Is Your Company Too Inbred?
FredEx….oops, I mean FedEx, has been led by Fred Smith, the founder, since 1971. As we all know, Smith created the overnight package delivery business. He built a massive and successful company so all-pervasive that FedEx became a verb used no matter the actual delivery service you are referring to.
The first 14 FedEx planes were launched in 1973 (they carried a total of 186 packages on that first day). Today the fleet has 681 airplanes, carries about 15 million packages a day, and is the largest cargo airline in the world. It’s been a nice run. Until now.
FedEx is suffering. Investors have noticed so its stock price has significantly underperformed.
As competitors appeared, FedEx has been unable to maintain their cutting edge place at the forefront of the industry. They’ve been slow to notice and address how their world has been changing. They’ve become a victim of what I talked about in my last missive Follow The Crowd, group think. The leadership team members talk to and agree with each other that they are the biggest and best.
Their group think derives from an even more significant problem. They’re inbred. It’s the same group of people talking to each other for decades without refreshing the brain-pool with new thinking. Including Smith, the top ten executives have been together for an average of three decades.
They make decisions based on ideas stemming from the same thirty-year history and experience. Hardly surprising that they’re no longer the thought leaders in touch with not only what’s happening today but with what is to come.
Compare them to Amazon, also with a huge overnight package delivery service. Their fleet is still small compared to FedEx but growing fast and bringing the future into the business with all kinds of state-of-the-art technology, logistics, warehousing, and everything else fully integrated.
Jeff Bezos has been at the helm of Amazon since 1994 but he’s surrounded by senior executives of varying longevity and a wide variety of experience. And with energy and vision that has faded from the decades-long inbreeding of Smith’s crew.
It looks like Amazon and the other leading-edge cargo carriers are forcing FedEx to finally take action to turn things around. It remains to be seen if it’s too late.
Falling behind? Look at those around you. Have they all been with you forever? When was the last time a new face with divergent ideas was added to the team? Divergent in all ways. Someone to shake things up and really bring new ideas and a willingness to push back on everything. Someone who actually lives in the world to come rather than looks back on the good old days when we were the only overnight package delivery company.