Waste Management, Inc. (WM) Earnings Call Transcript & Summary

Hey, next up, we have John Varkey. John is the Vice President at -- I'm sorry, the Enterprise Digital Services at Waste Management. John, great to see you.

How are you doing today, Hunter?

I'm excellent. Hey, thanks for being on -- coming on the program.

Tell us a little bit about Waste for those folks who don't know about Waste, the size, the scale and the scope that you're working on.

Sure. Yes. So Waste Management is about a $50 billion organization, Fortune 200-ish, and operating in North America with about 50,000 employees. And it's in many dimensions. It's the leader in the environmental services business, whether it's around taking away trash or recycling based here in Houston.

So -- thanks. What -- John, what's changed for you in the last 7 months? What were you able to get done or get pushed through that would -- never would happen without a crisis like the pandemic?

Yes. It -- before the pandemic, we already had a full agenda. So we were doing everything from changing out our ERP platforms to moving data centers to rolling out new technologies on trash trucks. So video cameras on trucks that do all kinds of things, identifying new opportunities for revenue and other capabilities, remote-controlled bulldozers that move trash around in a landfill. So we have things going on across the organization. But once the pandemic hit, we had to, as many people did, pivot quickly. And we had about 20,000 people that were working in offices that needed to go home. Our business is an essential business, so we had to continue -- as you probably saw on your front door, we had to continue picking up trash everywhere. But the folks that were in the offices, we needed to do something with them, and we needed to do it quickly. And so what typically would have taken, as many people have faced, months to do properly, we did it in days and moved these 20,000 people to working from home. And as part of that process, the company became a lot more comfortable with working iteratively in -- as opposed to having a typical what I'd say is a waterfall type of project where let's plan this out and do this instead. We were iterating and sometimes making mistakes along the way, and there was a lot of forgiveness for that. And I mention this to you because this was the impetus for what we did next. So recognizing how quickly the organization and our team, which we call the digital team, responded to that, they said, you know what, if we could focus our energies on something and work in an iterative way, I think we could do some really big things. So in the midst of this crisis, we launched the largest digital transformation effort in our company's history, a multiyear program. And instead of doing the 6 months or a year of planning, we said we had 6 days of planning, and we said, let's go. And we launched this thing, which was focused on the customer and improving the customers' experience and working from the customer and working our way back. And so there was a number of processes inside of our company that were less than optimal that we can address. So we spun up this whole transformation program to improve our company's -- the way that we interact with our customer in the midst of this crisis, which -- that's typically not the thing you do, but the idea being, once we come out of this crisis, then we've distanced ourselves even more from our competitors and come out even stronger.

Well, it sounds like you guys went with a top down, right, big-picture approach. Here's your curt, go to market. And then you reimagined the future customer experience and where you want to take it, right, redefining that open space.

That's exactly right. I think the key word I'll peg out there, Hunter, is top down. Oftentimes, when we're doing our planning, you get a million requests. We'll have hundreds of requests from different places in the organization of things we want to have -- that we want to have done. And all of them are really good things to do. I mean -- so there's not a bad one in the bunch. The challenge is wading through all of that and getting to the ones that have the biggest impact. And instead of starting from the bottom up, what we did was start from the top down. We brought together the leadership team of the company and said, what is it we should focus on? And we created a list of criteria. It needs to be customer focused, it needs to make us agile and so forth and so on. And then we said, so what is it of the things that we could do that would do that? And we put together this program that's around the customer and improving the customer journey. Again -- and there's other things we're already doing, but this was the area that was going to make the biggest impact, the biggest impact to our employees and our employee experience, the biggest impact to our customers and the customer experience and then, ultimately, in our shareholders' experience. And so that's where we focused our energies. Instead of being distracted with all the little things, we focused on what's most important.

A little bit -- John, a little bit about your role in digital services. What is it -- what's the scope of that? And how do you map to the CTO, CISO and CIO?

Yes. So my role is effectively the CIO role. We just don't call it that in our organization. So I've got accountability for all the application development, infrastructure, security, but we just don't have the CIO title in our organization.

That's a great title to have, right? It's really where the action is. You've had a great career. Give us -- help us with some career-defining moments when you knew you were walking into the right situation, the right opportunity. Any tips or clues how you found success in your career?

I mean for me -- and when I was looking at this opportunity, and I've recently joined Waste Management. It's a little over a year ago. For me, I know that I found it when I found a place that is an organization that has a mission and a purpose that I believe in, as well as an organization that has a set of values that align with mine. And Waste Management is a great organization in that it's an employee first, very familial type of a culture. So for me, it's a place that has the values of integrity and a meritocracy and the ways that I like to work. And thirdly, it's a place where technology matters. We have in our organization 4 strategic pillars. They're about the employee, technology, about our -- protecting our assets and growth. And so #2 in that list is around technology. And for me, I don't want to go to some place and run the helpdesk. And nothing wrong with the helpdesk. That's not the job I want to do. I want to do something interesting that's going to move the needle and make an impact, and to go to an organization where technology matters is important. And so I say that because those are the kinds of environments where you believe in what's being done, the values are in alignment. And where technology matters, then the world is your oyster and there's no limit to what you can do.

John, what is the mission of Waste Management?

I mean it's about -- around the mission and the thing that really resonates with me is around sustainability. So you think about a trash company, but we're often at the top of the list of sustainability. We have a sustainability conference that we have annually. We have the largest sustainable sporting event in the world, which is the Phoenix Open golf event there where we produce nothing that goes into a landfill. Even the building, actually we're moving into a new building. That is the most sustainable building, say, in the U.S. It's a Bank of America building in downtown Houston. So it's all about sustainability. And even though you're putting trash in the ground, we do it in a way that's very sustainable. We're capturing the methane from it. And we have power plants in our -- many of our landfills that are powering homes in the neighboring communities from the waste methane that comes from it. So for me, it's about doing things right and doing things right for the environment. And I'm glad to be part of that kind of a mission.

John, thanks for coming on the program today. This is a great interview. I'd love to follow up with an interview for my new book and possibly highlight you in one of our global summits.

Great. Good speaking with you, Hunter, and have a good day.

Great. Take care. Bye now.