FedEx is the world’s largest express delivery, ground small-parcel delivery, less-than-truckload freight delivery, supply chain management, customs brokerage, trade facilitation and e-commerce solutions company with more than 145,000 employee’s worldwide and delivering more than 3.2 million packages daily. They command a fleet of 634 aircraft and more than 42,500 vehicles. FedEx offers various international packages and document delivery services to 214 countries, as well as international freight services and also offers commercial and military charter services. On 12-Feb-2004, FedEx Group acquired Kinko’s, Inc. Now it also provides document solutions and business services, including copying and printing services, signs and graphics, videoconferencing, high-speed wireless and wired Internet access and computer usage.
FedEx is best known for its by-line of “when it absolutely, positively has to get there”. This is but one reason FedEx is the leader in the industry. Fred Smith founded FedEx in April of 1973. Smith incorporated such management principles that have made FedEx an overnight success. These principles have made FedEx employees show unprecedented dedication to their work and to their company. On August 20, 1997 – Federal Express Corp. distributed an approximate $20 million Special Appreciation Bonus to nearly 90,000 U.S. operations employees in recognition of their extraordinary efforts. It’s no idle boast to say that they are a family.
One reason FedEx is a corporate leader is it’s an organization filled with individual leaders. Indeed, the company has designed the process by which it turns rank-and- file employees into middle managers (and then senior leaders) with as much creativity and attention to detail as the process by which it sorts packages in its Memphis hub.
According to FedEx, its best leaders share nine personal attributes such as charisma, individual consideration, intellectual stimulation, courage, dependability, flexibility, integrity, judgment and respect for others, which the company defines with remarkable specificity. FedEx also has a system for rating aspiring leaders on whether they posses these attributes. The flat management structure minimized the distance between leaders and frontline workers. This has an affect of empowering employees and expanding their responsibilities. Employees who feel empowered through open communication, training, quality improvement tools, and excellent leadership gain the freedom to take risk and innovate in the pursuit of quality and service for both internal and external customers.
The company rank of priorities sets “People” first. This goal is measured through a tool known as Survey-Feedback-Action (SFA) in which subordinates express their opinions of their leader’s performance. Thus, says the CEO “every action, every planning process, and every business decisions, requires extraordinary commitment from every manager and every employee” reason why Frederick Smith dedicates 25% of his time taking care of personnel subjects. FedEx management, together with investors and clients want to know what makes people good leaders and how new leaders learn? FedEx has a leadership curriculum that takes up to 14 months to complete which teaches new managers the proper management skills required in order to be successful. “Most people don’t realize all the rewards that management has to offer”, says Bill Hooker, a senior human-resources specialist at FedEx. “They also don’t realize all the frustrations”.
Every year, about 3,000 FedEx employees decide they are ready for management positions, however, FedEx CEO Fred Smith realized that more than 10% of first time managers were leaving the company within 14 months of taking on their new assignment. FedEx implemented LEAP – Leadership Evaluation and Awareness Process. This is a process 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.
A candidate must complete the following process to become LEAP-endorsed:
“Is Management for Me?” a one-day class that familiarizes candidates with managerial responsibilities.
Employee’s Leadership Profile: the employee documents successful demonstration of the nine leadership dimensions required to successfully complete the LEAP process.
Manager’s Focused Recommendation: the written report from the employee’s manager supporting or opposing the candidate’s leadership capabilities. It is usually prepared after a three- to six-month period during which the manager coaches and evaluates the employee.
Peer Assessment: an evaluation of the candidate, completed by three to ten of the candidate’s co-workers selected by his or her manager. Peers provide their opinion as to the managerial abilities of the candidate.
LEAP Panel Evaluation: an interview process conducted by a group of mid-level management trained in LEAP assessment. LEAP candidates present written and oral arguments to the panel supporting specific leadership scenarios. In making their decision, the panel considers the Peer Assessment, Manager’s Focused Recommendation and the Employee’s Leadership Profile. If a candidate is endorsed, they are eligible to apply for management positions, if not endorsed, an employee must wait six months before trying again.
FedEx initiated LEAP about a decade ago, after CEO Smith realized that more than 10% of first time managers were leaving the company within just 14 month of taking on their new assignment. That’s why the first LEAP module involves an eight-hour class called “Is Management For Me?” Senior FedEx executives teach these sessions, which take place around the world.
These eight hours alter the new manager’s perception towards leadership and responsibility. Fully 20% of the people who experience IMFM choose to pursue a different experience at FedEx and drop out of LEAP. George Pollard, a senior official in human resources, identifies the three biggest frustrations that come with being a leader-at FedEx.
First, there is the increased workload. “Lot of people do not understand that manager’s workday starts hours before a shift and ends hours after a shift,” Pollard says. Another is the unrelenting sense of obligation. “Managers are never’ off the clock,” he argues. “We are always representatives of FedEx, even when we’re not at work.” Last, is the headache of responsibility for other people. “I don’t know of any manager who enjoys disciplining people,” he says, “but that a real part of being a manager.”
At FedEx, they strive for transformational leadership rather than transactional leadership. FedEx’s manager’s guide relates the following “A transformational leader raises subordinates” awareness about issues of consequence, shift them to higher level needs, influences them to transcend their own self-interests for the good of the company, and inspires them to work harder than they had originally expected.
Leaders must be loyal to their employees, seek partnership rather than impose patriarchy. They must have well-honed sense of duty and bearers of change, while being able to take criticism as well as give it. Transformational leadership starts at the top. Fred Smith, through these principles, has made FedEx into a world-class leader in the overnight delivery industry. Smith leads the industry and follows no one. He inspires his workers by doing and providing an example by which they can follow. The LEAP process that he initiated demonstrates the dedication of FedEx for continuous improvement and opportunity in management. LEAP gave FedEx employees an added incentive to dedicate their careers with the company knowing that the program will help them move-up in the company’s corporate ladder. With the organizations strong leadership, which gives emphasis on employee satisfaction, it is no surprise that FedEx continues to be one of the most successful global companies.