Frederick W. Smith Interview (page: 4 / 5) Founder, Federal Express	Print Interview

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."
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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.

How do you handle the stress, and the responsibility for all these employees?

Frederick Smith: I don't find it that stressful. I find it fun. Business is a game, it's great fun. I take enormous pride in the fact that we now have 170,000 people employed. That's what it's all about, giving people good jobs and we try to have a lot of fun. Our very famous advertising has always been tongue in cheek. The fast-talking man, and 10 or 15 years ago, up to the 1998 Super Bowl, where we ran a test pattern and put a little script down at the bottom that said, "It would have been a great commercial but they didn't send it FedEx."

How important is a sense of humor?

Frederick Smith: It's everything. I can't imagine going through life without being able to laugh at things. Even when things get bad, there's always a humorous side to it. I think it may be the most important attribute somebody can have to get through life, because everybody has tragedy, and everybody has bad things happen. If you don't have that reservoir good will, or ability to look at yourself with a little bit of humor, I think you're missing an awful lot of life.

No matter what the field, you can't please all the people all the time. How do you deal with criticism?

Frederick Smith: Criticism doesn't bother me. What we've tried to do inside FedEx is to say that criticism is a real opportunity to improve. When we do something wrong for a customer, that's when we really have a chance to learn how to do things better. We've made some mistakes from time to time, we've gotten criticized. The mistakes have been relatively small, given the overall success of the company. But I've never been bothered too much by criticism. Folks are entitled to do that. It's a free country, increasingly a free world, so let them take their best shot. If they're right, they may tell you something you didn't know before.

What do you think your most important traits have been in achieving what you have done?

Frederick Smith: Probably conviction. I was convinced that what I was trying to do with my teammates was important and that it would be successful. The opposite side of that coin is persistence. Very rarely have I ever seen any business or major undertaking that goes in a straight line. There's zigs and zags, victories and defeat, and you have to be propelled by that conviction that what you're doing is right and what you're doing is important, and to persevere in it. That's probably more important than anything else.

Secondarily, I've been very interested in the people who I work with being successful as well. I don't think we have many people who've worked at FedEx, particularly in the executive ranks, who don't have good feelings about the company. I hope that's because they feel they were treated fairly and got their shot at glory and opportunity. I think that's a big part of it. To make sure that the people you're working with have a chance to be successful.

And then, third, is that element of humor. You've got to enjoy what you're doing, and have some fun, and be able to laugh at yourself a bit.

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