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

Embrace Turbulence

How many really bad things can go wrong in business in a single day? One or two? Five? Dozens? Dozens of dozens?

A key employee leaves because a spouse is offered a job a thousand miles away.

A key partner botches a supply chain handoff and your warehouse is empty ahead of an annual sale.

You discover a critical hidden formula error in one of your financial spreadsheets that even your auditors missed.

Your customer service lines light up for a problem with your competitor’s product being confused for your own.

Sound like a normal enough day?

Then why do we think of turbulence as extraordinary?

Maybe a better question is how many things can go right in a day. Sometimes if you achieve one modest success you count your blessings and call that an outstanding day! A win is the welcomed exception. Problems are the norm.

Just remember one of the key maxims in career longevity: If you’re a manager, problems are job security. If there weren’t problems in business, we wouldn’t need management. Lucky for us, huh?

I was recently talking with a colleague about his desire to offer calm to his staff after a rough few weeks. He wanted to give a talk where his message and tone signaled that the bad stuff was behind them.

I advised against it. How could he possibly know what fate might bring even later that afternoon. You never want to make a liar out of yourself with stuff you can’t control. Besides, the very notion of calm to me signals surrender.

What is the stuff you can control? Attitude, anticipation, and readiness.

It’s a question of urgency over fear. Fear in the form of debilitating anxiety may not be your friend, but urgency in the form of nimble responsiveness is always your friend. There is so little in our future that we can control, pretending it is otherwise is advancing the clock on the certainty of smack down.

Complacency lets down your guard. Predictive, proactive realism keeps you sharp at all times.

How many times have I heard hardworking but tired employees utter the phrase: “If only we can get through this [fill in the blank], we’ll be fine.”

Remember this instead: The reward for getting over a hill is the opportunity to climb another hill. There is always another this to get through. Beyond each valley is always another hill, often steeper and higher than the one behind you. That is the nature of economic cycles. That is the nature of problem-solving. Whatever you solve today may create an opportunity, but the market response to that opportunity will likely create the next problem on your plate.

It’s no different for capital and equity markets, where despite our hope for smooth sailing, volatility is the norm. That’s why for so many stock picking is a loser’s game. You’re in for all the good and bad days or you’re out.

What to do then?

Embrace turbulence before it becomes turmoil.

Make turbulence your constant companion. Celebrate small wins, but never be fooled by a quiet few hours. Once you are comfortable with the inevitability of unpredictability, your confidence level will rise. You will learn to address change because you accept the inarguable market force that change is constant.

A good sales quarter is always exciting, but as every prospectus states, past performance is no guarantee of future results. You know that like you know your boss’s ugliest shirt. Why pretend otherwise?

Did AOL fall on hard times or fail to respond to turbulence?

Did Yahoo suffer an explainable devastating blow or wander aimlessly amid turbulence?

Did Kodak get ambushed by new technology or fail to play its strongest hand in a climate of turbulence?

Each of those companies allowed turbulence to become turmoil. When turmoil escalates to the unbound, creative destruction has usually made its decision.

Think about what those implosions mean to you.

Did the last project that didn’t go your way take you down or prepare you to outperform it?

Did your last failed product launch demoralize you or teach you how to make a better product?

Are you looking for comfort in the quiet ordinary or comfort in outrageous curiosity?

Big Company Syndrome is believing your paycheck will always show up. Smart Company Syndrome is knowing you have to earn your keep every day. Doing work and adding value are not the same things.

Turbulence in business is the norm, not the exception. Companies that win do so because they surf over, around and through turbulence. They might purposefully avoid an obvious storm they can’t navigate, but they expect storms, they don’t anticipate their magical elimination.

In daily business dealings, if you know that bombs are regularly going to drop, you won’t be surprised when they do, no matter from where. If you’re a CEO or close to one, you know it’s the job of leadership to address crises, not to hope they will slink away.

Make peace with turbulence. Pace yourself for a ceaselessly bumpy endurance contest. Expect an unruly rollercoaster ride and be mildly pleased the days it doesn’t throw you from the train.

When you have one of those good days—and you will—you will appreciate it even more. Your definition of a good day may also begin to change. Mine certainly has. Stay tuned to this channel for how.

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Image: Pixabay

What’s Eating Brother Elon?

Let’s start with what needs to be said before all else: I am an enormous fan of Elon Musk. I think he is quite likely the most important and visionary entrepreneur today leading the way in technology, business, and innovation. He walks in the American continuum of Edison, Disney, Gates, and Jobs.  I wrote as much in a post dating back to 2014.

So when a guy as brilliant as Musk goes sideways, I start to ask myself some questions. Like, what’s up with all the weirdness?

Clearly I have no ability to understand what’s going on in this amazing individual’s life, other than to observe the monumental toll that stress can take on even the mightiest of titans. To guess at what might be at the root of Musk’s recent unpleasant run in the headlines would seem a fool’s errand.

While I am unable to fashion an informed evaluation of why Musk appears in many ways to be undermining his own success of late, I am thinking about the learning that might be had from observing his stress. I am reasonably certain he will have no interest in my reflections of what his behavior could be telling us, but perhaps this will provide a mirror for others on what some of this means and how it possibly could be addressed.

Here are five thoughts on that.

Focus Is No Small Trick

Can one person really be an effective CEO at more than one company? It’s hard enough to be a decent CEO period. Now add longevity to the CEO run and enormous competitive forces, and you start to wonder if running both Tesla (after integrating SolarCity) and SpaceX is remotely possible. Let’s also not forget that Musk is additionally CEO of Neuralink and The Boring Company. If you have ever been CEO of a high-growth company or even know one, you are aware that the job requires super-human energy, and even then the clock is always ticking against the corner office. Musk is beyond super-human, not only as a leader but as a founder who tackles some of the most difficult problems of our day. Will he succeed at all of his goals? I am sure a lot of investors and customers are counting on that, but wouldn’t the odds be more in his favor if he narrowed the scope of his personal agenda and delegated authority with a much broader brush?

A Competitive Advantage Is Not Forever

Tesla has created leading-edge, clean-exhaust automobiles. These electric vehicles are as beautiful and luxurious as anyone could have imagined. Most Tesla owners are evangelists for the company and fiercely loyal to the brand. There is no question that Tesla has been an inspired market leader, but all it takes is one visit to the showrooms of other luxury car companies and you start to see that high-end electric cars are on a fast path to becoming commodities under many brands. BMW and Jaguar already are introducing competitive product lines. Others are on the way. Staying ahead of the pack is its own form of madness and a lot less fun than introducing first-of-a-kind category killers. Can playing king of the hill without a summit in sight have a troubling impact on the psyche? How can it not?

Production Efficiency Is as Difficult as Innovation

Why hasn’t a new auto manufacturer in the U.S. survived at scale beyond the Big Three? The bulk of car buyers want cheap—most consumers don’t have an option to spend more, so the entrenched behemoths take small margins to achieve broad sales and then make money in other ways like service and financing. When you are playing with other people’s money, the demands of Wall Street can be insanely demanding. It’s hard to make big bucks selling very few cars. While Model S and Model X are both category-defining luxury cars, they remain low-volume production units with difficult margin economics given their scale. Model 3, the low-cost mass-market entry, is supposed to change the scale of Tesla, but realizing the dream of high-volume, low-cost, low-margin automobile economics seems precisely what is eating away at our hero. Is the problem perhaps not solvable with the reality of capital constraints all businesses face? Is there another business model beyond manufacturing that Tesla might want to explore with respect to the investment burden they carry?

Health Matters

A lot of people at the upper echelons of business take pride in working themselves to death, or at least appearing to do so. I will admit I am personally not beyond this criticism, and have winced more than once when listening to colleagues celebrate the notion of work-life balance even in the most competitive environments. Many leaders demonstrate manic obsession in their devotion to their enterprises, and it is hard to argue a company can be at the top of its game with a standard forty-hour work week. That said, no matter how much we wish to argue the contrary, we are human, our bodies have limits, and when we cross our own lines of practicality, we can become counterproductive. Sleep matters. Nutrition matters. Some relief from stress is necessary to be consistent in exercising good judgment and productive reasoning. When our vitality breaks down, it is only a matter of time before we collapse or the responsibilities we own become compromised.

Authenticity Does Not Require Unrestrained Drama

The modern workforce is not put off when a boss exhibits some vulnerability. Relationships defined by org charts actually can be strengthened when a manager exhibits humility toward his or her own limitations. Leaders who acknowledge that emotions and potential exhaustion set them on a level playing field with peers and subordinates can foster a dynamic environment of trust and support. That doesn’t mean employees and other stakeholders want executives to ramble, wander, or become media fodder. Remember that old saying, “When you’re in a hole, stop digging.” Random proclamations to shareholders and needlessly quirky public appearances can leave deep craters on the social graph. All organizations want some form of predictability in the leaders they choose to follow. When they lose confidence in top management because of repeated, silly, and unnecessary antics that can demoralize their aspirations, they can make another choice. They vote with their feet.

I am rooting for Elon Musk to win, for SpaceX even more than Tesla, because he has proven that not only government bureaucracies can build dependable rockets. That is forcing innovation around reusability in space exploration and keeping admirable government spending on otherworldly travel in check. While I probably can’t put a dent in Musk’s corrective arc (which I want to believe is on the horizon), perhaps I can open the eyes of a few mere mortals to the underlying tension of his story. Perhaps your story of stress and self-expectation has similar subplots of immovable market forces. What could you be doing to course-correct that might give Musk reason to pay attention?

Three Thousand Ears in Cape Town


You’re probably thinking there is a typo in that headline. Nope. It’s correct. Not years. Ears.

This is a story about service. This is a story about choices and not enough choices. This is a story about experiential learning and tangible human impact, one small moment at a time.

Three thousand is an estimate of how many children’s ears were recently screened in Philippi Township, Cape Town, Western Cape, South Africa. At best count and two ears per young child, a volunteer team screened about 1500 children for otherwise undetected ear infections. If left untreated, this preventable and correctable condition could easily have left many of these children permanently deaf. About ten required immediate surgery. Six had cysts that could have resulted in meningitis or death.

A project of this scope had never been attempted. The average number of children screened by public health services in the township for ear care is 150-200 per year, largely based on referrals. The team we assembled, working hand in hand with local clinicians familiar with medical infrastructure in the township, took on more than that each day. Once this model partnership committed to the challenge, there was nothing stopping them from achieving a new record they can’t wait to break or see broken.

The ear clinic was only one of many innovative projects our group of volunteers tackled earlier this month near the far-away Cape of Good Hope. One team worked on AIDS prevention and education in a place where HIV remains epidemic, potentially impacting the vitality of an entire emerging generation. A construction team built bookshelves for public schools across the township. Another team focused on robotics learning, with young children lighting up as their minds opened to the basics of computer programming.

We also ran a dance program led by a former champion from television’s Dance Fever. We engaged a team of professional journalists to start a school newspaper. We organized a series of open discussions on women’s health and personal well-being. We developed a peer-to-peer math mentoring program for high school students.

My own team focused on business consulting with micro-entrepreneurs, working with an NGO called Business Activator to help bolster start-up companies. We were based in a unique business park created from the remnants of an old cement factory, with stacked shipping containers creating storefronts along a makeshift plaza.

So what’s the buzz? Why were we in Cape Town? Why take this on in lieu of a leisurely vacation?

It was all about service—an alumni project organized by my college. This time a hundred volunteers descended on Cape Town, a highly unusual metropolis of contrasts and contradictions. You may remember that I wrote about a similar project a year ago at the Fort Mojave Indian Reservation. Indeed, this is the tenth anniversary of the Yale Alumni Service Corps, harnessing the passion of individuals from all walks of life to immerse themselves in unfamiliar cultures and spend a week helping to ignite a spark in the lives of others that will be embraced, measurable, and lasting.

If you’ve ever dedicated any amount of time to volunteer service, you know the cliché is apt that you take away much more in your heart than you can ever give of your time. A visit to a place as complicated and torn as Cape Town can change your life if you let it. At the very least it can change your perspective on what you thought you knew about a subject as harrowing and sadly unresolved as apartheid.

I thought I understood the plague of apartheid from reading about it in newspapers and history books. I thought I understood the plight of institutionalized racial oppression from seeing the struggles on television and internet video. I thought I understood the meaning of healing through Mandela’s Long Walk to Freedom.

The little I understood was academic. I didn’t know it until I was in Cape Town, but I needed to be in the townships to even start to internalize what apartheid was and what of it remains. Apartheid may officially be dead, but its pervasive toxins leave long, lingering trenches of decay.

Now I have seen this. I also see the corollaries to many of the deepest problems in our own backyards. A simple service project made this possible.

Service isn’t just about doing good deeds. Service is about cultural immersion. Service is about lifelong learning. Service is about coming to terms with empathy for distant problems that on closer examination are wildly close to home.

On the second day of our trip, my direct observations on an extended bus ride through the townships almost stopped my breathing. I had never before seen systemic, uncontrolled poverty on that scale. As much as I thought I knew what economic inequality meant, nothing prepared me for seeing the ruins brought on by apartheid sprawling without containment almost a quarter-century after the election of Nelson Mandela.

Service let me see this. Service opened my eyes to the impact of history and the seemingly immovable obstacles of current events.

There is no way words can adequately describe the inequality in Cape Town. The city center is picturesque and opulent, with cascading views of the gorgeous waterfront. Quaint streets reflecting British influence and signage wind past towering universities, luxury-car dealerships, and New World wine-tasting rooms.

Fifteen minutes down the road are the townships originally created by apartheid, still standing—expanding actually—with millions living in abject poverty. Many live ten or more in tiny corrugated metal shacks, if they have an overhead shelter at all. There is minimal plumbing, shared toilet structures, electricity pirated from public lines tempting common incidents of fire. School dropout rates approach 80%. Unemployment stands near 25% with utter confusion among the suffering how America is not stuck in the same recession.

It all seems apocalyptic. We aren’t talking a few blocks or a few streets of urban decay. We’re talking mile after mile of human beings on top of each other trying to survive, source decent food, tote clean water, find a way out.

Remember, this is more than 25 years after the end of apartheid, which astonishingly lasted as law into the early 1990s! I was shocked to hear several young people actually speak ill of Mandela. To some he has become more myth than legend, and they question why his promises haven’t panned out for their prosperity. Many have become cynical, wondering why his vision was never realized, whether he compromised too easily and sold out their future. It is common to hear the electorate speak openly of parliament as corrupt and self-serving. They ask if the ANC can once again become their champions.

In service we seek to offer hope, and while there were glimmers of resilience in each of our day’s work, the scale of oppression remains impossible to talk past. All of this is the long tail of apartheid, a system so vicious and deeply embedded in societal ills it is difficult to decipher how many generations it will take to overcome. I was left thinking of the United States after our Civil War, how long it took for any kind of normalcy to prevail, where even today we can’t seem to get past racial hatred. I wondered how in the embers of Nazi defeat at the end of World War II, with the Nuremberg Trials in the headlines, it was possible for apartheid come to power with the National Party in 1948. The irony of 1948 is impossible to escape. That was the founding of Israel.

Our work in Cape Town was facilitated by a dynamic NGO known as Amandla Development, whose mission is to “empower children to succeed from cradle to career.” One of the sheer joys of being in Cape Town was getting to know the local staff of Amandla, to spend time with people who grew up in the townships and are now determined to reverse the course of history by touching the lives of children one at a time. This is how hope becomes action—not with epic commitments of resources in attempts to shatter daunting obstructions, but in finding one or two individuals open to the idea of collaboration and helping them improve their lives.

Our volunteers in journalism reported that many of the students in their program seldom interact at all with white people. They simply don’t have the occasion or opportunity, another awful remnant of apartheid. One student wrote that she never thought she would develop a friendship with a white person. That friend became the person who encouraged her to publish her first story.

All that brings me back to the 3000 ears in Cape Town. Perhaps on equal footing with ensuring quality hearing for these 1500 children was the opportunity to let each one of them know that we care about them. Our volunteers didn’t just process them through a waiting line. These were very young children, most of whom don’t begin learning English until the third grade. Of course they wondered why we were there. Our loving colleagues went to their classrooms and explained through a translator what we were doing, that they would be in no discomfort, and that we truly were friends from abroad.

Raising awareness of the scourge of hearing related diseases was as important a part of the mission as the specific medical attention offered. Adroitly changing the perception of these maladies from endemic to treatable afforded our educators an enormous creative window. While the children were waiting to see the doctors, our volunteers played games, sang songs, and worked on art projects with them to reinforce this learning. I can’t help hoping that some of these children will remember these joyful moments of sharing as they become adults. I know our volunteers will never forget them.

Perhaps the Cape of Good Hope is well named. I won’t forget any of it. Not apartheid, not the townships, not the children, not the entrepreneurs in their offices anticipating a brighter future.

That is the nature of service. I’m pretty sure we can’t fix this rotten, broken, unjust world. I’m completely certain we can always help one or two strangers if we care to make that choice.

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Photo: Copyright Melanie Belman-Gross (shared with permission)