From the bottom up: CP Rail’s Keith Creel steps out from Hunter Harrison’s shadow to cement his own legacy

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Keith Creel was just a relatively raw kid from Alabama when Hunter Harrison summoned him to the 21st floor of the NBC Tower in Chicago for a meeting in 1996. It’s a day vividly imprinted on his memory 26 years later, because days like that were not supposed to happen to people like him.

Harrison, a brash southerner, with a rich baritone voice, a taste for Marlboro Red cigarettes and stiff drinks, and a reputation as a master storyteller, was chief executive of Illinois Central Railroad and already a legend in railroad circles.

Creel was a nobody. A new frontline hire, soon bound for Memphis, Tenn., and a job as trainmaster. He couldn’t really fathom why the boss would want to meet him. His nerves were hopping all over the place as he walked into an office anteroom with bookshelves and a couch, comfy chairs and a million-dollar view of Lake Michigan. He found himself thinking, “Somebody must live here.”

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Around a corner sat Harrison. He told the kid to “sit down,” and he started telling stories of growing up in the South, of sports and railroading.

“I spent three hours with Hunter,” Creel, now 52 years old, said. “And I heard a lot and I learned a lot, and I realized then that this wasn’t just a CEO in a suit, and no disrespect to CEOs in suits, but this was a guy who understood the business from top to bottom.”

Harrison also recognized, for whatever reason, something in Creel, and would pull him along from railroad to railroad, dispatching him to towns along the way to sort out operational kinks and learn the business just as he had: from the bottom up.

Until, that is, the protege appeared at the top, and succeeded Harrison as chief executive at Canadian Pacific Railway Ltd. in January 2017. Harrison died later that same year, but were he alive today, Creel could tell him a story of his own, about that kid from Alabama being the driving force behind CP’s US$25.2-billion deal to purchase Kansas City Southern.

The merger is a whopper in an industry where whoppers rarely happen, and it positions a Canadian railway, one started in 1881 that now connects the country from coast to coast, to drive a stake into an expansive network stretching from northern Alberta deep into the Mexican industrial heartland.

Regulators will have their say, no doubt, but most everybody else — the Alberta Wheat and Barley Commission, Canadian Association of Petroleum Producers, Alberta’s premier, Kansas City Southern’s board, analysts and the stock market, where CP is trading at record highs — are cheering the purchase.

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Should it ultimately go through, Creel’s name, as Harrison’s typically is, may never again appear without the word “legend” practically affixed to it.

“This has been a transaction that has been talked about for the last 15 years.” Steve Hansen, an analyst at Raymond James Ltd., said of the deal. “It is massive.”

Chances are, though, it never would have happened were it not for another guy named Steve, who worked at Food World in Atlanta in the early 1980s. That Steve, whose last name has been lost to time, worked alongside Creel, a high school sophomore, wrestler and impressionable teen with car payments to make.

This has been a transaction that has been talked about for the last 15 years. It is massive

Steve Hansen, analyst, Raymond James Ltd.

Steve had been to U.S. Army boot camp. He had a brush cut. He could talk.

“What he told me inspired me,” Creel said.

No one in Creel’s family had a military background. (No one in his family worked for the railroad, either). But he heard enough to enrol in an officer’s training program while pursuing a marketing degree at Jacksonville State University in Alabama.

Midway through university, Creel was called up for active duty during the Persian Gulf War, and the wet-behind-the-ears 21-year-old lieutenant got his first taste of leading others while stationed in Saudi Arabia.

The army was about teamwork, order, logistics, troubleshooting problems, following rules and believing in a mission greater than oneself. It was also about motivating people to do their best.

“I learned that I had a huge love for leadership in the military,” Creel said. “When I came back, the military opportunity was what led to the railroad.”

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And the railroad led to that first meeting with Hunter Harrison in Chicago. Before Harrison came along, railroads were notoriously unreliable. Major delays were the industry norm. Punctuality was but a rumour.

Harrison set out to fix things, evolving his philosophy of “precision scheduled railroading” along the way. In short: his trains were going to leave on time and they were going to arrive on time. Locomotives would pull more cars to maximize loads and boost profits. Reducing transit times between point A and point B was paramount. Providing fast and reliable service would attract more customers, and more customers would mean more profitable railroads. A culture of slow and inefficient would become a culture of quick.

“PSR is basically doing what you say you are going to do for your customers,” Hansen said. “If you say you are going to leave at 2 p.m., then you leave at 2 p.m., where, historically, it was always, ‘Let’s just wait a little bit longer before we leave.’”

Canadian National Railway Co. bought Illinois Central in 1998, and brought in Harrison as its chief operating officer, later promoting him to CEO. Now running a Canadian railroad, he would send Creel to Winnipeg, in -40 C weather, among other stops, to implement his precision-guided philosophy.

“Keith and Hunter were a lot alike in that they were both extremely focused,” said Andy Reardon, former chair of CP’s board and a 40-year industry veteran. “They strove for perfection.”

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Reardon first met Harrison in the 1970s. He describes Creel as having a softer touch, and an uncanny talent for soaking up the best parts of the best people he has ever worked for and applying them to his own leadership style. As another person phrased it: no one finds Keith Creel “intimidating.”

Creel likens Harrison to a coach, or a father figure, someone who could be tough but caring, someone you hated to disappoint.

“When you needed it, Hunter would knock you down in the dirt,” he said from his home in Florida. “But he would also stick out his hand and dust you off, and tell you to go get them again.”

The question for Creel always seemed to be: go where? In learning the business from the bottom up, he uprooted his family 13 times in 14 years to live in places such as Battle Creek, Mich., Wichita Falls, Texas, and Edmonton.

“I became a fix-it guy,” he said. “Hunter put me in some very challenging locations and terminals. I would parachute in, stay for a year, get things turned around and going the right way, and then he would have another project to send me to.”

Living out of a suitcase wasn’t easy. Harrison may have been the boss, but Creel’s most “trusted adviser” was his wife, Ginger. Somewhere along the way, the former high school wrestler also became that most Canadian of things: a hockey parent.

Creel’s son, Tanner, was a goaltender at the University of Connecticut, while their daughter, Caitlin, competed in equestrian at Auburn University in Alabama.

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“Often, I was by myself,” Creel said of watching Tanner’s games from the stands. “I sort of internalize, because that was the only healthy way to do it, or maybe it wasn’t healthy. But the stress of (watching Tanner) was more than the stress of work.”

Harrison retired from CN at the end of 2009, but came out of retirement to run CP in 2012. A year later, he poached Creel from CN under cantankerous circumstances to sign on as president and chief operating officer.

As close as the two men were, they didn’t agree on everything. The CP beaver is a case in point.

Canadians may recall a black-and-white photograph of a small man with a white beard driving home the last spike of CP’s railway in November 1885. For a young country just finding its way, post-Confederation, the railway proved transformational. Goods and people could get around, as could a budding narrative of a nation, from sea to shining sea, united by a feat of engineering know-how.

The small man with the beard in the “Last Spike” photograph was a financier, political arm twister and philanthropist named Donald Alexander Smith, a Scotsman. More than a century later, it was an Alabaman, Creel, who twigged onto the idea that there was an opportunity to rebrand the company by reconnecting it to its roots.

CP first adopted the industrious beaver as a logo when it began running transcontinental trains out of Montreal and Toronto in 1886. The critter was tossed onto the metaphorical tracks in 1968, revived for a spell in the late 1990s, and then sidelined again. Harrison had no use for the beaver. The past was the past.

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But Creel brought it back almost immediately after taking over as CEO, incorporating it into a snazzy new company logo — albeit one with a retro feel — and painting it in gold on CP trains. He even helped sketch out the logo.

“I literally sat at my desk in Calgary with a colleague and started scratching out some thoughts,” he said. “And I said, ‘This is it, we will just combine the past and the present, and it will carry us into the future.’”

The logo overhaul was a small touch, a clever bit of marketing from a guy with a marketing degree. To customers and the world outside, it was a nod to the past, sure, but it also pointed directly at the future.

Here was a fresh look for a new CP: a railway that leaves and arrives on time, gets goods to where they need to go, has a strong safety record and happy shareholders, and one that was still looking to grow.

But Creel hoped an internal shift in tone, even more than the external messaging, would resonate with employees. The Harrison era at CP, with Creel as chief lieutenant, was a painful exercise in righting a business that had a weak bottom line and was teetering toward potential bankruptcy and break-up.

Hundreds of locomotives were parked, railyards were closed and about 8,000 jobs were chopped from the payroll during Harrison’s five years at the helm.

“PSR is a cultural, financial and operational principle, and it can be wrenching for some people, particularly for those accustomed to doing things one way, and who don’t want to change,” former chair Reardon said.

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Harrison may have invented PSR, but Creel, in his role as implementer-in-chief, perfected it. Travel times between Toronto and Calgary were reduced by 22.5 hours. Another 12 hours was cut from the Calgary-to-Vancouver leg. The culture of fast won out, though not without friction.

In February 2015, 3,000 conductors and engineers walked off the job, protesting poor working conditions such as extreme fatigue and unreliable schedules. Harrison’s response to the two-day strike was to keep the trains running by putting white-collar executives on the rails.

“I can tell you that when a train comes running by at 60 miles per hour, pulling 20,000 tonnes with the manager blowing the whistle at them, their eyes get awful big,” Harrison reportedly said of the striking workers.

By the time Creel officially took over, the mandate was growth, not more cuts, and the logo refresh was, in part, his way of extending an “olive branch” to employees. He describes the company’s 13,000 employees as “family.” It probably doesn’t hurt that the family generates about $8 billion a year in revenue.

The kinder approach has mostly paid off. A source among the CP rank and file, who requested anonymity, said there are some guys who “come to work with a smile on their face,” while others are “constantly looking over their shoulders, and feel as though they are being watched.”

Things are not perfect, Creel allowed, but no family is. What is beyond dispute is CP’s and Creel’s reputation for getting the job done.

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“CP are unmatched, they are the gold standard,” Hansen, the analyst, said.

Now, it is poised to get a whole lot bigger.

But the merger with KCS was another thing that Creel and Harrison could never quite agree upon. Harrison disliked the idea; Creel had long been intrigued by it.

The younger man visited his mentor several times as he lay dying in a Florida hospital. Harrison was on oxygen, vulnerable — human — and it was tough to see. But two days before he died, he was back to being Hunter Harrison: lucid, funny and eager to tell stories with his protégé.

They thanked one another for “doing right” by one another. Harrison held forth, just like in the old days, coaching Creel on whom he could trust and who he couldn’t. They talked for three hours.

Creel knows just what Harrison would say, if he could see him now.

“He would be proud,” he said. “He would be extremely proud. I know that he would.”

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