There are few chief information officers with as stellar a reputation as Rob Carter’s. He has played an integral role in FedEx’s sophisticated logistics and analytics systems, which have been sources of efficiency for the company and its customers, and have fueled tremendous revenue growth at the same time. It is not surprising that Carter has been asked to sit on the boards of multiple companies including Saks Incorporated and First Horizon National Corporation. He has added tremendous value to each board, but as he notes herein, he has also gained a lot for himself and for his company in the process. It has afforded him tremendous insights into two industries of critical importance to FedEx (retail and financial services), and it has continued to hone his business skills.
It is that last point that he reiterated multiple times in my conversation with him: IT leaders need to think in terms of business value, and need to communicate in a similar fashion to other executives across the company. These are pre-requisites to be asked to lead other functions, as Rob has done, but they are also pre-requisites for CIOs with the ambition to join the boards of other companies as well.
(To listen to an unabridged audio version of my interview with Rob, please visit this link. This is the second article in the Board-Level CIO series. To see a summary of the series, please click this link. To read future articles in the series, including interviews with Board-Level CIOs from Intel, Texas Instruments, Cardinal Health, Lincoln Trust, and BDP International, please click the “Follow” link above.)
Peter High: Rob, you were instrumental in transitioning FedEx from a package delivery company to an incredibly sophisticated logistics company. Can you provide an overview of that transition to being a company for which technology is so strategic?
Rob Carter: FedEx is a special place when it comes to applied technology. Our chairman and founder, Fred Smith, said all the way back in 1978 that the information about the package was as important as the package itself. This established a culture that made information central to our mission in order to strategically scale a business.
Now it is the backbone of how we operate the company, from delivering ten million plus packages each day, to how we interface with our customers; it is all technology based. We have one group of people who do an incredible job for our customers, but the tools that they use to make sure things are running smoothly and that nothing is overlooked are technologies aligned with the pulse of the business.
Peter High: You have held a number of roles in addition to being CIO of FedEx, including that of co-CEO of FedEx Corporate Services. Can you elaborate on the evolution of your responsibilities and why you and the company determined that having the single role of CIO was best?
Carter: There was a time period when the shared services at FedEx were taking on an increasingly important role. My experience happened to align to the needs of that division, and we developed a solid team to do run it.
There was a long period of time when I ran customer service and I ran revenue operations, and I was the chairman of Kinko’s, now FedEx Office. I got to the point where I felt like it was more important in this business, and that the information technology was just so important, that I went to my co-CEO business partner and said that you ought to focus on the business side, and I will be your partner from the technology side, because virtually nothing here happens without technology’s support, and our roles became much clearer.
I add the most value to this business by helping architect the information solutions. For the last four years I have been solely focused on IT. I am a member of the strategic management at the company, and I report into one of the greatest business entrepreneurs of our time, Fred Smith.
I am day-to-day integrated with the business and my business partners, but my focus, where I apply my time and energy, is in delivering technology for our customers and our business.
High: You are on the boards of Saks and of First Horizon National Corporation. Could you talk a little bit more about your initial foray into board membership, and what needs these organizations had that you helped fill?
Carter: Board work is a wonderful immersion into different parts of the business, and as a business executive, my company has supported me in that. There are many companies that are ambivalent or even negative on board seats for key executives. Retail and financial services are two critical sectors for us, so my experience on the boards of the companies you mentioned help me do my job better for FedEx.
Those boards had the foresight to recognize that information technology is something that the board has to pay attention to. They recognized the importance of e-commerce, the explosion of new business models around e-commerce, and the presence of IT risk, such as compliance or cyber risk.
I think that companies have gotten a lot from having someone on the board who is an information technology expert and can ask a different set of questions and raise different topics than they might given the differences in our experiences. As a director, you don’t manage a company—you advise and work with the management team, and we each contribute according to our areas of expertise.
It is also important to note that at FedEx, we have a number of IT experts who sit on our board and always have, and even have formal committees dedicated to IT and its implementation. Having learned from those executives has helped me in my duties to other boards.
High: Is the lack of CIO’s sitting on a board more of a reflection of something lacking among CIOs (experience, skills, knowledge), or a lack of creative thinking on the parts of the executives of companies?
Carter: It is probably a bit of both. The critical construct that I find is most often missing from IT executives is that real passion to be a business partner which might manifest itself in using more of a shared language with the rest of the company, common goals with the rest of the company, and a shared desire to make good things happen for the business not just developing technology for technology’s sake.
I have always focused on speaking carefully to my business partners in ways that would engage them in the process of technology delivery and technology implementation. I don’t use jargon, or deeply technical terms. I talk about business outcomes and value to our business. We need to communicate in a way where our colleagues outside of IT are equally motivated to deliver the capabilities that we are working on.
That is what makes a good director as well—someone who can speak the language of the business as well as translate the dialogue of the technology in ways that keep it relevant and do not alienate people.
High: As you reflect on your own experiences, and all that has led you to be a board-level CIO and an IT executive, is there wisdom that you might impart upon those who might wish to emulate your experience?
Carter: I’m very content, but I’m also not complacent, and those things can look the same sometimes. You always have to strive to engage and learn new things. That’s why being a director is fun for me, but it is also why I have gotten deeply involved in a variety of functions at FedEx.
We have an optional program here at FedEx where you can adopt a sales territory, so I adopted the Golden Gate territory out on the West Coast. This allows me to tap into customers in that region, and given the sophisticated technology that is produced in that region, again, it is an opportunity to learn as much as it is an opportunity to share the exciting things we are doing here at FedEx.
I’ve seen my peers completely stiff arm the “vendor world,” and to be honest with you, the vendor world, the people building tools that help to drive technology forward, are really important relationships to have. They can be great sources of insights that can lead to innovations.
High: What excites you in terms of the future of technology? What are certain trends that you are keen to leverage three to four years in advance?
Carter: I have a view of the world that viable networks always expand. At FedEx, it is the tale of two networks. We not only have the huge physical network, but we have a digital overlay that provides evidence and information about what’s going on in that physical world at a nearly real-time basis. The most exciting things going on in the world have to do with that exact phenomenon. Being able to understand patterns, and make decisions quickly to seize opportunities as quickly as possible – that is a source of tremendous value for our company.
I get very excited about the potential activated in a digital world. It’s a really fascinating time to apply technology, in an incredibly hyper-connected capability that has come our way.
High: Given these tremendous, new opportunities, what new skills are necessary within the IT department in order to ensure that value is in fact seized?
Carter: We have typically organized IT along verticals, but we need to think more horizontally across our businesses. The new skill set is much more of an assembly skills set than a giant vertical build, and that is a paradigm shift for many IT professionals. It is critical to snap into a world that completely accepts and endorses this “tap-in” phenomenon of going and getting the resources and capabilities you need, and assembling them into unique ways. That is a horizontal piece of work, not a vertical piece of work.
Peter High is the President of Metis Strategy, a business and IT advisory firm. He is also the author of World Class IT: Why Businesses Succeed When IT Triumphs, and the moderator of the Forum on World Class IT podcast series. To read his series on CIO-pluses, visit this link. To read his series profiling CIOs who have risen beyond that role, visit this link. Follow him on Twitter @WorldClassIT.