Case Study

Description

Questions: 1. Compare the way FedEx Freight sought to put people first with the way Scripture teaches us to put people first. What are the similarities and differences? How can leaders help develop a culture of “putting people first?” 2. What biblical connections can be made to the values displayed by FedEx Freight? Are these values discussed in current business/organizational literature? Note: -number of words: 350 words -number of references: 3 (within 3 years)

 

2 FedEx Freight – Putting people first

Gary W. Bouch

As the Senior Vice President of Operations and Transportation for FedEx Freight, Gary W. Bouch faced a life changing vision of leadership, and unlike many executives, did something. The result would be a leadership environment called “People First,” the design of an experiential learning model that can be measured, engaged the workforce, and did prove positive results. The FedEx Freight story is a good example of how even a very successful company has the potential to lose their values because of success, and a merger, unless a senior leader takes ownership of consistently and repetitively championing the values. It is a story of personal courage, meaning, corporate political risk, how values are operationalized and measured, and a story of how powerful values can be resonating deeply inside of people. It is also a reminder that leadership is hard work, that leadership and putting people first is an everyday job, and that success can bring complacency unless it is countered by leadership.

History

October 25, 1982 was the birth of what would become the nation’s leader in less-than-truckload (LTL) transportation. Sheridan Garrison started the operations of Arkansas Freightways by opening twenty centers with next-day transit times in mind. The industry laughed at Sheri- dan (he preferred first names), saying, “He must be crazy.” After a very short time of operations, the competition’s tone changed from laughter to pensive concern. “How is he doing this?” At the time, Sheridan would answer that in some very concise statements: “If you are going to be successful in this business, it is all about people. People with principles to live by and a common goal of working together to satisfy customers each and every day. People are the tiebreaker. You don’t hire people for their backs; you hire them for their minds and their winning spirit.”

Pg. 30 Leading with Values

Arkansas Freightways grew quickly, spreading its aggressive transit time system throughout the Southeast and Midwest. Sheridan Garrison knew that he must be the change leader in the industry, employing the best people, running the best equipment, and embracing leading-edge technology. After over ten years as Arkansas Freightways, in 1993 Sheridan and his team took a bold step and re-branded his company for a more national appeal as American Freightways, with his people and six business principles:

• Take care of our customers.
• Take care of our people.
• Honor our commitments.
• Work hard, smart and safely, and work together.
• Make the most of resources.

r Have fun! It was upon review of these principles that all business decisions should be made. While simply stated, each principle has a more detailed statement behind it to explain its meaning.

Sheridan set out to revolutionize the LTL industry. He embraced his people, had a great long-range vision and loved change, not for change’s sake, but in order to keep the competition off balance and the customer always on the radar screen. Change was a requirement to create differentiation and give the customer a reason to use our company.

In early 1996 I was hired, along with a team of five others, to help Sheridan not only maintain growth, but ensure the company’s infrastructure was rock solid, and that we had not lost sight of his single most important asset – his “People.”

It’s important for readers to know that Sheridan constantly traveled throughout our network of centers to visit with our employees informally – in break rooms, on docks, or wherever people were and wanted to talk. I spent many weekends during my first three years traveling to off-site employee breakfast meetings followed by a lunch meeting in another city that same Saturday afternoon. Sheridan loved his people, and he thanked them regularly and told them how proud they made him. His “passion” for the business and his people was truly an inspiration for me and others.

Success is hard to ignore, and many companies began to notice us. As Sheridan would often point out, “When you are on the top of the hill, there is always someone wanting to knock you off!” And somebody FedEx Freight – wanting to knock you off can happen a couple of different ways. Com- petition is always after your position and your people, but sometimes great companies become attractive to greater companies for acquisition targets. This is where FedEx comes in, or at least in my version. While we were busy planning our final Western expansion at American Freightways, we had also been talking with FedEx about offering them some premium freight services, moving some of their shorter length of haul freight over the road. As discussions continued, our Western expansion projection costs seemed to be higher than desired and, for the first time in my knowledge, Sheridan started to think about acquiring a carrier rather than expand internally. This was a huge decision for him to even consider because acquisition was never an option for discussions, and I have a vivid recollection of being scolded for suggesting it at one point. He strongly believed in maintaining the culture he had established and protecting his people and that would be very difficult through acquisition. Anyway, FedEx owned a well-established Western less-than-truckload (LTL) carrier named Viking Freight Systems that would match our expansion plans very well. To make the longer story short, instead of American Freightways acquiring Viking Freight from FedEx, the acquisition turned around, and in 2001, FedEx Corporation purchased American Freightways, aligning us with Viking Freight. FedEx Freight became our combined new name, servicing the entire United States. It was a perfect fit for us freight guys, and even a better strategic fit for FedEx Corporation.

Do I have a problem?

October 2003 I was now Vice President of Operations and Transportation, recently promoted from Vice President of Transportation, where I spent the previous seven years. The change in responsibilities meant that, in addition to leading our over-the-road linehaul systems and expedited products, which encompassed about 4,800 people, I now had responsibility for all our field operations (256 service centers), Fleet Maintenance, Claims Prevention, Weight and Research, Operations Support, Operations Planning, etc., meaning another 12,000-plus people. We were operating very strong, beating all our revenue, profitability and efficiency goals. I was adapting well to my new responsibilities, learning about my new team, giving them lots of room and empowerment as we learned together and worked through challenges, and I was thinking about what we could do to make further improvements on great results. After all, our belief was always to seek continuous improvements. In other words, things were going GREAT, and that’s the best time to facilitate change, so what next? Well, all was great except these occasional e-mail notices I would receive, called InTouch.

In order to keep our finger on the pulse of our people, we have an 800 number that our people can call to give us suggestions, comments, and complaints or really just say anything they want to say. They can leave their name, or they can give us an anonymous message. The “InTouch Voice of Americans” system, as it was originally named, was and is extremely effective. While compliments sometimes come through on calls, the more typical comments tell us where people see “smoke” allowing us to address issues before they become fires.

During a two-week period, I received at least four or five of these messages, which are summarized by category monthly, and it just happened to be that time. So there I was in my office reading the most recent summary of InTouch communications from our people when I became very emotionally disturbed. I saw what I viewed as a new trend as I read claims from around our company of employee favoritism, poor leadership and lack of communication, resulting in employee dis- satisfaction. I couldn’t believe stories that supervisors were ignoring seniority to work a favored less senior employee, or that a favored city driver was getting their choice of city routes over a less favored driver. AnotherInTouch wassayingthattheirmanagernevercommunicated with them; they never had pre-shift meetings, which are supposed to be daily, and, as a result, he didn’t know the deadline had passed for submitting his daughter’s information for a Sheridan Garrison Scholarship.

Yet another message stated that the employees at a certain center never saw their manager and those drivers were locked out of and forbidden to enter the office area without an appointment. But the one that finally set me off was an InTouch alleging that a supervisor asked a driver to drive another driver’s tractor and trailers outside the property gate so that a late driver dispatch would not be recorded against that center’s dispatch performance goals. If true, this was a pure integrity breach to falsify production numbers where a leadership person was essentially telling an hourly employee that it was okay to be dishonest to achieve efficiency targets. This one really angered me

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because if there was any point I had ever repeatedly made clear to all leadership, it was that we cannot tolerate dishonesty or theft in our operations, and that no one should ever play with the numbers to produce false results.

Pondering my internal conflict, I asked myself, “How could we be having these problems? Are they real, and, if so, why are we having these problems? Have I been misunderstood? And why would we not communicate with our people; why would we play favorites?” Our Business Principle #2 says Take Care of Our People, and we stress that we must openly and regularly communicate with our people, so why this new trend?

After contemplating where we might be failing in our communications and/or expectations, I worked myself through the analysis. It could not be my Division Vice President level because they clearly knew what I expected, so my Division Vice Presidents must be failing with their Managing Director Operations. Then I found myself in a little bit of a circular argument, thinking to myself that if my Division Vice Presidents mirror my leadership style, then the Managing Director Operations should mirror the Division Vice Presidents, so the problem must be the Division Vice Presidents . . . which meant it had to be ME! I wanted to find what level of my leadership team I could blame, and suddenly the answer smacked me right in the face . . . It was my fault! It was my reflection in the mirror . . .

Could it possibly be true that I was not demonstrating what I expected from my leadership team, and I was accepting the status quo because I thought things were going well? Certainly not me! After some further reflection I realized the fact was that our leadership styles were not consistent because we had never agreed upon what expectations we were going to lead by. Their styles, based on personal experiences, were producing good results, so I never truly defined leadership expectations. Sure, we had our Six Business Principles as defined by our founder of American Freightways, Sheridan Garrison, but now we were FedEx Freight, and there was some uncertainty about those Business Principles. So maybe it was time to develop some clarity.

Ok, now what do we do?

It was clear to me that my leadership beliefs were not as clear to my leadership team as I had thought. It was my responsibility to the

Company, and ultimately to myself, to make sure we had clear expectations to lead by, right? But, I wondered, does anybody else really see this? I mean we’re producing good results and nobody has asked me about these InTouch messages, so . . . do I need to act? Why rock the boat if it’s not really an issue to anyone but me? Suddenly, it dawned on me. “Gary, what are you thinking here? If you consider yourself a good leader, then isn’t it your obligation to proactively take action, to do something, to lead yourself rather than be told by somebody else to take action? If you were a true leader, you would recognize that you have but one choice – to act. But at that same time, you also recognize that you have an opportunity to change our leadership expectations.” So, I challenged myself to step out to make a difference, try to effect a change of beliefs to create more consistency in our leadership approach. In hindsight, is this not the goal of many, to simply want to make a difference in life? Well, at least for me it has been and will continue to be, as that is my value to the Company – to help differentiate us from all others.

Perhaps another less philosophical reason was my simple belief that leadership all boils down to having the right attitude and building relationships with your people. Sometimes we just lose sight of those facts and think we have to be some “super-person” who must know all; that must control everything. We forget it’s the people who got us where we are, that it was their belief in us at one time which made them want to produce for us and made us successful. I just honestly wanted to believe that it could be that simple, that basic. It had worked for me in my past experiences with much smaller groups. Couldn’t it work here?

Initially, I took a cautious approach, unsure how it would be received. I thought it best to ease into the idea of a leadership style change and set forth some of my beliefs so people could get a better sense of where I was coming from. I started with a series of messages about trust and integrity and talked about communication and empowerment, not totally sure where I was headed and unsure of how much acceptance I would have. I knew to foster change that I could attempt to impose it upon my team as their superior, or I could seek a desire for change from them by building belief in needed change. For long-term success, I knew that if I were them, I would only change if I “wanted to,” so that became my challenge – how to move my leadership team from a “have to” attitude to a “WANT to” change attitude. Only then could I succeed at moving their direct reports and so on.

First step

Each year, beginning about mid-January, we conduct a series of three divisional annual management meetings, which include all leadership from the service center level up, including our account managers and sales leadership. These meetings include about 1,200 people in total, so we reach a good sample of our company. I decided that I would use an hour of these meetings to take a more aggressive path and begin to speak out about my leadership beliefs in a town hall-type setting. I planned on stating my leadership expectations, seeking feedback, and hoping that we were more aligned than not. While it’s hard to have an informal setting with 400 people, I sat on the edge of the stage with a microphone in my hand and just spoke about my leadership beliefs; how I learned and forged them over years of experience, sharing stories that impacted me – pretty much straight from the heart and unrehearsed. Several people asked questions, many offered supportive statements, but many others just sat and listened. I struggled with how my discussion was interpreted by the captive participants. Perhaps it did not apply to some of them because the Sales folks don’t report to Operations, but I received good feedback from many, suggesting that we were more closely aligned than I had thought. I left them with the clear message that I would have more to share with them in the near future, and if anyone had thoughts they preferred to share one-on-one to reach out to me at their convenience.

Second step pg. 36

From the confidence I gained from the three informal meetings and the message I left with them, I knew I needed some kind of vehicle or event to draw the senior leadership closer together to build trust, share thoughts and exchange some beliefs about control or micro- management. After some discussion with our Managing Director of People Development, John Sherman, the event suggested by his team was a ropes course. My initial reaction was “WOW!” My question was, “Are you sure that’s the ‘best’ vehicle? It seems a bit radical, doesn’t it? The premise was to provide an atmosphere where we had to learn to trust and rely upon each other, and to challenge our beliefs (with the hope for change), so that we could build a cohesive team prepared to take us to the next level – in Jim Collins’ term, move from Good to Great. John Sherman could read in my face that I was taking a leap of faith, and he sought to comfort me. He told me of a place his team had found called Victory Ranch in Bolivar, Tennessee, about two hours east of Memphis. After some discussion, and trusting in John’s judgment, I agreed we should schedule this ropes course in the face of huge risk to pursue a change of beliefs with what I hoped had greater benefits.

To be frank about it, the challenge scared me to death. I felt I was really reaching, and it could destroy my credibility if we failed. So again, with the support and help of John Sherman, we recruited help from our sister company FedEx Express, because their leadership development folks were familiar with ropes courses and the ability of these courses to change beliefs.

Off to Memphis we went to meet with Ross McAllister of FedEx Express. Ross offered himself and two other members of his team (David Fitzgerald and Sam Haskins) as facilitators to support our needs. We further discussed some learning objectives, leadership text ideas, course recommendations, pre-evaluation tools, and Ross recommended a pre-visit to Victory Ranch so I could experience what I would be asking our people to experience, as well as get a layout of the area. It was also to help relieve some of my fears and apprehensions.

We scheduled our pre-planning visit, determined the list of potential attendees, the random team assignments, and all the other agenda ideas after walking through the site. Ross thought it might be a good idea for our small planning team to try several of the actual obstacles to get a real feel for the learning opportunities. I was certainly not ready for that. I didn’t imagine that I would be challenged that day to climb rock towers, jump 60 feet above the ground on a wire cable and zip line, perform trust falls, walk through an actual high ropes course, and several other uncomfortable events. He put me way outside my comfort zone: Heck, I had no idea I could do the things I was asked, nor did I want to do them – but WAIT! Something happened to me. I did things I never believed I could do, and suddenly I realized that my beliefs had not only been challenged, but had been changed . . . I DID THINGS I NEVER WOULD HAVE TRIED IF NOT CHALLENGED! and a half days, I was totally convinced this was the right vehicle. It could change beliefs that we would relate to leadership challenges, and I immediately became super-charged to try and prepare our team for change.

Creation of a “people centric” culture pg37

So, what were we trying to do? It was simple, insuring we were focused on our people and understanding that our people operate all this equipment and perform all the duties that make us successful. Perhaps more than anything else, our people need validation that this type of leader- ship is okay; that it is the way to lead our people and we can achieve not only equal results, but more than likely superior results, if we will believe it possible. The trucking industry is not known for having engaged and empowered employees, but rather it is known for micro- management and control-dominated leadership styles, so there is much of the old mindset to overcome. While our internal Company culture and beliefs may not have been as harsh as trucking management historically, we are still a relatively new Company at 23 years old, and our leadership pool is typically from the older established styles. It takes courage to change leadership styles when financial results are hanging in the balance and short-term (next quarter) thinking prevails. Not many are willing to take that risk.

The moment of truth

The first day of Victory Ranch was perhaps one of the most emotionally cold days of my life. Each person that arrived was very quiet and very skeptical. In retrospect, they probably each said, “Why are we here? Why are you wasting my time? My people love me, and there is nothing you can teach me about leadership.” In addition, I’m sure they were thinking, “You’re forcing me to be away from my family, and you plan to strip me of my privacy by making me sleep in open quarters. How dare you!”

I would sum up the prevailing attitude going into Victory Ranch as, “Gary must not think we have a very good team, or else why did he think this week was necessary?” While all were physically present because they had to be, mentally they wanted to tune out Victory Ranch. In reality, my belief was that we had a good team, but that we needed something to move us to want to become a great team.

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Sunday night was really more of an introduction program that started with some basic opening comments, which led into a video presentation from two critical people: the President and CEO of FedEx Freight Corporation, Doug Duncan, and the President and CEO of FedEx Freight East, Pat Reed. Both spoke from their heart about the importance of engaging our workforce and the leadership styles necessary to take our Company forward. I felt these presentations would answer the questions about how serious our support for our Leader- ship Summit was. The remainder of the evening was to just get briefed about the rules and housekeeping type issues, let them all get settled in, and a name game to break the ice, so everybody could put a face to names. We handed out a checkbook-looking pad of something called “Emotional Deposit Slips” and vaguely told people they could give these to anybody they felt performed some task or feat that was worthy of recognition. On the Deposit Slip you would write the person’s name who performed the worthy act, describe the act and why it caught your attention. Whether you signed your name as the author or not was optional. When complete, the Deposit Slip was to be placed in a mailbox in our meeting room. That’s all that was said, and it was purely optional. Then, we told everyone that they were expected to participate fully, openly and give it their best efforts, not leaving any- thing on the playing field. Finally, we sent each of them off to bed with the message that Monday would start early and be a long day, as would every day that week.

Monday morning was welcomed with Reveille blasting from the boom box at 5:30 a.m. While I thought this would add a little humor to start the day, most didn’t seem to appreciate it. Breakfast each day was at 6:00 a.m. and calisthenics were scheduled for 7:00 a.m. Most were quiet, but in wonderment of what was ahead, which was soon to be FAILURE.

The first obstacle was a large platform on a fulcrum point, or what I’d call a low impact balance platform. The task was simple – get everybody on the platform, keeping it balanced without the platform touching the ground. There was absolute chaos with 36 egos all trying to talk and have control at once. After each failure, the temporary speaker was tossed aside as the new voice was heard. Soon, several small groups broke off and had their own ideas, planning and waiting

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for the next failure. Some just totally disengaged and stood alone, just waiting for it to end. But as the exercise continued, there were some people who actually started planning and working together, adjusting their plans as they moved forward. As we (I was a participant) got closer to success, you could see others re-engage and pay attention or offer advice. Finally, time ran out, and we failed because we couldn’t work together and function as a cohesive team. This was probably the bottoming out for the team, as they did not expect failure.

During the debriefing, some brutal honesty came forward as we acknowledged the fact that we didn’t work together as well as we thought we would. We began talking about why we failed, what we could have done better, that we needed to have just one or two people in charge, create a plan and build a strategy on the next challenge. As we wrote our individual experiences in our journals, you could see most knew that we had to get committed to the future tasks if we were going to succeed. I wrote in my journal that I was fearful about whether we could set aside the egos and be successful.

The next challenge placed us into our six-person teams and separated us from the whole team. My team succeeded in the next challenge because we planned and worked together. Everybody was asked for input to develop the plan and we executed it, making a few adjustments along the way. I can tell you, we felt much better after tasting success and were committed to work together going forward. Other teams found mixed results, depending how well they released control and worked together, and the results presented great lunchtime discussion. Monday afternoon the teams had more successes than failures, and that felt good. But there were still some long faces in the crowd, and either titles or egos seemed to be a factor. Monday night this issue was addressed with a silly game called “Bunny-Bunny” that related to “commitment.” Let me try to explain . . .

Sometimes as leaders, we are asked to do things we may not always agree with, and our lack of commitment usually shows through to our people. Because we are the mirror for our people, if we expect success with new ideas, projects, initiatives, policies, procedures, then our commitment behind the implementation is critical. Without commitment, we won’t succeed. So, with this established as the premise, the objective of Bunny-Bunny is for three people working together to be the best bunny they can possibly be. Visualize three people standing together with the middle person hopping and wiggling their fingers under their nose as whiskers saying “bunny, bunny, bunny”; the per- son on the right uses their left arm in a raised “L” position to represent the bunny’s right ear; and the person on the left uses their right arm in a raised “L” position to represent the bunny’s left ear. The whole team is in a big circle, and once started, the middle bunny person randomly points to the next group of three people who must immediately jump into bunny mode, and so on at a very quick pace. Here’s the catch: it’s not easy to figure out who is being pointed to as the next middle person to be the bunny face, so you have to pay very close attention. If you don’t focus, what occurs is bunny mutilation, meaning multiple left or right ears, multiple whiskers, etc., and if you are one of the extra parts, then you get eliminated. The game continues until only three people (one bunny team) remains, and they are crowned the best bunny and thanked for being the model of commitment.

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As silly as it sounds, Bunny-Bunny was phenomenally successful. While the intent is “commitment,” the benefit we found was that all egos and titles went out the door. I mean how can you perform in this game unless you have checked your ego? The game created a moment for fun and laughter, for bonding, and took all the tension away.

As Monday night came to an end, the facilitators distributed the small handful (maybe a dozen) of Deposit Slips written that day. The simple recognition provided by these few forms nearly brought tears to some, one of whom was me. With all the tension and stress that I had built up in anticipation of this event, I choked up when a teammate wrote a simple statement: “Thanks for believing in me and giving us this opportunity.” It was from somebody who recognized the risk I was taking and offering encouragement. That’s all I needed; my day just became wonderful. But more than that, it made me think of how receiving such simple words of encouragement could be so powerful and that I must remember that we all have the power to encourage others who just need a little help to make their day outstanding! I learned an important message, and so did the other few who received Deposit Slips that evening.

The first real life challenge – pg41

Without going into more detail, Victory Ranch did change our beliefs and has established a solid foundation of cohesiveness from which we have continued to build. It gave us common goals, which began with consistency in our leadership approach. Victory Ranch also gave us our first real challenge as a single-focused team, the disappearance of our founder, Sheridan Garrison. During our final days, we received an emergency message that Sheridan was missing, that it appeared he may have fallen from his boat while fishing, but it was not confirmed. This was very disturbing news, and it was unclear to me how our team would respond to this. I had two very different thoughts pop into my mind: (1) I expected that all would say that they must return to their domiciles to communicate with their people, and (2) is there some sick irony in Sheridan’s disappearance as we are discussing how to differentiate ourselves in the industry by making “Take Care of Our People” our number one Business Principle, refocusing on something he held so near and dear to heart? Was this potentially a passing of the torch, if you will? While I quickly criticized myself for such a thought, I knew Sheridan would have been proud of the huge progress we had made as a leadership team that week.

As news spread among the facilitators and our Vice President of Human Resources, the initial direction sought was to pack up and go. Perhaps being a little pig-headed and insensitive, I questioned whether we could really make a unilateral decision to go when our discussions all week focused on working as a team, not making decisions without input. After some further discussion, it was decided to dis- cuss the circumstances with the team and seek their input. Wow! What a surprise and revelation came forth from doing so. The team had several questions about how they could communicate with their folks back in their respective centers and develop a plan with the input of their subordinates. Having clarified this for them, one team member who knew Sheridan well voiced his opinion, stating that we should stay and complete our leadership summit. In his mind that is what Sheridan would want because Sheridan did not like people fussing over him. A few others voiced similar support when I stopped speaking. What I put in front of the team was that we had a serious issue that needed to be communicated very well and very carefully. Could they trust their people in the centers to convey the proper message of Sheridan’s disappearance in their absence? Furthermore, before we debated that, I was going to ask for a show of hands on a three count to determine whether we should just go and not prolong debate. I said the vote would have to be unanimous, a single vote would send us home. So, if you think we should go home, then raise your hand. One, two, three, not a single hand went up. Thinking I confused them, I asked a second time. If you think we should STAY, then raise your hand. Immediately everybody, without hesitation, raised his or her hand high. It nearly brought tears to my eyes; we were unified, right or wrong.

The unanimous vote was that we could trust our subordinates to communicate with our people until we could join them upon return. This was from a team that only four days earlier hotly con- tested that we could place so much trust in our people and relinquish control. Again, wow! I was awestruck. We immediately began to brainstorm and discuss the basics we needed to accomplish during a brief conference call communication between the leaders at Vic- tory Ranch and their leaders back in their centers so as to ensure a consistent message would be conveyed. This was a huge demonstration that we could trust our people if given a new opportunity to do so.

Top-level validation pg42

When I returned from our Victory Ranch Leadership Summit, the buzz from the week had already been circulating throughout our Company. Our Executive Committee had been briefed prior on our plans, but was not fully informed, because, honestly, I wasn’t confident how much we’d accomplish. I was taking some risks. Once fully updated on the events and on our team experiences, our Executive VP Operations and Chief Operating Officer, and President and CEO of FedEx Freight quickly expressed their desire to take proactive charge of what we were now calling our ‘People First’ strategy (since we were making Take Care of Our People Business Principle number 1). John Sherman spent some reflection and visionary time with our FedEx Freight President and CEO, Doug Duncan, and was given the privilege of designing a “FedEx Freight Commitment” model, of which People First would be the foundation (a pyramid model People First base, followed by Quality, then Certainty, and a pinnacle of World Class Customer Experience). I’ll speak more about this later.

Declaration of leadership expectations pg. 43

In our July 2004 Management Meetings, we scheduled time to follow up on the Declaration of Leadership Expectations assignment from Victory Ranch. During the month of June, we passed several drafts among the team members from their submitted ideas with the intent to finalize them at the July meeting. The name and format were no accident. The Declaration format carried a historical theme, which honors our founder, Sheridan Garrison, who had a talent for tying our products and marketing to American history and patriotic themes. As the process would unfold over time, I liked the idea of each service center as a local team “ratifying” or adopting the Declaration of Leadership Expectations, agreeing to be bound by the tenets on the original Declaration that was signed by senior leadership. These signatures would indicate 100% unanimous commitment to these tenets, which was the condition established for each of the tenets to appear on the Declaration.

Further, each senior leader agreed to be held accountable by any person in our Company to these tenets and specifically asked others to hold us accountable; that is our promise to our people, and they would honor us by holding us to our word, by making us walk the talk.

Having the local centers ratify the Declaration and then post both the original and their adopting versions side by side in the centers for all to see would make a powerful statement to our people. I didn’t have a time-table for this to be completed; it’s a personal local leadership choice; and the Managing Director of Operations for their particular region would be required to challenge and validate the ratification as genuine for this adoption process by speaking and seeking input from the local center people.

Why the process described above? I firmly believed the symbolic use of the Declaration imposed a slightly different commitment from the local centers and leaders because they did not participate in the process my team did, nor did they have a hand in drafting these tenets. My sincere request from the center was to commit with their leadership Team as soon as they would become comfortable to commit to these tenets. I believed this request was fair because I believe that as senior leaders we are their mirror for leadership, meaning that if we lead in a fair and just manner, then local leaders would, in turn, lead this way.

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Their local team would also mirror their leadership, so each individual leader clearly sets the tone at their location and is the example that their people will follow – a responsibility that requires courage.

Our commitment to local leadership is to provide educational and leadership support to make their thought process consistent with ours. When their people see consistency and are ready to voluntarily commit to the tenets that would be the right time to adopt the Declaration.

Our first outward support in the field operations began by holding individual operation regional meetings to introduce our People First learnings and to discuss the Declaration of Leadership Expectations. Each of the 17 regions held meetings across our Company between mid- July and October to spread our refocus. I personally attended many of these two or three day meetings to offer further clarity, some his- tory or other support. The plan was to complete this series of meetings prior to our next Division Vice Presidents/Managing Directors joint meeting in mid-October to assess our next steps. At each meeting I attended, I would personally read the detail behind Business Principle “Take Care of Our People” so as to link our efforts to our past culture and more a refocusing effort than a new “flavor of the month” project. In other words, use our founder’s own words for credibility. That Business Principle developed more than 20 years ago says it all:

Take care of our people.

When we started this company, we said we wanted a living, breathing fire- belching company – but one that still had feelings. What we wanted was a company with a heart – and a soul. And that translated to people with a pioneer spirit, people with open minds and “can-do” attitudes. We did not have to look far. Good people heard what we were doing, and they came to us.

These people shared our belief that we could build a different kind of company, one not afraid to take risks or make mistakes. One that would embrace an operating environment which was non-political, or of making mortal enemies. One, where people have the freedom to think and propose ideas with- out fear of ridicule. One, where people would believe in the future of their company but also would understand and practice the principle that when it comes time to get things done, there is no tomorrow.

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If you plan to build a business, you have to believe in people. You have to like people. People and principles are the proven building blocks of a successful business. At our Company we do not want our people to all come from the same mold. We do not want our people to become numbers. We want individuals. We recognize that all people have strengths. Our job is to identify and accentuate those strengths, combining them in pursuit of common goals.

We owe our people opportunity, trust and respect. They need to know what we expect of them and they need the tools, the education and the freedom to do their job. As they succeed, and they will succeed under these circum- stances, we share that success with them in the form of better wages and benefits and opportunities for growth as individuals. The development of people through personal growth and betterment of their lot in life are primary aims of our Company.

It is routine and almost fashionable for a business organization to say it is “people oriented.” But saying it and being it are two different matters. People relationships of any type are a very fragile thing. Treating people decently and fairly has to be a way of life. It has to start from the top down. As a leader, if you want your people to respect you, then you have to respect them first. What you say, how you say it, and what you do all count. The people of our Company are all leaders, respectful and helpful to each other and their customers. They are not whiners and groaners. They are unique in this business, and they get the job done.

People – Get the best, expect a lot, and take care of them.

The meetings went very well and were generally well accepted. Most service center managers wanted to carry back and deliver their own special messages to their centers. To support them we provided hand- outs, history, copies of the Declaration, reading materials/books we used, PowerPoint presentations, and essentially anything else they felt would help.

New people in our life and validation

It was also during this period that I met Ed Hess after reading and sharing some of his published articles. Don Hinkle (one of my key Victory Ranch initiators and supporters) reached out to Ed and Ed graciously offered us an opportunity to meet with him in Atlanta. During our

46

Leading with Values

WORLD CLASS CUSTOMER EXPERIENCE

CERTAINTY

QUALITY

PEOPLE FIRST

Figure 2.1 FedEx freight commitment

meeting, Ed offered some great advice to Don and me, as well as some additional books to consider which I did put to use later. I honestly credit Ed Hess for validating our ideas and direction, and he gave me courage to continue on what I felt a very worthwhile, but somewhat risky path.

At the same time, we had two other efforts going: (1) John Sherman and his small team continued work on the Freight Commitment model with particular attention to developing the full educational support behind that foundation . . . People First, and (2) detailed planning for our upcoming Division Annual Management Meetings (AMM) that were scheduled for January 2005 through early February 2005. Below are illustrations of the two models:

People First is a leadership methodology, and way of life. r The model starts at its foundation, “Leader Awareness – Knowing You.” The theory behind this beginning is that “you” as a leader must know and admit to who you really are based on what others perceive you to be. Also, the experiential learning exercises in our

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Loyal Customers Engage People Leader Awareness – Knowing “You”

Figure 2.2 People first layer of the FedEx freight commitment

People First Leadership Experience will reveal many of our fears, and shortcomings. Only a leader who knows him/herself will gain the most success from their team.

• The next step going clockwise is “Evaluating Your Role & Job.” Through various personality profiles and skills evaluations, the course reveals if you are doing the job that makes you happy, or performing because you have to perform.

 

• Step three is “Education & Personal Development.” Throughout the leadership course are education steps needed for development. Followed by assignments for further growth.

Based on the first three steps, the rest of the model becomes a result of People First behaviors:

• People First leaders produce “Engaged Employees”

 

• Engaged Employees produce the “Strategy– Processes – Systems” needed for a world class successful business

 

• These “Strategy– Processes – Systems” produce for FedEx Freight a world class service “Product Delivery” ¢ With world class service come “Loyal Customers”

Education & Personal Development Product Delivery

Profits

Evaluate Your Role & Job Strategy – Processes – Systems

Growth

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• Loyal Customers produce “Growth”
• Growth along with all of the above produce “Profit”

 

• ¢ Tieitalltogether,andyouhavea“PeopleFirst”culture…

People will be our competitive advantage

Another reason for People First is that I truly believe our service products will become commoditized as further consolidations occur within the transportation industry. Recent evidence demonstrates the trends such as Yellow-Roadway-USF and UPS-Overnite, following the footprints of FedEx-American-Viking. My personal opinion is that three or four global giants will prevail; hence, our products become commodities. At that point, differentiation becomes difficult but I believe that our people can be the differentiator, giving customers the reason to choose our services. I believe as Gallup reasons, that customer service and loyalty are all based on emotional bonds (relationships) with our customers and people. Therefore, if our people do not differentiate us in the eyes of customers, then customers will move their business to another carrier with whom they have better relationships. People do business with people they like. People are more productive when they are happy and that typically correlates to a good leader/employee relationship. I believe this because of what my lifetime experiences have taught me. I believed this before the Gallup research validated it for me, but I will use such data to help support my personal experiences.

Our pathway becomes solid

Thanks to the energy spreading throughout our leadership teams, and probably somewhat related to promoting our founder’s legacy of Take Care of Our People, our Executive Committee decided that our Annual Management Meetings (AMM) theme would be “First Class to World Class.” Now if you think about the elements of the Freight Commitment model mentioned earlier you would remember that to provide the World Class Customer Experience which builds customer loyalty that we must first establish the People First foundation, then Quality and Certainty. In other words, the primary focus of our Annual Management Meetings in early 2005 was People First.

 

Pg.  49 Assignments, measurement and results

 

People First works…The results of the curriculum and follow-up assignments and measurements are life changing. The sections below are assignments given to each participant:

“People First” Assignments Know Yourself Know Your Role Educate and Develop Yourself

 

1. Mend relationships
2. Report via email any and all relationships you have mended or attempted to mend:
3. No names, just situations
4. Done within the next two weeks

iii. Permissiontoforwardtoeitherthefacilitatorsorothermembers of the group

2. Select accountability partners
3. Name them
4. Let others that influence our life know who they are
5. ContinuetoaddAccountabilityPartnersasyouneedthem.Youcan- not have too many . . .
6. Select/seek/mentor
7. Name them
8. Let others that influence our life know who they are
9. ContinuetoaddMentorsasyouneedthembasedonyoursituations. You cannot have too many . . .

 

4. Live and “walk the talk” people first tenets:

 

1. communication–Increaseyourcommunications atyourcenter.Measurement for ROI:
2. Improvement in the People/Gallup Survey
3. Improved productivity
4. expectations(s)–Insurethateachpersoninyourcenterhasreviewed their job expectations. Measurement for ROI as follows:
5. Lower HR incidences
6. Lower OS&D

iii. Improvement in the People/Gallup Survey

1. Fewer errors
2. education/development – Measurements for ROI as follows:
3. Fewer mistakes
4. Lower OS&D incidences or claims
5. Improved productivity resulting in: a. Improved transit time b. Fewer billing errors
6. Fewer safety issues or incidences ii. Engaged and confident employees encouragement & recognition – Measurement of success: i. Improved People/Gallup Survey results Right seat on the bus . . . Measurement of success:
7. Lower HR incidences 1. Measurable turnover
8. Improved People/Gallup Survey results
9. 100% full responsibility – Recognizing that everything is a choice and you are responsible for the choices you make
10. Servant leadership – Recognize and “walk/do” the following:

• Servants lead through relationships, not coercion r Servants lead by support, not control
• Servants lead by developing others, not by doing all the work them-selves
• Servants guide people, they do not drive them r Servants lead from love and caring, not domination r Servants seek growth, not position

7. “please”&“thankyou”&“why”–Makethesekindsofverbalgestures a part of your vocabulary going forward. Measurements of success: a. Improved People/Gallup Survey results
8. conflict = positive outcome “Good for the Many…Sometimes the Few…Never the One…”
9. Do not walk past problems
10. Approach all potentially negative situations with a positive outcome
11. Use your “Emotional Braking System”
12. emotional braking system – Behavioral device for you to use during potentially negative situations. Measurement of success Improved People/Gallup Survey results:
13. STOP – Do not blow up…
14. Think before you speak
15. Do not take things personally
16. Listen more than talk
17. Try to empathize with the other’s point of view
18. Look between the lines to their personal “feelings”
19. Do the right thing for the good of the many
20. people first in everything you do; positive and compelling “attitude”; total employee “engagement” – Measurements for ROI are extensive. Gallup Survey – HR – Operations – Systems – Processes etc.

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1. If you are People First, your people will get the task completed . . .
2. Take Care of Your People, they will take care of the customer

The following are just a small selection of statements/testimonies from People First participants:

I just completed my 35th year in the industry, of which most were spent in leadership. In 35 years I have attended several management courses, but none that stressed leadership as much as this. Victory Ranch . . . I had my concerns about attending, but found by the second day I was really into this . . . I came back to the center and held meetings with confidence on “People First.” I would like to thank all involved for the opportunity and the fact that this “old dog” can still learn new tricks. (Steve Wood)

When I came to Victory Ranch, I said that there was nothing you could teach me about leadership. I was wrong . . . I am going to take back to my people a new appreciation for listening to their ideas. I am going to let nothing frighten me in the future, let nothing stop me from being successful for my company, and always have respect and trust for my people. (Bob Fennell)

It really doesn’t matter how strong you are personally, as long as your team is pulling together in the same direction, at the same time. (Bill Cherry)

This final excerpt is from a young leader as he followed up on his first assignment: Mending Relationships:

I gave this a lot of hard thought, and initially had a hard time with this. I kept telling myself that I really did not have any relationships to mend, but after I thought about it a while I really did have a lot of opportunity. I did not really have any relationships that were “bad,” but had some gaps in some relationships that needed mending.

• In my opinion I have a great relationship with my family, and we have always been close even though we live many miles apart. I have never had a very emotional “touchy feely” type relationship with my parents just because this is the way it has always been. I realized mainly through our coat of arms exercise at Victory Ranch that I really needed to let them know how I really felt. At Victory Ranch when we were going over our coat of arms we had 3 out of the 7 presentations that were really touching and opened up my eyes. 3 people had lost a loved one and had really not closed the gap and felt they had left something on the table that they wanted to share or experience with that person. I have started and will continue to work on this “process” with my parents for the rest of my life. I want to be one of those people who, when I lose a loved one, can say I had the best relationship I could have had, and did not leave anything out there.

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(2) My wife and I have been married for 9 years and as of a couple of months ago now have 3 children. We have a very good relationship but have really started to let our relationship dwindle because of so much focus on our children. After Victory Ranch we had a long talk about our relationship and I feel really good in the direction we are going. It does not take a lot to sustain a loving relationship, but it is something that I have to remind myself of on a daily basis. The little things are what count, and I have to realize that it takes these little things to make it work. Also, a large part of what I thought I was doing to help out, and what I thought I was doing to show my love and commitment my wife did not perceive as the same. She realized that I was helping with the kids giving her some time to herself or cleaning the house to help her out, but she wanted family time or words of affection or a loving touch etc. I have learned a lot and will continue to as long as I continue to look out for her needs.

(3) I do a good job of communicating, but sometimes I do not communicate enough. I know we have the right people on the bus here in South Bend IN but felt we did not have two supervisors on the right seat. About 5 months ago I realigned some duties within the center for 2 supervisors. For one of the supervisors it did not change much and only gave him more time to plan, but for the other it changed a lot of what he does. Both of them knew how to perform the job functions that they were going to be doing, but for one of them it was a big change. I set the minimal expectation and sat down with them and talked very briefly about the change. What I realized after VICTORY RANCH is that I did not really communicate the expectation and get the buy-in that I should have before making the change. I spoke to this supervisor for a couple of hours about this last week, and I feel like a weight has been lifted off of my shoulders. I also believe that he is more engaged now and has a sense of ownership of his duties. Also because of this change I know our business in South Bend IN. has increased because people are in the right seats now. (Aaron)

Today

As you can see, I believe we’re making progress and have a good top- down plan. I’m still concerned about the bottom-up plan and will continue to work on that. In the meantime, we have just finished the Gallup Q12 Survey company-wide, to establish a baseline for employee engagement so we now have a good idea of where we are . . . plenty of opportunity but not bad, with some truly bright spots to examine and perhaps model. I have certainly had my ups and downs and some passive top leadership challenges to meet. There are always the questions of when will the productivity improvements from this engaged style reflect in the financials, are we sure we can hold people accountable with this style to ensure desired results, etc., etc. . . . Again, most publicly held companies are focused on the next quarter’s financial results, so long-term commitments are always a challenge to keep on track and transition is not a fast path. At the same time, we just completed a record-breaking performance year in all areas. Morale is high, retention is great, best claims performance, best injury rates, best service performance . . . I would argue that we’re already seeing the results but aren’t quite ready to admit that our People First focus is the reason. To do so would challenge the beliefs of some that want to remain within their comfort zones and take credit for successes with little or no personal involvement. The heck with them, our people are performing because our leadership cares, and time will only further document that fact.

One final note . . . In November 2006 all the corporate and executive officers of FedEx Freight (East, West, Corp, Systems) will be attending a leadership challenge course at Team Trek in Heber Springs, AR. All means all officers. I believe this session will do more to unite and bond our leadership than any other event we could experience together. This is an absolutely huge step for our team. I just hope that I will survive to join them with the “contracts” I’m sure some have taken out on me…HA! HA!

Summary

In this chapter we have shared with you a little of our rich history; and the reasons why we needed to revisit our most important asset, our “people.” For some this might be seen as a program that will wear out its welcome over the course of time. For us “People First” helped us realize a new beginning that must be maintained for a lifetime.

It is easy to direct and or command that change take place. The “thinning out” process is actually quicker, but more costly from a people point of view. With “People First” the job is harder; takes more courage; takes extraordinary leadership; stretches the leader beyond what they think is safe; but more importantly for most, the process sticks. The truth is simple, People First works.

We will maintain that our industry, (Less Than Truckload Trucking) will become more competitive each moment we are in business. We will also maintain that we will be a world-class company with “people” being the only sustainable competitive advantage.