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FedEx's Stories

(2007-11-17 06:21:42)
分类: 商业沙龙
 
Roger Frock, one of the founders on the executive team and previous COO of FedEx, gave a surprisingly interesting talk yesterday at Ross school of business.
 
I like stories, especially legendary business stories. And Rodger is really a story-teller that reveals one story after another. The stories were all about Federal Express, from a risky start-up to a household name. However, such remarkable journey will not be alone, although not many companies can ultimately become an 800 pounds giant as FedEx does, with annual revenue of $30B and 600 airplanes.
 
Fred Smith, the founder of FedEx, was a Yale graduate, ex-pilot, Vietnam veteran, and a new entrepreneur. Fred has worked on his business of trading corporate jets and made his profit.  Fred proposed to the Federal Reserve that he can use aircrafts to ship bonds between reserve branches and the central, and based on this proposal, Fred named his new venture, Federal Express.
 
However, Federal Reserve turned down his proposal. Not intimidated, Fred developed an innovative idea of using small cargo airplanes for priority delivery, and he had foreseen that the hub-and-spokes model was the only feasible system that could deliver packages within a reasonable time frame, and of course, with limited airplanes.
 
Fred is never just an idea developer, instead he is a person that believes in his ideas and make them happen. One day, in 1971, Fred came to A.T.Kearney for help. And Roger was in a supervisory position at A.T.Kearney and has many years experience in consulting in the aviation industry.  A lot of experts at the time shadowed doubts on FedEx's business model, as the costs of operating and the risks of hitting the ceilings of aviation regulation were so high. However, after scratching the surface, Roger raised his interest in the venture. Roger outlined the operating plan and wanted to help Fred seek after a general manager. Fred said "why don't you just come here and make it work?" Wow.
 
In last evening's talk, Roger told a story that propelled him making the move. At the beginning, Roger didn't seriously consider Fred's offer because Roger had everything to lose but too much risk to gain. On a weekend when they were at a party, a gunman broke in and asked everybody for money. Everyone gave his cash. Fred said to the gunman, "stay cool, we will give you the money, and no one gets hurt". Fred handed the only dime he had. As Roger recall, the gunman seems to be on his first week out and his hands were shaking so there was a quarter feel off. As the gunman collecting from others, Fred calmly picked up the quarter and put it into his pocket, which make him end up making a profit :)  Anyway, Roger saw the courage and the leadership in Fred, and joined FedEx as its first COO.
 
The start-up journey of FedEx is nothing but difficulties. One of the most legendary stories is that FedEx had to pay the fuel provider on next Monday, but on Friday night there was almost nothing left on their accounts. Then on the Monday morning when Roger came to office, he was so surprised to find $27,000 showing in FedEx's account. So he asked Fred where the money came from. Fred said that on Friday the General Dynamics refused his plan, so Fred was angry and went to Las Vegas. Then, guess what, he had good fortune and made $27K back, which saved FedEx! Roger believed that storied was true, but regardless whether it is purely an anecdote it demonstrated the falter of FedEx in its cradle.
 
One inspiring note Roger made was that to be a true leader and entrepreneur you have to stand up to voice yourself in some very unfavorable situations. At one early point, the investors of FedEx controlled the board, and they wanted to replace Fred with another CEO. However, Fred was a charismatic leader and almost every idea that he argued with the board turned out to be on his side later at some points. Roger and another executive member decided to stand up. They said to the board "If Fred goes, we go!" Eventually, the board gave up, and the FedEx was again back on track from yet another verge.
 
I got Roger's book: "Changing How the World Does Business: FedEx’s Incredible Journey to Success - The Inside Story" after his talk. I am still immersing myself in the numerous stories of last-minute saves and turnarounds. It is like sipping the entrepreneurialship out of the success journey of FedEx, one of most admired company of America.

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