1 00:00:03,760 --> 00:00:07,280 Speaker 1: Everybody, it's Bill Courtney Shop Talk number twenty two. You 2 00:00:07,360 --> 00:00:09,399 Speaker 1: still haven't got a bell, Alex, We're supposed to have 3 00:00:09,400 --> 00:00:12,600 Speaker 1: a bell enough. I don't pay you enough. For God's sake, 4 00:00:12,880 --> 00:00:16,120 Speaker 1: you don't pay me enough. Yeah, that's a good point. 5 00:00:16,200 --> 00:00:19,840 Speaker 1: Nobody's getting paid enough over here at army and normal folks. Everybody, 6 00:00:19,960 --> 00:00:23,400 Speaker 1: Shop Talk number twenty two. We're going to talk about perseverance, 7 00:00:25,800 --> 00:00:29,120 Speaker 1: and the perspective's going to be from a name you may. 8 00:00:29,000 --> 00:00:33,040 Speaker 2: Know, Fred Smith, the CEO of fed X, who. 9 00:00:32,800 --> 00:00:36,360 Speaker 1: I got a really cool chance to sit down with 10 00:00:36,520 --> 00:00:38,800 Speaker 1: and talk to one day. And the stories you told 11 00:00:38,920 --> 00:00:46,199 Speaker 1: me were inspiring, yes, but even more maybe interesting, how 12 00:00:46,240 --> 00:00:51,479 Speaker 1: the man persevered to change the world. Right after these 13 00:00:51,520 --> 00:01:10,440 Speaker 1: brief messages from our general sponsors, Everybody, Bill Courtney Shop 14 00:01:10,480 --> 00:01:11,360 Speaker 1: Talking number twenty two. 15 00:01:11,440 --> 00:01:14,240 Speaker 2: Ding Ding Ding, Since Alex won't buy me a belt? 16 00:01:16,319 --> 00:01:17,000 Speaker 2: Fred Smith. 17 00:01:17,800 --> 00:01:22,280 Speaker 1: Fred Smith is the founder of fed AX, and he's 18 00:01:23,040 --> 00:01:28,480 Speaker 1: been incredible to the Memphis community, but obviously to the 19 00:01:28,480 --> 00:01:30,720 Speaker 1: world of largs. He's changed the way we do business. 20 00:01:32,640 --> 00:01:34,840 Speaker 1: I had an opportunity to interview him for my book 21 00:01:35,120 --> 00:01:38,319 Speaker 1: Against the Grain, and some of this content is in 22 00:01:38,400 --> 00:01:38,880 Speaker 1: that book. 23 00:01:39,880 --> 00:01:42,360 Speaker 2: But I learned so much from him, and. 24 00:01:45,280 --> 00:01:48,920 Speaker 1: I think it has value to talk about his idea 25 00:01:48,960 --> 00:01:53,760 Speaker 1: of perseverance. The first thing is, this guy went to Yale, 26 00:01:54,640 --> 00:02:00,880 Speaker 1: and while at Yale he realized that what's up Mississippi 27 00:02:00,960 --> 00:02:04,640 Speaker 1: to Yale, which is a big deal. While at Yale, 28 00:02:04,720 --> 00:02:09,000 Speaker 1: he realized that business, business, and industry were headed toward automation. 29 00:02:10,040 --> 00:02:12,360 Speaker 1: And believe it or not, FedEx. The idea of fed 30 00:02:12,560 --> 00:02:16,240 Speaker 1: X was born from the fact that banks were replacing 31 00:02:16,880 --> 00:02:21,880 Speaker 1: you know, my goodness stories floors full of clerks that 32 00:02:21,960 --> 00:02:27,800 Speaker 1: were typing in debits and credits and running passbook, checking accounts, 33 00:02:27,840 --> 00:02:31,840 Speaker 1: and all of that was done by hand, and they 34 00:02:31,880 --> 00:02:37,200 Speaker 1: started to be being replaced by mainframe computers. Machines were 35 00:02:37,200 --> 00:02:43,600 Speaker 1: replacing laborers. Insurance companies were using computers to calculate actuary 36 00:02:43,639 --> 00:02:47,440 Speaker 1: tables instead of relying on huge staffs of accountants. And 37 00:02:47,520 --> 00:02:52,000 Speaker 1: while all of these cost saving measures were taking place, 38 00:02:53,080 --> 00:02:56,160 Speaker 1: you know, if two of your accountants at an insurance 39 00:02:56,200 --> 00:02:59,080 Speaker 1: company or five of your clerks didn't show up at 40 00:02:59,080 --> 00:03:01,400 Speaker 1: a bank one day, he still had hundreds of others 41 00:03:01,480 --> 00:03:04,200 Speaker 1: doing this work. But when you place all these people 42 00:03:04,240 --> 00:03:08,600 Speaker 1: with these massive computers, if one part breaks, the bank 43 00:03:08,680 --> 00:03:12,600 Speaker 1: shuts down. And can you imagine what would happen to 44 00:03:12,720 --> 00:03:15,639 Speaker 1: your economy in the country if the bank's just shut 45 00:03:15,680 --> 00:03:18,680 Speaker 1: down because the mainframe computer shut down. And so what he. 46 00:03:18,720 --> 00:03:19,720 Speaker 2: Realized is. 47 00:03:21,160 --> 00:03:24,960 Speaker 1: Banks and insurance companies and then as industry involved in 48 00:03:25,040 --> 00:03:29,520 Speaker 1: manufacturing companies to be able to do the work that 49 00:03:29,520 --> 00:03:32,560 Speaker 1: they'd always done with people with these mainframe computers, they 50 00:03:32,600 --> 00:03:37,840 Speaker 1: were absolutely positively going to have to have replacement parts overnight. 51 00:03:39,320 --> 00:03:43,520 Speaker 1: You see, his first idea wasn't really about replacing documents 52 00:03:43,520 --> 00:03:47,400 Speaker 1: and mail. It was about parts for banks and insurance 53 00:03:47,440 --> 00:03:52,160 Speaker 1: companies and large manufacturers. So that was his idea. But 54 00:03:52,840 --> 00:03:57,840 Speaker 1: before he was able to work on this new logistics system, 55 00:03:58,320 --> 00:04:01,160 Speaker 1: Fred went to serve in the Marine Corps Vietnam. That 56 00:04:01,360 --> 00:04:04,240 Speaker 1: was expected in his family. Six of his relatives served 57 00:04:04,280 --> 00:04:07,520 Speaker 1: in World War Two. When he returned from the United 58 00:04:07,560 --> 00:04:11,600 Speaker 1: States in nineteen seventy, Fred realized that his predictions from 59 00:04:11,640 --> 00:04:15,240 Speaker 1: the early sixties were coming to fruition and quickly. But 60 00:04:15,360 --> 00:04:18,919 Speaker 1: in the military, he'd observed this tremendous coordination between the 61 00:04:19,000 --> 00:04:21,960 Speaker 1: air and ground forces and the Marines, and he further 62 00:04:22,040 --> 00:04:27,520 Speaker 1: developed the concept of a hub and spoke system integrated 63 00:04:27,680 --> 00:04:30,520 Speaker 1: air and ground backing. The hub would be in Memphis, 64 00:04:30,520 --> 00:04:34,920 Speaker 1: this whole town interesting. Interestingly, when I asked him why 65 00:04:34,920 --> 00:04:38,719 Speaker 1: it was in his hometown, it's because Memphis International Airport 66 00:04:38,920 --> 00:04:41,200 Speaker 1: was a large airport. It's much larger now because of 67 00:04:41,240 --> 00:04:44,960 Speaker 1: feder X, but it was because it was the airport 68 00:04:45,000 --> 00:04:47,400 Speaker 1: in the country that had the least amount of fog. 69 00:04:48,040 --> 00:04:50,559 Speaker 1: And he knew he'd have to be landing planes early, 70 00:04:50,640 --> 00:04:53,320 Speaker 1: early in the mornings and late at night when fog 71 00:04:53,360 --> 00:04:57,600 Speaker 1: could be prevalent, and because Memphis had very very little fog, 72 00:04:58,200 --> 00:05:06,960 Speaker 1: it would interrupt rations less frequently. So he started. The 73 00:05:07,040 --> 00:05:12,240 Speaker 1: next step was raising capital. Everything was going according to 74 00:05:12,320 --> 00:05:16,960 Speaker 1: plan until an Arab oil embargo happened. Fred was forced 75 00:05:17,000 --> 00:05:20,320 Speaker 1: to raise more capital and navigate miles of red tape 76 00:05:20,320 --> 00:05:23,719 Speaker 1: in DC to secure out fuel for his fleet. This 77 00:05:23,880 --> 00:05:25,719 Speaker 1: was a task that could have crippled a lot, but 78 00:05:26,040 --> 00:05:30,520 Speaker 1: he persevered because he planned properly and the research showed 79 00:05:30,520 --> 00:05:36,360 Speaker 1: his concept was sound. So he went to work, and 80 00:05:36,920 --> 00:05:42,880 Speaker 1: the whole time he's overcoming the naysayers. He's persevering the 81 00:05:42,960 --> 00:05:48,000 Speaker 1: difficult times of raising money and oil and bargoes and 82 00:05:48,360 --> 00:05:51,680 Speaker 1: all of the things that face starting up an airline 83 00:05:52,480 --> 00:05:55,039 Speaker 1: based on this was just an airline carrying passengers that 84 00:05:55,120 --> 00:05:58,120 Speaker 1: was approved concept. This was an airline which is hard 85 00:05:58,200 --> 00:06:01,520 Speaker 1: enough to raise money for and start, but also a 86 00:06:01,600 --> 00:06:05,080 Speaker 1: concept that was his idea that had never been proved out. 87 00:06:06,720 --> 00:06:10,000 Speaker 1: The whole time, though he's falling back, his perseverance is 88 00:06:10,040 --> 00:06:13,679 Speaker 1: falling back on his time in the military. He said 89 00:06:13,680 --> 00:06:16,919 Speaker 1: to me, quote, there's no poke your head over the 90 00:06:16,960 --> 00:06:20,279 Speaker 1: next hill and see what's going to happen in business, 91 00:06:20,400 --> 00:06:22,440 Speaker 1: because if you do that in warfare, you end up 92 00:06:22,480 --> 00:06:25,760 Speaker 1: with a bullet between your eyes. So he approached and 93 00:06:25,800 --> 00:06:29,440 Speaker 1: he persevered through business, much like he persevered through his 94 00:06:29,520 --> 00:06:35,200 Speaker 1: military service in the Marines. When skeptics such as Shipping 95 00:06:35,279 --> 00:06:38,799 Speaker 1: Magnet Malcolm McLain refused to invest in those early days, 96 00:06:38,800 --> 00:06:41,840 Speaker 1: Fred Preston he knew his company would thrive as long 97 00:06:41,880 --> 00:06:43,760 Speaker 1: as he stayed the course and carried out the plan. 98 00:06:44,880 --> 00:06:50,440 Speaker 1: Today FedEx employees over three hundred thousand people and it 99 00:06:50,520 --> 00:06:55,920 Speaker 1: has changed the way the world does business. Fred does 100 00:06:55,960 --> 00:06:58,839 Speaker 1: not believe in luck. He believes in what he learned 101 00:06:58,839 --> 00:07:03,919 Speaker 1: in the Marines, proper planning. Fred does not believe in risk, 102 00:07:04,880 --> 00:07:09,560 Speaker 1: because risk in the Marines led to death. Calculated risk 103 00:07:10,680 --> 00:07:14,560 Speaker 1: is how he ran his business. He wasn't worried about 104 00:07:15,320 --> 00:07:18,000 Speaker 1: what people had to say about him. He didn't have 105 00:07:18,040 --> 00:07:22,480 Speaker 1: a fear of failure. He persevered because of proper planning, 106 00:07:23,400 --> 00:07:29,600 Speaker 1: and he persevered because of a proof of concept, and 107 00:07:29,640 --> 00:07:32,560 Speaker 1: in doing so, he changed the world. How does that 108 00:07:32,600 --> 00:07:37,920 Speaker 1: affect us? Why is that a shop talk? Because we 109 00:07:38,040 --> 00:07:41,400 Speaker 1: have problems every day as normal folks. We've got to 110 00:07:41,440 --> 00:07:47,520 Speaker 1: overcome money problems, kid problems, relationships problems, work problems, business problems. 111 00:07:48,560 --> 00:07:51,200 Speaker 1: But what Fred has to teach us, what Fred Smith 112 00:07:51,240 --> 00:07:53,520 Speaker 1: has to teach us about the way he changed world 113 00:07:53,600 --> 00:07:55,880 Speaker 1: and the way we can change our wives, is that 114 00:07:56,560 --> 00:08:00,560 Speaker 1: perseverance is not about just being tough. It takes me 115 00:08:00,600 --> 00:08:06,920 Speaker 1: in tough, but if you work a concept, plan accordingly, 116 00:08:07,800 --> 00:08:13,080 Speaker 1: and stay the course and don't take unnecessary risks, that 117 00:08:13,320 --> 00:08:15,880 Speaker 1: sets you up to be able to persevere through any challenge. 118 00:08:16,640 --> 00:08:19,880 Speaker 1: Starting a five, TOHO one C three, serving in your community, 119 00:08:20,880 --> 00:08:24,880 Speaker 1: whatever it is that you seek out to do, plan accordingly, 120 00:08:25,400 --> 00:08:28,760 Speaker 1: prove your concept, stay the course, and don't worry what 121 00:08:28,880 --> 00:08:34,319 Speaker 1: other people say. That's how you persevere. And if Fred 122 00:08:34,320 --> 00:08:38,920 Speaker 1: Smith can use that menu of options and that recipe 123 00:08:39,240 --> 00:08:42,560 Speaker 1: to change the world, maybe we can use it to 124 00:08:42,679 --> 00:08:46,720 Speaker 1: change our little corner of the world. That shop Talk 125 00:08:46,800 --> 00:08:51,920 Speaker 1: number twenty two. If you have any ideas about fundamentals, tenants, 126 00:08:52,720 --> 00:08:55,040 Speaker 1: current events and you'd like me to do a shop 127 00:08:55,080 --> 00:08:58,600 Speaker 1: talk on it, would you please email and let me know. 128 00:08:58,880 --> 00:09:02,679 Speaker 1: You can reach me any time at Bill at Normalfolks 129 00:09:02,840 --> 00:09:03,600 Speaker 1: dot us. 130 00:09:04,440 --> 00:09:06,559 Speaker 2: If it's a. 131 00:09:05,720 --> 00:09:08,040 Speaker 1: Topic or an idea that I think I might have 132 00:09:08,640 --> 00:09:11,199 Speaker 1: a thought on that could be valuable, I'd love to 133 00:09:11,640 --> 00:09:14,240 Speaker 1: cite that you send it to me and have a 134 00:09:14,240 --> 00:09:17,400 Speaker 1: little chat about it on shop Talk thanks to our 135 00:09:17,440 --> 00:09:18,920 Speaker 1: producer Iron Light Labs. 136 00:09:19,240 --> 00:09:21,640 Speaker 2: I'm Bill Courtney. I'll see you next week.