October 12, 2000
Written by: Ricardo Vera
American Management Association (1997). Blueprints for service
quality: the Federal Express approach: AMA Management briefing.
3rd edition. New York, New York: AMA Membership Publication
Division.
Federal Express Corporation (1998). The World on Time! Delivering the XXI Century. (R. Vera Trans.) Hong Kong: Hanley-Wood Custom Publishing.
Marin, Luis and Vera, Ricardo (1996). Cuales son los efectos de la communicacion gerencial sobre la productividad de las organizaciones? Caso: Federal Express. Trabajo de Grado, Caracas, Venezuela: Universidad Catolica Andres Bello.
Summarizing the corporate philosophy in one sentence, Frederick W. Smith believes: "When people are placed first, they will provide the highest possible service, and profit will follow."
Smith, founder and CEO of Federal Express, applying his People-Service-Profit principle, turned the company from eight packages shipped the first night (April 17, 1973) into a large and recognized corporation. Ten years later, the company reached $1billion in revenues, being the first U.S. company in history to top that amount of money within its first ten years. Today, FedEx has more than 150,000 employees worldwide, moving more than 2.8 million packages a day to and from destinations in more than 219 countries with a fleet of more than 585 aircraft claiming itself the world's largest air cargo fleet. But what is the Federal Express secret? The AMA Management Briefing described the answer in four very simple points explained by Smith. According to the association:"This AMA Management Briefing will substantiate Smith's assertion: there are no "secrets" at Federal Express.
What sets Federal Express apart is this:
- A consistent, clearly stated service quality
goal - 100% customer satisfaction - enunciated frequently and pursued
doggedly in innumerable ways, large and small.
- A mathematical measure of absolute service
failures as catalyst to promote continuous quality improvement.
- Employees who feel empowered through open
communication, training opportunities, quality improvement tools, and
excellent leadership. they thus gain the freedom to take risk
and innovate in the pursuit of quality and service for both internal
and external customers.
- Finally, and most fundamentally, a people first environment that acknowledges employee satisfaction as the primary corporate objective and nurtures a culture from which customer satisfaction and profit spring."
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 manager's performance. Thus, says the CEO "every action, every planning process, and every business decision, requires an extraordinary commitment from every manager and every employee" reason why Frederick Smith dedicates 25% of his time taking care of personnel subjects. For example, FedEx offers high-capacitating training for every one of the positions within the company. The company keeps from 3 to 5% of the employees on training everyday expending around 155 million annually in total. In addition, some other policies support the philosophy adding value to the values that Smith promotes. For instance, every employee can enjoy the "promotion from within," "pay for performance" and "recognition/ reward program (bravo zulu)" among others. Besides, FedEx implemented a series of programs such as "guaranteed fair treatment procedure (GFTP)" and "open doors" to provide fast answers to its people getting back no more than employee empowerment!
In
short, these are only some examples that Federal Express has about it
People fist environment. The AMA Management Briefing concludes
with an outstanding paragraph:
"By taking a 'human side of quality; approach to empowering employees in the pursuit of service excellence and customer satisfaction, Federal Express offers a reminder that the foremost quality detail to be addressed by a service organization is not the product or the process. It's the people. Absolutely, Positively."
