Wednesday, June 29, 2011

Lunch with David Steiner, Waste Management CEO

From left: Chris, Daniel, Nimisha, David Steiner, Meredith, Stephanie, and me

Last Monday I was privileged to have the honor of dining with David Steiner, CEO of Waste Management. The Strategy and Organic Growth MBA interns met David in the "Parlor" room, the fancy-pants corner suite in corporate headquarters connecting the CEO's office with the Board of Directors' conference room. Swank digs indeed! Over a catered lunch from Lenny's Sub Shop, the local sandwich place in the basement of First City Tower, we picked David's mind to learn his thoughts about the future trajectory of Waste Management's business.

First, though, David was the one asking us the questions, an excellent strategy for buying himself time to eat his sub. He wanted to know how we thought about his company's branding, going as far as to suggest that the name "Waste Management" may not accurately represent its business. For a company looking to ride at the front of the sustainability train, Steiner may have a point. David believes that in 10-20 years a big transformation will have happened in the waste industry, that we will actually be mining landfills for raw materials. He thinks that Waste Management could eventually pay consumers for their garbage if investments in technologies pan out that can convert wastes to chemicals and fuels. David wants to put his competition out of business through his investments in these new innovations.

David told us his story about becoming CEO, which was somewhat unusual as he entered neither as a "company lifer" nor as a "celebrity boss". Rather, Steiner entered Waste Management in 2000 as deputy general counsel, a time when WM was reeling in the wake of an accounting fraud scandal and shareholder lawsuits. These lawsuits gave David visibility with the Board of Directors, which relied on his opinions to help dig WM out of its problems. Subsequently, Steiner was promoted to Chief Financial Officer in 2003 despite repeatedly being told by Board members during the interview process that he was "unqualified". David actually had a speech prepared to the Board for if he didn't receive the position, and was almost completely unprepared for when he did! A year later he became the most visible person in the company.

David shared with us his advice for aspiring CEO's of the future. Though talent is important, he said, timing also plays a crucial role in moving ahead with your career. Therefore, you must put yourself in situations where you are given visibility and asked for your opinion by superiors so that you will be considered for promotion when opportunity strikes. If you're not in such a position in your career, he said, then it's time to find another one.

Also, David believes that one can broadly categorize those in corporate America into two types: those who do as they are told, and those who ask "Why?". David firmly believes that businesspeople should aspire for careers where they can ask this latter question.

Finally we talked about the challenges of being CEO, as one would have little visibility into the role until one is actually in it (or very close). CEO is a 24/7 job, says Steiner. A CEO needs to avoid the "Godfather" dilemma -- the virtues of a corporate structure (established decision-makers, ability to manage distant operations, steady cash flows) are constantly met by roadblocks to information by lieutenants who don't tell the CEO everything. In fact, the CEO can't possibly know everything about the business; he just doesn't have enough time to research for himself. Therefore, Steiner said, it's vital as CEO get people you trust around you.

For Waste Management specifically, Steiner is challenged by getting people to believe the vision of his business's transformation from a company which hauls trash to a landfill to one which gives waste materials new life. Shifting the course of the "battleship", as David likes to refer to his company, isn't easy.  Steiner talks frequently with other CEOs who have managed transformations and is good friends with the CEO of Best Buy, an American electronics mega-retailer which managed to change itself from a high-volume outlet to a premium high-service store. Because of his focus on the future, Steiner doesn't like managing quarterly earnings, and speaks primarily to the 40% of investors he believes will stay with the company for the long-term.

Overall, I came away very impressed with David and his leadership of Waste Management. David is highly personable and could tell stories about the business for hours. I think storytelling ability is a trait which associates itself with all of the CEOs I have listened to since beginning at Darden. Also, I find that CEOs possess incredible energy for their grueling jobs. CEO's aren't superhuman -- they put on their pants one leg at a time just like the rest of us -- but they do all seem to be powered by nuclear energy. With endless meetings and pieces of information flying around these individuals are able to stay engaged and maintain their roles as face of the company. I don't quite know how they pull it off, but I realize that if I don't find this zest for a career that I will never rise to the top.

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