UPS Chief Transformation & Strategy Officer, Scott Price

UPS CTSO, Scott Price

Very excited to have interviewed UPS’ Chief Transformation & Strategy Officer, Scott Price, and hear his story with my classmates. Thank you Scott for your time!

This discussion reaffirmed for me the exciting things happening in transportation as enabled by cloud technology, autonomy, drones, etc. Speaking with Scott illustrated how now is an exciting time to be at UPS as it transforms itself in this evolving, global industry.

Prior to UPS, Scott had an extensive international career in leadership roles for Coca-Cola, DHL, and Walmart in Asia-Pacific and Europe. We spoke about a wide range of topics covering: Scott’s global experience, transformation at UPS, innovation in logistics/transportation, etc.

Scott’s International Experience

Can you share with us the lessons learned while working outside of the USA?

My time outside of the United States taught me two life lessons.

1. A sense of adaptability and skill to pivot along with an agility to go with that.
2. Greater appreciation for culture of diversity and inclusion.

I was in three different industries: consumer goods, logistics, and retail. In international environments, it can be easy to mistake english communication for intelligence — first mistake expats make. You learn that the squeaky wheel gets the oil. As such I created environments where I pulled from people with english as a second language or were hesitant to speak. Doing so made for better teams. The ability to speak quickly and interject, which is typically common in US-based firms, may not allow for an inclusive culture. Dogs don’t meow for a reason, so you need to have an environment where cats can speak.

How should people think about moving from one company to the next during their career?

It is a combination of construct and opportunistic. Regarding construct, your resume is your most powerful asset. As you grow in your career, you need to be able to protect it and make sure it’s clear what your expertise is. Although it’s nice to gain experiences in multiple companies, it’s important to demonstrate your ability to integrate into a team, create value, and get promoted into leadership in order to show progress.

It’s not advisable to switch companies unless it’s to escape a tough situation (one I’ve been lucky to have not found myself in) or for career progression.

When you move into a new role and company, what are the three questions you like to answer?

1. How do you influence and get people to listen? This can vary across corporations as well as countries.
2. How is conflict resolved? Different people resolve conflict differently. While leading Walmart’s EMEA team, I created a conflict resolution process to make sure everyone in my team felt heard.
3. How do you create change? This one is table stakes as you need to be able to change organizations in a culturally relevant way in order to have a sustainable career. Every employee needs to recognize that they need to justify why they are there by creating change and adding value.

What region in the world would you recommend MBA grads look into?

Work and lead outside your home country. Wherever it is, make sure you get to the place that’s the fastest growing so that you can learn the most and be given the most responsibility.

Experience as Chief Strategy and Transformation Officer at UPS

What does it mean to be a Transformation Officer?

My organization currently consists of corporate strategy, transformation office, back office, M&A, strategic venture fund, and advanced tech group including drones, robotics, autonomy. The pace of change around the world is disrupting everyone which calls for the transformation office.

Transformation is just the mechanism in which you support the pivot in your corporate strategy to apply costs from one area in your business to support growth in another area. Right now we are aiming to allocate billions of dollars for transformation.

Before accepting the role, I had to confirm three things

1. Commitment from Chairman, CEO, and Board to transformation agenda because you need the support of the leadership.
2. Balanced hiring. I’ve been able to hire 50–50 from outside and inside.
3. Control the accounting. Need the ability to manage the scorecard and P&L in order to maintain focus.

In this global environment, if you don’t transform as a corporation, you will die. Market, consumer, and technology changes are speeding up. You need to be clear that you have a competitive proposition, can’t let others be cheaper than you, and stay on top of investments in technology. Many companies sit on tech debt, and it’s hard to compete with nimble startups leveraging cloud based technology unless you have adaptability and agility as a skill set.

UPS is currently undergoing a major transition as we change CEOs. Over the last two years, I’ve gone from being the 12th most tenured executive to being the 4th. UPS is changing very quickly as our brand is strong and hiring bright people with ambition. For example, we are consolidating disparate solutions into one platform (i.e. Workday) so that we can invest the savings into growth areas and our employees.

On innovations in transportation and logistics

UPS has a drone subsidiary (Flight Forward), invested in self driving trucks (TuSimple) and electric vehicles (Arrival), and partners for autonomous delivery (Waymo). How does UPS decide to build, invest, or partner for new innovations?

I am skeptical of building in areas where you don’t have a distinct competitive advantage. What UPS owns as competitive advantage is brand awareness, service reputation, reputation among package drivers for higher customer orientation, and most importantly growth. Unless technology can dramatically improve the customer experience or reduce costs, I would say no go on build, but it’s important to understand how the tech will impact our existing model. This is one reason why we partner and invest in new technologies.

Is there a technology that you believe could disrupt UPS?

With the recent pandemic, we saw a surge in volume due to B2C residential shipments. Although it played havoc with the network, we still had movement. One trend that could potentially replace “the movement of goods” is 3D printing as it provides on-demand sizing on-site.

Future of the supply chain after COVID-19

How do you see the future of the global supply chain being impacted by coronavirus?

I recently gave up chairmanship of the National Center for Asia-Pacific Economic Cooperation. That experience gave me visibility to an 18 month long pressure on intercontinental trade as countries move to interregional trade. Coronavirus created a hastened business case for near-shoring — wage arbitrage is losing its allure. If you spent a lot of money creating a factory in a low-wage area, you will need to balance between heart and head. Low capital intensity products will be near-sourced sooner, either in the USA or nearby Americas.

What are your views on automation as it may be a double-edged sword that could potentially provide economic opportunity as well as social disruption?

I am optimistic on the benefits of automation, and don’t think the claims of job elimination are correct. There hasn’t been a major automation advancement in history that has caused mass unemployment. Six months ago (pre-COVID), it was difficult for companies to hire. From my perspective, automation and technology will create jobs. Drones will need 150k to 200k jobs for trained operators, maintenance, and air traffic control. 3D printing will create software engineering jobs that aren’t currently filled along with machine manufacturing capability. I believe automation won’t eliminate jobs as much as change the scope and pool of jobs.

I will say that tech is highlighting a gap between haves and have-nots which is a problem. As automation removes specialized jobs, we are seeing social pressures. Earning capability will be an issue going forward.

Final Thoughts

How do you give back to Darden?

I feel that I very much owe a lot to Darden. Darden was a pivot point for me. I do what I can to give back via time and treasure. I’m on the board of trustees and governance. I believe tertiary education is going to have problems. I’m open to mentoring others and make sure to set the tone to pay it forward.

Advice for MBA students graduating this year?

1. I know it’s stressful, but everyone (MBA graduates) needs to relax. Things will pass and you must understand that you can’t expect a 30 year career of consistent growth. Use this time to build resiliency that will help you going forward in your career.
2. It’s hard to get an “A” grade at both home and work. Be mindful that your career won’t be paused if you missed a meeting to attend a family event.
3. Be really clear on what your resume says about yourself. The whole concept of career development has changed. You are responsible for your own resume and learning going forward. Need to stay on top of technology. For example, today you should be able to explain as a layman: How does the cloud work? How does blockchain work? What is an algorithm?

Open Q&A with Students

What are your thoughts on last-mile delivery, and its impact on sustainability?

We are working hard to reduce the weight of footprint, but the shoe print is getting bigger — challenge of last mile work. Need to balance convenience and on-demand mindset with the most sustainable delivery method. Especially residential — 54m packages delivered in the USA everyday. In 2028 it will be 122m where 80% of growth will be ecommerce residential. Residential is inefficient as 1.2 boxes per stop whereas others are 4.4 boxes per stop in business. We want to reduce the pace of delivery to increase density. Next day mindset is great to be competitive, but not great for sustainability.

One solution is leveraging the supply chain upstream, where we can vertically integrate. We can help multiple items deliver on the same day or pickup in the CVS store.

Electric bikes are already in use by UPS. Europe is ahead of the USA. We need to be a level playing zone — e-bikes are great for no drive zones. For example we can park a removable container next to a no drive zone and e-bike packages from there. Hard to do in Manhattan with large bikes. Will have to be a regulator driven approach so that the ecosystem supports it.

What are your thoughts on urbanization?

Urbanization as a megatrend is not going anywhere. We need to understand how we manage demand. We had to hire 100k people to handle the four weeks of delivery peaks during the holidays. We can’t afford to receive and send parcels on 5th avenue in New York City. We instead bought a plot of land to handle it, but it creates travel time and congestion. One solution is to leverage drone technology to deliver a package to a city node that can then be delivered home via an e-bike.

What are your thoughts on autonomy?

Excited about it as shown by our investment in TuSimple and partnership with Waymo. We are already doing platooning and full autonomy. There are huge gaps in the US given the truck driver shortage. Right now autonomy is being done in pilots, but I expect there to be an acceleration in the coming years.