Academy of Achievement Logo
Home
Achiever Gallery
  The Arts
   + [ Business ]
  Public Service
  Science & Exploration
  Sports
  My Role Model
  Recommended Books
  Academy Careers
Keys to Success
Achievement Podcasts
About the Academy
For Teachers

Search the site

Academy Careers

 

If you like Frederick Smith's story, you might also like:
Jeffrey Bezos,
Michael Dell,
Bill Gates,
Craig McCaw,
Pierre Omidyar,
James Stockdale
and Ted Turner

Teachers can find prepared lesson plans featuring Frederick Smith in the Achievement Curriculum section:
Entrepreneurs

Related Links:
FedEx
business.com

Share This Page
  (Maximum 150 characters, 150 left)

Frederick W. Smith
 
Frederick W. Smith
Profile of Frederick W. Smith Biography of Frederick W. Smith Interview with Frederick W. Smith Frederick W. Smith Photo Gallery

Frederick W. Smith Interview (page: 4 / 5)

Founder, Federal Express

Print Frederick W. Smith Interview Print Interview

  Frederick W. Smith

Did you ever wake up in the middle of the night and say, "I want to give it all up?"

Frederick Smith: No, I never felt that way at all. I was very committed to the people that had signed on with me and if we were going to go down, we were going to go down with a fight. It wasn't going to be because I checked out and didn't finish it out.

What sacrifices have you had to make?

Frederick Smith: You have to pay a big personal price in terms of time and other things. You have to have a decision regarding priorities. If you're not willing to work hard, if you're not willing to give it your total commitment, you're probably not going to be successful.

That means you're probably not going to be a very good golfer. You have to do what I do, take up tennis, where you can do it in an hour and a half. You can't spend five hours on it. You have to prioritize what's important for you and what's not.

What do you think are the most important principles, or ideals, or policies that have made Federal Express such a success?

Frederick W. Smith Interview Photo
Frederick Smith: First and foremost is our corporate philosophy, which we call PSP: People, Service, Profit. If you're going to run a high service organization, you have to get the commitment of the people working for that organization right at the start. If you don't, you'll never be able to deliver at the levels of expectations of the customer.

You can't make people do what's right. You can lead them, and you can empower them to make the right decision, but if you don't produce a culture that allows them to do that, then all the rest is just bumping your gums as one of my old business partners used to say. That's Jim Barksdale of Netscape, by the way, who's been very successful himself.

Our "People, Service, Profit" philosophy insists that our people be treated fairly. If we give good service and we come up with a reasonable profit, we make that a good deal for our employees, with profit sharing, promotions, complaint procedures. If you spend any time looking at the culture of FedEx you'll find that PSP philosophy is the foundation of everything else. Secondarily, our management system is built on continuous quality improvement.


We decided a long time ago that percentages were not acceptable to our customers. In other words, 99 percent sounds great, unless you're the one percent who we don't deliver for. So we never talk about percentages. We built a management system which measures problems on an absolute basis. And the secret is, as traffic or volume increases, the number of complaints have to go down on an absolute basis. In other words, we've got to get better and better year after year.


We spend a huge amount of money, particularly on the technology, to allow us incremental improvements in every part of the operation year after year, month after month. That's the second thing that was a big part of our success. The third underlying element of the FedEx culture, after the philosophy and the continuous improvement management system, has been the focus on change.


As time changed and markets changed and peoples' expectations changed, we changed with them. For example, when it became obvious that people wanted to interface with FedEx electronically, many years before people were doing this, we built an electronic interface system that allowed them to do business with us. When the Internet came on the horizon, we built versions of that that allowed people to interface with FedEx over the Internet. And now there are millions of people doing business with FedEx every day electronically.

[ Key to Success ] Perseverance


There are lots of different examples of that. We have a culture that allows us to change without threatening the people that work at the company.

What led you to make the guarantee? That's the simplest, but maybe the scariest part of the whole thing.

Frederick Smith: That was putting our money where our mouth is. The fundamental principle behind fast cycle or express transportation is that you are substituting your services for other processes. If an electronics manufacturer is going to operate without inventory, or field service engineers are not going to have the parts and pieces to fix things rat-holed in the trunk of their car, then when they need the part or piece, or they need the item delivered to the customer, you've got to perform. You've got to be able to let them know where this item is all the time.


It's not like we're carrying sand and gravel. You know, we're carrying chemotherapy drugs, and important manuscripts, and electronic parts, and pieces for airplanes that are grounded. So when we pick it up and say, "We're going to have it there early the next morning," I mean we have to deliver. There's nothing else to it. So putting the guarantee in place was much more important internally than it was externally. Because most of our customers -- based on the experience they've had with us -- they believe we'll do it. But it's when we said to all of the employees, "This is guaranteed. If we don't get it there, we don't get paid."

[ Key to Success ] Integrity


That made it very clear to everybody what they need to do every day. We manage the continuous improvement in a mathematical manner every single day. Our service gets better each year. That's very rare for big service organizations. Most of the time, as they get larger service deteriorates, it doesn't improve.

Frederick W. Smith Interview, Page: 1   2   3   4   5   


This page last revised on Sep 20, 2010 09:11 EDT
How To Cite This Page