32 Slices
Medium 9781576754139

16. An Inauspicious Beginning

Roger Frock Berrett-Koehler Publishers ePub

89

We needed to show our potential customers that we were very different from any other shipping service. We tried to keep things simple by providing representatives with a sales talker, a Dick and Jane story: These are our planes, these are our trucks, this is our system, here is our sorting facility. Our system was so simple, so unique, and so new that it required explaining. Our sales group put up posters of the Federal Express planes in each prospect’s shipping area as a reminder of our closed-loop system, but that still wasn’t enough.

In the early days, people had a difficult time understanding the concept of shipping through the hub. Diane, one of our customer service agents doing telemarketing at the time, was explaining to a prospect that our central sorting hub was the reason we were so reliable.

The prospect said, “You mean that if I ship a package from Milwaukee to Chicago, it has to go through Memphis?”

Diane responded, “Look, sir, if you don’t tell your customer, we won’t. It just will be there by noon tomorrow. Will that work?”

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10. The Humble House Gang

Roger Frock Berrett-Koehler Publishers ePub

57

As we started to look at the enormous task of establishing the ground pickup and delivery operations, Fred began thinking about ways to shortcut the process. One alternative was to form a joint venture with United Parcel Service. Basch contacted UPS and set up an appointment with Jim McLaughlin, the chief executive officer.

“What are you guys doing here?” McLaughlin asked.

Basch responded, “We have an appointment.”

McLaughlin said he didn’t have the meeting on his calendar, but graciously invited our delegation to the conference room. Fred described what he had in mind and the role he would like UPS to play. McLaughlin abruptly said, “No, we’re not interested in doing that.”

McLaughlin’s indifference turned out to be a “save” for us. If UPS had agreed to become the ground distribution arm of Federal Express, it would have controlled the customer base and, most likely, the priority package business. Federal Express, if it survived at all, would probably have become just the air portion of UPS.

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30. People Are the Wind beneath Our Wings

Roger Frock Berrett-Koehler Publishers ePub

201

Federal Express was not just a good idea—it was and still is about dedicated people. The company was conceived and guided by Fred Smith, nurtured by an entrepreneurial management team that established its form and structure, and nursed into being by dedicated employees. All of us struggled to help the company grow. We nudged it along with love, enthusiasm, passion, excitement, and strength of will. During the formative years, the organization was fortunate to have an exceptional management team—but the real force behind Federal’s success then and now is the passionate, tireless, resourceful, innovative, motivated, and never-say-die employees who support the managers.

As we struggled through the early stages, our employees unselfishly shared their creative abilities, maintained a mutual respect for other team members, and developed a focus aimed at collectively achieving the company goals. These individuals remained loyal to the company through all the difficulties and turmoil of the startup.

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25. Three Division Offices

Roger Frock Berrett-Koehler Publishers ePub

155

My term as general manager of operations ended as the management group agreed to the structure proposed by the board’s executive committee. I was nearing the completion of my three-year employment contract anyway and was relieved that Art would be the one to take over my position. I was confident he would do a good job. Perhaps this was a propitious time for me to move on, but on the other hand, Federal Express was still an exciting company with an improving financial condition. It would be interesting to see what we could do when the company became profitable. It was time to have a serious talk with Fred.

I was astonished when Fred did not even mention the strange events of the preceding days. Estes suddenly no longer existed; gone were his Mercedes, his private parking spot, his papers, and his persona, all without a single comment from Fred. In fact, our meeting progressed as if the resignation threat and the board’s attempt at ousting our founder had never occurred. As far as I know, he never even acknowledged the stand that the management group had taken. I was seeing another side of our leader—an emerging attitude of executive infallibility and a certain aloofness in his personality that left no room for personal gratitude.

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13. More Obstacles

Roger Frock Berrett-Koehler Publishers ePub

71

The commitment to take the remaining Falcons from Pan Am was just two weeks away, but Federal Express was running out of funds and facing a financial crisis. We had fallen behind on the payments to Little Rock Airmotive for the earlier conversions, and the modification center was holding back on the parts stored for the conversion of the remaining planes. Two important suppliers were threatening to close the door on the company, and numerous others were sending menacing messages about past-due bills.

We’d underestimated the capital required for the launch, thanks to the following surprises:

Fred had come up with the initial startup funds. He had done a remarkable job in Washington, convincing the regulators to modify the outdated air taxi restrictions. His charisma and enthusiasm had inspired nearly a hundred associates to pursue his dream. The company would be ready to begin small-package operations in just a few weeks. This was not the time to fold the cards and leave the table. This was the time to ignore the problems and charge ahead!

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