Inside Fedex Express

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(unclassified paper)

Secretary of Defense Fellowship Program

Inside FedEx Express

Captain Gary Peterson
12 May 2006

Edited by
Ms. Gerry Yemen

Inside FedEx Express


As a Secretary of Defense Corporate Fellow during 2005-2006, I was assigned to work at FedEx Express located in Memphis, Tennessee. FedEx Express provides time-critical delivery services and associated information assistance globally. It is one of several Operating Companies (OPCO) within FedEx Corporation. Other OPCOs include: FedEx Custom Critical, FedEx Ground, FedEx Freight, and FedEx Kinko’s. Each OPCO operates independently, competes collectively, and manages collaboratively. FedEx Services, FedEx Trade Networks, and FedEx Supply Chain Solutions are separate corporations that interface with the OPCOs. The company continues to operate under the company founder, Fred Smith’s, original 1973 business plan, adding improvements as global competition and opportunities have emerged.

Summary of Findings

The organizational capacity to successfully adapt and effectively compete at FedEx Express is enhanced through the influence of their leadership culture. The fundamental elements of the culture are: identity, information exchange, learning ability, freedom of action, and participation. These elements are company attributes supported by a set of strategic processes. I call this assembly of processes the Leadership Supporting Process (LSP), and it underpins and enhances cultural capacity. This paper uses FedEx Express as a case study to illustrate that leadership supported by LSP allows an organization to nurture a workforce more open to the idea of adopting positive changes and improvement to compete more effectively. The main points are:

• leadership and management are different practices, and FedEx Express’sthe leadership culture is the company’s single greatest strengthFedEx Express’s single greatest strength. • it’s essential to design, assess and continually improve a permanent Leadership Supporting Process (LSP) as a cultural centerpiece, which integrates with other management practices to increase capacity for change. • the use of appropriate metrics is essential to measure expected leadership outcomes. • organizational leadership capacity is increasingly important in today’s global competitive environment and would enhance the effectiveness of most organizations– including the Department of Defense (DoD). • recommendations for DoD are based on FedEx observations and include:

1. Review the Leadership Supporting Processes (LSP) as they apply to the workforce in DoD, including the civilian force, and incorporate improvements similar to FedEx processes with the goal of increasing cultural capacity for transformation.

2. Consider executing a survey-based analysis to determine areas for improvement in the areas of identity, information, learning, freedom-of-action and participation, with a goal of increasing speed, adaptability, and flexibility to deal with unpredictability, complexity and rate of change.

3. Consider the Business Transformation Agency analogous with FedEx Services and adopt a business strategy of "Operate Independently, Compete Collectively, and Manage Collaboratively."

4. Maintain the mindset and capability to create entities, which will nurture disruptive technologies for fast track to the battle space or business space, and avoid allowing "lower margin capabilities with promise" from being swallowed into the wrong value network.

Company Background

Federal Express Corporation (now known as FedEx Express Corp) was an idea for an overnight package delivery service that Frederick W. Smith developed in the early 1970s. By 1983, operations had grown immensely through expanding services, purchasing more trucks and aircraft, and raising capital. A strategy that proved to be very...
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