32 Slices
Medium 9781576754139

4. This Dog Might Hunt!

Frock, Roger Berrett-Koehler Publishers ePub

23

In mid-April 1972 I arrived at the offices of Arkansas Aviation Sales to present our last progress report prior to preparing a final report. We started with a tour of the facilities and met some of the employees, most of whom were involved with sales operations and care of the corporate jets. While the offices at Arkansas Aviation were at best Spartan, the hangar area was quite a different story. Crammed into every possible parking space were beautiful, shining, expensive corporate jets of various configurations and with a variety of company logos and color schemes designed by their previous owners, which Arkansas Aviation had purchased for resale.

There was even an Aston Martin sports car parked in the corner of the hangar similar to the James Bond model. Curiosity got the better of me and I just had to ask what that beautiful car was doing parked in an airplane hangar. Fred had taken the car as a down payment in trade for one of his smaller propeller planes, as he turned his attention to the more rewarding corporate jet market. As he explained, “It takes up a lot less space than the plane.”

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6. Kick the Tires, Light the Fires

Frock, Roger Berrett-Koehler Publishers ePub

31

Fred was never one to wait around for things to happen. Near the end of the consulting study, Fred began searching for an agency to develop a professional corporate image and logo. At his request, I made several calls to New York firms, but the best price I could get was over $100,000, and that was just too expensive. The company was still months away from startup, and Fred decided to defer development of the corporate image while he attended to other more pressing matters.

Then fate stepped in. Rick Runyon, a young designer from Los Angeles, flew his own airplane, a Cessna 310 to Little Rock on a mission to convince Fred that he was the one to create our corporate image. Rick had his own West Coast graphics company and was responsible for the branding for Getty Oil. He now wanted to do the same for a new airline in need of a dramatic, eye-catching image. Fred was somewhat skeptical, but Rick offered to do the whole thing at his own risk and charge a fee of $25,000 only if Federal Express used his design. It was a generous offer, and one that Fred was pleased to accept.

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7. A Climate of Chaos

Frock, Roger Berrett-Koehler Publishers ePub

37

In my 12 years at A. T. Kearney, I had adjusted to the realization that corporations rarely conducted their operations in the crisp, professional manner we had presumed in the business school classroom, but even the more disappointing consulting experiences had not prepared me for the chaos I encountered at the Arkansas Aviation Sales facility.

Irby Tedder, a retired air force colonel, was the executive vice president, controller, and “mother hen” of the group. He was well qualified for his role at Arkansas Aviation. Irby had served as inspector general of the Continental Air Command and as commander of two large air bases. The “Colonel,” as he was frequently addressed, had amassed over 8,000 hours of command pilot experience and served as deputy wing commander in the Strategic Air Command, which operated B-47 jet aircraft.

Irby was a calming and mature influence on the group, but in some respects, the staff was almost unmanageable. He described Fred as “a nitpicker who had his hand in everything. He worried about seemingly insignificant problems that other people could easily have handled.” However, after my first few days of “managing by walking around” and just observing the confusion, I concluded that Fred had a right to be concerned about the trivial problems. People were doing a lot of talking but had no idea of the enormous tasks required in the next 10 months to launch our small-package service.

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27. From Caterpillar to Butterfly

Frock, Roger Berrett-Koehler Publishers ePub

171

Federal Express illustrates the importance of transformation,” argues Charles Brandon. “Originally, we were really operating a prototype system, though few “ of us realized that in the beginning. Our analytical and communication applications were generally copied or acquired from others, utilizing off-the-shelf, almost primitive systems.” FedEx became a leader in applying new technology to the business of transportation, only after going through an extensive transformation.

Initially, our ground operations were modeled on United Parcel Service. However, we learned there was a profound and important difference between UPS and Federal Express. UPS had a large customer base, so its pickup routes were very dense, highly regular, and generally composed of fixed, prescheduled stops. Irregular or infrequent shippers could contact the company and, by paying the service charge for a full week, schedule a pickup for the next business day.

Federal Express initially had far fewer customers, and our courier van routes changed daily in response to customer needs. Rapid reaction to customer calls, real-time dispatching, and sophisticated communications systems were of utmost importance.

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18. Light at the End of the Tunnel

Frock, Roger Berrett-Koehler Publishers ePub

101

The loan guarantee from General Dynamics raised our hopes and increased our spirits, but also increased the pressure to finalize the private placement. We continued to be in desperate financial trouble, particularly with our suppliers. The most demanding suppliers when it came to payments were the oil companies. Every Monday, they required Federal Express to prepay for the anticipated weekly usage of jet fuel. By mid-July our funds were so meager that on Friday we were down to about $5,000 in the checking account, while we needed $24,000 for the jet fuel payment. I was still commuting to Connecticut on the weekends and really did not know what was going to transpire on my return.

However, when I arrived back in Memphis on Monday morning, much to my surprise, the bank balance stood at nearly $32,000. I asked Fred where the funds had come from, and he responded, “The meeting with the General Dynamics board was a bust and I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.” I said, “You mean you took our last $5,000—how could you do that?” He shrugged his shoulders and said, “What difference did it make? Without the funds for the fuel companies, we couldn’t have flown anyway.” Fred’s luck held again. It was not much but it came at a critical time and kept us in business for another week.

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