Founder, chairman, chief executive officer, and president, FedEx Corporation While attending Yale University, Fred Smith

wrote a paper on the need for reliable overnight delivery in a computerized information age. His professor found the premise improbable, he only received a grade of C for this effort, but the idea remained with him. After graduation, Smith enlisted in the Marine Corps and served two tours of duty in Vietnam "There's only three things you gotta remember: shoot, move and communicate." While in the military, the young lieutenant observed military procurement and delivery procedures carefully, got his chance when he left the service and started his express transport business in 1971. "I wanted to do something productive after blowing so many things up," he told an interviewer. But Smith's true passion was flying; by the age of 15 he was learning the ropes while operating a crop duster. In time he became known as a skilled amateur pilot. Smith's business acumen started early; while in high school, he and a group of friends founded the Ardent Record Company, a small recording studio that later went on to become a legitimate company. In 1962 Smith left Memphis to attend Yale University. . To get his fledgling business underway, Smith began by purchasing the controlling interest in Ark Aviation Sales, an aircraft maintenance company owned by his then father-in-law. By 1971 Smith had expanded the company's venue, turning the focus from airplane maintenance to a company that bought and sold used corporate jets. But even the success of posting over $9 million in revenue and the company's seeing profits for the first time were not enough to satisfy Smith. His business plan called for a fleet of planes that would pick up packages for delivery. The planes and cargo would be flown at night, when air traffic was minimal; packages would then be dropped at a central location or hub, where they would be sorted. From there the parcels, using both ground and air, would be routed to their destinations within a 24-hour period. Smith chose Memphis as the hub city because of its central location, moderate climate, and labor resources. Smith also wanted the company to own its own planes in order to bypass federal shipping regulations. Financially, the business required a tremendous amount of money for planes, pilots, and insurance. Smith also needed to design a transportation system that could not only link any two parts of the country but also ensure that packages going back and forth could be delivered within the promised 24-hour windowsomething that had never been tried before in cargo delivery. Although Smith was unable to convince the Federal Reserve that his plan would work, he decided to spend money on an intensive advertising campaign to persuade anyone else who might be interested in such a venture. Finally, on June 18, 1971, Smith, then 27 years old, created the Federal Express Corporation. His startup funds consisted of $91 million from venture capitalists in addition to his own $4 million inheritance. By 1973

Smith was ready to go; Federal Express, with a fleet of 14 jets and several vans, began offering service to 25 cities. first three months of operation, the company had lost almost a third of its start-up cash. The company also lost money because of high advertising costs (Smith believed advertising to be essential for his company's survival) and because of increased aircraft fuel and gasoline prices resulting from the Arab Oil Embargo of 1973. Smith's sisters also brought suit against their brother for misappropriating their trust fund monies. "I was very committed to the people that had signed on with me, and if we were going to go down, we were going to go down with a fight. It wasn't going to be because I checked out and didn't finish," he says. ad campaign, "FedEx-when it absolutely, positively has to be there overnight," Smith's tried and true philosophy: people, service, profit (P-S-P). To that end, Smith worked hard at being accessible to his employees and clients with a management style that combined vision, risk-taking, a sense of community, and a tough-minded approach. Smith operated his company on a basic premise that he called P-S-P: people, service, profit. The idea was that the three concepts work in a circle, each supported by the others. Fred Smith's effort to instill company loyalty bore fruit. During the UPS strike, when FedEx was swamped with 800,000 extra packages a day, Smith publicly thanked them in 11 full-page newspaper ads; he also ordered special bonuses. FedEx pilots are among the best-compensated and most contented in the industry By 1978 the company had proven itself financially stable enough to begin selling shares on the New York Stock Exchange. In 1984 Federal Express reached a milestone not only for itself but also for American business when it surpassed $1 billion in revenues. the decades of the 1980s and 1990s were characterized by adaptation and experimentation. never allowed FedEx to rest on its laurels. Continuous improvement In 1988 Federal Express bought the Los Angelesbased international heavy freight carrier Flying Tigers for $880 million, thereby becoming the largest all-cargo airline in the world. Now Smith had his own network of overseas delivery routes and no longer had to rely on outside contractors to make his foreign deliveries. Software for customers print their own labels directly from the FedEx web site. The rise of Internet commerce and the growth of the global economy are also contributing to the company's growth. FedEx has capitalized on both of these trends, with proprietary software for Internet catalogue service, and the completion of facilities in the Philippines, Taiwan and France. "You absolutely, positively have to innovate-if only to survive."-Fred Smith His success came in part because of his ability to understand the changing needs of business and the importance of such things as the Internet, deregulated trade, and changing business practices.