FedEx CEO Fred Smith on Leadership and Teamwork

Well, you know, it's more common than people think to begin with. BusinessWeek did an article a couple of years ago about companies that were still being run by their founders, and there were a surprising number. So it's a bit like I think somebody being a pretty good athlete and then going on to be a pretty good coach. And I think the secret of doing something like that, whether it's starting a company and then running it 35 years later, is you have to be very disciplined in terms of study and managing change at the different levels of the game. And if you don't have the self-discipline to do that, you probably are not going to be able to go from one level to the next.

I certainly think that my service in the Marines had a profound effect on me, and I think it had a huge effect on the beliefs I have in terms about running an organization that I put into FedEx. But I think that one of the things that you find when you study leadership—and obviously you were interviewing one of the paragons of leadership in Coach Wooden—is that the principles of effective leadership have been known at least since the time of the Greeks. And there's no mystery about what it takes to coalesce a group of people around a larger or an organizational goal. The problem is that it's very hard to do. It takes an enormous amount of attention to detail. All of the things that Coach Wooden puts in his pyramid of success, that's what it takes. And most people, quite frankly, aren't willing to subject themselves to that kind of discipline to achieve that type of competitive greatness that he did.

Well, I think the important thing to recognize is that most things in human accomplishment are the result of a lot of people, not just one person. And I think Coach Wooden would be the first to say—and has said in his writings and over and over again—that he was a great coach because he had great players and great assistants. So I can assure you, I'm sitting up here being interviewed tonight not mainly because of my efforts, but because of the efforts of hundreds of thousands of people that make up that FedEx team, and a lot of them in the audience today. And I want to thank them personally for everything they've done for me and my family. But it takes at the top a team of executives because the world's just too complicated. Nobody can stand on the bridge of a corporate ship and shout orders anymore because you don't know how to do the arcane things in finance or IT or whatever the case may be. So most things in life require teamwork to accomplish anything. And the people who get recognized the most are, by happenstance or by accident or hard work, they end up being the leader of that team. But they really represent what the team produces and not just what they produced.

He—you know, anything as exacting as basketball where a fraction of an inch or a millisecond late pass makes the difference between the game and—gosh almighty, all you have to do is watch that game last night. I mean, you know, just one thing or another and it could have gone a different way. But you know, our business is like that. I mean, we have 300,000 folks, 700 planes, 70,000 vehicles, 8 million shipments operating around the world. I mean, it's a choreography of incredible precision. And any individual member of that team can determine whether we do the right thing for our customers and continue to earn their respect, or alternatively, they can not produce and the efforts of the other 299,999 don't make any difference because we've disappointed someone. So I think the precision that Coach Wooden and his basketball teams represented is very similar to the industrial world that I live in.

Well, we had the misfortune of starting our company in the midst of the first Arab oil embargo, and that was really the difficulties that we went through. But the idea was so profound and it was very well researched, so you could see that it would be successful. But to answer your specific question, I told the MBA students today, in my opinion, the reason that the United States has been as successful as it has been for so long, at least in this century, is because of two reasons. The first is we have the most unique system of higher education of any country in the world, and our MITs and UCLAs and University of Chicago and Yales and Harvards and Princetons and Stanfords, combined with the entrepreneurs that come out of them and the venture capital business that we have in this country, allow you to produce a Google or an Apple or a FedEx or a Microsoft, or you could go on, or a Starbucks. And I think it's certainly possible to do what any of those examples I just gave you today, because there actually is more money and more willingness to take a chance today than there was when we started FedEx. So I'm very optimistic longer term.

Well, I think you mentioned a moment ago my service in the Marine Corps. I spent two years in Vietnam, and I learned a lot of things from a lot of great people there. And I think I learned the importance, in a similar way perhaps to Coach Wooden, about loving the members of the team. You don't have to like them all the same. And you have to have the ability to lay out your expectations, to play the game with precision and great coordination. So I think my service in the Marine Corps probably is the most profound influence on me.

Well, I certainly have some regrets, particularly when I was in the Marine Corps, perhaps using profanity a bit more than I should have.

Well, I don't think I was as circumspect as he was. I forget in his book what the phrase he used over and over again as players would remember—it was 'gosh almighty' or something like that. But I probably used a more industrial approach to my admonitions to my troops on occasion. But you know, life is a story of, as one famous Greek philosopher said, the same story being endlessly repeated. And we all make mistakes, and the secret of it, I think, is to learn from them. And I think Coach Wooden would be the first one to say this, and I know his players would, that he had up here: if you're going to dwell on that missed free throw or that missed this, that, or the other thing, you can never go on to win the game. So I certainly don't dwell on things. I try to learn from them, but I don't think there would be anything I would put in the category about dwelling on it.

Well, I think the most important thing that people in leadership positions have to do in tough times, economic or otherwise, is to set the example. And if you're going to cut people's pay, you better cut yours first, and you better cut it the most. If you expect people to be putting in that extra effort, they better not see your car out of the parking lot at three o'clock on Friday afternoon. If you're somebody that expects somebody to be knowledgeable about their job, the next time they see you at a meeting, you better know the subject at hand as well as anybody in the room. Now, those are just basic principles of leadership, as we talked about, which are as applicable to college basketball as they are to FedEx or the Marine Corps or running a high-tech company. The principles of leadership—and again, I would commend Coach Wooden's pyramid of success because they're all there—and you can find similar admonitions about what makes effective leadership in many different places. And as I said a minute ago, Deborah, it's not that people don't understand it, and it's not that history doesn't record what you need to do. It's the fact that it's difficult for many people to have the discipline to do it.

You know, in that book—or I guess it's the video Coach Pepper Rogers sent to me about Coach Wooden—there, and he's talking, and I made the joke about my socks, where he starts off with all these fantastic high school players, all-stars, and every year we're going to start off with how to put your socks on because you may get blisters, and if you get a blister, you're no good to the team. It's that fastidious attention to detail. And I'll give you a good example in the FedEx context that'll show you that. When we were raising money for FedEx—this has been years and years ago—and the oil embargo came up, and it was difficult to get people to go on and put their money in the enterprise. And it was a network, so we had to have a network before we had anything to sell. It was a lot of money that had to be put up on the front end. And we had a group that came in from Chicago, and we gave them the pitch and all the research we had done and one thing or another. And as the gentleman left, he said, 'You know, times are so difficult, and I'm worried about this oil supply, and I don't think we're going to invest.' So obviously, I was very down on it. I walked through the hangar. The next day, this guy called me up on the phone. He said, 'You know, we changed our mind, and we decided we would invest.' And I said, 'If you don't mind, tell me why you decided you'd invest.' He said, 'I walked through your hangar, and I could have eaten off the floor. It was so perfectly polished and so completely clean with no oil or rags, and the equipment was so perfectly laid out. That's the reason that we're going to invest in FedEx.' Now, the reason that hangar was that way was obviously that's the way we set the standards, but it was the guy that cleaned that floor that probably had as much influence on FedEx's success as I did over the long term.

Well, but the point I'm trying to make is that the somewhat humorous story about Coach Wooden and those socks, or FedEx's insistence that our hangar floors be clean—it's the same principle. It's the attention to detail that makes the difference between the great teams, the great organizations, and the ones that just don't quite make it.

Let me just say this much. I want to tell you I am very honored to be in the same company as Howard Schultz and Ken Chenault, and I think that the organizations they run are very similar in that respect, in that great attention to detail. So there's a common theme here, clearly.