COO David Abney's 40-year career with UPS has taught him that "nothing is more important than investing in and developing our people."
In a little more than 100 years, UPS has grown from a message delivery business with two employees and two bicycles based in Seattle to a worldwide company specializing in shipping, freight, logistics, and supply chain management. Today, its 398,300 employees and its fleets of planes and brown trucks operate in 220 countries. Its technology lets customers track and even control the timing and location of deliveries. And its training—in the opinion of Chief Operating Officer David Abney—delivers the knowledge and skill that makes the company competitive and successful.
We spoke with Abney in his office at UPS headquarters in Atlanta.
UPS has set a business standard called synchronized commerce, referring to the fact that the company moves not just goods (4 billion packages and documents in 2011), but also information and funds. How does employee learning and development support the achievement of that standard?
When you think about our scale, you can appreciate the importance of having a discipline in this area. We start at the very beginning of the new product process. When we look at new ways to create value for our customers, we determine right then what training will best support the new products we're launching.
As we create those products, we build training for our employees simultaneously. No new product is developed without incorporating the right amount of training. This gives them the knowledge required to provide value to our customers. In this approach, corporate goals are driving new learning solutions from the start of product development.
Our model is to provide seamless and consistent reliability to our customers, regardless of the mode, weight, or size of the goods we are handling. For example, take a shipment that's tendered in Shanghai, China, and delivered to Colby, Kansas. It travels across our logistics chain through the use of motorcycles, trucks, ocean freighters, or aircraft. It takes a great deal of training and planning to ensure the process happens consistenty when you span more than 220 countries and territories.
As we look to the future and the increasing complexity of the supply chains needed by modern business, our combined top-down and bottom-up approach to alignment with corporate goals becomes even more important. And as we go deeper in supply chains—this is what synchronized commerce is about—it amplifies even more the importance of training because if we make a mistake inside a customer's supply chain, we can stop a production line.
You started your career at UPS nearly 40 years ago as a part-time package loader. What role did training and development opportunities play in your career path?
I started when I was an 18-year-old college freshman. I have been trained and developed throughout my career. That included formal training such as orientation, leadership schools, methods workshops, and people skills. It also included informal training through mentoring—which helped me with both strengths and weaknesses—and constant feedback and recognition.
UPS also provided me with development opportunities through eight relocations and numerous special assignments across the enterprise. My work in domestic small package, logistics, freight forwarding, international, and UPS Airlines gave me the foundation for my position as COO.
How did those experiences shape your expectations of the learning function as you took on more management and leadership responsibility?
I learned that nothing is more important than investing in and developing our people. We have no other choice. We have to satisfy our customers. We have to satisfy our investors. The way we do that is by investing in our people and they take care of the results.
Are there indicators you look at to know if you are doing the right amount or right type of development to prepare people to take on new assignments and responsibilities?
The most obvious sign is if you have an important job and you have to struggle to think who is going to move into it. We're taking care of that today so that in five or 10 years from now we will be far ahead of the curve.
What is your role in learning and development today?
Effective training and leadership development are a means of achieving our long-term strategic objectives, and I'm involved through my work with the Management Development Committee. It consists of five of the 10 most senior executives at UPS and serves as the link between corporate strategy and talent, performance, and learning strategies.
The members are involved in the oversight of training, particularly the leadership competencies, to ensure it aligns with our business strategy. Learning is integrated into our business at all levels, from onboarding to the most senior leadership.
You've given speeches about the importance of a supportive environment in fostering innovation. Tell us how that works at UPS. And, how do you know that UPS is being innovative?
First, you should understand that innovation is truly part of our company's DNA. Despite its size and market position, UPS is not afraid of tearing up a business plan, transforming itself, and starting over. We started as a two-person messenger company in Seattle in 1907, with two bicycles and two messengers. We kept adding bicycles and messengers, and then something very tragic happened: the telephone, which took away the need for messengers. So we began delivering packages for department stores.
Decades later, UPS became a common carrier, offering its services to any company or consumer. Then it expanded outside the United States, established its own airline, went public, and built the capabilities needed for today's push into logistics. We've grown from a messenger company to an airline, to an international company in 220 countries managing our customers' supply chains. So UPS embraces innovation.
Now internally, we've learned over the years that it really does take multiple tools to create a supportive environment. I'll highlight just a few for you. First, you can't under-emphasize the importance of rigorous strategic planning. We believe the most important job of our management committee is to look out five, 10, and 15 years. We have a formal process for this and also a formal team of people dedicated to strategic planning.
The next tool is technology. We've invested about $1 billion a year in technology during the last 15 to 20 years and it has given us a certain competitive advantage. By using technology to achieve total visibility into our operation—to track and control the flow of packages through our network—we can dream and build all manners of new services. The latest example is what we call UPS My Choice. For the first time in our industry, consumers who are receiving packages at their homes can control the timing and location of delivery. That's a game-changer.
The third tool is an attitude that says, "We're not afraid to experiment, but we'll control the size of the bet." In other words, it's OK to "fail small" if that leads to better understanding, new ideas, and more experimentation.
And finally, another tool is what we call the UPS Strategic Enterprise Fund (SEF). This is similar to a venture capital fund, in that we're investing in small start-up companies. But we're investing to educate ourselves and stay on top of new trends rather than to make money on the investment. We use the SEF as a tool to stay ahead of the latest service and technology developments.
UPS invests about $300 million a year on training programs to help employees further their careers within the company. What is the strategic value of that investment, and how do you know that the investment in learning is working?
We have a long history of promotion from within. Our culture is to develop our people into leaders who can eventually run a multibillion-dollar company. We are proud to say that eight out of 10 of our management committee members have spent their entire careers at UPS. Seven of those eight began as part-time package handlers while in college and one started as a seasonal driver. That says a lot about the investment we make in our people and the development they receive during their careers.
Our training programs, and specifically our leadership and talent development programs, are designed to deliver the right training to each person at the right time in his or her career. We require each full-time management person to complete a yearly quality performance review (QPR) that is tied to nine leadership competencies. We are able to quantify their progress, with the use of QPR data and other talent measurements, and then to shift focus and provide opportunities early in a candidate's career.
We also conduct an annual employee opinion survey to our workforce. Last year 87 percent of our employees completed the survey—that's more than 325,000 people. We were pleased to see a 10-point increase in positive responses to the career development questions on the survey—quite an accomplishment to move that much in one year. Employee satisfaction impacts our business and its future success. Statistical analysis tells us that the higher the career development index, the better the business results.
This positive direction does not happen overnight, and it will be ever-changing as we continue our journey into the future of learning at UPS. As our founder, Jim Casey, said in 1958: "The finding and training of people who might go higher in our management organization is a duty of every one of us. We won't find such people unless we look for them and give them a chance."
We believe UPS demonstrates how a widely dispersed, multidimensional organization can support and deliver learning that meets and exceeds organizational and individual goals. We encourage new ideas and embrace innovation when it comes to ensuring that our people are properly trained to meet our customer promise and deliver on time, every time.
$300 million a year is a large investment in training, but we realize that we cannot afford not to invest in these programs. We know that we must continue to provide best-in-class training to ensure our people operate safely, deliver solutions to our customers, and provide oustanding service.
As a company that turns 105 years old in 2012, UPS has been through 21 recessions plus the Great Depression and the Great Recession. In the tough times of the past few years, how did UPS change the amount and type of investment in employee training?
During the last few years and tough economic times, we were able to adjust our resources, including people, facilities, and vehicles, to meet the market needs. During the most recent economic change, we took a look at our operating structure and made the bold move in 2010 to transform our business strategy to refocus our approach to profitability. It was a rounded approach that included defined strategy, tactics, measurement, and rewards.
UPS is emerging from the global recession with strong growth momentum, and we are also in a transition time for learning. We made the decision to discontinue our broad, sweeping, traditional classroom, instructor-led training and move to a more blended approach. We still use instructor-led classrooms, but also utilize virtual instructor-led training, web-based e-learning, and on-the-job training.
We've always been known to be constructively dissatisfied, and we continuously look for new ways to do training better.
We've heard some business leaders say that as economic conditions get tougher they will overinvest in training to help them recover more quickly when the economic cycle changes. What's your view?
I do believe that situations can drive the need for change. And when you realize the need for change, especially when you're as large as we are, then one way to change is to train and develop people for that. So from that angle I agree completely. And we know we have to invest in people early on to get them ready to assume bigger levels of responsibility. If not, we pay the price further down the road.
You have to look at training as an investment because if you look at it as an expense, then the first thing you want to do is see how much you could cut, right? However, from an investment standpoint, if we didn't think we were getting the best return, we would make adjustments.
UPS makes a particular effort to recruit women and develop their leadership skills. Why this focus?Because it's the right thing to do and it makes sense for the business. UPS's workforce is multicultural, multidimensional, and reflective of the communities where we live and work throughout the world.
Our diversity strategy is driven by talent management to recruit and retain top talent. We provide visible career development to build and maintain a strong pipeline of leadership. The skills level of employees worldwide is growing at a fantastic pace. For example, both China and India are outpacing the United States in engineering graduates.
It used to be common for U.S. companies doing business in other parts of the world to import their management team from the United States. Today, those managers are more likely to be hired domestically. This creates the challenge of learning how to recognize, grow, and retain talent in different cultural settings. It is a daunting task for a company like UPS that's doing business around the world.
Several years ago we began the Women's Leadership Development Program to support and develop UPS women. It is global in scope and provides networking and business growth opportunities. The program has recently been expanded to other affinity groups and has been renamed Business Resource Groups.
With the widespread availability of social tools, individuals are able to learn from each other in unprecedented ways. How is social learning affecting UPS today, and where do you see it heading?
Social media provides new ways of reaching target audiences directly, without going through the filter of the news media, for example. So on the external side, we're already very active in the social media space with a presence on Facebook, Twitter, and YouTube, among other places. We also have a corporate blog and are constantly exploring the use of social media to reach potential customers.
On the employee side, we have nearly 400,000 employees worldwide and we have a training campaign to educate them about the responsible use of social media. It is a powerful tool and when used wisely, can have a vast reach with reasonable cost. So yes, we are exploring other ways of using social media to communicate with our employees and to help them learn.
We started, of course, with an intranet site just for UPS employees and now that's the way we access a lot of the computer tools needed to run the business. But we are encouraging our employees to follow the company on its Twitter feed, and we're also exploring greater use of discussion boards. And we're working to develop corporate tools that deliver the same type of user experience as our employees may be used to at home. It's an important communications frontier.
It's now possible to ship with UPS using a number of mobile devices, from smartphones to tablets. What role does mobile technology play in building the knowledge and capability of UPS employees?
We have been using mobile devices for more than 20 years with our drivers. We call it the DIAD, or Delivery Information Acquisition Device. That's the handheld computer used by our drivers to link to our global network of tracking information, which customers can also view online.
The system facilitates on average 32.1 million online tracking requests daily. It also enables UPS operators to forward customer requests, including changes to package delivery instructions, while the UPS driver is on the road. We also regularly transmit training materials to the handheld device to reach 90,000 drivers simultaneously.
We have learned a lot in our mobile device usage. The DIAD was designed to withstand the rigorous conditions in which our drivers work, including temperature changes, rain, and snow. Just recently, we began to deploy the fifth version of DIAD, which is small and light compared to earlier versions.
We also use tablet technology in our package, hub, and air operations to increase productivity and efficiency. We are implementing a new dispatch program we call ORION that utilizes a tablet device.
It allows us to take specific route and delivery information held only in each driver's head and put it into integrated databases that are used to run the operation in real time. Using the tablet, which is tied to GPS technology, a supervisor can ride with a driver and make real-time adjustments to maps and routing to better serve our customers. It also aids the supervisor when doing driver safety training, and provides electronic documentation of the training event.
We currently are testing other tablet technology in Worldport, our global air hub in Louisville, Kentucky. It is being tested by a group of part-time supervisors to monitor aircraft loads, [which is] allowing them to make staffing decisions in real time.
Using the tablet also saves time. Instead of going to a workstation to input information, supervisors can just go from container to container or plane to plane and update information. The tablet application graphically displays the containers destined for each aircraft, [and] determines the volume or capacity of each container and how much volume is projected for the space allowed. The tablet is also being used to track training events and timecard documentation, resulting in reduced paperwork and workload.
What do you expect from your CLO, Anne Schwartz?
Anne has the ability to put vision into practice. She is a champion of change and has led her team in completely transforming learning at UPS. Anne and her partners bring quality and direction to our enterprise-wide leadership and talent development. They have the ability to analyze training needs, then design and deliver to our global workforce. With Anne's experience and leadership skills, the learning team has been able to offer a more flexible and customized approach to individual development.
I support Anne and her team, and I know they will bring new and innovative learning practices to our people as we continue to grow and transform our business.