FedEx has built a massively successful business by consistently delivering on promises…
They recently lived up to that reputation once again by reporting higher fourth quarter earnings than expected…
But FedEx’s journey to entrepreneurial success story hasn’t always been easy…
On his way to building one of the most successful companies of the 20th century, founder and CEO Fred Smith had to overcome some serious obstacles.
It’s this struggle, and the determination to live up to the company motto of “When it absolutely, positively has to be there overnight…” that makes the FedEx story such a compelling entrepreneurial tale.
Here are some of the key lessons we can take from FedEx’s success:
1. Have Faith In Your Ideas (Even If Others Doubt Them)
When Fred Smith was a student at Yale University, he wrote a paper that outlined his idea for an overnight delivery system. Unfortunately, the paper was less than well received… and Smith got a C.
While the teachers may have not been able to grasp the significance of his vision, the up and coming entrepreneur wasn’t deterred….
He knew the value of his idea. When he had the opportunity, Smith pursued his dream with all the resources at his disposal.
2. Sell On Value, Not On Price
There’s a story told to new managers at Federal Express that typifies the way the company runs its business…
If a bear and an alligator are having a fight, the winner is likely to be determined by where the fight takes place… If the fight occurs in the swamp, the alligator will almost certainly win. Switch the terrain to open land and the bear has the upper hand…
Bill Razzouk, Vice President of U.S. Sales, describes how this applies to selling at the company:
“Salespeople can avoid swamps by
learning how to sell value, not price.”
Salespeople at FedEx are taught to understand their customers’ businesses – so they can offer a solution that enables them to achieve their ultimate result.
Federal Express doesn’t try to be the cheapest option – it aims to be the best option.
3. Be Willing To Overcome Obstacles
Throughout his career, Smith overcame obstacles when most others would have simply given up.
This resilient spirit was tested not long after graduating from college. Rather than go directly into business, Smith chose to join the U.S. Marine Corps and served 27 months in Vietnam…
He was involved in 200 ground support missions and become a decorated war hero…
Upon returning home, he took the lessons he learned about overcoming adversity and applied them to business, taking over his stepfather’s aircraft sales and services business.
His first big break came in 1971 when the Federal Reserve agreed to moving packages containing cash overnight.
Using part of his inheritance, he purchased two Falcon 20 jets and called his new business Federal Express.
Unfortunately for Smith, shortly after purchasing the jets the deal with the Federal Reserve collapsed and he needed to scramble to recover.
This pattern of hiccups and collapsed deals was repeated often during the early years of the company… In fact, Federal Express was on the verge of bankruptcy three separate times.
Each time, the company was saved at the last minute when Smith was able to obtain new financing.
4. Deliver Results Every Single Time
Federal Express understands that in order for the business to succeed, they HAVE to be consistent…
Their customers expect their package to arrive on time, every time. This commitment to consistency paid off when the company was (once again) on the verge of bankruptcy:
A woman called FedEx frantic with worry… It was her wedding the next day, but her dress was on the West Coast. The problem? She was on the East Coast.
Every other delivery company she called said that delivering the dress on time would be impossible, but FedEx employees had been trained to deliver – even when no one else would.
At great expense, they hired a private jet and had the dress delivered to the woman.
But FedEx didn’t know that the woman was the daughter of Eastman Kodak (the founder of the Kodak Company). Attending her wedding were Fortune 500 CEOs and various other captains of industry…
When these guests heard the woman’s gushing praise for the company that had delivered when no one else could, they were naturally intrigued. The corporate clients FedEx won over as a result of this one delivery kept the company in business!
Achieving these exceptional results isn’t easy.
To achieve this type of consistency, FedEx has a relentless focus on quality and minimizing mistakes. Even small delays can upset other parts of the chain. To succeed in such a complex environment, Federal Express just can’t allow itself the luxury of making any errors…
FedEx’s entrepreneurial journey has seen the company grow from two jets to a global giant, delivering over 1.2 billion packages a year and employing more than 300,000 people.
They are a prime example of what can be achieved when you commit to excellence and follow up with perseverance and passion.
In your corner,
Charlie