Jim Fish, CEO of Waste Management Credit - Bret Hartman, courtesy of Waste Management
(Miss this week’s The Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, Nov. 15; to receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)
Archaeologists and private eyes have long known that sifting through trash can yield juicy revelations. As the nation’s leading garbage collector, Waste Management has a unique vantage point into what’s going on in the country’s homes and businesses. As people quarantine—and eat more—in their homes, residential garbage bins are heavier; cardboard from all those Amazon boxes is filling the recycling stream. The company’s pickups at concert venues and stadiums, however, have largely dried up. Cardboard cutouts of fans don’t create trash.
The $15.5 billion company is also the biggest residential recycler in North America and the largest operator of landfills in the country. The waste business is capital-intensive and increasingly driven by technology and innovation. Waste Management has invested almost $600 million in startups and companies with next-generation approaches to throwing things away. The company has made dozens of investments in companies, some trying to turn plastic back into crude oil or cardboard into ethanol. Others deal with hazardous waste, medical waste or waste conversion. “There are a bunch of different investments that we’ve made, probably upwards of 50 different companies over a decade,” says Waste Management CEO Jim Fish. One of Fish’s most promising bets is on a company that turns junk mail into roofing board for big commercial buildings.
Some of the innovation is lower tech but equally transformative. For the past 15 years, the industry has been moving increasingly to side-loader trucks, which mechanically dump the large plastic green and blue curbside containers into garbage trucks. That shift has cut down on injuries and labor costs. “And by the way, it makes it easier to hire a driver,” says Fish. “If I told you, ‘Look, your job is to get out of the truck every 20 feet and dump a trash can in the back of an old-style rear-loader as opposed to running a joystick sitting in a truck,’ I think I can tell you which one you and I would choose.”
Fish, 58, recently joined TIME for a video conversation on how the pandemic changed what people throw out, who are the best recyclers, the surprising complexity of landfills and why people think bowling balls are recyclable (they are not).
(This interview with Waste Management CEO Jim Fish has been condensed and edited for clarity.)
What does America’s current garbage output tell us now about the state of the economy?
We are a pretty good barometer for the overall economy because we service every different sector. What we’re really seeing is that particularly in those places that opened more quickly than others, their economies have come back more quickly.
Any sectors where trash output is still way down?
The hospitality space is the one standout, whether it’s airlines and airports, hotels, theaters.
With people at home more, what is the impact on your residential business?
The weight per container went way up—almost 25% at the depths of COVID. On a normal basis, you might be going into your office or you’re going into restaurants. Now you’re eating everything at home. Everything you do is at home. All the waste that you might have put in your wastebasket or your recycle bin at work is all going into your home containers. It’s not up 25% anymore. It’s single digits now.
What does the residential waste stream tell us about changes in consumer behavior?
What we’ve seen is an acceleration of a trend that was already taking place, which was this move to Amazon [and other online retailers]. That was taking place before COVID, but boy, it really rapidly accelerated within a COVID environment. Every day I see a dozen UPS and FedEx trucks and Amazon trucks running around the neighborhood. And they’re dropping off 10 packages at every house. That might have been two packages at every house pre-COVID, and now it’s 10.
So how does that impact what people throw away?
The impact on our business is cardboard in our recycle stream. It’s coming from a different place. Instead of coming from a Sears store, which we might have picked up before, now it’s coming in small quantities from residential customers as opposed to big commercial customers. One question that I have asked and I haven’t gotten a good answer to internally is, ‘So is it more cardboard that’s being created?’ If you think about it, all of those 10 boxes that come to our house, I think there’s more cardboard being used than one big box going to a Sears. I don’t know for a fact, but I suspect that all these individual boxes actually add up to more cardboard. So it’s more and more important that we be a good recycler of old corrugated cardboard. [After the interview, Waste Management provided the following answer to the question that Fish posed: Cardboard has increased in the residential stream—about 15% to 20% over the past few years, and recently with COVID we have seen increases in cardboard and additional bottles and cans. So while cardboard has increased on a percentage basis, overall recycling volumes are down about 4% to 5% on the year when looking at commercial and residential volumes.]
I think most Americans think that a landfill is kind of the old-style dump, where all you do is just throw it into a hole. There is a lot of complexity that people just simply don’t appreciate.
Based on what you are seeing in terms of what people are throwing away, what do you think will be the most lasting change in consumer behavior to come out of the pandemic?
I honestly believe that the shift back toward single-use plastics has been a temporary, COVID-19 shift. Ultimately, when the world gets back to normal, we will again move toward fewer single-use items and more reusable ones.
As a result of the pandemic, by some estimates, state and local government revenues will decline $155 billion in 2020. How will that impact you?
We have a lot of big cities that are customers of ours, and I suspect that in many, many cases, those cities are going to be under pressure. Their tax revenues are going to be down. So while it hasn’t affected us yet, it probably will as we go back to the negotiating table and look to recover some of this increase in container waste that we just talked about. It’s a tough conversation for us with those municipalities because they’re coming at it from a budget-shortfall standpoint. We’re coming at it from a lowest-margin standpoint, and the two are going to collide.
Does that mean that garbage pickup will be cut back?
I think they’re going to come at it probably as much as anything from a price standpoint as opposed to a frequency standpoint, because really it becomes a public-health issue. When you start to talk about reducing frequency or eliminating pickups, I mean that becomes a real public-health problem.
With 249 landfills, you are North America’s biggest operator of landfills. What does it take to run a landfill these days?
I think most Americans think that a landfill is kind of the old-style dump, where all you do is just throw it into a hole. There is a lot of complexity that people just simply don’t appreciate. Our landfills are almost like engineered assets. There is a tremendous amount of cost, capital expenditure required now to construct a landfill.
What are the different factors that come to play?
Part of the complexity is that we have GPS on our heavy equipment, and it helps us to determine the compaction levels. How compacted do you want that landfill to be? You have to be very careful about how steep the slope is in a landfill. You don’t want to have a slide. Probably the most complex thing we do in our landfills is the collection of gas. We capture the gas that comes from the decomposition of trash. At over 100 of our landfills, we have gas-collection plants. So we collect the gas in all of our landfills, and then at over 100 of them, we turn it into renewable energy. That is truly a complex process. You have to determine how many wells you’re going to sink, at what depth you’re going to sink those wells. And then we have to buy the generators to convert that gas. With renewable natural gas, we clean that gas up before we turn it into pipeline-quality gas.
Do you sell that gas, is that a profit center for you?
How do you protect the environment?
We have triple-lined landfills. So whether it’s a geosynthetic lining and then a clay lining and then another geosynthetic lining, we capture all of the water that seeps into the landfill. We capture that and treat that water. There isn’t anything escaping those landfills. We make absolutely certain of that.
Let’s move on to recycling. Can you give us a brief summary of what China did and how that impacted the recycling business?
China announced they’re fully shutting down the import of recyclables. Obviously, they are a big exporter, not of recyclables but a big exporter of products. And so they needed corrugated cardboard. They announced that for whatever reason they were shutting down the import of OCC, which stands for old corrugated cardboard. They were our single biggest customer on the recycling stuff. And now they will shrink to simply zero by the end of this year. I couldn’t tell you exactly what their motives were, whether they were environmental, whether they were economic or political or whatever. But we found really good replacements.
We’ve also taken it upon ourselves to change the technology at our recycle plants. Part of what they said was that the material coming to them was contaminated. And so we’ve taken it upon ourselves to really innovate, and we’ve built a new plant in Chicago, for example, that probably is going to be a carbon copy for what we do with future recycle plants. There aren’t as many people at the plant. It’s much more technology. It’s optical sorters and the like, and we think it produces a cleaner recycle stream. So it’s better for the environment. It’s better for us economically.
I understand this Chicago facility is like the Taj Mahal of recycling. Can you just tell me a little bit more about it?
This facility has I think 14 optical sorters, which is a lot. So from a capital standpoint, it is more expensive.
What do the sorters do?
An optical sorter has pretty amazing technology. You’ve got a conveyor belt that’s coming through pretty quickly. And an optical sorter is able to look at what’s coming on that conveyor belt, and at the right time, it shoots a jet of air. And it can knock that piece of plastic, that Tide bottle, into a particular bin, So it’s amazing technology that is able to actually identify it quickly, and then at the same time shoot this stream of air and knock that plastic off of the conveyor belt. So it saves having a person pull it off.
Is the average household getting better at recycling?
Most of us who recycle, we honestly are trying to put what’s recyclable in the recycle bin. There are some people that use the recycle bin as trash overflow. I mean, look, don’t put your turkey carcass in the recycle bin. And people that do that, they know better.
I mean, look, don’t put your turkey carcass in the recycle bin. And people that do that, they know better.
What regions are the best recyclers?
The Pacific Northwest has done a really good job with education. Minnesota is another place that’s done a good job. There are parts of New York; upstate New York in particular has done a nice job.
Let’s put this urban myth to rest once and for all: Bowling balls are not recyclable, right?
We do get a lot of bowling balls, and I don’t know why. How many bowling balls are out there, for goodness’ sake? I couldn’t tell you what a bowling ball’s made of. I’m not a big bowler, but it’s not metal and it’s not cardboard [which means it is not recyclable].
And what do you do with them, start a bowling league?
They end up going in the trash. What happens with this stuff that ultimately is not recyclable, it comes into a recycle plant, is it goes into this kind of contamination pile. And that all ends up going to a landfill.
Have you ever engaged in dumpster diving?
I have, actually, a long time ago. I lost my wallet, and I thought maybe it had gotten thrown in the trash. I was living in an apartment complex, so I went out to the dumpster at that complex and I went through it. I didn’t find it.
LEADERSHIP BOOK: I don’t read a ton of those leadership books. I feel like they all kind of sound the same after a while. But I like Execution, by Larry Bossidy.
AUTHOR: I just finished Team of Rivals [by Doris Kearns Goodwin].
APP: been, a travel app.
EXERCISE ROUTINE: I was having lower-back problems; my wife got me into Pilates.