 So welcome everyone. Welcome to this future tense conversation on disruptive innovation and specifically on how large and complex organizations adapt to change. I'm Ann Marie Slaughter. I'm the CEO of New America and I will introduce our panelists or really our conversationalists shortly. I do want to just tell you that future tense is itself a innovative collaboration between Arizona State University ASU slate and New America, and it explores the impact of technology on society. And so we in fact this this collaboration has brought all sorts of interesting and innovative programming. We will be talking for about 40 minutes and then I will turn it over to all of you and we will take your questions. So we have two fabulous people to talk about innovation in large and complex organizations, universities and railroads, which I think it's fair to say when people say innovation, those are not the images that jump to mind. I say that having taught in universities for 20 years, and I am also an Amtrak rider and so innovation is pretty much the last thing I think of when I think of railroads. But really that's the point of today's conversation because particularly in the United States but I think globally, when you talk about disruptive innovation, people think Silicon Valley or Silicon Alley or Silicon something. People think about new technologies, information technologies, biotech. They don't think about what it takes to disrupt, and the disruption part is as important as the innovation part to disrupt and to innovate in really big organizations and yet without that, we are not actually going to be an innovative society. Our desired discussants are Dr. Michael pro who is he became the 16th president of ASU in July 2002 almost 20 years there, Michael, and he has revolutionize ASU. There are no adjectives to describe the full impact of the change that he has wrought, and he'll talk about that so I won't steal his thunder. Before that he was executive vice president at Columbia University and he was a professor of science and technology policy in the school of public and international affairs and that's important because Michael has studied innovation as a scholar, as well as as an educational And our second discussant is Lance M fritz, who is the chairman, president and CEO of Union Pacific Railroad. So note, we are not talking about passenger train. I can't wait to hear more about about this kind of innovation for Union Pacific. So he also joined Union Pacific in the year 2000. I think that's interesting to be just right off the bat. It takes a long time to innovate in these organizations. So these are both leaders who've been there almost to two decades. And he was COO executive VP of operations and VP of labor operations. Before joining Union Pacific he worked for Fiskars Inc, Cooper, Cooper Industries and General Electric, and both he and Michael serve on all sorts of boards, and have had lots of outside opportunities, but rather than going through their CVs. I want to start by asking both of you, just to start off, talk about the organization you found when you came in and give us a little just set the scene for us you know and Lance I'll start with you. What was Union Pacific like in 2000, what did you encounter and what did you immediately think of in terms of of needing innovation. Yes, thank you very much, Ann Marie and thank you for having me here today. Let's go back to 2000 one of the things that's striking and unique about Union Pacific is our, our age, and what we mean to the United States economy and. So when I landed at UP, it was a company that was about 140 years old at the time. And into existence by President Abraham Lincoln in 1862 part of the Pacific Railway Act. And we were extremely proud of what we did for the US economy, you know we, we operate in 23 Western states we serve about 7300 communities. And then back then, we were talking about how we build America, we connect the communities that we serve the businesses that we serve to each other and to the world. And we play a pretty vital role, railroads in the United States ship about 40% of the freight between cities, and we account for less than 1% of the greenhouse gas emissions. But all together there was a couple of other things though that that needed a little changing one was, we are very insular, and as a company at that time. We did a lot of promote from within we did a lot of invent here did a lot of our own writing of software of applications. So a lot of our thinking started inside the railroad, and looked outward. And of course that's not the best way to, to create an innovation engine. So that's, that was the lay of the land I found a team that was just outstanding in terms of their pride working together, looking for ways to be better, but also one that that was inwardly focused. We have a lot of born locally in terms of the ideation and knew that we played a big role, but we could play an even bigger role as we improved. And how many employees were there with about 50,000 employees when I first joined the company. But that's, that's my definition of big organization to do setting the seat. Alright, so Michael as you definitely does not go back to 1862. So we get here starting from a different place but you also I'd like you just to describe the ASU you found and I should have said in introducing you, you are the one who transformed ASU into the new American university and I say that obviously a CEO of America because that was really part of our original partnership was that you had a new vision of the American university and one that that is very consistent with our desire for kind of big innovation in the country as a whole. So, tell us what it was like, you're on mute. Thanks for the chance to be here I guess where I'll start was, you know, like Union Pacific we're, we are an older institution we were a territorial teachers Academy for the territory of Arizona, established in 1885 and then because of politics and all kinds of things in Arizona we didn't become a university until roughly 1960, but only by public plebiscite, meaning it was overruling the legislature the governor and the Board of Regents by public vote the university was named a university name only in 1960. Some 42 years later and the model that they had worked for those 42 years to implement between 1960 and 2002 was the classic public agency model for university public bureaucracy model very fixed in the public university model, very much buying into the sociology of the day very much buying into the structure. We had this separation of research elite universities from egalitarian accessible universities and so 2002 found us with a low graduation rate insufficient diversity, basically attempting to implement the old archaic 19th and 20th century model which long ago has faded I mean it's worth noting that, you know, the more than half the people that go to college in the United States never graduate with any kind of degree, more than half the people that have used the three quarters of a trillion dollars for Pell grants have no degrees whatsoever, because we are our model had failed and it was clear to me before coming that the model had failed and we needed a new model we'll talk a little bit about that. The structure that was inherited here operated as a public bureaucracy, my predecessor was very successful at optimizing that old model, but the old model itself was completely inadequate to the assignment, and needed to be completely reconstructed particularly at this interface of public bureaucracy versus what we now call public enterprise. And so we took the logic of how do you build enterprises that serve the public, but do not have to operate as a bureaucracy or be only paid for by taxpayers that can be more entrepreneurial, more innovative, more adaptive faster quicker, all those things and so all those things were missing. There was no speed. There was no community centric culture the culture was faculty centric so we had to focus on I'll end here. Culture change. We had to focus on structural change we had to find a way to adopt and use technology which was an anachronistic to the evolution of the institution. And then I think really most importantly we had to go into design mode. So in universities, everyone thinks that the design is isomorphic replication of what someone else has done before you. So, all ASU has to do is to try to be UC Berkeley, or all all your school Princeton has to do is strive someday to be as great as Harvard you know whatever that whatever the, the object of adoration is or the object of replication. And that's a terrible, terrible, terrible model so we had to first blow all of that up. So we've got, we've got lots of kind of ingredients for disruptive change already and then Michael just emphasize your point about optimizing the existing model, which is it yes there that that is stewardship it can be innovation but it's going to be small innovation, and actually disrupting and creating a new model and what you have to do so Lance let me come back to you I'm thinking, you know, both of you had a fixed plant I mean you have rails and they go places and presumably you can't just blow them up and run new rails. So you have some fixed elements, you've also got 50,000 people that's a lot of people and you can't just kind of go in, even if you, if you could or you don't want to, you know, develop a new workforce it would take a long time so how do you think about a new model, in the parameters of what is fixed and how in particular, do you, do you change that culture, because as Michael said and you've said that that culture of, you said before it was, you know, inside out how do you open it up to constantly thinking and changing. Yeah, well, Michael, when Michael was speaking about transformation and getting into design mode and not optimizing the old model but finding your model, the one that works for you for the next whatever period of time. Yeah, that that's absolutely spoke to me we've just gone through that iteratively. And so for a railroad. The fundamental business question is a gigantic linear program, right you've got for Union Pacific, 8 million or 9 million cars that want to go from where they are to where the customer wants them, because something moved there. And you need to do that by, you know, optimizing on your resources, making sure you hit a schedule that works for your customers, utilizing the existing footprint to the maximum extent possible. So what we had been doing up till about a handful of years ago was maximizing the old model, which, which was a lot of discrete products within that one big network was very complex to execute very hard for our field leadership team to do repeatedly well. And as a result, our service product was pretty good. We had beautiful white glove service to the customer facing the customer, but we weren't always doing what we said we were going to do for the customer. And we blew that model up and iterated a new design that worked for us and the core principles of doing that were one we had to streamline the organization and push the decision making. Down deeper to where the work in the expertise resided to you had to both put the accountability there but also enable it. So when we created the new design instead of having two dozen really smart people in the headquarters building build a network model. We asked 100 hundreds of people from the field to come in. And with the express need, you're going to design the transportation model. We've got the experts that can help you figure it out. But your job is, don't touch cars, unless you had to move them as deep into the network as you possibly can. Make sure it's a plan that you can execute on your average day with your average team so that our, our service product is very consistent and reliable. So by pushing the work there by having the experts build out their own model and be supported by people who know how to, you know, connect all the moving parts. We've removed about a third of the work that we were doing. All of our service product numbers have improved our efficiency has improved dramatically. Now we've, we've drug our team through a keyhole, but on the backside of it, they're winning. And we were super transparent about the process. It was very painful to the large group of the team. Because I don't think anybody runs to change. I mean, it's a rare human that goes against, you know, hundreds of thousands or millions of years of evolution and runs to put more energy in and runs to the challenge. Most people just want to go away. And we've, we've kind of really helped our team understand the challenges never going to go away. And so let's just be transparent, build a foundation of trust, and be clear on what the challenges and hold hands as we're going to go after it have a little grace with each other. I love that. I want to come back to, to talk about how you create that culture because I do think one thing all three of us share and I, I'm definitely a leader. I'm much more interested in leading in a transformative way than a stewardship way that what excites me is building things and changing things but we often find then we are we are those rare people who run toward change we love change. Most people are not like that so I want to come back on culture but let me ask Michael to jump in and is the same idea you blew up the model. But you blew it up within an existing university that had students that had faculty that had departments that had disciplines. And so talk about how you did that at ASU and to what extent you use the same frame that the or process that Lance just described of decentralization which we've often heard right that's what Toyota did ages ago right they bring everybody from the floor to say hey, you're the ones closest to what's actually happening, you help us design where what we should be doing but that's not so easy to do in a university so Michael talk about it. Yeah, there's some there's some similarities I mean so basically the technique was to recognize first that we were a marginal operational success, and a failed social enterprise. And so we use basically the argument that, well we could sit here continuing to operate the way that we are and have less impact than we really ought to or we could transform the institution so. So, basically, what was done was that a proposal was made about how we could improve our social impact. This was then the what eventually became our charter which was our new reason for existence, which was an institution built around inclusion and exclusion and the measured success of the student, an institution which would do research to benefit the public as a measure measured outcome, and an institution which would take responsibility for the outcome of the communities that we serve social, economic health and well being and cultural evolutionary outcomes now, once you change that model inside the university, you've altered its purpose you move away from being faculty centric to student centric you move away from being internally focused to being fully focused and these might sound like minor things they're not. And so we we completely altered the cultural paradigm and then within the institution you know we have 5600 factor members and 30,000 employees. And we had only 40,000 degree seeking students now we have 150,000 degree seeking students so we have almost four times as many degree seeking students as we had in almost 10 times the diversity that we had in our student body and so all of that comes from being willing to basically attack the status quo but not just attack it just to disrupt it. It has to be simultaneously replaced I mean the simultaneity of the replacement has to be instant. And so you do that in our particular case. By driving down the idea that you as a faculty member you as a chair of a department, you as the head of a school or a college are an architect you're not a bureaucratic actor you're a designer of what you're doing to help attain this upset of objectives that we've outlined and so it was empowerment of our actors as designers that then has led to 40 new departments and schools, you know, a whole new designs of things 85 to most universities have never eliminated a department, we've eliminated 85 departments, and built and constructed the key here I guess to the listeners is its culture change driven by design empowerment with measurements of success that are understandable to the entire organization and so those are really the things that we that we focused on in a very complicated place. The employees are a little bit different than some of Lance's employees, in the sense that you know we have 2100 employees that have a lifetime contract with the institution we have, we have we have high degrees of independent operating within the institution. Yet nonetheless you still have to drive innovation or the institution would continue to fail at its social objective which we were failing at that point. And Maria I want to make one observation. Well that that's simultaneity of having to reinvent without a hard stop, a pause, and then an implementation is Michael that's exactly like running a railroad, right the railroad never stops, there's never a day where freight on the railroad doesn't want to go from where it is to where our customers would like it to be. So you don't have the luxury of shutting the doors, figuring it out, and then firing it back up, you've got to land the plane, while you're designing the plane. And that's a unique challenge there's not a ton of industry that's like that like your school. Yeah we're we found that in the pandemic so people say, people say to me well how's it been being closed I'm like we haven't been closed for one second. I've been closed for one day I've been sitting here in my office for one year to the day today. One year ago was the was the last day that I traveled anywhere and and I've been in the office for one year so the institution has been has been moving forward every single second of every day because that's the only way we can operate like you were 24 seven organization I mean literally 24 seven organization. But it's fascinating and I have to say I'm taking active notes. Just, just as a leader myself this this kind of constant transformation, but Lance I want to I want to focus something Michael said because he started with an institution that he was able to say look we're failing, you know where we are we're marginal operationally and we're a fail social enterprise. I never likes to hear that, but in my experience it is easier to change a place where people know they're at the bottom of a ranking or they're just not really doing what they should be doing. It doesn't sound like that was the situation at Union Pacific power I mean it's often hard to convince people they need to change because they think well we're doing fine. We're, we may not be the best but we're not the worst and we're we're good at what we do. How did you convince people at UP that they needed to change. I very simply harnessed our desire to be the best. So if you go back. If Abraham Lincoln is the creator of your company. Meh, doesn't really cut it right if we're one of the largest we think perhaps the largest freight railroad in North America, performing at a man level doesn't really get the job done. We had in the old operating model, we had been a tremendous success from the perspective of our shareholders. Maybe some number of our stakeholders we had, we had improved our operating margin by 2700 basis points over the course of about 1314 15 years. That's kind of unheard of in industrial America, but about three years prior to this very significant transformation, we've been treading water, right we'd, we'd essentially reached a plateau, and I would go out and visit our employees in the field who are who are on the front lines of creating the value. And I would never come away from one of those visits thinking, but for a smarter team, or a harder working team, we'd be hitting the objectives that we should be. I'd come away gone, you know that's a great team they're working their ass off, and yet something's getting in the way and candidly it took me a while to figure out. So our plan it was to Michael's point. The fact that we were managing, looking backwards at last year's model, instead of really challenging ourselves to think hey if, if we want to be the best running the railroad the old way isn't going to happen. So what do we got to do. And we kind of opened our eyes to what the model needed to look like and and changed ourselves, it was just harnessing what was already there, but giving it a name. So then that's important so I'm going to ask you both about the biggest obstacles, but Michael before I do. So Lance just just opened this question. You have had to invent a new, a new vocabulary, a new concept I mean you you talk about ASU as a knowledge enterprise as a public value university. I'm sympathetic to this because I run a think tank that isn't a think tank it's something else it's a public problem solving organization, but I don't have a vocabulary for that. People then default to university railroad whereas you are really bringing something into being as as you both said, running it so talk a little bit about the, that conceptual part the vocabulary part though the way that you convince people that they're in a new space. Yeah so we spend a lot of time actually looking at philosophical underpinnings, drawing heavily from the philosophy of John Dewey or Richard Rorty or other of the American pragmatists, you know and truly American philosophical techniques and tools and ideas and then underlying, and then on top of that moving into the design of the university the purpose of the university. So we use logic and rhetoric and philosophy as an underpinning basis for the argument because we have to do that in the world that we live in or you get wiped out. And then and then I think that the, the other thing that we've decided and this has been hard because, you know, we, you know people in academia as you know think that big is bad they think that they think that if you don't admit only students with a plus from high schools then you're a weaker institution when in fact you're you're more of a democratic institution in that sense. If you have a broader set of students coming in so what we've had to do is come up with very very strong measurements of success against social goals against individual goals so it's highly goal oriented. I think that we've also, you know all turned into a little bit of Cicero. And that is just to suggest that we criticize by what we create. And that is there's our, there's our comment it's what we did. And so you know we are producing we do have the largest engineering school in the United States right now with 25,000 students and 10 years ago we had 6000 students in engineering. We have thousands and thousands and thousands of more women in engineering and thousands and thousands of more minority students in engineering than we did, and we're graduating them into the open marketplace with the same market outcome as UCLA or Texas or or any other school in the country including MIT in terms of how our engineers do. It's just now that we're graduating thousands and thousands of them because this notion that that you know you have to be small and elite. That's built around the original design of the small colleges in Oxford and Cambridge I mean that's where that comes from Plato's Academy in Athens I mean our academia, you know that that that's where that comes from and it's just it's not. It's okay there's nothing wrong with it but if we have to do that we're never going to be able to achieve our social outcomes or our social objectives so to your question. At some point what we try to do is we try to basically say, you know we're producing, we're producing from a very diverse population of students from a very diverse faculty at a large diverse institution. We're producing, you know, a democratically derived student body of equal potential as the graduates of any other college because somebody has to figure out how to do this and so you got to give up a little bit on on getting beat up we get beat up constantly. I mean constantly just beaten beaten black and blue over, you know, how can you do this how can you possibly do this we had a we had a reviewer here in the accreditation of our university that that alluded to the fact that we were making up data. And I'm like, well dude I don't know what it's like in Ann Arbor but at least over here in Phoenix you know you start talking like that that sounds a lot like you know, calling us a liar. So, so then we overwhelmed him with data and facts and so forth and so on and he backed up and said I'm sorry I didn't understand. And I'm saying yeah you didn't understand and you went ahead and mouthed off anyway, and so and so that that's a bad thing to do so. So we also use huge amounts of data, huge amounts of analysis and we're driven by a philosophical driver which is what a People's University look like in the democracy called the United States of America, which was accessible and committed to the success of, you know what I mean when I say this our economic democracy. And so and so we're one of those institutions and we measure so ourself against that goal. I note that both of you, I have created this long arc of history right both of you, I mean Lance you said you know when you were created by Abraham Lincoln met won't do it. And Michael you're talking about going back to the entire history of not only as you but but of universities. And that's part of raising people sites right it's part of giving them the sense of the arc of history. So Lance I'd love for you just to respond to anything that in what Michael just said that resonates but also then shift to what are the biggest obstacles you've encountered that and maybe though that those obstacles, they are more generalizable, because we all have our very specific obstacles individuals or you know, politics. So I recognize a lot of what we do in what Michael was saying, maybe with the exception of studying philosophy is the underpinning of the strategy. But, but to Michael's exact point, we have touchstones that we go back constantly to verify that we're doing what we said we were going to do, and that what we said we were going to do is still relevant. Some of it hasn't changed in a long long time. To your to your point about how do you make what you do matter to every employee, we build America, who doesn't want to do that. We say that we connect 7300 communities the communities and businesses that we serve to each other into the world. Who doesn't want to be a connector like that. We talk about our values right we have a passion for performance which means we want to win with our customers, very high ethical standards, which means how we do it matters as much as what we do, and that we work as a team. The railroad's a very unique place, not dissimilar to Michael's institution. It's one very big asset that's used for a lot of different purposes we have 10,000 customers, and they run the gamut in the US economy, and the one asset has to serve them. So anytime we're thinking about our sat strategy you know it's founded and serve operational excellence, we want to grow with our customers, we want to win. And we want to do that together and each one of those, I can peel out strategic action work streams with KPIs and measurements that aren't made up their mainstream to the business. And that that what Michael was talking about very much can be reflected in our approach to purpose and mission, the overall values, the stakeholders that we're serving. So let's talk a little bit about your question about what are the big kind of roadblocks the impediments to the kind of change we're talking about. And Michael discussed this earlier as well. You can manage last year's model well and convince yourself that you're winning. If you narrow down your focus on statistics that measure did I incrementally get better than last year, or sustain a high level of performance, based on the old business model. And that's true that's winning. And it might have nothing to do with what your overall mission is and advancing the mission, or in my world creating real long term value for all of your stakeholders. So, you know, last year's success can be a real impediment to next year's what you have to do. And the humans generally are wired up not to run to change right that we, I've read a fair amount about how humans view change as as risk and a threat. And then we go on to fight or flight and, and it's all about energy expenditure and our history tells us the less energy you expend the greater opportunity you have for survival. So don't do that right so there's, there's this deep seated in a, don't make me do anything right just let me do what I know what to do. And that's an impediment, but I find that the ways to overcome that to your point are make the argument so compelling that the difference between current state and future state is is just untenable it's unacceptable for the average, the majority of your employees. And also help them understand okay, and just bring this together. I don't know the promised land beats the snot out of today. And I promise you we're going to get there. I know we're going to get there. And then you just are very transparent about every day. It's one step at a time. And today's step can be celebrated. It doesn't get you to the end, but you recognize, hey, that's a step, and it took something and we did it. And then you wake up three years later and you're like, man, you know, the world is better we are, we can do this. And it starts becoming a little bit more of a flywheel. That's very so Michael I'm going to ask you about your obstacles as well but I'm going to say to the audience that we're getting close to turning to your questions so if you have questions send them in and I will be looking at them shortly. Yeah, so I haven't had any obstacles I know that no obstacles I'm no obstacles none academia is that these are the safest jobs in the world over here. And so, and so I'll list some none of them will be surprising but the first one I would say is most of academia is trapped in a, you know what what bureaucratic theorists would call a petty or petite bureaucracy model of conservers who argue against each changing small political combat regimens with each other and and it just is all consuming. And so this small model this bureaucratic model is not the way that intellectual enterprises should ultimately be run in my view so that was a huge barrier to change and I think we've gone a long way to changing that second. There is a fear in academia of too much change, just as there is in religion and other areas you know where, how much further out ahead of the of this of the of the body of knowledge or the philosophical foundation can we go. And I'm like, Well, just look back in history and be thankful for the people that took these leaps on which your entire existence is premised. And so we're 400 years into the enlightenment and it's hopefully another 400 years or more ahead of us in this enlightenment leading to the second enlightenment and so don't give up now thinking that we need to change and so you have those conversations and then there is a third part of this which is a barrier to change is this selfish focus of the faculty. The university, the universities are not built for the faculty but they think that they are, at least not the public universities the public universities are built for the citizens, the faculty are the mechanism they're the public servants. You know who are supposed to drive the society forward and then the last barrier to change that I'll list is. This is what I'm still working on, which is the resistance to public enterprise that is enterprise means entrepreneurism it means generation self generation of resources. It means taking risks it means failure. And when the entire system was built on being funded by the state so when I got here. I've, we've increased our operating budget by over a factor of five. And, and we've lowered our reliance on state investment in the institution to less than 8% of our operating budget. And that's without a hospital. And so we're generating billions and billions and billions of dollars a year by competing. And that competition, then has put us into a position where that's the means by which we advance. And that is a logic which is absent from the ultra wealthy private universities which are built on endowments and and high tuition models and heavily supported publicly supported public universities and so it's just it's a it's a it's a barrier to get people to realize that the only people responsible for our fate is us. It's that that's it's really hard to get people that are at public institutions to realize that. So that leads perfectly into our first question and I think there are many people who think that public enterprise is an oxymoron. Right, that you, it's an antithetical to that spirit of enterprise of trying things of failing the public stands as you say for bureaucracy for other things but that's not necessarily true. They may have never heard of things like the Tennessee Valley Authority or the Bonneville Power Authority or they may have never heard of the Salt River project out here in Arizona are innumerable on the Heathrow airport, innumerable public enterprises that are highly entrepreneurial parts of Heathrow. The new terminal but so actually our first question though goes directly to the relationship with government so that one thing that most tech firms don't have or have much less of them both railroads and universities have our major government stakeholders that the government depends on you doing these things or directly funds you. So how does the role of government oversight play into the innovation challenge and can it actually also be a facilitator and Lance I'll start with you. Yeah, absolutely it can be a facilitator and the railroad industry is an embodiment of that now let me get it straight though for all of our listeners. The great railroads are self funded. Our Union Pacific, our revenue base is about $20 billion, we invest about $3 billion in capital a year from that $20 billion. We own our own right of way and we, we maintain our own right of way it's, it's a wonderful business model for for the US economy we don't rely on the federal government for a dime to do that. Having said that, we are pretty heavily regulated, both from the safety side and on the commerce side, and we have a great relationship with our regulators. It's not always perfect, but they can be helpful and innovation. Sometimes we get an argument where they're an impediment. If you're a 159 year old company. There's a lot of regulation that was invented a long time ago that just gets carried forward. And you have to help your regulator understand that replacing it with something that reflects the capability of technology today and into the future, makes a lot of sense. But to the extent that we invest in that relationship and help that understanding. We have regulators that that come along. We also have good partners when it comes to safety innovation. Because, because the intent is ever improving levels of safety we're already a very safe industry, but we're not perfect we're not at a zero incident environment and I think we can get there. So we're constantly working those issues as well. So I would say and Marie that in the in the on the ground reality, just like in most every relationship in life. It's all about how much do you put into it. How much do you listen, how much do you try to find common ground with your regulator, so that on the backside, you can have enabling conversation and regulation as opposed to disabling, we're nowhere near perfect there's a long path in front of us on that. But but I wouldn't say it's all on one side or the other. Interesting. So Michael you have relations with government at the state and federal level and frankly at the international or foreign government level as well so how do you, how do you answer the question in terms of the difference it makes and whether it can be an enabler. Yeah, so we have we have four academic campuses and research campuses in Metro Phoenix we have five innovation campuses in Metro Phoenix we have a new we have a center in Washington that you're familiar with we have a brand new center that we're opening in downtown Los Angeles this summer and a beautiful renovated Harold examiner building we have, we have more than 10 international partnerships that have physicality to them around the world so we've got all that going on. We are dealing with governments and all those levels. And, and what we've worked really hard and made a lot of progress on is moving the government away from the notion that somehow they are a watchful overseer of the managerial functions of the institution and what color is the paint in boiler 62, you know, in building 297, because, you know, and really tried to move all of them to the notion of what goals would you like us to achieve. And so, so we were established by the people to serve the people so the people that are appointed to oversee us, we asked them what would you like us to achieve. We will worry about how to fund the university. We will worry about how to advance the university you will make sure that we stay on that that track. We will make sure that the university is kept at the lowest possible price for people from Arizona to maintain accessibility and so forth and so on but, and so we've really moved to this notion of objectives. And, and so I think we have a very dynamic and and very constructive relationship with the government at all levels. You know, in the new campus we built in downtown Phoenix with significant investment by the city of Phoenix. You know the objective was to, to, to, to, to help evolve the success of Phoenix as the fifth largest city in the United States and we have measurements of progress towards those objectives. We have a new, a new campus that we're building in downtown Mesa, Arizona, a suburb of Phoenix of more than 500,000 people that most people have never heard of that's got a whole new life and a whole new bigger, and it's bigger than St. Lewis and about the same size as Boston, you know we're building a world class technology center for unbelievable digital design digital creativity, and we just launched as a part of that. We have a Sydney Portier new American film school which will operate in Phoenix, Mesa, Arizona and Los Angeles in these fabulous facilities but those are the, those are public investments in infrastructure that that the expectation is not, you know, did you follow the building in the right way. It's did you create a dynamic change in the trajectory of of Arizona in the trajectory of downtown Mesa in the trajectory of the lives of the people that you're touching. And so we, what we've done is we've just changed the whole, you know what is the goalpost. The goalpost is not oversight through functional review of every transaction. The goalpost is oversight through the establishment and attainment of objectives. So that also leads into it perfectly into another question although Lance I gotta say you've got some real railroad buffs in this audience there's a bunch of questions coming in that Sheldon Sheldon Cooper must be watching off the big bank there. I'm trying to choose those that will have maybe a little broader application but I'm learning all sorts of things. But so one question that goes, I think exactly to something you both talked about is, does major innovation always require a basket of new metrics and performance indicators. So how do you decide on what those are because you're changing your you're coming up with something new. So what they are and where they should be and Lance let me go back to you but because both of you did say you develop new metrics is that necessary. And Marie, I would say our experience is new metrics, almost always are birthed from a fundamental change process or a business process that's been fundamentally changed. However, I wouldn't say that we necessarily start there every time sometimes we do. But with some frequency, you know if the, let me put it this way. Transforming the railroad from the last way we used to run the transportation plan to the way we ran it today. We've had some carry forward metrics, a productivity metric like locomotive productivity, or fuel consumption rate, or a service metric like how do we serve our local customers to and from local industry. And we've unveiled and and embraced replacement brand new metrics like the speed of every freight car every day on the railroad or the trip plan compliance for every inner modal box that we ship every day. So our our experiences, all metrics don't get thrown out because there's some fundamental metrics that are still reflective of what your customers and markets desire from you. Because the network is transforming and being managed in a different way. We've we've almost always found there are either additional or new unique key KPIs really key success factors that we just didn't measure before because we weren't looking at the, we weren't looking at the business model the same way before. You know what what what I would add to this and Marie is that for us it's not new metrics in the notion of like foreign things that didn't exist before it's new attainment and so I'll give you an example so. So, you know, after a while you just get sick of the fact that we're producing a million call a high school dropouts a year in the United States. Most of whom will end up in some kind of need for public assistance across large swaths of their life, because they're not prepared for the labor force requirements that lie ahead and so. So we then say okay well then we're going to start k 12 public schools under Arizona's charter clause with public school districts and where every single student is going to graduate and every single student is going to go on to, to post secondary whether at a technical school a community college or university or the military. We've done that we have no dropouts in the schools that we've run for at least four years none. And so so that's a new attainment for us the metric is anything below below completion is unacceptable. And so that's a new metric. It's a new attainment level likewise, you know when we set a 90% retention rate in engineering versus our traditional weed out look to your left, look to your right. You know one of you two jokers are not going to be there. You know that that you can't you can't you can't you can't be weeding people out and booting them to the curb at age 19 and hoping that that's going to produce a good outcome. And the last time I checked there's a lot of angry people in the United States and the last time I checked, there's a lot of people that took college debt that don't have jobs capable of paying it back there ticked off. And so one of the things that we have to do is we you know we can't be a part of that anymore. And so it's not it's not that there's a new metric there's a new attainment objective relative to our metrics so. So for instance we'd like to not be only a white middle class institution okay well if you're not if you're going to be something other than a white middle class institution, then you have metrics you're moving towards these goals and so. It's it's it's it's it's metrics that you would imagine that we have. But with new levels of attainment that there are some new metrics that we have and that is, since we're funding ourselves we have to have margins. And then we have to reinvest the margin back in the institution that's a that was a foreign concept to have financial metrics in a university was a foreign concept. And that's been a hard one for us to advance but all the rest are basically new attainment levels of the traditional metrics. Hey Michael, but what I what I love about what you said there when you said. We're looking at educating our engineers in a different way where in the old in the old school I was an engineer and I remember that lecture you know as a freshman look to your left look to your right somebody's going to be gone. You learn in the business world and in your world in the in the real world of executing and owning. If you got rid of half your employees every year you'd be in a world of hurt. Yeah, you can't. You can't take the general population or the population that gets into ASU and then subsequently get half of them booted because you don't know how to teach them. There's 35 million people in the United States that went to college that have no degree. And I guarantee that the majority of them are not necessarily happy about that fact. No no and and that gets that gets back to it's our obligation as leaders to help everyone in the institution, get up to speed that you need. And that doesn't mean sprinting every day that just means getting into the flow of the work that needs to be done understanding it being empowered enabled. If you got to train them train them if you got to get out of the way you get out of the way. Every once while you run across somebody that shouldn't be there. So be it but that's a pretty rare day. That's very rare and then and then it's so rare that you can have, you can really focus a lot of energy on them and then only very few of them won't make it so. Yes, well so it's interesting as you're talking about individuals you are laying out that same runway that same sense of possibility that you are for your organizations in terms of how you motivate people and how you actually ensure their success. We've got lots more questions and not much more time I want to ask one about technology because both of you have talked about how technology has helped you innovate. And again I know more about as you in terms of really transforming the idea of what immersive education physical based education can be but also Lance I know you you've used lots of new technology and safety elsewhere. But are there ways in which technology is a barrier to innovation, because we typically equate new technology with innovation but I just want one of the questions was, what about when that equation equation does not work. So, Ann Marie, presuming you're you're pointing at me first I'll go first. I think innovation can be a barrier. In my experience, if your team starts with, well it's a technology problem. In my experience it is almost never a technology problem, or opportunity. Now there's a lot of times we're a technology company, we write our own ERP ERP. We have a massive micro services architected enterprise system that is maybe second only to Netflix. It's just been gutted and rewritten over the course about the last eight years. And, and my new CIO lands here and goes, Lance, you guys are a wonderful platform company it's awesome. I guarantee our service product isn't better, because we rewrote our ERP had nothing to do with that. Our service products better because we redesigned the way we run the railroad, and oh by the way, had a technology that enables it. I think technology becomes a bit of a stumbling block if the team gets confused and thinks, but for a spend here or a system there or a invention here, we'd be a much better institution. Yeah, I agree with Lance on that and that is it gets in the way if it becomes the object of what you're doing so you know we're not a technology manufacturer we're a learning knowledge and academic enterprise that produces people ideas and new gizmos. Technology is this ink pen is a technology. It's a funny little joke this ink pen by the way is directly connected to my brain by by by itself it has no functionality whatsoever and it's just a means for me to do things and so we look at technology as a way to project our way to connect our fact that we just look at it as as air or electricity. And so it's nothing but it's air water electricity that's that's all it is and and and we want it to be ubiquitously available to whatever anyone anyone needs to do whatever they think they need to do as transparently as possible. And that's how we view it so it would get in the way if all of a sudden we started in fact we have to worry about this occasionally, we have some projects that become pretty big technology projects, and we don't want them to become the project because that's not the project that's not why we're here. You know we're here to enhance learning outcomes across a large spectrum of people. I could talk to you guys all day long, but we have got a few more minutes I'm going to ask you a final question. You've both been in your jobs as I said at the outset for almost two or two decades indeed Lance and almost two Michael. So what would you tell or will you tell your successors, you are both transformative leaders you have created massive innovation you and you both said you broke the old model you created the new one. So, now your successor comes in do they come in to steward what you built, or, or do they have to keep innovating and if so how so what will you tell your successor not that I'm inviting either of you to step down but I think it's an interesting question. Lance, go first. Yeah, sure. The words out of my mouth will not be keep doing exactly what I've just done right that's that that's a losing proposition that so I've thought a little bit about this. And I think the guidance to my successor is going to be. Give it a little time. Look at what you've got be really clear eyed about what's coming be very inclusive in all of that research and thought and conversation. Don't wait too long. If you've got a pretty clear image of what you think we need to be. Be relentless, just be relentless make sure you're, you're building your cohorts make sure you're building understanding, but there's not a minute that goes by that you're not working on whatever that is. And I think if we pick right she's going to do a hell of a job. What what what I would say is good luck. And what and what I mean by that is that is that in our sense, by that point, we will have completely moved away from any of the standard managerial training practices of thousands of other colleges or universities. And so the good luck will be good luck and keep the innovation process going and that that the institution is in fact an innovation enterprise that's what we do. And whoever takes over for me will then focus on a team leader of an innovation process that's continuous and and the good luck part is do not fall back I mean the fear that I have is the retrograde to the rest of the sector. Which has not innovated in the same ways and so innovations got to continue to move forward and so that and then and then you know, here's my email. Don't use it too much. Let me know. When we started I said that people don't normally think of disruptive innovation in terms of railroads and universities they think of this as a Silicon Valley startup conversation but you have both completely disproved that idea. I've been taking notes as a leader myself all the way through and I'm struck in in kind of pulling this together because it's impossible to summarize, both at the scale of your vision, but your willingness to go back to the fundamental what it is you're trying to do so you didn't take your institutions as given you started with the mission, and the mission stays the same to deliver at the high to deliver for your customers to educate students. That stays the same and you both pose it in the largest terms and set very high attainment goals, but of course how you achieve that mission, then must change as circumstances change but you focus people on purpose and mission and quality. And then everything else you loosened up to allow for design and natural human creativity. And it's just striking and listening to both of you that I feel inspired by your company's missions. I'm just as much as I'm impressed at the actual innovation. So it's been a fabulous conversation I want to thank both of you. I thank the slate team, the future tense team. And as always, our fabulous new America events team that makes all this possible. So have a great afternoon. It's wonderful to talk to you both. Alright, thank you. Thank you. Bye. Bye bye.