The selection of David Bozeman as the new CEO of C.H. Robinson Worldwide Inc. came as a surprise to most people. It may have come as a surprise to some on the company’s 11-person board as well. Typically, a news release announcing such a move will specify if the board’s decision was unanimous. That didn’t happen here.
Going into last week, the consensus was that former UPS Inc. (NYSE: UPS) COO Jim Barber, who sits on Robinson’s (NASDAQ: CHRW) board, was the odds-on favorite for the job. That a decision had not been made led some to believe that Barber’s IT chops weren’t what the Robinson board was looking for.
Bozeman, who starts June 26, lacks C-level experience, a factor that concerned Ken Hoexter, an analyst at Bank of America Securities. For a “company in transition” like Robinson, which has struggled in recent quarters, especially at its freight forwarding unit, a “longer learning curve of a C-level position could be an overhang on turnaround timing,” Hoexter wrote prior to the announcement.
Another question will be whether Bozeman has the skill sets such as in freight forwarding, ocean freight and third-party logistics required for such a demanding job. Without any C-level experience, Bozeman has never had to identify and execute strategies to turn around a company. He does have significant supply chain experience, however.
Bozeman joins Robinson from Ford Motor Co., (NYSE: F) where he spent less than a year as vice president of its customer service division. He also spent five years as vice president of transportation services at Amazon.com Inc., (NASDAQ: AMZN) where he built the e-commerce giant’s middle-mile delivery network, as well as lengthy stints at Caterpillar Inc. (NYSE: CAT) and Harley-Davidson Co. (NYSE: HOG).
He is also an outsider, a fact that may have weighed in his favor.
Bascome Majors, an analyst at Susquehanna International Group, was a more sanguine observer. “Today, Dave lacks name recognition with most transport investors,” which might have explained the steep (6.4%) dive that shares took on Monday, he wrote. “That said, we think only a clear ‘slash and burn’ hire would have driven a short-term pop, and Mr. Bozeman’s resume doesn’t fit that narrative (on paper at least).
“Longer-term, his skill set of managing global teams at customer-focused organizations, including at Amazon’s complex transportation & supply chain operation, could help Dave earn the trust of CHRW’s employees and investors, like another former Ford executive (Joe Hinrichs) is doing today at CSX (NYSE: CSX).”
Jason H Seidl, analyst at Cowen & Co., said in a Tuesday note that Bozeman’s tenure at Amazon was the key reason he got the job. “We believe his time spent at the home delivery giant could potentially serve CHRW’s digital brokerage platform well,” he wrote.
Brittain Ladd, a longtime logistics executive, was cautiously optimistic about the move. “I’m amazed at how many people have reached out to me to question the selection of David. A lot of people don’t understand that a VP of transportation at Amazon has a tremendous amount of responsibility, certainly more responsibility than the average VP of transportation. David is credited with driving a lot of changes at Amazon and he was highly respected.
“David can be successful in the role as long as he surrounds himself with the best executives he can hire from Amazon, DB Schenker, DSV and certainly Amazon. David has to own the role of CEO. I believe he will have no choice but to terminate board members [and] to bring in board members who want the company to grow and take risks,” Ladd said.
The outspoken Ladd said Robinson under Bozeman “should absolutely go after an acquisition of DSV or at a minimum, acquire Uber Freight.”
In addition, Bozeman should contact Capgemini Invent, Deloitte or the Boston Consulting Group and have them conduct an independent review of Robinson’s operations and technology; determine future technology needs and optimal organizational structure; identify acquisition opportunities and which parts of the business to divest if any; and design the optimal go-forward strategy for the company, Ladd said.
“If Bozeman doesn’t do this, he will be in a situation where C.H. Robinson executives will do their best to protect their pet projects and fiefdoms. Bozeman needs an independent assessment of the company and a strategy that he can drive using a team he can trust,” he said.
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