© F

edEx

Cor

p. O

ctob

er 2

005

Sustaining excellence as a company and as a leader

Tom Schmitt,President and CEO,FedEx Global Supply Chain Services

2

Visible signs of sustained excellence at FedEx

● Visible signs● Sustaining excellence for the long haul● Sustaining personal excellence

Visible signsVisible signs

3

… Turns out he was right.

Visionary Leadership –FedEx began as a term paper and grew into an industry we didn’t even know we needed.

● Fred Smith said it was possible to send overnight letters all over the world by routing them through Memphis, Tennessee.

… Turns out he was right.

4

“Next day” became the rule, NOT the exception

FedEx changed the face of business in America.

5

In less than 10 years, FedEx was a billion-dollar company- the first U.S. corporation to achieve that benchmark revenue

without the benefit of a merger or acquisition.

From an $84 million capital investment, Fred Smith purchased 33 Dassault Falcon corporate jets and painted them in bold purple and orange colors.

Growing up fast – from start-up to a billion dollar company.

From start up to a billion dollar company

6

“… the information about a package is as important as the package itself.”

Frederick W. SmithChairman, FedEx Corp

Moving from boxes to bytes.

7

From Letters to Logistics.

● In April 1973, FedEx delivered 186 packages in 25 cities

● Today FedEx is a $35 billion corporation offering services to more than 220 countries.

● More than 6 million shipments every business day move by a FedEx company.

8

What makes a product or a company become a household word?

● In the United States, Coca-Cola is synonymous with “soft drink” and has been for more than 40 years.

● People say ‘Kleenex’ when they mean any brand of tissue.

● People say ‘FedEx’ when they mean overnight.

9

The FedEx unique style of management did not go unnoticed.

● “World’s Most Admired Companies” - No. 7 (2007)– Top honors in six of the eight reputation

attributes: Innovation, People Management, Use of Corporate Assets, Quality of Management, Long-term Investment and Quality of Products and Services.

● “America’s Most Admired Companies” - No. 6 (2007) – FedEx was #1 across all companies in People Management

and Quality of Products and Services

10

Federal Express becomes FedEx

… can you find the FedEx arrow?

11

12

Sustaining excellence for the long haul

● Visionary Leadership● Operational Excellence● Customer Centricity● People First

The FedEx DNA

● Visible signs● Sustaining excellence for the long haul● Sustaining personal excellence

Sustaining excellence for the long haulSustaining excellence for the long haul

13

Visionary leadershipSkating ahead of the puck keeps FedEx out in front of the pack.

● Flying Tigers● Kinko’s

14

Customer CentricityCombining operational excellence and true customer centricity - a winning combination.

● FedEx achieved service excellence by going for root causes and managing in a service quality index from day one.– WAR 1/10/100 operations style– 10-15 scans for every package that moves through FedEx– Sales dashboards to measure performance– Same-day contingency plans for inclement weather or disasters

● More and more, the company began turning to its customer to ask how the FedEx experience could be better.

© FedEx Corp. October 2005

The Customer Summit:Bring on the customers – the grumpier the better.

● Every year FedEx executives – from the Chairman on down sit for two days and get chewed out.

● We listen to the grumpiest customers we can find.

● We get feedback from customers on how we’re doing and how we can make things better.

16

People FirstAt the heart of the Customer Summit (as well as everything else we do) is a promise.

● You’ll see Purple in the logos of all our operating companies – it’s what unites us. It’s also a promise.

● We change the way the world works and lives when we do one simple thing: put customers at the center of everything we do.

17

FedEx made it clear – its people came first. And its people responded by putting the customer first.● Legends were born in the early days

of FedEx, fueled by the resourceful spirit of its employees. – Pilots loaded packages onto planes– Couriers sometimes used their own

cars. – Once a pilot used his personal credit

card to refuel his aircraft– A part-time courier pawned his

wristwatch so he could fuel the delivery van.

18

That passion lives on today.

● It’s what has kept that 1973 entrepreneurial spirit alive through four decades.

19

Sustaining personal excellence as a leader

● Balanced effectiveness● Cycle of communications● Keeping the balance in place

● Visible signs● Sustaining excellence for the long haul● Sustaining personal excellenceSustaining personal excellenceSustaining personal excellence

20

Keeping the balance in placeHarnessing the power of passion and simplicity to get results

● Some people prefer leaders who think only with the rational, analytical left side of the brain.

● That’s not necessarily the right balance

21

Keeping the balance in placeHarnessing the power of passion and simplicity to get results

● The ability to distill the most complex issues into simple, easy to communicate points is essential to success

– A strong correlation exists between simplicity and clarity of thought

22

Keeping the balance in placeManagement savvy: work smarter, not harder

● Think “what would have to be true …”– Incrementalism is the deadly

enemy of innovation

● Don’t fall into the “process over content” trap

23

Keeping the balance in placeBe ambitious for your people and ‘the cause’

● Good ambition creates dedicated and high-performing professionals

● Bad ambition leads to the wrong path

24

Keeping the balance in placePut people first – every time and you will be rewarded.

High Will, Low SkillCoach for performance

High Will, High SkillGet out of the way

Low Will, Low SkillReassign

Low Will, High SkillBoost energy around the will axis, motivate

25

Keeping the balance in placeLeadership – leave a place better than you found it.

“I know the answer, but I

can’t tell you.”Hire leaders who are better than you in at least one key area that matters.

26

Keeping the balance in placeCollaboration – think ‘one big team’

● Be wary of the dedicated “devil’s advocate”

● Be inclusive from the beginning

27

Keeping the balance in placeVision – imagine the possibilities.

● A single vision can launch a company but only long-term vision can sustain that innovation

● Think breakthrough

28

Keeping the balance in placeTime management – align time with the right goals.

● Time cards for managers and professionals?

What are you thinking?

29

Keeping the balance in placeFocus – use a laser, not a floodlight.

“Don’t confuse efforts with results.”

Jim Barksdaleformer CEO, Netscape

30

Keeping the balance in placeExecution – don’t sacrifice good for better.

– Instill a bias for action • But you’ll need to be willing to take

a few risks.

– Be directionally correct. • Hold out for the perfect answer and

you’ll still be looking while your competitor gets the business.

31

Keeping the balance in place Determination – stick to it.

● Hire people with optimistic outlooks and can-do attitudes over sheer talent.

● If you can dream it, you can do it.● Check your inner compass and

follow your heart.