Fred Smith

Founder, Innovator and spiritual leader of FedEx

(Photo taken the day he flew this a/c to Washington for display at the Smithsonian Aviation museum. Paul Benbrook)

Roger Frock

Roger Frock had a B.S in Engr and MBA and he did one of the original studies on whether FedEx could be a viable business. He left his job at A.T. Kearney in May 1972 to move to Little Rock and become the General Manager at a salary of $36K; Fred Smith was paid $35K

Art Bass

Hired in the Fall of 1972 and eventually became Pres. of FedEx unexpectedly in Feb 1975; Left FedEx in 1982

Vince Fagan

Vince Fagan and Tucker Taylor had both a consulting and advertising business. They closed both to become part of the original FedEx team in 1974. He left the company in 1980, and passed away in 1982.

Vince is credited for FedEx's innovative marketing and advertising strategies. Responsible 'When it Absolutely, Positively, Has to be there Overnight'

He is credited for many advertising industry firsts.

Using market research to classify potential clients and set prices.

Pushing Federal to go after an untapped area--the front office (advertising, offices, sales offices, legal offices etc)

Pete Wilmott

Pete Wilmott joined Federal Express in May 1974 to head Finance after the death of Fred Juravich. He became President in September 1980.

Mike had extensive experience from UPS and was currently working at a sortation company called Rapistan. He held several positions at FedEx, the last being in charge of implementing FedEx's SuperHub. I worked with Mike for several months during the SuperHub development and found him to be extremely disciplined and a good person to work for and with.

His BOOK on FedEx can be found here.

Mike Fitzgerald

The inaugural flight was March 12, 1973 with a 11 city network.

There were 6 packages when they opened the cargo doors. One was a birthday present that FWS had sent to a friend.

FedEx stopped all package flights and put the packages on passenger airlines for the next 5 weeks.

Charlie Brandon had recently joined FedEx to build an Operations Research group.

Bill Arthur(marketing), Art Bass and Charlie went to an office at Union Planters in Little Rock and revamped the system without computers. FedEx could not afford computing time. They decided they weren't going to the right cities and enough cities and built a new operating plan. Later, Charlie would hire a professor from the University of Memphis(Ron Ponder)to adapt computers to modelling the FedEx system. Ron later brought in one of his graduate students(Joe Hinson)

Service was re-launched a month later, on April 17th, 1973. Mike Fitzgerald had forecast 168 packages from the sales info. When they opened the cargo doors there were 186 packages.

A new network of 25 cities was built with plan to add 4 cities every two weeks. They added Rochester NY because that is where IBM was headquartered.

Thru May the package volume averaged 473; In late July the average moved to 1,000 packages per night.

In 1975 there was a reorganization which moved three senior officers into the field to better manage operations. Four Districts were formed headed by Roger Frock, Wes Terry, Mike Fitzgerald and Tucker Taylor. This was done partially to appease investors who wanted more control over operating costs.

With these separately operated regions, and accelerated growth, Federal Express had difficulty keeping up with volumes. Customer calls were answered at the local stations and Salesmen were so busy answering pick up requests they barely had time to sell.

FWS had studies done on how to handle growth in early 1978. The consultants relayed was that Federal Express was out of control and recommended he move to a Centralized management approach.

One of the consultants Paul Lanier(recommended by Frank McQuire) helped with the re-organization plan. FWS put out a memorandum 'Managing Federal Express or Holding onto the Tigers Tail'. This put the company on a path to centralized management of the company. The memo was co-signed by Art Bass but was the work of FWS. they recommended instead of running 4 separate districts that FWS centralize management and also go to centralized call centers which is what Avis and the passenger airlines were doing. The memo outlined why Federal Express needed to change to survive and the problems they were encountering with massive growth.

On Valentines Day, 1978 FWS had a dinner meeting at Grisanti's on Airways with the division heads: Roger Frock, Wes Terry, Tucker Taylor and Mike Fitzgerald.

FWS announced that he was going to deploy a Centralized Telephone system. There was some disagreement and the district heads were arguing about why. FWS stated he didn't want to hear another word about the decision, it had been made and if they wanted to stay they needed to sign on to the plan.

The Centralized Telephone system was the Centralized Call Center + Computerized dispatch system later known as COSMOS. This idea of an 'Avis' like system for packages was envisioned by Tucker Taylor beginning in 1976. There was disagreement from the division heads about implementing this. It had already been prototyped and was successful in routing customer calls to a central facilty which allowed agents to enter customer info and dispatches sent quickly to the stations.

Some books have called this dinner the 'St Valentines Day Massacre'. A staff meeting scheduled the next morning with the 4 divisional managers was cancelled.

On March 1st, 1978 details of a re-organization came from FWS office, printed on red paper.

the following re-assignments were made:

Some comments form Jim Moore about Centralizing Operations:

Being small in the beginning, we had lots of opportunity to be close especially for myself as that is all I did but travel around, sorting out dispatching problems and advising Regional division heads on converting to 800Mhz, and that Memphis was a good idea for Centralized call Centers. I was in Newark during the cutover “just in case” (had a physical switch in the building to bypass call routing to Memphis should things go wrong, it didn’t). My first challenge was to Centralize dispatching, then when they got too large, Decentralize, like NY all in one place almost 10% of company revenue coming through one building. Not a good idea… so it was “… well Moore, make up your mind”,the rest was history, and you were all a part of that. Great stuff.

In 1980 Art Bass went from President & COO of Federal Express to ViceChairman of the Board. He also was chosen to head up a new group called Advanced Projects & Research.

Pete Wilmott was named the new President of Federal Express.

Many of the founders were re-orgd to this Advanced project group that was set up in East Memphis. Some books call the new location, the 'Turkey Farm' because it looked like they wondered if some farmed out till retirement. This group looked at strategic projects like Satellites, Magic Window to land planes by radar imaging, Blimps/Dirigibles, fast ships, International opportunities and possibly integrating the supersonic Concorde into the fleet and other strategic ideas. The objective was to look out at technology and projects into the 1990's.

(Around the 1982 timeframe, I was called to meet with Ron Ponder at this location in the Ridgeway area south of Poplar. Ron was working on several projects and staff which later became the Operations Research group and SIS or Strategic Integration Systems Group. It was my first meeting with Ron and he wanted to discuss some computing directions his staff wanted to look at. The next year Ron offered me a promotion into his organization after he became CIO of Data Systems.) Alan McCartor who became the head of the FAA was also hired into this group in the early 80s. I worked for Alan in the mide 80's.

Moved into the Advanced Projects organization were Art Bass, Wes Terry, Mike Fitzgerald, Roger Frock, Tucker Taylor and Charlie Brandon. Charlie had decided in 1978 that he didn't want to run the rapidly expanding Datacomm group, and Jim Barksdale was brought in from Cook Industries, to manage the Telecom & Data Processing group, now called Data Systems. Jim later became COO of Federal Express, before going to McGraw Telecommunications and later became the CEO of Netscape.

By 1982 most of the original members of the Advanced Projects group had left FedEx.

Other original staff were not part of this organization: Mike Basch(was managing the SuperHub implementation), Vince Fagan( I think Vince was working with John Schwarzman on International zapmail opportunities,Vince passed away in June 1982 after leaving FedEx). Tucker Morse, Brian Pecon and Ted Weise had other duties. Ted would later become the President of FedEx Express which was Federal Express under the FDX corporate organization. FedEx Express was the company minus Sales and IT, which was put into a new division called FedEx Services in the late 90's.

The Establishment Phase 'America You Have a New Airline' ; campaign lasted 4 weeks and cost $800,000.

The commercial was adapted to major cities ie 'New York, You Have a New Airline'.

Comparitive Stage ie comparison with Emery:

'Twice as Good as the Best in the Business'

'Who's cheaper, Who's more Reliable'

Stressing FedEx's effectiveness & efficiency:

'Take Away our Planes and We'd be Just like Everybody Else'

'Federal Express--When it Absolutely, Positively Has to be there Overnight'

Using humor. Example w/John Moschitta

If This Package isn't in Peoria by Tomorrow Morning....

Law Offices

Bulbs

Anyone Can do it

Evolution of Delivery