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Fred Smith and FedEx: The vision that changedthe world
1 Every night several hundred planes bearing a purple, white, and orange design touch down at Memphis Airport, in Tennessee. What precedes this landing are package pick-ups from locations all over the United States earlier in the day. Crews unload the planes' cargo of more than half a million parcels and letters. The rectangular packages and envelopes are rapidly reshuffled and sorted according to address, then loaded onto other aircraft, and flown to their destinations to be dispersed by hand — many within 24 hours of leaving their senders. This is the culmination of a dream of Frederick W. Smith, the founder, president, chief executive officer, and chairman of the board of the FedEx Corp. — known originally as Federal Express — the largest and most successful overnight delivery service in the world. Conceived when he was in college and now in its 28th year of operation, Smith's exquisite brainchild has become the standard for door-to-door package delivery.
2 Recognized as an outstanding entrepreneur with an agreeable and winning personality, Smith is held in high regard by his competitors as well as his employees and stockholders. Fred Smith was just 27 when he founded FedEx. Now, so many years later, he's still the "captain of the ship". He attributes the success of the company simply to leadership, something he deduced from his years in the military, and from his family.
3 Frederick Wallace Smith was born into a wealthy family clan on August 11,1944 in Mississippi. His father died when he was just four years old. As a juvenile, Smith was an invalid, suffering from a disease that left him unable to walk normally. He was picked on by bullies, and he learned to defend himself by swinging at them with his alloy walking stick. Cured of the disease by the age of 10, he became a star athlete in highschool, playing football, basketball, and baseball.
4 Smith's passion was flying. At 15, he was operating a crop-duster over the skyline of the Mississippi Delta, a terrain so flat that there was little need for radar navigation. As a student at Yale University, he helped revive the Vale flying club; its alumni had populated naval aviation history, including the famous "Millionaires' Unit" in World War I. Smith administrated the club's business end and ran a small charter operation in New Haven.
5 With his study time disrupted by flying, his academic performance suffered, but Smith never stopped looking for his own "big idea". He thought he had found it when he wrote a term paper for an economics class. He drafted a prototype for a transportation company that would guarantee overnight delivery of small, time-sensitive goods, suchas replacement parts and medical supplies, to major US regions. The professor wasn't impressed and told Smith he couldn't quantify the idea and clearly it wasn't feasible.
6 However, Smith was certain he was onto something, even though several more years elapsed before he could turn his idea into reality. In the interim, he graduated from Yale in 1966, just as America's involvement in the Vietnam War was deepening. Since he was a patriot and had attended officers' training classes, he joined the Marines.
7 Smith completed two tours in Vietnam, eventually flying more than 200 missions. "In the military, leadership means getting a group of people to subordinate their individual desires and ambitions for the achievement of organizational goals," Smith says, fusing together his military and business experiences. "And good leadership has very measurable effects on a company's bottom line."
8 Home from Vietnam, Smith became fascinated by the notion that if you connected all the points of a network through an intermediary hub, the streamlined efficiency could be enormous compared to other disjointed, decentralized businesses, whetherthe system involved moving packages and letters or people and planes. He decided to take a stab at starting his own business. With an investment from his father's company, as well as a chunk of his own inheritance, Smith bought his first delivery planes and in1971 formed the Federal Express.
9 The early days were underscored by extreme frugality and financial losses. It was not uncommon for FedEx drivers to pay for gasoline for their vans out of their own pockets. But despite such problems, Smith showed concern for the welfare of his employees. Just as he recalled, even when they didn't have the money, even when there weren't couches in the office and electric typewriters, they still set the precedent to ensure a good medical and dental plan for their people.
10 Along the way, FedEx pioneered centralization and the "hub and spoke" system, which has since been adopted by almost all major airlines. The phrase FedEx it has become a fixture in our language as much as Xerox or Google.
11 Smith says success in business boils down to three things. First, you need to have appealing product or service and a compelling strategy. Then you need to have an efficient management system. Assuming you have those things, leading a team is the single most important issue in running an organization today.
12 Although Smith avoids the media and the trappings of public life, he is said to be a friendly and accessible employer. He values his people and never takes them forgranted. He reportedly visits FedEx's Memphis site at night from time to time and addresses sorters by name. For years he extended an offer to any courier with 10 years of service to come to Memphis for an "anniversary breakfast". That embodies FredSmith's philosophy: People, Service, Profit (P-S-P). Smith says, "The P-S-P philosophy is like an unbroken circle or chain. There are no clearly definable points of entry or exit. Each link upholds the others and is, in turn, supported by them." In articulating this philosophy and in personally involving himself in its implementation, Frederick Smith is the forerunner of the new sphere of leadership that success in the future will demand.
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