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11. Good-bye, Little Rock—Hello, Memphis

Roger Frock Berrett-Koehler Publishers ePub

61

While Mike was conducting the Florida meeting, he and Ted Sartoian talked about the heady days of expanding UPS’s service areas and the sales blitz teams that had been so successful. Mike decided to duplicate that approach for opening the new cities at Federal Express. Ted suggested hiring an experienced high-level manager to take responsibility for the field operation. He recommended Mike Fitzgerald, then vice president of operations for the D. H. Overmeyer Company in New York, the largest public warehousing and warehouse leasing company in the nation. Ted knew Fitz very well and said, “This is the guy you need to get on board.”

Mike contacted me several times,” Fitz recalls, “but frankly, after UPS I had enough of small packages to last me the rest of my life. The business was horrible around Christmas and other holidays. I told Mike there was no way I was going to move to Little Rock. My wife, Joan, and I were living with our two children in a beautiful home in Ridgefield, Connecticut, on an idyllic two-acre setting with a stream, wonderful neighbors, and excellent schools. I was content with my job at Overmeyer and I wasn’t going to leave all of that.”

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22. Fund-Raising—Round Three

Roger Frock Berrett-Koehler Publishers ePub

135

It was time to begin planning for a third round of financing. Charlie and Rick Stowe began visiting other venture capital groups in the hope of attracting new investors by midsummer, but they found no takers. Charlie explained, “It was a tough time generally in the financial community. This was 1974 and the capital markets were in the tank.” Charlie realized he needed another source of funds for the third financing.

At his urging, we sent our best, most eloquent and personable ambassador to Paris for a face-to-face meeting with the Rothschild family. Art had a natural ability to charm our harshest critics. Over lunch with Baron Guy de Rothschild, his son David, and nephew Nathaniel at their Paris office, Art explained the mechanics supporting the optimistic growth projections for the company: each new city opening created shipping opportunities from and to every city already in operation. It was a straight numbers game at this point. The baron was impressed with Art’s elegant presentation and decided that the bank would participate if his son and nephew invested their own money, as well. To our relief, they agreed.

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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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28. Mach 1 to Idle

Roger Frock Berrett-Koehler Publishers ePub

177

Federal Express was maturing, transforming from an entrepreneurial, fast-paced, decentralized decision-making entity to a more tightly controlled and highly structured corporation. The company was beginning to lose some of its flexibility, to downplay the interchanging roles of the senior management group, and moving toward compartmentalization. Inevitably, territorial silos were rising, to the detriment of the some of the cooperation that characterized earlier years.

Fred, freed from most of his financial concerns and personal problems, was changing from primarily a charismatic leader to a tougher, no-nonsense corporate executive. He was beginning to have second thoughts about the decentralized division structure and was concerned that the division heads were creating too much autonomy and were building independent fiefdoms.

The purpose of decentralization was to empower our hands-on managers to make decisions based on their knowledge of the region and its special needs. For the most part, things functioned well for the first two years. Our productivity measurements, the service level reports, and the way we treated employees and customers were coordinated through regular monthly meetings. Geographic differences affected our operations, of course, but we never strayed from the company’s founding principles.

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8. Looking for a Few Good People

Roger Frock Berrett-Koehler Publishers ePub

43

The development support staff needed to be experienced, creative, flexible, and capable of moving quickly in order to have the system ready in less than 12 months. Most of all, the staff would have to be compatible and work in harmony. This was to be no place for egos to disrupt the flow of accomplishment. Only a group of dedicated individuals could pull off this Herculean task. It was going to take a significantly larger and more sophisticated staff than the one we had at Little Rock in the spring of 1972.

Irby continued to be a valuable source of information, providing knowledgeable insights into the personalities and capabilities of the small staff from Arkansas Aviation Sales while serving as a stable bridge between the corporate jet activities and the hectic pace of the Federal Express startup. It sometimes seemed as if everything needed for the small-package operation required a unique approach; we were not merely reinventing the wheel, but creating an entirely new type of service that had no direct precedent.

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