Newcomer of the Year

Tracy Robinson (BComm'86) would be the first to admit she was a surprise choice for CEO of Canadian National Railway. She’d stepped away from the industry for close to eight years before taking over CN in February 2022. Sure, she’d spent nearly three decades at Canadian Pacific before that, with roles in sales, marketing and finance, but the investor and analyst community didn’t see her as an “operations person.”

There is, after all, a kind of mythos around railroaders. The men who lead Canada’s railroads—and they’ve all been men—have typically spent decades working with trains, prone to telling tales of the grit involved in keeping them rolling. Hunter Harrison, who’s credited with turning around several railroads, including CN, got his start as a teenage carman-oiler. Keith Creel, the Harrison disciple who now heads Canadian Pacific Kansas City (CPKC), once trekked to a hotel in the dark of night to turn over rooms so a rail crew could sleep.

Robinson had never been an operations chief in an industry whose entire raison d’être is moving stuff from one place to another, not to mention that CN in particular was grappling with operational problems. Plus, as one analyst noted when her appointment was announced, for some of her 27 years at CP, it underperformed so badly it could only be righted by (who else?) Harrison. So how, analysts asked, was the company confident that Robinson was the right choice?

Today, the question during an interview with The Globe and Mail elicits a wry chuckle. “I don’t blame anybody for having some questions,” she says. The skepticism didn’t rattle her. “I’d rather come in and show than talk,” she says. “I don’t mind having to prove it.”

And she’s made a lot of progress.

Since Robinson joined CN close to two years ago, she has retooled its operating model, whittled down its operating ratio (a crucial efficiency metric), closely integrated departments, restored credibility with key investors and won plaudits from analysts. She has done so without slashing jobs and cutting costs—a tactic so common among CEOs looking to juice results that it’s basically animal instinct—but by playing to the organization’s strengths.

What’s more, she has managed to keep at bay TCI Fund Management, CN’s second-largest investor, which waged a vicious campaign to oust her predecessor. Earlier this year, Robinson was in London to be interviewed on stage by Chris Hohn, the hedge fund’s founder, at TCI’s annual meeting.

“The things he wants are the same things all our shareholders want,” she says. “I would say we’re very aligned.” TCI partner Ben Walker said over email that the fund isn’t giving interviews, “but we do think Tracy is doing a good job.” Coming from an investor with a history of issuing bombastic statements to tear down weak executives, that may well qualify as high praise.

There’s still more to do, however. Profit has trended down in recent quarters, and the stock price is below where it was when Robinson joined. She has a stronger and wilier competitor in CPKC, whose blockbuster merger closed this year. And then there’s the weakening economy, which prompted Robinson to cut CN’s outlook earlier this year.

The initial skepticism may have waned, but Robinson isn’t done proving herself just yet.

Read the full article at www.theglobeandmail.com.