Innovating Leadership:
Co-Creating Our Future

Resources:

You can learn more about DHL Supply Chain at https://bit.ly/DHLpreps. To contact Mike directly, email him at michael.mclellan@dhl.com.

Our host Maureen Metcalf posts a newsletter every week on LinkedIn. You can subscribe here.

Maureen’s latest book is Innovative Leadership & Followership in the Age of AI. You’ll find details about it at https://bit.ly/LeaderInAI, or check out the Kindle version at https://amzn.to/44buVz8. The audiobook version is now available at  https://amzn.to/4dTCleZ.

Her other 10 books are available on Amazon here.

Other episodes you’ll enjoy:

– Disruption No More: Future-Proofing Your Business with Mike McLellan

– Unraveling Uncertainty: The Real Job of Modern Leaders with Michael Marks

– Leading with Care & Purpose with Sudhanshu Palsule and Raj Sisodia

Guest(s):

Guest(s) Bio:

Mike McLellan is the Chief Operating Officer for DHL Supply Chain (NORAM).

Transcript
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Maureen: [00:00:00] This is Innovating Leadership Co-Creating Our Future. I’m your host, Maureen Metcalf, the founder and CEO of the Innovative Leadership Institute, where we help leaders become future ready. I. Mike McClellan, COO of North America for DHL Supply Chain will help us on that mission. Mike, welcome to the show.

Mike: Thanks Maureen. Thanks for having me.

Maureen: Can you share your perspective on how recently shifting tariffs have impacted global supply chain and built into that is. What do we anticipate over the next potentially years? You’re in a unique role since you see the impact across industries across North America, but also with a role on DHL’s global board, you’re seeing the global impacts.

Mike: Supply chains thrive on consistency and stability. I would say the one thing that we are experiencing [00:01:00] right now is a little bit of chaos. As you can see, the tariff communication shifts from day to day, from week to week. We’re not exactly sure what’s gonna happen every day.

And so that puts us in a position, it puts our customers in a position where they have to react on a daily basis and really come up with a strategy to react to the chaos a bit. That’s neither good nor bad. In some ways, it’s just different, you know, if you look at COVID, it was a significant impact on supply chains overall.

And the chaos overall is what we are trying to navigate. What we’re seeing from customers is a lot of wait and see again, reacting to the overall expectation that we’ve gotta still run supply chains under this chaos. Depending on what sector you’re in: auto manufacturers I think go through a lot more because it’s a longer lead time to recreate a supply chain within North America that has not sat in North America, or maybe segments of that are in North America, but segments are in other partner countries.

There’s quite a bit of [00:02:00] instability around how to navigate through that right now. And I think a little bit of uh, waiting for the dust to settle.

Maureen: Finding alternate supply chains in North America, some of those supply chains take years to decades to build. Companies are sitting with big questions about, do I even engage in breaking ground and starting a plant that by the time it’s even done with construction, we’re gonna be in a different political administration.

Mike: Yeah, that’s correct. part of the complexity of this is that do I move now, especially with the changes that come sometimes even daily with the shift in what we’re doing. You saw that with China, I think we came down from 140% down to 30% tariffs and 10% in some cases.

There is a little bit of trepidation about where are we gonna land and what do I need to do. The landscape right now is a little bit foggy. And again, the wait and see, we feel it in our businesses to a degree, but we’re also in a [00:03:00] position where we can help navigate whatever happens.

I’ll tell a couple of stories where I feel like there’s some impacts . I was with a colleague just yesterday who bought a pair of shoes that came from China and he got a bill, I don’t know how expensive the shoes are, but at 140% tariff. The cost of his shoes were $270 and we’re like, well, okay, did you pay it?

He is like, well, I had to pay it. The shoes were here and the 30% tariff just hit over the last couple days. So yeah, my cost would’ve been a lot less, but, I had to have those shoes. I was at the airport this morning and went by a moving a people walker conveyor, and the conveyor was shut down and the sign on the conveyor was, “This is going to be down for a while due to the tariffs.”

I expect that there was probably a part that was needed that was needed to be exported and there was probably a delay on that part or a stop shipping within it. And then the third story is we hear stories in the in the ports, especially on the west coast [00:04:00] where like Port of Seattle or the Port of Long Beach.

They don’t have near the number, or actually no ships that are inbound or staged there for unloading and potentially loading back overseas. You know, I think there’s some impacts that are happening that we’re learning to navigate through, but there are disruptions to the supply chain. I think overall we saw that it wasn’t so much impacted the first quarter and into the second quarter. But there were a lot of people that were starting to move more product in. So it almost felt like, in some cases, a peak shipping where people were loading up and trying to beat the tariffs.

Maureen: I know we accelerated any kind of technology purchase before the tariffs.

Mike: Yeah,

Maureen: so new phones, new computers. I didn’t wanna be at that 145 point tariff percentage when my computer crashed.

Mike: Yeah. A personal story, I’m a big board gamer. I have a huge collection of board games and newer types of [00:05:00] board games.

It’s not like your traditional monopoly and risk, but the board gaming community is, really concerned with what it’s gonna do to their business because almost exclusively board games are being built in China. They have the technology, they built the technology for it, they have the expertise in it.

Some of the board game manufacturers I’ve heard that are starting to take down business have said that i t would cost more to get the machines moved to the United States. We just don’t hold the technology here. So we’re starting to hear about companies that are gonna stop doing business just because they either can’t pay for the cost of some of these games.

Some of the games I have are a hundred dollars. They would immediately go up to, you know, two or 2.5 times that. Already that’s a costly board game for some people. From a personal standpoint I’ve, I’ve even seen some impacts in those ways as well. Some of the smaller companies are struggling a bit.

Maureen: I’ve heard a lot about the instances of small businesses. They just don’t manufacture what they’re trying to create [00:06:00] in the U.S.. And so they have to deal with the fluctuating tariffs and it will put many of them out of business. Mike, let’s go back now to large enterprises. I understand, wait and see because we’re in the middle of it.

But you’ve mentioned COVID. It seems like this current environment is yet another data point that tells us that if supply chain hasn’t been a significant part of our overall organizational strategy, we may wanna rethink that.

Mike: Yeah. And as I’ve mentioned before. What we found during COVID is that a lot of people didn’t put the right focus on supply chains, and to a degree, we’re probably starting to see it again.

Events like this are causing us to rethink the strategy, to make sure that there’s resilience that there’s redundancy built within the supply chain. I think some of our impacts from China over the prior Trump administration: you know, there were [00:07:00] some some tariff implications coupled with COVID.

it caused people to change their supply chains a little bit. We saw a lot more manufacturing move to Malaysia or move to Vietnam out of China. But now we’re starting to see that there’s even tariff implications with those countries as well. I really believe that we learn from events like this, and I believe that are in the greater enterprises, the larger companies will uh, take a different approach to uh, prepare for incidents like these. Hopefully we learn from issues like this and we get better at what we do overall from a supply chain perspective.

Maureen: DHL does this for clients as your primary business. What are some components that you emphasize that helps an organization build a more resilient supply chain?

Mike: What we help them do is to manage the supply chains that they have to settle on. So if a customer is largely present in China [00:08:00] and we’re helping them with exports there, we’re helping to move product there and they need to move to India, well, we’re across the globe.

DHL’s a large company. We’re a $90 billion plus company. Overall we’re prepared to help out wherever we need to. We got a lot of strength across the globe where we can g ive a viewpoint on the ways to manage the product across the globe.

So I think that what we’re really there for is to be that consultant and to help people to build whatever resilience they need within their supply chains and to offer the best opportunities. We have so many examples of the best ways to manage supply chains and how to be involved in the right opportunities. Really we’re a subject matter expert in what we do and in offering the viewpoint in that way is where our greatest strength is.

Maureen: Can you give a story or an example of how you’ve done that? Your presence has really helped somebody rethink their warehousing structure, their distribution structure, [00:09:00] their return structure.

Mike: There’s many examples of how we add that level of expertise. Especially when it comes to things like innovation or analytics.

When it comes to partnering with a customer and really having subject matter expertise. People that have been in this industry for years and years, uh, there’s not very many supply chains out there where we haven’t been involved in that type of supply chain, or we have a way where we can really get involved and help them to grow their business.

There’s one particular customer who was singularly threaded into a location that I was involved in where they needed to broaden out more across North America, and we actually did a pilot for them for six months where we tested out a different location. There were some implications with tax structures and setting up their [00:10:00] system.

And that six month pilot really helped them to drive ideas behind how they could broaden out more locations within North America. And now they’re multithreaded across the USA t o a degree where they’re really more regional with their distribution centers and with their supply chain.

And so that’s really what we offer is we can be a good partner to uh, customers like this to where uh, we come up with ideas with them can execute the ideas together and really be partners for them when they choose to move forward.

Maureen: I love the example, ’cause as you talk about supply chain resilience, being single threaded at this point seems risky.

Mike: Yeah, absolutely. We have seen partners within our supply chains , where a singular threaded location can bring such risk. Because if you only have that single thread and it goes down for whatever reason, your whole business can go down, and we’ve seen that in different supply chains.

Again, I’ll talk outside of [00:11:00] DHL, but I know of a couple of customers who have been hacked or had some sort of ransomware where it’s brought down their whole business for multi weeks or months and can really cripple their overall business again, because of being in a singular location. We have weather events all the time.

We have 550 operations at DHL across the US and there are locations that get hit by tornadoes or other weather or other events . If that customer is a single location, tornado can take a building down for weeks at a time. And so having that multi-threaded supply chain, I think is very important.

Hopefully we learn some of that from COVID not just within North America or regionally, but within the globe overall.

Maureen: Are there other significant strategies that come to mind as we think about supply chain resilience. Being regional is certainly one that’s crucial. Is there anything else [00:12:00] that you typically recommend to an organization?

Mike: Well, a lot of the work that we do is centered around really identifying where a customer base is and getting closer to the customers. A lot of the supply chain appetites these days are around how can I get quick delivery for the cheapest cost? And a lot of that will usually come with building more of a regional supply chain or distribution network.

You see a lot of activity on the East coast. You see a lot of activity on the West coast, centrally more towards the Texas area or through the Midwest. We start to see a lot of customers that may start out small and really a Midwest presence most of the time because they can reach a New York and a Dallas in about the same amount of time from let’s say a Memphis or a Chicago.

But then they need to get to the West Coast, especially when they start importing broader . And so that’s where we do a lot of work and have a lot of [00:13:00] expertise, is really taking a look at the overall customer footprint and making suggestions on the best places to build your supply chain.

And really it can be a multi-year, multi-tiered approach on how to do that as well, because again, things change so quickly. We’re talking about tariffs now. The tariff landscape a year from now could be completely different. What we’re putting in place now may not really matter in a year or two years or three years.

There could be so many changes that come along with that. Our expertise, and I think a lot of our partners uh, we all have expertises in really managing these supply chains and offering suggestions and partnering with customers on how best to do these things.

Maureen: You manage warehouses and distribution centers. For a company that recognizes that the volatility will continue, it seems that outsourcing some of the warehousing and distribution is a wise short term strategy, even if long term you’re gonna be building your own warehouses. If you’re [00:14:00] supplying parts to manufacturing, as an example, if you’re doing inputs to chip makers, are we actually gonna be making chips more in the US or is that a short term o ptics that won’t be realized in five to 10 years.

Mike: That’s exactly right. I know I talk about DHL in our position here, but that’s what you get from a large company is the flexibility to move with whatever the strategies are.

Again, we’re a company that’s been doing supply chain for so long and we have such expertise. I’ve been with the company, it’ll be 10 years next month. Yet when we get into some of these large meetings with our senior level people that 10 years, I feel like I’m a baby in the company.

We just have so many people that have been around for 20, 25, 30 years and have seen so many different segments and opportunities in supply chain that we build that expertise .

I think that’s what you get with a company the size of DHL is that we have the breadth to really help support whatever the [00:15:00] needs are for supply chain. We have the expertise, we have a lot of folks that have been around supply chains for a long time. They’ve seen every opportunity out there and can offer the right opportunities for any size customer and, and really help to build any kind of opportunity that’s needed.

Maureen: Mike. You’ve just been promoted to COO. DHL has gone through internal changes. What has that journey been like for you? You’ve been preparing for this type of promotion for a number of years now.

Mike: Yeah. To be honest, I wasn’t preparing for this type of promotion because I kind of came outta nowhere when I applied for the COO role and was a bit of a dark horse when I got the role. I was announced probably about a year ago now, and fully in place beginning of July. My predecessor retired and so there was a few months of overlap and she exited the company fully in September.

So really that was the point where [00:16:00] I took over the role completely and got into it. And I will tell you, it was a bit of a transition. Fortunately, every C level within North America changed over the course of the same time period.

We have a new CEO, our former CEO retired, our CFO retired and we had someone take that role. Our chief commercial officer retired, and we have a new person in that role. Our CIO for North America was elevated to a global CIO role, and so that position also was a new position. And so the five C-level roles are all new within the role.

All of us have been in the company for a while but it really allows us a chance to determine what we’re trying to do as far as what culture do we wanna have in place or what are the initiatives that are important to us? We develop a new strategy every five years, and so this next year, 2026 is the [00:17:00] beginning of our, what we call strategy 2030.

So it allows us to be in on the ground floor of that and work together. And I’ll tell you, it’s a good team. Aside from the five chiefs within North America, we also have a peer group that are presidents of our sectors. And altogether we are on the North American Board. And I’ll tell you, it’s a strong, strong region.

North America is known as very profitable, high performing region. In addition to reporting into North America, I report directly into the global COO for supply chain. And so I sit on the global operations board and have a hand in really determining how to use best practices across all of our five worldwide regions and working with those teams on best practices and really creating executional agility and resilience across the whole world.

You know, It’s been a very rewarding experience. I feel like I’m finally getting my feet under me and getting the traction [00:18:00] with the role to where I understand it. you know, I have a really good team in place. I inherited a large number of VPs. There’s been no turnover there, so there’s been some consistency with my team overall.

As a result, they’ve been really gracious in getting me into the role and getting me settled and keeping me honest. And together we’re working on some transformational things within North America that I think are really good. And those guys really work with our global partners as well. So overall, I uh, coming out of a straight operational role where I was day-to-day into operations into more of a strategic role where I impact operations and have to take a longer look or a longer view and play a longer game. Learning how to do that effectively and, uh, and I think I’m very pleased with the role and decision to take this one on.

Maureen: Being more strategic has been something you’ve been leaning into for a number of years.

Mike: Yeah. You and I have worked together a number of years now. If I could look to what you and I have worked on [00:19:00] consistently, it’s really getting me to understand who I am as a leader and how I use those leadership impacts to drive the business the right way.

An important part of it is also understanding who I’m not as a leader and really leveraging my strengths. Compensating for my opportunities. It’s okay to have, I’ll call them weaknesses or opportunities, but do you have the right team in place to compensate for that or do you have the right views on how to leverage the sprints the right way?

And I think that you and I have done a great job together. And you’ve done a good job of kinda rounding out my experience and my expertise and my leadership.

Maureen: You are such a good fit for this role, but as you said, you weren’t initially thinking that was even your career path.

Mike: Yeah. I fully expected that I would be in ops until the end of my career and that is an expertise for me. I started out as a temp forklift driver, 30 something years ago, and I’ve worked my way up through [00:20:00] every level of operations within a building and understand it completely.

Having to get into a role where I don’t have direct responsibility for a site, but I have to come in and have to be able to influence. And really be part of the team. Some people say, well, how does it feel getting out of operations? Well, I’m not out of operations. I’m still fully in operations, just in a different role.

Our department is specifically called operational excellence, and that’s what we’re there to drive. How do we take the operation, make it better? How do we make an operation more effective for leaders to run? How do we make life simpler for the key people in our organization , they’re our associates.

We have 55,000 associates within North America and all those people want to do a good job. And it’s our responsibility to break down barriers for them to make work life balance good for them to make sure that we’re providing a good work area. Part of the excitement that I see when I’m out in the [00:21:00] field, I just got done in Memphis doing six site visits with, my leader one thing that I see is that people are excited about where they work. I said it a couple times that we’re really an extension of our customer’s brands. We are brand managers, and when you see people that are working in an environment like that, they’re excited about the brand. I was in a Yeti facility.

That’s a fantastic brand. We love Yeti. Cups, yeti swag is something that just the associates are excited by what they do. We do a lot of value added services for the brand overall and it drives a ton of excitement. I could go over just many, many customers where we are excited about the brand.

We have a large number of brands that everyone would recognize, and it’s it’s a great place to be able to navigate through all these different customers things that we buy every day.

Maureen: The other thing we haven’t mentioned is AI. You managed a building with 3000 robots so robotics also are [00:22:00] changing the complexion of what happens in supply chain and warehousing.

Mike: Yeah.

You used the word, I’m gonna change a little bit and that is changing the culture. I think that the one thing that we have in DHL is such an embedded culture of excellence that I would call it refining the culture. The new people that are coming in are just an extension of what we’ve already created, and that’s what’s exciting about the company overall.

When people ask me what’s the culture of DHL? Well, we take care of customers. We take care of people, and we in our conferences this year, happy associates and satisfied customers, equal growth. And so that’s what we strive for, is how do we take care of the two most important segments of our businesses: our associates, who actually do the work and move the boxes and create the value for our customers, and how do we take care of our customers by the right relationships and really driving an interaction that’s very healthy. The best customer relationships [00:23:00] that we have are those ones where you can sit in a room together with 20 people and not know which 10 are from each side of the table, which company?

We have a lot of interactions like that where there’s some blurred lines where we just work so closely together. And, I would say our new C-levels and the continuation of our presidents, we have that within DHL and we have it globally too. And I just think that we’re really good at that.

Driving that culture overall and maintaining no matter who the piece is. I strongly believe I could get out of this position tomorrow, and the person that replaced me would be just as good of a cultural fit. There’s so many people that could fill this role and it’s a privilege to be in the role, but i’m also not arrogant enough to think that there couldn’t be many dozens of people that could fill this role the same way. And it is because of the culture and the people that we select and how we drive leadership within our company.

Maureen: if I looked at your new C level cohort, what were some of the characteristics that [00:24:00]you were delighted with when you met your new colleagues?

Mike: Yeah, again, I knew all the new colleagues, none of us are new to the company. That’s, I think the most powerful thing is that there’s not any of us C-levels that came in, that were brand new to the rest of the group. I’ll quote really it’s a mantra that Patrick brought in when he came into the CEO role.

Patrick Kelleher is our new CEO; he came in the middle of last year, formerly he was our chief development officer globally, so he sat on the global board before but there’s a tagline he uses and it’s called “Even More, Even Better.” That alone really to me, talks about , it’s not necessarily a new culture, it’s an extension of the old culture.

What, we’re doing good. We want more of it. What we were doing good, We wanna be better at it. And so that probably is a good summation of what the viewpoint is that we’re taking overall. I will tell you what was a pleasant surprise [00:25:00] to me. The first board meeting I was ever in is when I was on the board.

Again, the C-levels are all newish. But the presidents there, we hadn’t had any changeover in presidents for a little while. But the embracing that I got out of the president group was fantastic. They really took me along for the journey. They taught me in some ways how to be in my role.

They were very open about expectations. They were open about the things they wanted to see change. Anytime you get a new person into a role, it’s a little bit transformative. You know, Even just in the thinking or the ideas or, I have a few things that I had that I wanted to drive within my teams, all of it has been very well accepted and embraced and really they taught me what are the expectations on the board? What are our expectations of you? And I was very pleasantly surprised and I shouldn’t have been because we’re very good at it. But it, again, the board was a segment that I wasn’t real familiar with, aside from my direct bosses and a couple of others. It was a, great [00:26:00] surprise to see how embracing they were as we got into the board.

It’s just like you stepped into a different family and, they’ve been instrumental helping me get up to speed.

Maureen: What was your biggest surprise as you stepped into both the North American and the global boards?

Mike: I’ve had more of an epiphany about the role that North America has and the influence that we have globally. We’re, again, we’re known as a very high performing team. We have a lot of expertise. We have a lot of things that we do in innovation, our operational execution, resilience, agility.

We’re really good at startups. We’re really good at large buildings. There’s a lot of things we’re good at and we’re looked at. Across the world as subject matter experts in a lot of things. We’re also open to taking, we call it oh, I forget what the terminology is, but basically it’s, we steal shamelessly from each other.

The best ideas are the ones that need to play out in our company, and [00:27:00] so we’re very good at that. We’re good at taking the good and bringing it into the North America, and we’re good at it. Being good partners in the rest of the regions and helping them to take the right ideas as well. And I think that our global board, My boss on the global board is new and most of the COOs, the regional COOs, out of the five of us, I have the second most seniority in role.

So there’s three other folks that came in around the same time or very close to where I came in. And so having that new viewpoint, from a transformation standpoint we’re all new and we all bring some new ideas and different perspectives and we’re all rolling in the same direction .

But also it’s it’s very evident to me that they look to North America. For the things that we do well, there’s an expectation that we’re gonna help the rest of the globe do well also.

Maureen: I love the amount of collaboration, and I’ll say open-heartedness, just kindness and acceptance of one another, supporting everyone’s success.

That idea that I don’t [00:28:00] compete with my other regions, we elevate one another.

Mike: That’s correct. And again, I look at that as a cultural strong point for DHL. Look, there are egos, but I would say that the political landscape isn’t as drastic as I’ve seen in other companies. And it is a low ego company.

You would sit amongst some of our folks together and really not know that we may be C levels or presidents or just a bunch of down to earth people that wanna go out and do good for our customers and for our company. And that’s why I love the place. I know I end up preaching a lot about DHL and I will shamelessly say that I.

I’ll never leave the company. I don’t have that much career left, but I, I’ll be proud to say that I will very likely end my career with DHL and for a good reason. How terrible would it be to leave someplace like DHL where you like the people and you like the culture and you like what you do, and maybe you go chase more money or some other title and you start out in a company where two weeks in you, you [00:29:00] realize this is not the right cultural company.

I’d been in a poor culture organization and it’s not fun. We’re having a good time.

Maureen: Well, congratulations. I realize it’s a year in. Thank you for letting me travel this journey with you ’cause it’s been my pleasure and honor to watch your career progression and have a close seat in that process.

Mike: Oh, we’re taking full credit. I I. Good

Maureen: job.

So how would people learn more I realize dhl.com is one place, but say I have questions about how do I integrate and update my supply chain strategy, is there a place I can deep dive?

Mike: There’s a lot of information out there about DHL, whether globally or within North America and, reach out to one of our executives.

We’re all over the [00:30:00] place on LinkedIn and, we happily do information sessions. If you’re looking to do something with supply chain, you have supply chain complexities that you wanna work through. You can even reach out to me, I’m sure my contact information will be posted somewhere around here.

And, hey, look, I can’t give you all the answers but I know people who can. And we have a very solid business development group who can start to navigate you through the journey with us. You’re handed off to a solutions design team that can design the right opportunities for you. Part of my org is a project management group who will navigate you through getting you incorporated into DHL and bringing up new opportunities.

Part of the strength of our company is that you get engineering, you get HR expertise, you get financial expertise. We just have so many good professionals and experts in these areas that you sign on to a lot of people. It’s like marrying into a family.

You get a really large family that you marry into, and if you [00:31:00] need something, continuous improvement, labor management, even as far as going out and doing community things we’re just so broad in a lot of things that signing on with DHL brings you a whole lot of other things into your company.

Maureen: Thank you so much, Mike. And thank you to our listeners for joining us on Innovating Leadership Co-Creating our Future. Are you interested in elevating the quality of your leadership? The Innovative Leadership Institute offers best in class leadership development, executive advising, and organizational transformation services.

Send me a note at inquiries@innovativeleadership.com. The world’s most successful leaders are created here.