New Venture Lab: Equipping Christian Entrepreneurs

This is the story about Fred Smith and FedEx, an idea he came up with while in college.  His professor was not impressed with his term paper that laid out his business plan, but Fred went on to build a $32 billion business.  This is a great story of creative thinking and leadership:

A Team Leader

He turned a mediocre term paper into a $32 billion business.

Leadership

Fred Smith was just 27 when he founded FedEx. Thirty-five years later, he's still at the helm. He attributes the success of the company to leadership, pure and simple -- something he picked up from his years in the military, and from his family.

Smith's grandfather had captained a Mississippi River steamboat; his father built the Greyhound Bus Line in the South, expanding his fortune along with the routes. Smith says he was just four when his father died, "so he probably served as a near mythical role model for me."

Growing up in Memphis, Tennessee, Smith says, "I didn't know I wanted to go into business, but I knew I wanted a leadership position. That appealed to me."

His passion was flying. At 15, he was operating a crop-duster over the flat fields of the Mississippi Delta. As a student at Yale University, he helped resurrect the Yale flying club; its alumni had populated naval aviation history, including the famous "millionaires' unit" in World War I. Smith took care of the club's business end and ran a small air-charter operation in New Haven.

With little time to study, his scholastic performance suffered, but Smith never stopped looking for the "big idea."

He thought he had found it when he wrote a term paper for an economics class. He outlined an idea for a transportation company that would guarantee overnight delivery of small, time-sensitive goods -- replacement parts and medical supplies -- to major U.S. cities. The professor was not impressed.

Smith was certain he was onto something, but it would be a while before he could turn his idea into reality. He graduated from Yale in 1966 just as America's involvement in the Vietnam War was escalating. Since he had attended officers' training classes, he joined the Marines.

A Central Hub

Smith completed two tours in Vietnam, eventually flying more than 200 ground-support missions. In 1970, he was honorably discharged, as captain, with a Silver Star, a Bronze Star, two Purple Hearts -- and a profound sense of what it means to be a leader.

"The Marines are arguably the best leadership training organization that one could possibly imagine," he says. "In the military, leadership means getting a group of people to subordinate their individual desires and ambitions for the achievement of organizational goals. And good leadership has very measurable effects on a company's bottom line."

Home from Vietnam, Smith became fascinated by the notion that if you connected all the points of a network through a central hub, the efficiencies could be enormous, whether the system involved moving packages and letters or people and planes. With an investment from his father's company, as well as a chunk of his own inheritance, Smith bought his first Dassault Falcon planes, and in 1971 formed the Federal Express Corporation.

Today, FedEx is a $32 billion global transportation and logistics company, serving over 220 countries and territories. Operations include more than 670 aircraft and 70,000 vehicles. Some 260,000 employees and independent contractors worldwide handle more than 6 million shipments each business day.

Along the way, FedEx pioneered the "hub and spoke" system, which has since been adopted by almost all major airlines. The phrase "FedEx it" has become as much a part of the language as Xerox or Google.

Smith says success in business boils down to three things. "You have got to have a viable product or service and a compelling strategy. Then you need an efficient management system. Assuming you have those things, leading a team is the single most important issue in running an organization today."

For Fred Smith, there is a bred-in-the-bone satisfaction that comes from getting people to do the best job they can do every day.

By Maria Bartiromo

Source: ReadersDigest.com