In 1965, Yale undergrad Fred Smith’s term paper advanced the then unheard of idea of an overnight, aviation delivery service. But the paper was called unrealistic by his professor and the young student received a C grade. Undaunted, Smith held the idea close and upon returning from two tours in Vietnam with the Marine Corps, he secured an astonishing $91 million in funding and launched Federal Express.
Much of Smith’s story is the stuff of entrepreneurial legend — from thumbing his nose at a skeptical professor to saving the company from bankruptcy with blackjack winnings in Vegas. How did the tenacious entrepreneur build one of the most reputable brands in the world? Through consistently out-innovating his competitors.
In an industry where meeting commitments to speed — from deployment to performance — are equally important, exploring the ways data centers can learn from FedEx’s culture of efficiency and innovation is key.
When It Absolutely, Positively Has to Be There on Time
In one of the recognizable ads of all time, 1981’s Fast Talker, FedEx introduced the famous slogan that would also double as a commitment to customers. For Smith, the tagline laid clear his sky-high expectations.
“If people were going to use FedEx in lieu of having incalculable amounts of money tied up in inventories, it ‘absolutely, positively’ had to be there when promised. The business had to operate with a level of precision and reliability that heretofore had not been possible in the service business,” he told Bloomberg.
The advice is prescient for data centers. In the new era of speed, delivering on deployment timelines is more important than ever for DCs — and their customers. What Smith understood was that by making a bold commitment to customers in his marketing campaign, he also committed his organization to deliver on that promise.
For large-scale IT organizations looking to outsource or add a DC, few variables are more important than the deployment timeline — and few commitments more important than meeting it. Indeed, in an industry where delayed deployments can devastate a company’s bottom line, FedEx’s principles stand the test of time.
On April 17, 1973, Federal Express launched, with 14 aircraft carrying 186 packages taking off from the company’s headquarters in Memphis. But in order to scale beyond its humble beginnings, Smith knew that they needed to harness technology to handle enormous logistical challenges. The problem — none of this technology yet existed.
The most revolutionary innovation was the advent of the tracking number used to track shipments through the supply chain that remains the industry standard today.
“The information about the package is as important as the package itself,” Smith famously said.
From the outset, Smith recognized that the key to his success was being able to scale efficiently without sacrificing performance and price. To realize these goals, he recognized that unprecedented innovation was the only solution. Sound familiar? For DC executives it should.
Just how good were they? FedEx became so synonymous with reliability that it was verbified (think to Google, Taser, or Tivo) — with Fedexing becoming synonymous with sending something quickly. In the 1980s, Merrill Lynch executives learned that employees would use Fedex to send documents within the confines of the building because it was still faster than inter-office mail.
Data centers hoping to reach this level of performance would be wise to adapt from the playbook of FedEx and founder Fred Smith. Especially now that the trend towards migrating data centers from small in-house centers to larger service providers grows.