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DEVELOPING NEW BUSINESS IDEAS208

shipment or its physical delivery. COSMOS®, a centralised computer
tracking system, was duly launched in 1979.

Smith used analogical thinking to great effect when he realised that the
handheld barcode scanners used in grocery stores represented the best-
in-class business process which he should incorporate. The Federal
Express SuperTracker® was introduced in 1986.

Initially, customers made no-charge telephone calls to establish
progress of their delivery. Launched in 1994 to allow customers to
access their own shipment details directly, Federal Express’s internet
site (www.fedex.com) is generally acknowledged to be an internet
classic, exploiting interactive functionality to improve the quality and
accuracy offered to customers while reducing the supplier’s own cost.

Smith structured the company on three interlinked principles – people,
service and profits. Enlightened human resource policies inspired staff to
go the extra mile. The recent Tom Hanks film, Cast Away, glorified this
purple-blooded staff commitment to such an extent that critics agonised
whether Cast Away was a commercial within a story or a story within a
commercial. In turn, the superior service levels lock in premium-paying
customers, who then contribute to the final element of the trinity, profits.

Subsequent developments extended Federal Express’s geographical,
technological and service reach. The founder’s unerring conviction was a
consistent thread within the development. As Smith said: ‘Very rarely
have I ever seen any business or major undertaking that goes in a
straight line. There’s zigs and zags, victories and defeat, and you have to
be propelled by that conviction that what you’re doing is right and what
you’re doing is important.’158

‘very rarely have I ever seen any business or
major undertaking that goes in a straight line’

Federal Express became the first US company to attain an annual
revenue of $1 billion in ten years without merger or acquisition. It
reported profits for 2003 of around $830 million on revenues of $22.5
billion. Vindication indeed of Frederick Smith’s first secret of being a
successful entrepreneur: ‘Have a compelling business idea, one that is
differentiated and sustainable.’159