she said don't sweat the small stuff like really had this ability to prioritize and have this very easygoing air about it all like and just share that. Um She as she got older, I noticed that she became more irreverent, Her tolerance for authority. Um, grew very thin to the point where she, she at the very end even denounced her Catholicism, which nobody could believe. Um, she had an incredible sense of humor and I think it got better and better as she got older. Um, I think in the 40s, you know, kind of maybe in the 50s like sense of humor can kind of get lost And she got funnier. She got older so she died when she was 94. Um, her priorities like, so reading, I'm 5 to 7 books a week, crossword puzzle master, uh, swimming anywhere in anything cold rivers and lakes preferred a lifetime of musical ability acquired and shared from choirs to piano and, and many other instruments and really saying things that you know, were hard to hear. Like she would tell my mother like those pants don't look good on you and, and they didn't look good on her, you know, and my mom was not thrilled about that or she would come at me, you know, when I quit teaching, which she thought was the most brilliant. Um, you know, the most brilliant thing to do in the world, you know, and who knows? So yeah grandma Helen, wow, it's like we had have your grandma in the room, thank you so much Angela. Well I'm going to turn your here, I'll start with you. Um, Angela back to you and say um your grandma is continuing in you. I just met you but I can bet you don't uh sweat the small stuff and that you're easygoing your reverence, low tolerance for you know, any authority. I have to read my uh my own writing and then being able to say hard things and um saying hard things to hear. But I'm sure with a lot of kindness. So that's you. And then um let's see, continuing with grandmothers, Antoinette, uh you have the same nurturing creativity and the kind of this resilience in the face of challenges uh and hardship, but you're also creating a beautiful next generation. So that's you. And this is my way of saying, this is my way of saying that what we see in these people, long life astronauts that we admire our our own values. This is really my way of asking you what do you use values when it comes to long life And you know, our values are the foundation of our design, whether we design a life or a product or a service or a business, right? Um so I just wanted to connect you with your long life value and this is an exercise that I designed to help build empathy and bridge the gap between one person's life and another person's life. And um Antoinette I'm going to work humility into that as well as my next step. Um and I hope that you you can feel that empathy. Um When we were working with amazon we had a room full of 350 young designers and engineers in their twenties and thirties. And we did this exercise with them to help them have empathy for themselves, their future selves and their end users In the space of 10 minutes you can see it's very efficient And that prepared them to design uh for people who were 65 and older. Alright mom see you um you are the users of your life and you have a long life. Give yourself permission to design that long life. And then you also have end users for whom you can design a beautiful life. Nothing was designed for these people right? Because this time didn't exist before. So it's onto us to design a beautiful life for them and as we do it there's one thing we need to do and that is to co design with them. Co create with them, listening doesn't do it it leads to that pessimistic viewpoint you age and something breaks. But when you're designing with older people you realize life is thrilling. So um I didn't think that this was gonna be my second book but it was so compelling and I thought I'm going to write a book about long life and um it's coming out in december if you're interested. There's like a little Q. R. Code on those pages you can preorder it or gifted. Um And when I was writing this book initially I thought this is a book for older people. And then luckily I caught myself like 23 months into the writing process and I realized I said everything that you're talking about is telling you that these are lessons that we could all learn the sooner the better. And I realized this book is actually the oXo peeler of books. It's thank you for understanding what I mean. It's really um based on research into longer life and people who are older. But the results are for everyone and it's for all of us because after all we're saying different right same difference. Thank you.

A.O. Smith

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