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Leadership Style at FedEx

Leadership Style at FedEx

Discuss Leadership Style at FedEx within the Foundation of Human Skills (F.H.S) forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; FedEx Corporation (NYSE: FDX), originally known as FDX Corporation, is a logistics services company, based in the United States with ...

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Leadership Style at FedEx
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Netra Shetty
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Leadership Style at FedEx - May 4th, 2011

FedEx Corporation (NYSE: FDX), originally known as FDX Corporation, is a logistics services company, based in the United States with headquarters in Memphis, Tennessee.[2] The name "FedEx" is a syllabic abbreviation of the name of the company's original air division, Federal Express, which was used from 1973 until 2000.

The Leadership Skills of Fred Smith
Like all people, Fred Smith’s values were influenced by his
experiences, and none of his experiences were more influential than his
service in the U.S. Marine Corps. Smith said, “The Marine Corps is the best
when it comes to teaching people how to lead other folks.” Smith made the
most out of his military training, which was a foundation for his ultimate
success at shaping and maintaining FedEx. This Marine influence has molded
Smith into the leader he is today.
Leadership Practices
What People look for and Admire in their Leaders: (Kouzes, 2003)
• Honest 88%
• Forward-Looking 71%
• Competent 66%
• Inspiring 65%
• Intelligent 47%
• Fair-minded 42%
• Broad-minded 40%
• Supportive 35%
• Straightforward 34%
• Dependable 33% Improving Software Support Service 14
What does it mean? The top four attributes are clearly demonstrated
by Smith. Honesty: Smith is truthful, ethical, and principled in all his
dealings. Forward-looking: he had the ability to envision the future from his
early college days. Competent: Smith demonstrates competent leadership in
his track record of successes and the ability to get things done. Inspiring:
enthusiastic, energetic, and positive about the future are accurate
descriptions of how Mr. Smith lives his life. A leader’s willingness to place
the welfare of those in his charge before his own, prompts others to do the
same for other members of the organization, thereby taking actions
proactively that keep the leader “out of trouble,” and pledging their loyalty
and willingness to follow. Mr. Smith embraces this principle through the
development of progressive Human Resources programs that reward and
recognize the contributions of his team at every level in the organization.
The rewards and benefits account for 50% of FedEx spending. Those
rewards include (FedEx 2005):
• Salary Increases - Salary increase based on individual performance
• Variable Pay - Incentives to reward individual and team contribution
• Tuition Assistance - Subsidy for continuous learning and education
• Paid Time Off and Vacation – Includes paid leave for marriage,
maternity, and paternity
• Retirement Scheme - Financial security in retirement
• Health Insurance - Healthcare Improving Software Support Service 15
• Life and Accidental Death Insurance - financial protection for
beneficiaries
• Reduced Shipping Rate - Exclusive discounts for personal shipping
• Discounted Travel – Discounted airfares
• Jumpseat - Free travel on FedEx aircraft
And many special awards to recognize employees’ performance:
• Bravo Zulu - award for outstanding performance beyond normal job
expectations.
• Golden Falcon - award for exceptional customer service.
• Humanitarian Award - Recognition for human welfare above and
beyond work or community standards
• Star/Superstar Award - A lump-sum, merit-based award for top
performers
• Five Star Award - The highest award for enhancing service,
profitability, and the spirit of teamwork
When the founder of FedEx e wrote a paper proposing an overnight
delivery service while a student at Yale,his professor commented, “The
concept is interesting and well-formed, but in order to earn better than a ‘C,’
the idea must be feasible.” Little did the professor know that Smith’s idea
would later become a $25 billion company with 240,000 employees and Improving Software Support Service 16
operations in 215 countries, that virtually invented an entire industry,
transformed other sectors as diverse as manufacturing, retail, and
transportation, and heightened expectations of globalization that reaches all
over the world. By starting his vision with a clear theme, Smith was able to
envision a unique and profitable future with multiple possibilities.
Smith has a willingness to perform above and beyond the call of duty
and share hardship. This is true no matter how intricate or inconsequential
the task. His willingness ripples throughout the entire organization, inspires
higher levels of performance at all levels, and creates an undeniable
credibility for the leader – through actions, not words. Smith demonstrates
this every day that he is at the office. He is a hands-on manager who takes
an active role in every aspect of the operation. Smith has performed every
function in the company and is willing to do so at anytime. A never-ending
commitment to recruiting, training, and mentoring develops, at all levels,
confident, aggressive leaders who have initiative and integrity that drive
success. Feedback is clear, constructive, candid, and regular; guidance is
specific, thoughtful, individually tailored, and intended to help the recipient
grow both personally and professionally.
A challenge Smith faced was how to share these values with all FedEx
employees. One of the first things he did at FedEx was sit down and record
these core values and the lessons learned in written form. These writings
became the FedEx Manager's Guide, which has been a mainstay for all FedEx Improving Software Support Service 17
managers for decades. The Manager's Guide is noteworthy because through
the written word, Smith has been able to establish a common culture and
leadership philosophy across his global organization. The importance that all
FedEx managers attribute to it is impressive; it is the de facto authority on
leadership-related issues at the company. This represents the alignment of
values and actions.
The LEAP program is a prime example of Mr. Smith’s commitment to
leadership development at every level of the organization. LEAP, Leadership
Evaluation and Awareness Process, was implemented to improve leadership
effectiveness and retention within FedEx. LEAP is compulsory for any
employee who wants to progress to management-level positions within the
company. The purpose of LEAP is to evaluate a candidate's leadership
potential and ensure that the individual carefully considers his or her interest
in, and aptitude for, leadership. This ensures that all management levels
are properly prepared to lead and understand the company’s position.
Kotter (1996) emphasize that challenging with a purpose drives
change, establishing a sense of urgency, creating a guiding coalition, and
developing a vision and strategy will draw people closer to a common goal.
Then communicating the change and empowering others to remove
obstacles will benefit all as it did in FedEx. To keep the momentum, small
wins must be identified, and recognizing and rewarding those who made the
wins possible is critical. Mr. Smith tells his employees: You're delivering the Improving Software Support Service 18
most important commerce in the history of the world. You're not delivering
sand and gravel. You're delivering someone's pacemaker, chemotherapy
treatment for cancer drugs, the part that keeps the F-18s flying, or the legal
brief that decides the case.
Leadership skills learned from Fred Smith
In the following section, the focus will be researching the leadership
skill of enabling others to act. Smith used this skill to effectively lead his
organization to success and competitive advantage.
When enabling others to act, a leader’s job is not to push, inspire,
challenge, manage, compel, celebrate, but it truly is to get out of the way
and let people act. Fred Smith and FedEx are consistently recognized for
progressive and innovative policies, programs, benefits, and stimulating
working environments. The culture fosters an environment where a person's
performance is what counts and productivity is highly rewarded. Federal
Express under the guidance of Fred Smith has been named the “Top
Corporation of the Decade” by Fortune magazine (Dumain, 2004). Smith
was determined to make employees an integral part of the decision-making
process, due to his belief that “when people are placed first they will provide
the highest possible service and profits will follow.” Resulting from this
principle is the FedEx corporate philosophy: People-Service-Profit. These
three corporate goals form the basis for all business decisions. The people
priority acknowledges the importance of employee satisfaction and Improving Software Support Service 19
empowerment to create an environment where employees feel secure
enough to take risks and become innovative in pursuing quality, service and
customer satisfaction.
There are several key elements that have been defined by Kouzes &
Pousner (Kouzes, 2003) as prerequisite for enabling others to act. These
include the following elements:
• Always say “we”
• Create interactions
• Delegate
• Focus on gains
• Involve people
• Keep people informed
• Provide opportunities to be autonomous
• Be accessible
The following section will discuss these key elements in greater detail.
Always say “we”
People who know Smith view him as an excellent communicator and a
naturally gifted speaker. His opinions on fast-breaking news are frequently
solicited by CNN reporters. When Smith gets an award, he accepts it on
behalf of the employees of FedEx, not as Fred Smith. When he returns to
headquarters, he tells employees that their great service is what maintains Improving Software Support Service 20
the company's reputation. Mr. Smith exemplifies the “we” concept in speech
and in action as demonstrated from a FedEx state of union speech on
December 7
th
, 2004.
We must all do the best job we know how to innovate, to collaborate
and to synthesize toward our ultimate goal of keeping our companies
quick and nimble in a world marketplace that continues to operate at
break-neck speed. Ours is a hard job but a great job, and I appreciate
the opportunity to share my thoughts on it with you today.
Delegate
In Smith’s own words, “I've yet to see one person do it alone. You
cannot do it alone so you must work well with others to put your plan into
action. To the extent that you believe in yourself, you must also believe in
other people.” Mr. Smith believes success for FedEx is the result of the
collective effort of teamwork and that he could not have been able to do it
alone. This means hiring the right people and trusting them to do their jobs
once you hire them. This also means persuading, motivating, and even
inspiring those people. Delegating authority is a result because you will not
be able, or perhaps even qualified, to make all the decisions. This is the
fundamental theme at FedEx, and it begins from the very top.
Manage the Managers
FedEx implemented a Survey Feedback Action (SFA). This is an
annual employee survey that provides a statistical measurement of Improving Software Support Service 21
employee satisfaction, as well as subordinates' opinions of management's
leadership performance. Each April, every employee is asked to participate
in the on-line survey. Results are tabulated, and managers then hold
feedback sessions with their employees to discuss the survey findings and
identify problems within and outside of their department. As a group, they
develop formal, written action plans for solving these problems. Groups
usually review plans throughout the year to determine whether problems
were solved satisfactorily. SFA has become a problem-solving tool that
operates throughout the organization. If employees still have a complaint
with management, they can take advantage of the respected and
benchmarked grievance system, Guaranteed Fair Treatment (GFT). The
program provides three levels of managerial review and appeal for employee
grievances, including an ultimate review by Smith and other top corporate
officers.
Recognition and Reward Program
Smith believes success is understanding the importance of keeping
employees happy and promotes and rewards actions taken by employees to
improve quality and customer satisfaction. A couple of the most popular
programs at FedEx include:
• Bravo Zulu: (U.S. Navy semaphore signal for “well done”). Managers
reward employees for outstanding efforts and achievement on the spot. Improving Software Support Service 22
Rewards include “quick cash” bonuses, theatre tickets, dinner gift
certificates, and other gifts of similar value.
• Golden Falcon Award: Results from a complimentary report from a
customer praising employee efforts above and beyond the call of duty.
The award consists of 10 shares of Federal Express stock and a
congratulatory visit or phone call from a senior executive.
Involve people
Another principle Smith applied at FedEx was to make sure every
employee felt they could share in the success of the company. FedEx
managers are carefully trained to ensure respect for all employees, and their
performance is monitored. Mangers are evaluated annually by both bosses
and workers to ensure good relations between all levels of the company.
Smith believes that fair treatment inspires company loyalty and that
company loyalty pays off. The short definition of leadership is getting
discretionary effort out of people. You don't want employees thinking about
the minimum amount of effort they have to put in to keep from getting fired.
You want them thinking about the best possible job they could do if
everybody was giving 100% of their effort.
Keep people informed
According to Mr. Smith, the key to getting successful effort is
communication and feedback. Workers want to know what's expected of
them and how they're doing. They have to have report cards, similar to Improving Software Support Service 23
school grading system. “FX-TV”, a closed circuit television station,
broadcasts live corporate meetings and briefings as well as periodic
performance data and training courses worldwide. The FedExaminer is a
Web-based newsletter that shares company and industry news, and provides
another source for communication. Additionally, all results of the SFA
annual surveys are posted online, so the entire company can see the
progress of corporation as a whole.
Be accessible
Smith has implemented an “Open Door Policy” throughout FedEx which
promotes accessibility. This policy allows employees to submit questions or
put forward a complaint about matters of corporate policy such as benefits,
hiring, seniority, or vacation. An employee submits the complaint or
questions in an open-door forum, which is routed by employee relations to
the management person best able to respond to the issue. The person
receiving the open door enquiry must respond within 14 calendar days.
Mr. Smith is a true advocate and a leader in enabling others to act. He
feels that a manager is not a person who can do the work better than his
employees, but a person who can get his employees to do the work better
than he can. This dedication has kept FedEx on the top 100 companies to
work for over the past decade.
The next section covers examples demonstrating Mr. Smith’s
commitment to leadership in more detail. Improving Software Support Service 24
Commitment to leadership
Search for opportunities by seeking innovative ways to change, grow,
and improve. FedEx supports innovation at every level of the business and
challenges associates to find a better way to improve the company than its
competition. Smith backs up this use of innovation with his progressive
human resources policies and has created a culture that insists on
innovation, embraces change, and does not fear failure. This speaks
volumes for the agility of the organization and shows why FedEx is a leader
in the overnight business.
Find your voice by clarifying your personal values
Smith’s values were shaped by his experiences in business as well as
his life experiences in the Marines. Smith has created an organization in
FedEx that understands the corporate culture based on his beliefs. These
personal values, and thus the climate, can be summed up as follows:
•Customer Obsessed: Meet and exceed needs of customers to ensure
loyalty
•Trust Honesty: Integrity, ethics, and accountability coupled with a freedom
to perform
•Team Spirit: Understand that the corporation is a team and all must
participate to succeed
•Relentless Achievement: Setting the bar higher for self and teammates
•Innovation: Embrace change, challenge the status quo Improving Software Support Service 25
•Zeal: Passion for business and commitment to the team
These values are shared, understood, and embraced in the organization.
Set the example by aligning actions with shared values
There are countless examples where Smith has “walked the walk” in
support of the values he holds so dear. A good example of this alignment
can be found at the FedEx Institute of Technology. FIT was established as
world class research facility used to solve real world business problems as
well as provide a world class recruitment pool for professionals. This
organziation shows Smith’s commitment to innovation and achievement as
well as pressing the boundaries to find an even more superior solution to
solving world business problems.
Enlist others in a common vision by appealing to shared aspirations
Smith is considered a keynote speaker not only in business and
legislative concepts but also in leadership: when he speaks, many listen.
However, he credits himself as being a good listener as well. This is evident
by the credit he gives his past chief information officers throughout the
years. He credits them with constantly having a vision that FedEx should
have real-time business processes and making that information available to
their customers, which allows them in turn to have more efficient business
processes.
Experiment and take risks while learning from mistakes Improving Software Support Service 26
More evidence shows that a great part of success is not fearing
failure. Mr. Smith launched Zapmail, a program to electronically transmit
documents between FedEx offices. Mr. Smith’s idea was to put a fax
machine in every FedEx office would radically reconfigure the center of their
network, thus slashing costs. The idea was a costly failure: two years and
hundreds of millions of dollars later, FedEx pulled the plug on Zapmail,
allowing it to vanish without a trace. “I'm not afraid to take a swing and
miss,” said Smith in an interview (Smith, 2002). Smith feels it is important
to groom an employee team that’s willing to take smart risks. He goes on to
add that if your organization is extensive with internal turf battles,
bureaucracy, lackadaisical customer service, and a lack of accountability,
your people will have no motivation to innovate. However, if you reward
innovative behavior from the top down and bottom up, and if you give
recognition and financial rewards, you encourage risk-taking throughout the
organization. You have to dedicate sufficient resources to innovation,
including training and empowerment of your entire team.
Foster collaboration by prompting cooperative goals and building trust
Fred Smith believes that you have to surround yourself with people
who will tell you the truth. If you don't, as your organization gets bigger,
you'll fall out of touch with what's going on. Smith’s top leadership is
comprised of many individuals who have been CEOs of other companies and
have been groomed through the FedEx ranks. Smith encourages these Improving Software Support Service 27
players and key staff to hash out any conflicts among themselves and rarely
intervenes. Smith trusts his people and expects more from this team than
outsiders. Smith has created a style that participants describe as “straight
shooting” with “no second-guessing.” Through the aggressive use of
emailing, he has tried to prevent the development of closed-loop
communications.
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