Category Archives: Leadership

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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 Difficult and the Daunting

You may have heard recently that Amazon is pulling back a bit on hiring and warehouse space. With all their vast resources in strategic planning, the executive team there overshot on leasing square feet their forecasts no longer support. I suspect they will manage through this just fine in the long run with little impact on earnings, but it is a powerful reminder of how difficult it is to predict future business both when you’re in an up-market and a down one.

We all get this wrong now and again. It’s normal and usually navigable. The problems come when balancing present challenges heavily compromises a company’s future, or betting only on the future sours a company’s current performance to the point where no one cares about the future.

I am often humbled by the nagging paradox of making tough business decisions every day at the relentless pace of 24x7x365. Running a company in response to everyday circumstances in the present will always be difficult, Running a company for an opaque future will always be daunting.

We have to do both well to accomplish our current goals and set the table for the next generation of growth prospects. Favor either the present or the future too heavily and the question becomes whether you want to lose now or later. While that’s not an option any leader wants to consider, if we don’t see the delicacy in how one affects the other, our intentions can be undermined by our outcomes.

We often hear about the pressures of being a public company, how corporate leaders make choices to focus on quarterly earnings from which they financially benefit immediately over building strong companies for the long haul. I do think this happens at some companies where short-term stock performance can dramatically impact executive compensation. Too often those companies fall prey to what Clayton Christensen famously has called The Innovator’s Dilemma and allow their long-established norms of success to be fully disrupted by more nimble competitors.

There’s a more ironic take on this notion, where equity markets sometimes forgive emerging companies for failing to produce earnings at all in the near term in the hope that someday they will have gained so much market share that they will prove invincible. This all-or-nothing strategy has paid off handsomely for companies like Amazon that didn’t produce earnings for years, reinvested heavily in their growth, and today reap the benefits of that bet. Sadly, this example has been exploited by too many newly public companies that don’t even consider near-term profitability a goal, allowing lazy business models to overshadow unfounded optimism that someday their customers will reward them with enviable positions.

A company that bets only on the future, never becomes economically successful, and runs out of cash can be train-wrecked just as decisively as a once successful company that fails to address The Innovator’s Dilemma. If the executives steering either of those failures happen to be selling shares along the way to a company’s demise, a feast of lawyers will follow.

Inflation and rising interest rates make the cost of doing business higher for everyone. We painstakingly decide how much of these costs we pass along to customers and how much we absorb. The benefit of preserving current operating margins is always tempting, but the rewards of long-term customer loyalty and lifetime value speak for themselves. How do we decipher the balance between current and future financial results? Data will often shine a light on the path, but there are no conclusive textbooks with clear answers to these calculations.

It truly is hard to run a company both for today and tomorrow. We have to consider the staff sizes we need, the leases we’ll require, the stability of our supply chains, price elasticity, and the promise of our brands. We also carefully must watch cash flow, our balance sheets, compensation, incentives, technology advancements, and investments in future product cycles. What works today may or may not work tomorrow. It is seldom that what works perfectly in one set of conditions works just as well in another.

There are no perfect answers, but the fluidity of making a decision now for its short and long-term impact usually weighs heavily on those who wrestle with the impossible crystal ball.

Covid-19 has been a good reminder of how difficult and daunting decisions can be. We were all blind during Covid and it was easy to misread fluctuating data. No leader had substantial experience with stay-at-home working conditions. No one knew how long the pandemic would last, how it would impact supply and demand, or how it would impact investor sentiment. If that wasn’t enough of a challenge, most of what we thought going into Covid proved to be wrong, and most of our assumptions about how employees, customers, and investors would behave post-Covid have been equally wrong.

If you want to be humbled, try making decisions that address the unknown with this level of frequency. You’ll likely realize you’re wrong more than you’re right, but the less tangible skill we develop is how to rethink and react quickly when we discover we are wrong. That’s why the rewards for creating a company that is “built to last” are immense, but the odds of lasting fifty years are long.

When it comes time to decide short or long, know you have to do both, and do your best you to keep dialogue and debate flowing among diverse opinions. The decisions we make have an impact we might be able to see today, but unless you know someone who has a gift the world has never seen, we are almost always speculating on the impact a year or more from today. Sometimes it’s decades before we find out if we were right or wrong.

We choose to sign up for the difficult and the daunting. The longer I do this, the more humbling it is.

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Photo: Pixabay

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Are You Smarter Than Elon Musk?

I’ve written before about Elon Musk. He’s impressive on many levels, but he needs a bit of humbling on behalf of his peer group. He knows what he knows. He doesn’t know more.

I don’t need Elon Musk to teach me about free speech. He doesn’t have the credentials.

I also don’t need Mark Zuckerberg to teach me about community, openness, or how we’re going to live in the meta future. He’s a guy who sells online ads. He’s not a futurist.

The opinions of these people outside their realms of expertise aren’t just conflicted; they are arrogant, self-serving, naive, and potentially dangerous.

Wisdom is not fungible. Insight is not fungible. A person can be really good at something and nothing else. They just don’t know it, or perhaps they choose to embrace a platform of pretension. Self-aggrandizement is often a spoil of war.

A thought leader with demonstrable success in one category has no de facto claim to distant adjacencies. A celebrity, even a business celebrity, doesn’t become a subject matter expert beyond their recognized success simply by claiming the public microphone and turning up the volume.

Knowledge is not transferable by sheer force of will or cult of personality. An ego like Musk would have you believe he can layer meaning where none exists. An agenda is not the same as a common belief set, or even a clearly defensible philosophy.

Your opinion of what constitutes the normal social limits or lack thereof around free speech is every bit as valid as that of Musk. He can spend billions and buy anything he wants, but that does not make him right, only influential. He can call himself a free speech absolutist, but he made that up. It’s a pithy expression meant to draw attention to himself, but consider Los Angeles Times writer Michael Hiltzik’s extrapolation of Musk’s mandate in a more chaotic application of the extreme unleashed:

“If that means that users will be able to post anything they wish on Twitter, no matter how redolent they are of ‘sexual harassment, group harassment, insults or name-calling, posting private info, threatening to expose private info, violent event denial, violent threats, celebration of violent acts’ or any of the other violations of Twitter rules that currently allow the platform to shut down an account, that would be bad.”

You may agree or disagree. You may say Musk has agreed to abide by the law, but his interpretation of the law may not be yours. Musk is a contrarian who finds delight in arguing against laws and has no trouble surfacing the means to challenge high court opinions in endless adjudications. As long as there remains an appeal to be had, Musk can prevail with his opinions despite the collateral damage of their impact. None of that makes him correct in the abstract, but too often the power of holding today’s authority is confused with ethical vindication.

Your point of view matters on the issue, because you have the same foundation and standing to express your own point of view. What you likely don’t have are the resources at his disposal or the same hidden agenda he is not going to publicly express. What you probably do have is a touch of measured humility, balanced perspective, and everyday graciousness for those around you.

You’re also likely not putting on a show. Healthy policy debate deserves better than purchased amplification.

Proclamations can be noise alone, or they can have severe implications. We get fooled all the time by the loudest voices in the room claiming an ask that is more than what it appears.

Rich is fine. Successful is fine. Neither offers someone transitive intellect.

In Fiddler on the Roof, Tevye sings, ”When you’re rich, they think you really know.” He wrestles with the irony of his dream. He wants to be sought by his fellow villagers as an all-wise sage and would gladly play that celebrated role in his community. Yet he knows from his deep faith he’s an ordinary man with or without money, not an inspired prophet.

We all have claim to an opinion. The validity of that opinion stands or falls on the credibility of its supporting argument and disciplined construct, not on the bank account or unaffiliated resume of its speaker.

If you think you know more about free speech than Elon Musk, it’s entirely possible you do. That would make you smarter than Elon Musk. I’m not sure it’s a compliment, but hold it in reserve should the foolishness you hear each day give you reason to stand up for your own well-considered belief system.

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Photo: Pixabay

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The Root Word of Contemporary Is Temporary

Sometimes I wonder if the advancing of age and a leaning toward old-fashioned values are a hindrance to relevancy in our contemporary workplace. Then I remember who taught me the most about workplace navigation in the early years of my professional career. It was bosses and colleagues advancing in age and leaning toward old-fashioned values.

I don’t think a bit of traditional thinking about the nature of workplace relationships is incompatible with rapid innovation, agile thinking, evolving workplace paradigms, and aspiring to more meaningful jobs. I think a bit of grounding is precisely what the doctor ordered. We all can learn from each other if we choose to listen.

One of the simplest and most striking plain language aphorisms I learned from a writing teacher many decades ago has never failed to inform my internal litmus test of change management. His name was J.D. McClatchy and he was a renowned poet. To my knowledge, he had no interest in business, but these words he taught me about writing have guided much of my business thinking:

”The root word of contemporary is temporary.”

Why is this gnawing away at me this particular moment? I am seeing a lot of individuals make terrible decisions in real-time that I am reasonably certain they will regret. They are trading the tangible present for a fragile future, often believing their choices are well-considered when they are unintentionally impulsive.

Much has been written of late about the Great Resignation. There is no doubt that Covid madness has wreaked havoc on our psyches. It is likely we will never see our lives the same way again after two rollercoaster years of public policy and uneven human isolation.

Ostensibly as a result, we see people quitting their jobs in record numbers to explore new paths. If handled elegantly, the liberation of a life change can be an enormous expression of creativity and empowerment. I’ve personally done it no fewer than four times in four decades with no regrets.

What’s my secret weapon for not burning bridges to embers? I’ve hung onto some of those old-fashioned values I learned early in my career.

Do what you want, when you want, where you want, and how you want at your own peril. Do it with a bit of finesse, and the mentors who helped get you this far may hang on with your journey quietly in the background for the rest of your ride.

It’s always perfectly fine to change jobs if you’re doing it for reasons that make sense to you, but you’re best served to do it admirably with serious planning, polite accommodation, and decent respect.

How egregious can we get in justifying some of our more lamentable choices? Here are some behaviors I’ve observed of late that I don’t think will serve people well.

A presumed job candidate schedules an interview with a potential employer and simply does not show up for the meeting—no email, no call, just a cold no-show.

A disgruntled employee walks off the job in the middle of a shift, unannounced, without explanation, and never shows up again; not coming back from lunch or break is a slightly less dramatic version of this bizarre concoction.

An even more disgruntled employee takes the extraordinary risk of in-person rage quitting, often accompanied by a cacophony of phrases best not repeated in a mainstream publication.

Someone with direct access to a company’s customers elects to ignore or dismiss the inquiry or encounter of an unsatisfied customer, perhaps with equal drama that leads to rage quitting while soiling a company’s brand.

An individual spontaneously rejects the well-intentioned constructive feedback from a manager’s review, and rather than discuss it with improvement in mind, ceremoniously destroys the relationship with someone who cares about them.

Once-attentive teammates emotionally check out, dial in the least possible effort for as long as they can hide it, and wait for someone in authority to notice.

That’s a quick collection of less than proud moments, don’t you think?

What’s the common lesson in talking yourself out of those behaviors and actions?

Don’t stop caring. Never stop caring.

To my good fortune, I’ve also been observing a steady base of colleagues, co-workers, and friends who aren’t drawn to the opportunism of fickle times. They cared about their jobs and the customers they have been honored to serve in the past. They care equally or more so now. Circumstances may be in flux, but their values are constant. They maintain a North Star of personal expectation. They make promises and keep them without excuse or compromise because that matters to them.

If you haven’t already lived through multiple recessions, it is a certainty that you will. Our economy is cyclical almost by design. Sometimes jobs are plentiful and you have your choice. Sometimes they are scarce and you take what you can get to provide for yourself and your family. Sometimes your skills are in high demand. Just when you think your expert knowledge is unequaled, it can become wildly obviated.

There are four very scary words that pop up every few years that I caution you to approach with skepticism:

“This time is different.”

Of course things are different. We live in a high-stakes world of volatile change. That is the blessing and curse of igniting technologies. It is the very stuff of innovation and unlimited opportunity.

Yet some things are not different.

Integrity. Honesty. Trust. Commitment. Dedication. Dependability. Sacrifice. Selflessness. Caring. Grit.

You can easily convince yourself these are simply old-fashioned words, empty crossword puzzle entries that no longer matter in a world assuring you that personalization and independent reward are all that should matter. If your long-term reputation comes second to your immediate needs, you have made a choice that carries untoward risk.

I’d caution you before that cement hardens to remember what my writing teacher taught me:

The root word of contemporary is temporary.

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Image: Pixabay