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The Uplifting Wisdom of Fred Smith

I recently enjoyed the privilege of participating in a small group online discussion with Frederick W, Smith, the founder and longtime CEO of Federal Express. Imagine being at the helm of a global disruptor like FedEx for an uncanny five decades. Think someone like that might have a few things to say about the life and times of business, society, and learning? You might be as surprised as I was about the big ideas he would most want us to embrace.

Legend has it that the initial business plan for FedEx emerged from an economics paper Smith wrote as an undergraduate at Yale University, describing the need for a reliable overnight delivery service. He best remembers receiving a grade of C on that composition. That idea grew out of his experiences as a young pilot, occasionally offering to deliver important packages for New England technology companies that he would carry in his personal travels.

Equally important in the formation of his character was a four-year stint in the U.S. Marine Corps commencing in 1966 where he received officer training and served in Vietnam. “Yale taught me to think, and the Marines taught me to do,” notes Smith in shaping his vision and leadership of FedEx, which he founded in 1971. The company began regular operations in 1973 and just celebrated its fiftieth anniversary. Smith has transitioned to executive chairman but is every bit as engaged in the company’s direction as he was at the outset.

Early market studies confirmed Smith’s thesis that there was an enormous opportunity for an integrated global delivery network that would be realized by harnessing the power of transportation machinery and sophisticated data systems. He took on the daunting task of merging the capabilities of technology with the mapping of logistics, bringing together physical assets and mathematical calculations on a vast scale. He knew that building this kind of network was a frontloaded bet, but that once established, the barriers to entry of challenging that network would create both a competitive advantage and a trusted brand among customers.

Today that network generates $90 billion in annual revenue, employs 550,000 people plus another 150,000 contractors, moves 16 million shipments each day, operates in 5000 locations in 220 countries, manages 650 planes, and coordinates 210,000 vehicles. FedEx accomplishes this through endless innovation, precision execution, and constant reinvention.

What can we learn from an incomparable entrepreneur, celebrated business leader, and caring philanthropist that might be even more exemplary than an indefatigable work ethic? My key takeaway from listening to his carefully chosen words is that humility is a choice, and Smith embraces humility not just as a core personal value, but as a motivating force that drives him to an always improving game. “The world does not begin with your birth,” he reminds us. “There is much to learn in studying the thinkers who came before you.”

Given the ceaseless advances in information technology, Smith believes it is the CEO’s job to stay immersed in the evolution of change management. In addition to the legally required standing committees of a public company’s board, he has found it essential to maintain a carefully identified technology advisory committee well versed in applied science beyond his company’s core competencies at any time to make sure those technical abilities become core competencies.

He also makes it a point to stay close to senior military leaders both formally and informally for their deep understanding of complex systems and human motivation in urgent circumstances. He has reciprocated over the years serving on key government panels and presidential commissions to help bridge the gap between private business and government, share emerging ideas, and offer his hard-won knowledge as a quiet contribution to public service.

Smith is now keenly focused on embracing the fast climb of artificial intelligence, yet another strategic inflection point both in the growth of his company and the world at large. The threat of cybersecurity has always loomed large on Smith’s short list of key concerns around systems risk, where he sees generative A.I. both exacerbating the problem and potentially forging a path to workable responses. “It will help remove the friction of international customs,” he suggests. He is also passionate about carbon capture, driving FedEx to a carbon-neutral future not just because it is the right thing to do for the environment, but because the companies that get there first will enjoy ongoing business advantages in proving models with measurable returns on investment.

The culture of FedEx remains focused on innovative practices as a competitive platform that is rooted in the company’s founding and ingrained in the necessity of proactive thought leadership. Not surprisingly, he is obsessed with teamwork and team accomplishment over individual ego and achievement. “You’re not the smartest person in the world, be humble,” he reminds us. His observations of multidisciplinary success in business, military, and government enterprises reinforce his championing of building and sustaining team dynamics.

Smith is concerned that people are now spending so much time behind video screens that their sense of reality is being distorted by inadequate forms of communication. “Thinking behind screens” does not bridge viewpoints or bring people together. He observes in social media that it creates “a place where outrage has found a business model.”

Now, about that lasting wisdom: Here’s where Smith brings down the house with his clarity of life’s lessons and unassuming purpose. Staying on the edge of technology and reinvention no matter one’s current success is more tactic than strategy for this highly accomplished individual. What is core to Smith is his embrace of mortality as a further reflection of humility. “Life is short and it ends, the clock is ticking,” he advises. “Don’t get all wrapped up in your personal self, that’s a very unhealthy thing to do.”

What is key to reminding us of our humanity in his worldview? “Maintain a sense of humor, because life in many ways is absurd, and you need to be able to laugh at yourself.” Smith clearly understands irony, has seen his share of farce, and with sporadic investments in the arts, knows a funny story when he hears one.

There you have it from one of the most successful innovators of our time: be humble, remember your mortality, and don’t lose your sense of humor. I would never have guessed that’s what I would take away from this conversation, but how delighted I am to have experienced such a treasure of actionable advice. Fred Smith understands leadership by example. Humility is evident in his journey, mortality is certainly at hand given these reflections, and if you listen at length he might just make you laugh.

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Photos: Pexels and FedEx.com

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The Pros and Cons of Generative AI

Generative AI refers to the technology that can generate new content such as text, images, music, or videos. Like any technology, it has its advantages and disadvantages. Here are some of the pros and cons of generative AI:

Pros:

  1. Creativity: Generative AI can generate new and creative content that can be used in various fields, including music, art, and advertising. It can come up with novel ideas that humans might not have thought of.
  2. Efficiency: Generative AI can create content much faster than humans can. For example, it can generate thousands of images or pieces of text in just a few minutes.
  3. Personalization: Generative AI can create content that is personalized to the user’s preferences. For example, it can generate music or art that is tailored to the user’s tastes.
  4. Automation: Generative AI can automate repetitive tasks that would otherwise require human intervention. This can save time and resources, especially in industries such as marketing or content creation.

Cons:

  1. Quality: The quality of content generated by generative AI can vary widely, depending on the quality of the data used to train the model. The content may be low-quality or even nonsensical.
  2. Bias: Generative AI can perpetuate biases that exist in the data used to train it. For example, a generative AI trained on a biased dataset may generate content that is discriminatory or offensive.
  3. Ethical concerns: Generative AI can be used to create deepfake videos or other content that can be used to spread misinformation or deceive people.
  4. Intellectual property: Generative AI can create content that may infringe on intellectual property rights, such as copyright or trademark.
  5. Lack of human touch: While generative AI can create content quickly and efficiently, it lacks the human touch that makes content truly unique and memorable.

In summary, generative AI has many potential benefits, but it also comes with significant risks and challenges. As with any technology, it is important to weigh the pros and cons carefully and use it responsibly.

Note: This special guest post was created in its entirety other than the title by ChatGPT.

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Photo: Pexels

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A Letter Regarding Financial Faith

Dear Financial Community:

The failure of Silicon Valley Bank is enormously troubling. Call it an isolated circumstance all you want, but it has further stressed our nation’s dialogue. An echo of other bank failures has followed SVB down the drain. Long lines of anxious customers waiting outside banks are never something we want to see. This was unnecessary. This was bad form.

As dependability in our institutions continues to fray, I worry increasingly about where we’re headed. As divided as we are in this nation, can we withstand a true crisis of faith in our banking system? What understandable assurances are in evidence that wider contagion is not possible, that limits can be maintained on the ramifications of remarkably poor judgment?

Where does resilience meet its match and cause us to lose faith in the basics of our grand experiment in economic expansion?

Our economy works on a number of elusive factors in concert with tangible reporting. One of those is faith. If we lose faith in our banking system, the notion of ongoing growth and innovation at scale seems to go out the window. The economic miracle we have created together freezes solid and then melts into the ordinary.

Ample credit fuels dreams. Intelligently borrowed capital brings to market hopeful new companies and bolsters the expansion of existing businesses. Financial institutions, mostly banks, have to lend money for ideas to become enterprises.

Lending money as its own business only works if there is leverage in lending. We understand the rules of engagement: a bank keeps some cash on reserve and lends more than it has at any given time. This works fine as long as there are no unaddressable runs on banks.

Should redemptions exceed liquidity, banks are forced to liquidate assets at any price to return cash to depositors. Trust in the banking system and the FDIC is required of depositors to prevent runs from melting down banks. Trust is a reflection of faith. Lose all faith, lose all trust, we all lose.

Here’s ground zero: If we lose faith that banks can get our money for us whenever we ask for it, deposits cease. If there are no deposits, there can be no lending. That’s the endgame you are teasing when you fail to do your job and cautiously manage risk. Kill deposits, kill lending — that’s a death spiral in the making.

Faith is increasingly becoming a conflicted proposition. Reckless financial engineers test us every decade. The savings and loan crisis. Long-Term Capital Management. Sub-prime mortgages. Washington Mutual. Collateralized debt obligations. Lehman Brothers. One day the combined impact of these attacks on faith may succeed in fully undermining the little faith we have left.

Then the thinning ice cracks for good.

Don’t tell me this time it’s about rising interest rates that weakened your balance sheet. You’re smarter than that. You know history. You knew interest rates had to rise. Nearly free money is never forever. You’ve been making loans as long as you’ve existed. You understand liquidity. You understand it so well that you spend millions lobbying against the very regulations you need to stay in business.

There are no excuses. You take bonuses for being clever. When you’re too clever, the damage has the potential to become systemic. When faith in the system evaporates, apologies are meaningless.

A brand is a promise. When a bank’s brand fails that promise, the entire concept of for-profit banking is soiled. We are only human. Serial violations of trust reveal fragile faults in what we’re repeatedly told is a robust system. We can only experience so many failures before trust is gone.

If we come to believe that U.S. Treasuries are the only safe place to park our money, what happens to commercial lending? If commercial lending retreats, how do the entrepreneurial efforts of the next hundred years replicate the last hundred years?

Do we really want to depend on government to keep righting the wrongs of irresponsible, conniving executives? Government’s role is to referee where self-regulation has proven farcical. Regulate, yes. Adjudicate, yes. Underwrite exponential losses, unsustainable.

If government must guarantee every deposit regardless of the amount in order to maintain faith in those deposits, how can bank executives ever be trusted to take risk seriously?

There’s a lot at stake, more than many of us may yet realize. We’re shell-shocked, but we’re supposed to maintain faith. Each day it’s harder. Each day we put our own historical investment paradigm at risk.

In simplest terms: Please stop putting our nation’s future at risk and punting your unnecessary failures to manufacture compensation you haven’t earned and don’t deserve.

Seek to restore our faith. You need deposits. We need loans. Keep our money safe to put it to work properly. We’ll pay our installments. That’s the contract. It’s a virtuous circle. We all have to abide by the rules, not wait to get caught if enough oversight is available.

Please make the rules work to all our advantage and believe in something more than your own benefit. Prosperity hangs in the balance. You’re toying with breaking everything. Let’s look to another hundred years of wise lending and liquidity to continue investing in positive outcomes we can’t even yet imagine.

Yours in faith,

A dissatisfied lifelong banking customer

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Photo: Pixabay

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Cold Call Catastrophes and Catalysts

As the economy comes under increasing pressure, I find myself wading through an email inbox increasingly filled with clutter. I am being too polite. It is filled with garbage. Sadly, much of that garbage comes from sales folk who think they are reaching out to me to generate much-needed business for their companies.

Cold-calling is part of a salesperson’s job, I know that, and it is hard. If you don’t learn to do it well, you won’t be in sales long, or you will be doing it for the rest of your life on increasingly less lucrative accounts with thinner commissions than you are currently receiving. If you are not hearing back from me and the many others you are bombarding with modestly tailored spam, I am sure I don’t have to remind you that you are not succeeding.

While overcoming objections is a pillar of sales, you aren’t doing that if I delete your pitch on sight. Given the lack of good training you might be getting, allow me to suggest a few things you might be doing wrong. At the risk of inviting further assault, I will then suggest some things you might want to consider doing instead. If you are a manager overseeing a platoon of cold-callers, this might be an excellent time to audit your strategies, tactics, directions, and results to help those under your wing succeed rather than struggle.

“Can I send you a gift card for your time?”

No, you can’t. I don’t trade my time for $10 per half-hour. I also don’t want a free Yeti mug. I am not taking a meeting as a thank-you for something I can buy on my own. Anyone who takes this paltry bait is either violating their company’s conflicts policy or stringing you along without decision-making authority. Don’t offer to have coffee, lunch, designer cookies, or anything else sent to my office as an introduction. We don’t know each other. This is not going to make us friends. It’s insulting and you must stop now. This is not the same as me agreeing to have lunch or dinner with you in person because you have caught my interest. It’s cheap, it’s icky, and it compromises both our integrity.

“Can we jump on the phone for a few minutes?”

No, we can’t. I don’t jump on calls. I choose them wisely. Remember the obvious: I don’t know you and you don’t know me. You’re selling to me. It’s not my job to pick a time from your calendar to hear a sales pitch you initiated. You are being presumptuous and overreaching if you think I am going to drop what I am doing to jump at your opportunity. Don’t make yourself look silly when you are introducing yourself.

“Are you the right person to consider a new service?”

Seriously, you can’t be bothered to do your homework and know the answer to this before you send your inquiry? Why do you think I pick the VOIP system here? Or the cleaning service? Or the door alarm? If you’re wrong soliciting me, do you think I’m going to tell you whom you should pitch when I don’t know you? If we’re considering a new voicemail platform, someone is already working on that and you’re too late.

“Did I drop below the top of your email list?”

Yes, each of the last three times you emailed me and I didn’t respond. Moving your fourth inquiry back to the top of my email inbox at best is going to remind me of the last three I ignored in my backlog or deleted. What’s that old saying about the definition of insanity?

Okay, enough timesink, I’m sure there are dozens (hundreds) more examples of these non-icebreakers. Your time is valuable, same as mine, and neither of us can afford to be wasting it. Your bosses may tell you they want to know how many cold calls you made yesterday (almost no one calls anymore so most of this is email), but what they want are prospects — warm leads they believe you can convert to business. Here are a few avenues that might get you an email in return, the start of a conversation, which is the best you can hope to achieve on a first solicitation.

Get a proper introduction.

Want to meet me? Find someone who knows both of us and get that person to facilitate an introduction. I just heard your head explore: “That’s so hard,” you bellowed. “It could take weeks, and then why would anyone volunteer to bother you about an intrusive sales call?” Yes, exactly. It’s going to be a rare occurrence, but if you know someone I know and they think meeting you could potentially help me, they will reach out on your behalf. This is the drumbeat of effective networking. When it’s mutually beneficial, all boats float. A warm introduction beats a cold introduction every day of the week. It is worth all your time to secure one.

Send me something I don’t know.

I may not want your canned demo, but if you take the time to prepare a custom report that clearly demonstrates how your product or service solves a problem I have, I might flip past slide one. It all depends on how hard you’ve worked to make your case, how much useful data you can amass that catches my attention, and how relevant your argument proves to be from the first sentence to the last. “I can’t possibly do that for every cold call,” you groan. I agree, you don’t have to do it for every unrequested approach, just the one you want me to acknowledge.

Establish a relationship based on shared interests.

There’s a lot you can learn about people you want to meet by doing research — the organizations where they belong, the charities they support, the articles they’ve written or talks they’ve given, If you find a way to establish an authentic bond or point of connection, there is a chance you might open a dialogue that leads to a business opportunity. This is a much longer road and it will fail more than it will succeed, but it is much easier to pitch someone when they’ve already decided you are credible, rather than evaluating your personal credibility and your pitch in the same instant. Would you be surprised to hear that people like to do business with people they know or have already done business with in the past? Getting that history is hard, but once you have it, a lot more doors open.

What’s the real secret?

The real secret to building a successful sales pipeline hasn’t much changed in a hundred or more years: It all comes down to advance work. As much as 90% of your sales success is in preparation. Once you get in front of someone, which is the shortest time on time on the calendar, your presentation skills will stand or fall on your offstage readiness. Shortcuts seldom work. It’s your time out of sight that makes your time in sight resonate. Your time is an investment in your outcome, and the more you invest, the more likely you are to establish the basis of an opportunity.

Or you can offer to send me a gift card for a luscious fruit basket I won’t redeem and add that send to the tally you report to your boss. Your choice.

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Photo: Pixabay